IMPLEMENTATION COMPLETION AND RESULTS REPORT (TF056601) ON A MULTI DONOR TRUST FUND TF IN THE AMOUNT OF US$ MILLION EQUIVALENT TO THE

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (TF056601) ON A MULTI DONOR TRUST FUND TF IN THE AMOUNT OF US$ MILLION EQUIVALENT TO THE REPUBLIC OF MOLDOVA FOR A Report No: ICR2444 GOVERNMENT`S CENTRAL PUBLIC ADMINISTRATION REFORM (CPAR) PROJECT June 30, 2014 Poverty Reduction and Economic Management Belarus, Moldova and Ukraine Country Management Unit Europe and Central Asia Region i

2 CURRENCY EQUIVALENTS (Exchange Rate Effective June 13, 2014) Currency Unit = LEU 1.00 = US$ 0.07 US$ 1.00 = LEU FISCAL YEAR: January 1 December 31 ABBREVIATIONS AND ACRONYMS APA AEI CAS CPA CPS CPAAs CPAR CS DFID (UKAid) EU GO GOM HR / HRM HRMIS IDA IDP IFR ISR ICRR MDTF M&E MoE MoF MTEF /MTBF NPC NDS OAS OECD PAR PDO SDP SES Sida TA UNDP Academy of Public Administration Alliance for European Integration Country Assistance Strategy Central Public Administration Country Partnership Strategy Central Public Administration Authorities Central Public Administration Reform Civil Service Department for International Development (UK) European Union Government Office Government of Moldova Human Resources/Human Resource Management Human Resource Management Information System International Development Association Institutional Development Plan Interim Financial Report Implementation Status Report Implementation Completion and Results Report Multi-Donor Trust Fund Monitoring and Evaluation Ministry of Economy Ministry of Finance Medium Term Expenditure Framework / Medium Term Budget Framework National Participatory Council National Development Strategy Office of Administrative Support Organization for Economic Development and Cooperation Public Administration Reform Project Development Objective Strategic Development Program Sector Expenditure Strategy Swedish International Development Cooperation Agency Technical Assistance United Nations Development Programme Vice President: Country Director: Sector Manager: Project Team Leader: ICRR Team Leader: Laura Tuck Qimiao Fan Adrian Fozzard Elena Nikulina Maya Gusarova ii

3 REPUBLIC OF MOLDOVA Government s Central Public Administration Reform Project CONTENTS DATA SHEET... iv A. Basic Information... iv B. Key Dates... iv C. Ratings Summary... v D. Sector and Theme Codes... v E. Bank Staff... v F. Results Framework Analysis... vi G. Ratings of Project Performance in ISRs... xi H. Restructuring... xi I. Disbursement Profile... xiii 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. Grant Preparation and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Grantee's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents MAP...75 iii

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5 DATA SHEET A. Basic Information Country: Moldova Project Name: GOVERNMENT`S CENTRAL PUBLIC ADMINISTRATION REFORM (CPAR) Project ID: P L/C/TF Number(s): TF ICR Date: 04/13/2014 ICR Type: Core ICR Instrument: MDTF Grantee: MINISTRY OF FINANCE OF MOLDOVA (on behalf of the GOVERNMENT OF THE REPUBLIC OF MOLDOVA) Original Total Commitment: USD 6.15M Disbursed Amount: USD 11.44M Revised Amount: USD 11.45M Environmental Category: C Implementing Agencies: The State Chancellery of the Republic of Moldova Co-financiers and Other External Partners: The Government of the Netherlands The Department for International Development, UK (DFID) Swedish International Development Cooperation Agency (Sida) B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: Effectiveness: 07/11/2006 Appraisal: Restructuring(s): 12/09/ /09/ /05/ /12/ /16/2013 Approval: 07/11/2006 Mid-term Review: 06/15/2010 Closing: 12/31/ /28/2014 iv

6 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Grantee Performance: Satisfactory Substantial Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Grantee Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Grantee Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Performance any) Potential Problem Project at No any time (Yes/No): Problem Project at any time Yes (Yes/No): DO rating before Closing/Inactive status: Satisfactory Quality at Entry (QEA): None Quality of Supervision (QSA): None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General public administration sector Theme Code (as % of total Bank financing) Administrative and civil service reform Other public sector governance E. Bank Staff Positions At ICR At Approval Vice President: Laura Tuck Shigeo Katsu Country Director: Qimiao Fan Paul G. Bermingham Sector Manager: Adrian Fozzard Ronald E. Myers Project Team Leader: Elena Nikulina Svetlana I. Proskurovska ICR Team Leader: ICR Primary Author: Maya Gusarova Maya Gusarova v

7 F. Results Framework Analysis Project Development Objectives (as approved by original approving authority) Strengthening institutional capacity of the public administration for better policymaking, policy implementation and efficient use of public resources Revised Project Development Objectives No revisions have been made. (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 (a) The institutional system is streamlined and consolidated around key policy areas, with Ministries playing a leading role in policy development and coordination of implementation. Functions and legal status of government bodies are not aligned. Responsibilities for policy areas overlap. Legal regulation for organization of public administration is absent. Delineation of policy and implementation functions complete at central government level. The Government Reorganization undertaken in winterspring 2010 was guided by the functional review findings. The number of government agencies was reduced from 16 to 8. Policy coordination units were created in the ministries and central agencies to lead sector policy development. Date achieved 06/01/ /30/ /31/2012 Comments (incl. % achievement) Achieved. (b) The GO and the MoF coordinate and control the quality of Ministries' policy Indicator 2 : proposals within a rolling MTEF. Policy management system established and functioning. Value quantitative or Qualitative) No formal policy coordination mechanisms or institutional system are in place. The MoE is responsible for national planning. New policies are approved regardless of fiscal implications. Institutional system, including policy units, central policy coordination, and methodologies are established and operational. Institutional system, including policy units, central policy coordination, and methodologies are established and vi Policies, strategic planning and external assistance division established within the State Chancellery and is operational. Interministerial Strategic Planning Committee established and is functioning. The State Chancellery is the lead institution in coordination of policy

8 operational. development. Annually the State Chancellery prepares a policy priority framework to inform MTBF. Date achieved 06/01/ /30/ /28/2014 Comments (incl. % achievement) Indicator 3 : Value quantitative or Qualitative) Achieved. The leading role of the State Chancellery in coordination of policy development is reflected in Law No 98 On Central Public Administration in Policy Areas (CPA Law), article 16, paragraph 3 (c). Legislation on civil service and public administration, compatible with EU practice, approved and implemented. Civil service law (1995) Civil service does not require merit based legislation approved competitive selection. The and enforced. Public civil service management Administration is system is absent. regulated by law. Appointments are not competitive. A law on public administration absent. Both laws with subordinate implementing regulations are signed and enforced. The CS law introduced inter alia merit-based recruitment. Civil service classification and grading system developed and approved. Public administration is regulated by CPA Law. Date achieved 06/01/ /30/ /31/2012 Achieved. Law No 158-XVI On the Public Function and Status of Civil Servant (CS Comments Law), signed on July 4, 2008 and enforced starting January Law No 98 On Central (incl. % Public Administration in Policy Areas (CPA Law), signed on May 4, 2012, is enforced achievement) starting February 3, Central civil service management instituted to enforce merit based recruitment and Indicator 4 : promote effective personnel management practices. Value quantitative or Qualitative) Central civil service management capacity absent. Central oversight and enforcement of civil service legislation does not exist. Central civil service unit set up and its capacity to enforce civil service law and effective personnel policies created. vii Central public administration reform unit with responsibility for civil service personnel policy development and coordination has been set up within the State Chancellery and is functioning. Merit-based recruitments and promotions reached 70.7 percent by Launch of HRMIS Civil Service Register has improved efficiency in personnel data management, HR reporting and decision-making.

9 Date achieved 06/01/ /30/ /28/2014 Achieved. Launch of HRMIS Civil Service Register has improved inter alia efficiency Comments (incl. % achievement) in personnel data management, performance appraisal and professional development planning processes, and ensured easy access to personnel data for data monitoring, HR reporting and decision making. The Register allows tracking records of competitions organized for public administration vacancies. (b) Intermediate Outcome 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 The system of management of public administration reform is institutionalized. The Government does not Sustainable capacity have institutional capacity to to implement public implement public administration administration reform. reform is established. Units set up, staffed and trained. The capacity of State Chancellery for PAR management has improved after its 2010 reorganization. The Division for coordination of Public Policies, Foreign Aid and Central Public Administration Reform was strengthened and formally assigned the responsibility for managing PAR. Date achieved 06/01/ /02/ /31/2012 Comments (incl. % achievement) Achieved. Indicator 2 : Civil Service legislation drafted. Value (quantitative or Qualitative) 1995 law on civil service does not meet criteria of competitive merit-based selection. Political and administrative positions are not clearly separated. The new Civil Service Law, compatible with EU practices, is approved by Parliament and enters into force. Law No 158-XVI On the Public Function and Status of Civil Servant, signed on July 4, 2008 and enforced starting January Government Statutory Act No 201 from March 11, 2009, approved new HRM procedures (by December 2013 new 11 procedures were introduced). Date achieved 06/01/ /02/ /31/2012 Comments (incl. % achievement) Achieved. Indicator 3 : Reorganization of public administration has taken place in line with the principle of viii

10 Value (quantitative or Qualitative) functional delineation and matching the role of government underpinned by national strategic documents. Policy and implementation Recommendations Reorganization of the functions are not well for functional Government in allocated. Staffing levels allocations in line winter-spring and resources do not match with good 2010 took into government strategies. governance account over 70% of Policy and implementation principles and the functional functions are not well government review allocated. Staffing levels strategies are recommendations and resources do not match formulated and supported by government strategies. reorganization plan the project in 2006 is endorsed. and followed the principles of functional delineation and focus on strategic priorities. Date achieved 06/01/ /30/ /31/2013 Comments (incl. % achievement) Largely Achieved. Recommendations of the functional review have been taken to a large extent, but not all. There is a still room for improvement in matching staff levels and resources to government strategies. Indicator 4 : Legal basis for organization and functioning of public administration has been developed and approved. Value (quantitative or Qualitative) There is no any legal act that A law on public stipulates the principles of administration is organization of public approved by the administration, including Parliament and structuring and enforced accountability. Law No 98 On Central Public Administration in Policy Areas, signed on May 4, 2012, is enforced starting February 3, Date achieved 06/01/ /30/ /31/2013 Comments (incl. % achievement) Achieved. The adoption of the law increased transparency in allocation of functions and responsibilities of ministries and agencies and clarified their accountabilities for policy implementation. Indicator 5 : A program for improving the quality, transparency and efficiency of administrative public services developed. Value (quantitative or Qualitative) Multiple, sometimes overlapping or conflicting, services provided by various government entities in a non-transparent, inefficient and customer unfriendly manner. A program for improving the quality, transparency and efficiency of administrative public services at national and subnational levels (the Program) developed. New service delivery model piloted in three rayons. ix Review of administrative services at the central level completed. 568 services were catalogued, and recommendations on reorganizing, merging, and discontinuing services developed. The new service delivery model has been developed and piloted successfully by three ministries. The Program and Action Plan for Public Services Modernization in the Republic of Moldova

11 for was approved by the Government Statutory Act #122 from February 18, Date achieved 12/31/ /31/ /28/2014 Comments (incl. % achievement) Indicator 6 : Value (quantitative or Qualitative) Date achieved Comments (incl. % achievement) Indicator 7 : Value (quantitative or Qualitative) Achieved. Pilot services included: (i) issuance of birth certificate and allocation of the one-time child birth benefit; (ii) the allocation of subsidies to agricultural producers; (iii) apostille service. Pilots identified opportunities to improve quality of services, reduce administrative burden and improve cost efficiency. Government policy management capacity strengthened. The new intermediate result including three sub-indicators listed below was added with the approval of additional financing in Baseline and target values were defined for sub-indicators only. Sub-indicator: Sector expenditure planning capacity at the line ministry level strengthened 5 line ministries prepare sector expenditures plans with the use of new strategic planning instruments with support from DFID project. Sector expenditure plans for at least 8 line ministries are fully aligned with the tools for strategic planning, other ministries make good progress in their adoption. By the end of 2012 under the project 13 ministries used new strategic planning tools for development of sector expenditures plans with methodology support from CPAR MDTF in the context of preparing MBTF Date achieved 12/31/ /31/ /10/2013 Achieved. In 2014, 11 ministries and 2 CPAA s (Academy of Science and Tourism Comments Agency) developed 16 SES (Ministry of Environment has 2 and Ministry of Economy (incl. % has 3) for the period achievement) Indicator 8 : Value (quantitative or Qualitative) Sub-indicator: Strategic planning capacity in the Center of Government Strengthened. National development New national Moldova 2020 strategy is outdated and strategic national does not provide a vision document strategic vision useful basis for finalized through document, finalized Government medium term participatory process through participatory activity planning and is under process and approved and budgeting. implementation. by Law No.166 of July 11, 2012, is under implementation. Date achieved 12/31/ /31/ /10/2013 Comments (incl. % achievement) Achieved. Indicator 9 : Sub-indicator: Mechanisms for NPC operations developed and functioning. x

12 Value (quantitative or Qualitative) Only 2 ad-hoc NPC working CPA's rules and groups created procedures for cooperation with NPC's working groups agreed by all stakeholders (CPA, NPC) and formally approved by the Government. CPA's rules and procedures for cooperation with NPC's working groups agreed by all stakeholders (CPA, NPC) and formally approved by the Government. The supporting NPC secretariat and NPC members were trained. Date achieved 12/31/ /31/ /31/2012 Achieved. The Second NPC was elected in NPC actively participates in a consultative process of policy development. NPC takes part in working groups Comments developing Public Policy Proposals, led by ministries and it provided substantial input (incl. % into Moldova 2020 strategy. In 2013, 85% of documents approved by the Government achievement) were consulted with citizens and civil society, compared to 30 percent in Recommendations accepted / received from NGO were 563/1463. G. Ratings of Project Performance in ISRs No. Date ISR Actual Disbursements DO IP Archived (USD millions) 1 06/24/2008 Moderately Unsatisfactory Moderately Unsatisfactory /14/2009 Satisfactory Moderately Satisfactory /24/2009 Moderately Unsatisfactory Moderately Unsatisfactory /17/2010 Moderately Unsatisfactory Moderately Unsatisfactory /28/2010 Moderately Satisfactory Moderately Satisfactory /14/2011 Satisfactory Moderately Satisfactory /02/2011 Satisfactory Moderately Satisfactory /08/2012 Satisfactory Moderately Satisfactory /13/2012 Satisfactory Satisfactory /24/2013 Satisfactory Satisfactory /07/2013 Satisfactory Moderately Satisfactory H. Restructuring Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions 12/09/2008 MU MU /09/2009 MU MU /05/2011 S MS 4.52 xi Reason for Restructuring & Key Changes Made Extension of the closing date until December 31, 2010 (24 months added). Extension of the closing date until December 31, 2012 (24 months added). US$ 3.75 million was added, increasing the total grant amount to US$ 9.9 million. Funding was

13 Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions 12/12/2012 S S /16/2013 S MS Reason for Restructuring & Key Changes Made added for the expanded scope of the project, under component A (b) Government's Policy-Making Capacity. Extension of the closing date until December 31, 2013 (12 months added). US$ 1.55 million added, increasing total grant amount to US$ million, for the expanded scope of component A (a) Institutional Reorganization. Extension of the closing date until February 28, 2014 (2 months added) to complete implementation of the contract for delivery of IT equipment for operation of civil service register at the local level. xii

14 I. Disbursement Profile xiii

15 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Following the April 2005 elections, the President, with the support of Parliament 1, announced that public administration reform (PAR) would be one of the top priorities for his administration. Focusing on PAR served to win the support of non-communist Parliamentary opposition 2 that saw improvements in the professionalism and effectiveness of the public administration as an important political step toward European integration. In response to one of the President s original reform objectives (to increase salaries of civil servants, while cutting 70 percent of staff), the Prime Minister requested international development partners the World Bank, United Nations Development Programme (UNDP), Swedish International Development Cooperation Agency (Sida) and other development actors - to provide technical assistance for PAR implementation. UNDP and Sida provided immediate technical assistance that addressed initial PAR management capacity building, and in coordination with the World Bank initiated the first phases of the horizontal functional review and related analyses of the governance system, civil service and decision-making systems. The Bank responded to the request from the Government of Moldova (GOM) with a non-lending technical assistance program to support the GOM with developing a credible agenda for public administration reform. The effort of development partners was driven by a desire to help the Government develop a PAR strategy before taking action on civil service cuts or other administrative changes. 2. As a result of this initial support and advice, the GOM took a number of important steps to advance the PAR agenda: (i) establishing an institutional framework for management of the reform (including the Government PAR Council chaired by the Prime Minister and the PAR Unit of the Government Office reporting to the Prime Minister); (ii) conducting a high-level functional review of ministries and central government agencies during July- November 2005; and most importantly (iii) drafting and approving the Central Public Administration Reform Strategy (CPAR Strategy) and Implementation Plan for the next three years 3 to guide future reforms. The CPAR Strategy identified the following underlying challenges constraining public sector management and development in Moldova: adjusting the institutional system to new policy priorities; developing politically neutral professional civil service; strengthening systems for Government decision-making; putting in place the fundamental legislation to govern public 1 The Parliamentary majority belonged to the Communist Party, dominating since 2001 and staying for the second term as a result of March 2005 elections. 2 The opposition backed up President s re-election in exchange for the promises of swifter reforms (UNDP & UNFPA Moldova, Institutional Development Outcome Evaluation, February 2010). 3 CPAR, Government decision No.1402 of December 28,

16 administration and civil service; and improving efficiency in the allocation of public financial and other resources Following the adoption of the CPAR Strategy, the Bank worked with the PAR Unit and in consultation with the development partners to establish the CPAR Multi-Donor Trust Fund (MDTF) (US$ 6.15 million 5 ) in July 2006 with the support of DFID, Sida, and the Government of the Netherlands. The CPAR MDTF was designed to support the implementation of the CPAR Strategy and its duration was set to coincide with the mandate of the government, through December 30, Original Project Development Objectives (PDO) and Key Indicators (as approved) 4. The original development objective of CPAR MDTF was to strengthen institutional capacity of public administration for better policymaking, implementation and efficient use of public resources. 5. Key Performance Indicators: While a formal Results Matrix was not required at the project start according to the World Bank trust funds procedures, the key performance indicators were identified in the Trust Fund Brief (henceforth referred to as Program Brief). The components results were monitored by the Government using their own M&E system, described in Section 2.3. In response to changes in Bank policies and procedures, an initial Results Matrix was developed in conjunction with the preparation of the first Implementation Status Report (ISR) in June The first Result Matrix for CPAR MDTF contained the following PDO indicators 6 : The institutional system is streamlined and consolidated around key policy areas, with Ministries playing a leading role in policy development and coordination of implementation. The GO and the MoF coordinate and control the quality of Ministries' policy proposals within a rolling MTEF; a policy management system established and functioning. Legislation on civil service and public administration, compatible with EU practice, approved and implemented. 4 These challenges have been acknowledged in key Moldova s policy documents, including the Economic Growth and Poverty Reduction Strategy Paper (May 2004) and the EU-Moldova Action Plan (Feb. 2005). 5 The total amount committed by the donors in the CPAR MDTF after charging administrative fee was US$6,933, However, only 85% of the committed resources for Recipient-executed activities were approved for disbursement under the Grant Agreement. As subject to exchange rate fluctuation, the remaining 15% of the donor contribution adjusted for the exchange rate at the moment of disbursement would determine the final amount of the grant (Side-Letter to the MOF from July 17, 2006). 6 3 out of 4 PDO indicators, included in the first Result Matrix, were the same as the key performance indicators in the Program Brief. 2

17 Central civil service management instituted to enforce merit based recruitment and to promote effective personnel management practices. 6. The Intermediary Performance Indicators included: The system of management of public administration reform is institutionalized. Civil Service legislation drafted. Reorganization of public administration has taken place in line with the principle of functional delineation and matching the role of government underpinned by national strategic documents. Legal basis for organization and functioning of public administration has been developed and approved. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 7. PDO remained unchanged from the Program Brief of PDO level indicators remained unchanged from the first Results Framework, where they were formally identified for the first time, until project closing in February However, several intermediary results indicators were added during MDTF restructurings: 8. May 2011 restructuring: Funding was added for the expanded scope of activities and new Intermediary Result Government policy management capacity strengthened was added with the following intermediary indicators, associated with this result: Strategic planning capacity in the Center of Government strengthened Sector expenditure planning capacity at the line ministry level strengthened Mechanisms for NPC operations developed and functioning 9. December 2012 restructuring: Expanded scope of activities included a result and intermediary indicator: A program for improving the quality, transparency and efficiency of administrative public services developed. 1.4 Main Beneficiaries 10. There was no requirement to identify beneficiaries or a primary target group in the original Program Brief. However, based on the context of project activities, the primary beneficiaries included: Government Office (which became State Chancellery after 2010 Government restructuring), with emphasis on the Public Administration Reform Unit (later 3

18 transformed into Department for Public Policies and Foreign Aid Coordination and Central Public Administration Reform 7 ). Ministries and other central public administration authorities (CPAAs). Academy of Public Administration (APA). Individual civil servants. 11. The indirect beneficiaries of the project include civil society organizations, which could contribute to policy development through consultations on draft government policies and regulations by participating in the National Participatory Council (NPC) or public consultations, organized by the Government. Finally, the citizens of Moldova were also expected to be indirect beneficiaries of improved performance of public administration, policy making, quality of public services and more strategic use of public resources. 1.5 Original Components (as approved) 12. CPAR MDTF was composed of Recipient-executed part and Bank-executed part. Technical assistance under Recipient-executed part (Part A) Strengthening Institutional Capacity was organized around five components: Institutional Reorganization (US$ 1,961,344.00): The component financed a government-wide functional review (phase II); redefining mandates and programs of central public administration entities; designing legal framework on the organization of the central public administration; and streamlining the system of planning and reporting. Government s Policy-Making Capacity (US$ 557,600.00): The component covered revising and further developing a legal framework on legislative and policy development activity of the Government, providing the role for the Government Office as a policy coordinating center; institutionalizing policy function, developing policy analysis skills in ministries; developing mechanisms for linking policy and budget planning; and establishing institutional linkages between policy and budget planning. Merit-based Professional Civil Service (US$ 3,131,170.00): The component included designing civil service legislation; implementing competitive merit- 7 Initially established in 2006 PAR Unit, has undergone multiple transformations. As a subdivision it functioned only in Then it was transformed in to two divisions: Policy and Foreign Aid Coordination Division (names has been changed several times, for example: Division for Analysis of Policy Coordination in 2007, Division for Policy and Foreign Aid Coordination in 2008, Division for Policy Coordination, Strategic Planning and Foreign Aid in 2010) and Personnel Policy Division. In December 2012 the divisions were combined into one Department for Policy and Foreign Aid Coordination and Central Public Administration Reform. 4

19 based recruitment; establishing civil service monitoring; setting up an HR register; implementing HR development system; training of civil servants; designing and implementing performance evaluation system; and developing a competitive and equitable remuneration and incentives policy and beginning phased implementation of these systems. Change Management and Information and Communication (US$254,800.00): The component envisaged to fund establishing a dialogue with the main stakeholders and civil society organizations; mechanisms for involving interest groups in policy-making process; and mechanisms for monitoring & evaluation of CPAR. Trust Fund Administration (US$ 511,500.00): The component was planned to cover provision of financial management and procurement support to the implementing agency the Government Office; tracking achievement of planned TF outputs; and conducting annual audits of the grant account. 13. The Bank-executed part of CPAR MDTF (Part B) Analytical Advice on Improving Policy and Accountability Framework (US$ 160,000.00) was planned to finance analytical and advisory services supporting public administration and civil service reform, including support for Client Document Review (CDR) and Institutional Development Plans (IDP), where needed, and the following thematic areas: Strategic policy framework: piloting the preparation of a strategic policy framework by the Government Office; and developing capacity of selected ministries to develop sector strategies and budget programs linked to policy outcomes. Managerial controls and accountability: designing the framework for delegation, central oversight and accountability for policy implementation (clarifying the system of management and accountability of implementing agencies). 1.6 Revised Components 14. The components under the Recipient-executed part remained unchanged until the closing date of the project. Several new activities were added under subsequent restructurings, with additional funding provided by the MDTF donors for the expanded scope of components in recognition of project achievements. 15. May 2011 restructuring: Expanded the scope of Government s Policy-Making Capacity including technical assistance to continue work, previously supported under a parallel DFID project, after the DFID program closed in These activities included: Strengthening capacity to apply a new methodology for improved elaboration and coordination of development of policy proposals and strategic planning documents, as well as building capacity in monitoring and reporting on policy 5

20 implementation at the center of government and across the line ministries, through expert advice, training and on-the- job coaching during two consecutive budget cycles; and Building capacity of the State Chancellery in supporting the National Participation Council as a key mechanism for stakeholder consultations on development of strategic planning documents of national importance. 16. December 2012 restructuring: Expanded the scope of Institutional Reorganization in the area of public services review, undertaken in 2010, and included: technical assistance to expand the service delivery strategy from services of CPAA to administrative services provided by central and local governments; and developing a program for improving the quality, transparency, and efficiency of administrative public services delivered at the central and sub-national tiers of the government. 1.7 Other significant changes 17. Changes in political leadership and changes in project management on the Government side: During the first years of project implementation, project managers on the Government side changed five times, causing implementation delays 8 and affecting project performance 9. Project performance improved only at the end of the Communist Government term when a more reform-minded Prime Minister led the Government from April 2008 until June In 2009, the political leadership of the country changed as the Communist Party failed to win a parliamentary majority and a coalition of four noncommunist parties, the Alliance for European Integration (AEI), took power. The Bank s 2010 MDTF Progress Review noted that the new Government had reconfirmed its commitment to CPAR and included implementation of the CPAR in the Government Action plan for Political change gave new impetus to the reform and to project implementation. 18. Changes in closing date: The project has been extended four times. The first extension for 24 months was approved in December 2008, the second extension of 24 months was approved in December 2010, the third extension of 12 months was approved in December 2012, and the fourth extension was approved in December 2013 for 2 months. The total cumulative length of extension is 62 months (five years and two months). Only the extensions of December 2008 and December 2013 were associated with more time required for implementation of project activities and enforcing the new 8 Project Completion Report, State Chancellery, March World Bank ISR rating before February 2010 on DO and IP remained moderately unsatisfactory. 10 World Bank Mission s Aide Mémoire, May-June Ibid 6

21 policies by adopting relevant legislation. Extensions of December 2010 and December 2012 are explained by the additional funding and additional scope of activities. 19. Changes in funding: The total amount of Grant under CPAR MDTF was increased from US$6.15 million at project start to US$ million at project closing. Additional funding was added under the following restructurings: US$ 3.75 million were added under the restructuring in May 2011; US$ 1.55 million was added under the restructuring in December In 2010, DFID decided to close its Moldova program and was unable to provide the remaining undisbursed installment of GBP 528,565 to the MDTF Changes in scope: The project scope was extended with each increase in funding. In May 2011, based on positive results of the project, Sida increased its contribution to CPAR MDTF and added activities to strengthen the Government policy-making capacity. The May 2011 amendment built on complementary activities started under a parallel DFID project, before DFID closed its program in Moldova in February 2011, and supported development of methodologies for policy planning documents. Additional activities were introduced at the Government s request in December 2012 to develop a program for improving the quality, transparency and efficiency of administrative public services, to follow up on the public services review. The additional activities are described in more detail in Section Change of Personnel in the Office of Administrative Support (OAS): The OAS supported the trust fund management and administration component, ensuring adequate financial, procurement and contract management. During OAS maintained staff continuity. However, in November 2012, the Project Manager and the Accountant passed away in a road accident. The State Chancellery and OAS team are to be commended for assuring smooth project management under these tragic circumstances. Temporary project management arrangements were put in place immediately. Eventually, a new Head and full-time Financial Management Specialist were appointed in January Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 22. In 2003, the Bank cancelled a lending operation in support of public sector management reform, but continued to provide support through its non-lending TA program which conducted institutional diagnostics and provided advice in areas such as 12 This reduction in MDTF funds did not require an adjustment of the grant amount because exchange rate fluctuations in the other donor currencies already transferred to the MDTF provided sufficient additional funds to fully finance the original USD-denominated grant amount. 7

22 civil service ethics. Public sector management reform returned to the agenda following the March 2005 elections as a trade-off between the ruling Communist Party and Parliamentary opposition, motivated towards European integration. The Bank and other development partners became concerned that the Government s plan to reduce civil servant staffing by 70 percent without conducting a functional review could lead to disruptions in government operations, and they recognized that the new government needed support In May 2005 UNDP, in coordination with other development partners, supported a high level policy advisor who helped the Government identify and formulate its priorities for technical assistance 14. The Bank team attended this workshop and contributed to the process of identifying next steps in developing a Moldovan central public administration reform agenda by advising on the initial diagnostic studies that would inform the CPAR Strategy and Action Plan. Based on the agreement between development partners and the Government, UNDP and Sida funded the first phase of the functional review. In July 2005, the Bank set up a non-lending TA program to support the development of a CPAR Strategy and started the design of the MDTF, as a financial instrument to channel donor resources under the leadership of the World Bank. The MDTF Program Brief emphasized Government ownership, demonstrated by Government approval of the CPAR Strategy and Implementation Plan, which formed the basis for the Trust Fund activities. 24. Project Instrument. The CPAR MDTF was established with contributions from DFID, Sida, and the Government of the Netherlands, to be implemented by the Government Office. The Government and CPAR donors asked the Bank to supplement the recipient-executed TA with its own analytical work, policy advice and comments on draft legislation and policy documents. This work was supported through a separate Bank-executed portion of the MDTF. 25. The use of MDTF facilitated implementation for Government and development partners but was much more complicated for the Bank team to manage than an investment credit. The MDTF process allowed consolidation of donor resources into one Bank-managed technical assistance operation, simplifying implementation arrangements for a Government embarking on complicated central administrative reforms. However, at the project start, the Bank s trust fund procedures placed little emphasis on the development of a results matrix and monitoring and evaluation framework. As a result, 13 Though during ICRR interviews the World Bank task team and development partners referred to the announcement of 70 percent staff reduction as a starting point of CPAR, they made it clear they had rather a concern about this government objective and mentioned this fact to demonstrate high risk of government crisis in case the development partners chosen not to respond to the Government request for support of CPAR and the Government moved to massive staff cuts without prier functional analysis. 14 UNDP & UNFPA Moldova, Institutional Development Outcome Evaluation, February 2010, p.12 8

23 these facets of the operation had to be developed and revised during implementation. The MDTF structure also allowed for easier access to additional financing; development partners were able to vote with their wallet by providing additional funds once they saw that the project was able to produce positive results. For the World Bank team administration of the MDTF required increased input in restructurings and reporting, while the budget allocated for implementation support and supervision did not take into account administrative complexity of trust fund management. 26. Risks. While the Program Brief identified risks and mitigation measures there was no formal requirement to rate the risks at the project start. The Program Brief identified limited beneficiary capacity in the areas of policy coordination and civil service management as the main implementation risk. Activation of the MDTF was conditioned on the establishment of an adequately staffed unit with appropriate authority to manage and coordinate the implementation of the CPAR Strategy. This requirement was reinforced by a condition under a parallel development policy operation 15. This reflected lessons from past efforts to implement civil service reform in Moldova in 2001, when the creation of a Civil Service Agency failed because it suffered from the lack of authority within the Government 16. Stakeholder and implementation risks identified in the Program Brief were addressed in the project design through the coordination committee and allocation of resources for communications and training. After Operational Risk Assessment Framework (ORAF) was introduced as a requirement for trust funds in the middle of CPAR MDTF implementation, operating environment risks were added. Country risk was assessed as medium with high impact 17 due to politically unstable environment, however this risk was mitigated by high reputation of the World Bank in the country and continuous Bank s team dialogue with the main political forces. Fraud and corruption risk was also considered in ORAF but in the context of implementing agency (rated low due to satisfactory project implementation arrangements and absence of issues in procurement and financial management) Donor Coordination. The agreement to merge resources into the MDTF demonstrates the development partners intention to act in a coordinated manner in support of the Government program. Donor coordination arrangement was formalized through a Donor Coordination Committee that included representatives of development partners and the Government representatives responsible for TF implementation 19. Donor 15 Interview with Ms. Elena Nikulina, Senior Public Sector Specialist, team member for CPAR MDTF in and TTL in Interview with World Bank Task Team. 17 Medium risk was classified into medium with high impact (MI) and medium with low impact.(ml) in ORAF in Project Restructuring Paper, Annex 2 (ORAF), February Program Brief, March

24 representatives participating in the project from the start have highlighted the high level of cooperation between development agencies Implementation 28. Low capacity combined with the lack of political support to institutional changes lead to slow start. Implementation of CPAR MDTF started well in 2006 but experienced delays throughout 2008, putting the project at risk of not achieving the development objective. The functional review of 5 government policy areas and some 110 central government entities was completed in November 2006, but implementation of the review s recommendations was limited. Government entities resisted change and the Presidency did not press for reforms 21. The first Implementation Status and Results (ISR) rated development objective (DO) and implementation performance (IP) as moderately unsatisfactory, noting that low salaries of the staff in counterpart agencies and general scarcity of relevant skills made implementation difficult. Capacity constraints were reflected in procurement delays leading to only 30 percent of the total grant amount being disbursed by June The project was considered borderline at risk. 29. Capacity issues were addressed. Following the Bank team s advice, the Government Office (State Chancellery) started to pay attention to capacity development. Preparation of functional reviews, drafting the law on civil service and the law on central public administration provided an opportunity for the PAR Unit to interact with international consultants, as well as the Bank s implementation support team. This facilitated PAR management capacity building 23. Implementation capacity in line ministries was gradually and deliberately enhanced through study visits to other countries for key reform players, and eventually, through training organized by the Government Office and the Academy of Public Administration (APA), brought into the project as a beneficiary in APA trained 1,000 to 3,600 civil servants annually from 2007 to Following a restructuring of APA and introducing in its civil service curriculum courses on the most critical CPAR topics, 15,230 employees or 59.8 percent of all public administration staff received training in APA continues to facilitate professional development required under the Civil Service Law that was adopted with support of the project. 20 Feedback from former DFID representative, SIDA and the World Bank team reinforced this view. The list of development partners representatives interviewed is enclosed in Annex 9 to this ICRR, List of People Met during data collection mission in December World Bank Mission s Aide Mémoire, June 8-22, ISR from June 24, 2008, World Bank. 23 World Bank Mission s Aide Mémoire, May-June World Bank Mission s Aide Mémoire, June 8-22,

25 30. Political support and strengthened supervision helped accelerate CPAR MDTF implementation. As noted in the 2010 MDTF Progress Review (substituting for project mid-term review), when a more reform-minded Prime Minister had led the government of Moldova from April 2008 until June 2009, the implementation of reform was more effective than before that 25. Project performance improved still further when the project has received greater political attention under the new Government starting in CPAR came under the direct supervision of the Minister of State and was closely monitored by the Prime Minister (before reorganization of the Government Office into the State Chancellery, project implementation was supervised by the Head of the Policy and Foreign Aid Coordination Unit). In June 2010, improved project performance was reflected in the ISR rating, which was upgraded to moderately satisfactory both for DO and IP. 31. Improved implementation performance led development partners to extend the project and expand its scope. At the request of the new Government, and based on conclusions of the Progress Review, the MDTF was extended for 24 months in December 2010 to expand the scope of activities and accommodate additional funding from Sida, increasing the total amount of grant under CPAR MDTF by US$ 3.75 million, reaching US$ 9.9 million 26. Additional Sida financing supported development of strategic planning capacity in selected sectors during A second expansion of the project scope was approved in December to accommodate exchange rate gains amounting to US$ 1.55 million. The Government requested that the exchange rate gains be used to build on the review of public services and enhance improvement of public service delivery agenda to sub-national level through piloting more efficient service delivery approaches and developing a program for improving the quality, transparency and efficiency of administrative public services. 32. There were delays in the implementation of the HRMIS Civil Service Registry. The HRMIS encountered substantial procurement delays due to lack of relevant 25 Project progress review substituted for the mid-term review (MTR) for this project. Since the formal mid-point of project implementation was not compulsory under the World Bank TF procedures at the time of the MDTF implementation in , it was decided to use the term project progress review rather than MTR. The review was initiated during the team monitoring visit in February 2010 and completed during the May-June 2010 mission. 26 Restructuring, approved in December 2010, extended CPAR MDTF for 24 months, as MDTF closing date was December 31, Additional Sida grant and expanded scope of activities was processed under separate restructuring in May 2011, due to confirmation of Sida additional funding at the beginning of However, decision on 24 months extension was taken, taking into account high possibility of additional funding to be coming from Sida. 27 This policy work was originally launched under a parallel DFID project which was closing in February 2011 due to closure of the whole DFID program for Moldova. World Bank Mission s Aide Mémoire, May- June Please see details on the disbursement rules for CPAR MDTF under reference 5, section

26 knowledge and skills in developing technical documentation in the PAR Unit. Implementation did not start until 2011 and required additional capacity building in ministerial HR Units. Further delays in operational acceptance of Registry due to challenges in data entry in CPAAs in 2013 were one of the reasons for the final two month extension of MDTF, approved in December The Civil Service Register was finally completed and launched in February Part of Bank-executed activities were cancelled. The Bank-executed portion of the MDTF was 90 percent disbursed by the end of The remaining funds were to be used to help the Government institutionalize management devolution but the Government did not confirm their readiness for this assistance at that time. As a result, US$ 17,000 were cancelled from the Bank-executed child TF. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 34. Design: While the Program Brief only required the formulation of key performance indicators, the Government designed a comprehensive M&E methodology to monitor CPAR implementation in The instruments used and the M&E framework are available on the CPAR website ( Performance indicators were designed to reflect components, objectives and actions of the CPA Reform Strategy. The majority of results indicators were formulated in qualitative terms, while some output level indicators were numerical and relied on administrative or national statistics. The methodology also included a schedule of monitoring and evaluation activities for the period of reform implementation. The official CPAR MDTF Results Matrix, developed with the completion of the first ISR in June 2008, was consistent with the Government s M&E indicators Implementation: M&E indicators were monitored by the PAR Unit on a quarterly basis, which completed both office and field monitoring in tandem with the working groups within CPAA which monitored the implementation of their own action plans. Semi-annual and annual CPAR reports and reports monitoring the implementation of the Civil Service Law were posted on the CPAR web site. The CPAR MDTF provided specific M&E assistance to the client on development of methodologies for monitoring the application of HR procedures and other provisions of the regulatory framework. The World Bank Task Team reviewed progress during implementation support missions and, from June 2008, reflected progress in semi-annual ISRs. 29 Government Statutory Act No 106 from February 11, 2014 On approval of Regulation on organizing and use of Automated Management Information System Register of Civil Service Positions and Civil Servants 30 Only sub-set of indicators, relevant to CPAR MDTF activities, was reflected in the Result Matrix. The indicators for the CPAR strategy were broader than the MDTF results. 12

27 36. Utilization of Monitoring Information: The M&E framework ensured transparency of reform progress and its outcomes. It also facilitated better and more efficient data collection and analysis. The Government s Project Completion Report indicated that the M&E procedures reduced the time spent on reporting by 70 percent. While the ICR team did not conduct a stakeholder survey to assess project results, a 2013 evaluation of CPAR implementation and results for the period of , conducted by international consultants, did hold consultations and focus groups. The Evaluation Report has been used to inform the new PAR Strategy for and the Government s Completion Report for the project. 2.4 Safeguard and Fiduciary Compliance 37. The project s environmental category was C and no assessment was required. Procurement and financial management was managed by OAS, located in the implementing agency, in compliance with the World Bank financial and procurement procedures for recipient-executed activities. Implementing agency performance in procurement has been rated Satisfactory. OAS organized 126 tenders under CPAR MDTF 31. No violations were identified by the Bank during supervision. Two large procurements of consulting services have been implemented based on single-source procedures: A contract with DAI Europe Ltd. (UK) for functional review, phase II (US$ 249,779.00), as a continuation of assignment, funded by UNDP, and implemented by the same consultant, competitively selected under UNDP procedures; A contract for services to strengthen policy management capacity (US$ 3,060,273.00) with ECORYS (UK), who had provided assistance under the DFID project that closed and whose activities were taken over by the Project. 38. Justification for both single source selections were reviewed by ECA procurement and found in compliance with relevant sections of the Guidelines for the Selection of Consultants by World Bank Borrowers 32. Performance on financial management has been also rated Satisfactory. The financial management arrangements were reviewed at the project design and regularly supervised during project implementation by the World Bank. The semi-annual unaudited interim financial reports (IFRs) were submitted to the World Bank on time. The audit opinion in the audited reports and final Audit Report 33 is unqualified. 31 Completion Report, CPAR MDTF ( ), State Chancellery, March DAI Europe Ltd. Contract: the World Bank issued the no-objection on September 21, 2006; ECORYS contract: reference made in the Project Restructuring Paper for CPAR MDTF, March Final Audit Report on CPAR MDTF, March

28 2.5 Post-completion Operation/Next Phase 39. Key improvements in government policy making and operations implemented under the project have been institutionalized through adoption of framework laws and relevant secondary legislation on public administration, civil service and transparency in decision making. Dedicated units under the Department for Public Policies, Foreign Aid and Central Public Administration Reform (responsible for PAR management and policy coordination, including civil service management) continue functioning in the State Chancellery. HR units from each public authority continue to implement the civil service normative framework (personnel procedures) and develop their community of professionals. Policy Analysis units have been established in CPAAs and continue implementing the strategic planning and policy analysis approaches introduced under the project 34. APA has incorporated training modules developed under CPAR in its curriculum which is now funded by the state budget 35. The public services modernization agenda is addressed through a parallel, on-going World Bank-funded e-transformation project and the Program for Public Services Reform ( ) will be partly supported by this project. The Government s strong commitment to continue public administration reform is evidenced by the new PAR Strategy for that it is developing 36. The Government has requested support of the next phase of PAR through a follow up operation (indicatively Investment Project Financing (IPF)), to be delivered under the Country Partnership Strategy (CPS) for FY Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Rating: High 40. The project objective and design were consistent with the Government s CPAR Strategy for and the World Bank s Country Assistance Strategy (CAS) for FY The CPAR MDTF was developed in response to the Government s request for donor support for the CPAR Strategy The CPAR MDTF development objective, key performance indicators and components closely reflected CPAR Strategy key priority areas. The project also was consistent with the CAS for FY05-08, supporting 34 See information on SES developed by the ministries and CPAAs in 2014 for the period of in the result matrix, intermediary indicator According to the State Chancellery information, in 2014, 1290 will receive training. 36 The draft Strategy for CPAR was developed and presented at the final workshop in December World Bank Mission s Aide Mémoire, December Government Statutory Act No 1402 from December 30, 2005, On Approval of the Government Central Public Administration Reform Strategy for

29 the pillar Improvement of public sector governance, combatting corruption, and better alignment of Moldova s institutions and structures to European norms and standards. 41. Driven by Moldova s aspiration for joining the EU, the CPAR agenda and the project s focus remained relevant throughout project implementation, even after a change in Government in Development partners consistent support for the project s objectives and CPAR more broadly, reflected in the additional financing that they provided for the project s objectives, is evidence of this continued relevance. The project development objective, formulated broadly, did not change, emphasizing relevance of the project to the Government s CPAR objectives and priorities. Additional activities and intermediary result indicators were aligned with the development objective and helped maintain the relevance of the project as the situation evolved. 42. The initial three-year time frame for CPAR MDTF was based on the timeline in the CPAR strategy and the Government s term. This was considered reasonable by the Government, development partners and the Bank. However, the initial lack of experience and low capacity in the implementing agency revealed that this implementation plan was too ambitious. The Government underestimated the level of capacity and political support required for CPAR implementation 39. As a result, the implementation timeline was adjusted during the project to reflect the gradual development of implementation capacity and to take into account additional activities supported by additional funding provided by development partners. By the project completion both the Government and development partners learnt a lesson, that institutional reform is a long-term effort, however at the project start planning CPAR strategy and CPAR MDTF beyond the Government electoral cycle was not feasible. 43. As was noted in the presentations at the project s closing event and in interviews with the government stakeholders 40, the project s objectives remain relevant for Moldova. An outline of the Government s PAR Strategy for also confirms that the Government is keen to continue public administration reform, with a focus on improving effectiveness, efficiency and accountability of public administration, making public service delivery more transparent and citizen-oriented while meeting European governance values and good standards 41. CPS for FY14-17 identifies governance as a cross-cutting theme and confirms relevance of the need strengthen institutional capacity 39 The project underperformance and risk for not achieving the development objective was captured in the World Bank Aide Mémoires and the first ISR, completed in spring and approved in June 2008, rated the project performance moderately unsatisfactory both on achievement of development objective and implementation performance. 40 Interviews were conducted during ICRR data gathering mission in December The list of people interviewed is enclosed in Annex Public Administration Reform Strategy for , draft, December

30 of public administration through a follow-up project 42. The project s accomplishments have created a solid foundation for further reforms and a follow-on Bank-financed project. 3.2 Achievement of Project Development Objective (Efficacy) 43 Rating: Substantial 44. The project achieved its development objective, contributing to strengthening of institutional capacity of the public administration for better policymaking, implementation and efficient use of public resources. The results and improvements in Moldova s central public administrative system, formulated as PDO level and intermediary indicators, were fully or largely achieved. (Details on the outputs associated with each indicator are provided in Annex 2). Achievements and constraints for each dimension of the multi-faceted PDO are described below. 45. Strengthened institutional capacity for better policy making: At the project start there was no formal policy coordination mechanism and responsibilities for policy areas overlapped. New policies were introduced without calculating their fiscal implications and without broad government and public consultations. Under the project, the Government was able to restructure and consolidate the institutional system around key policy areas; institutionalize policy coordination and strategic planning functions; and introduce mechanisms for transparent decision making, and mainstreaming public consultations on government draft regulation and policy documents. 46. Based to a large part on the functional review recommendations developed under the project, the Government was reorganized in A dedicated Policy Coordination Unit was established in the State Chancellery, competent staff were hired and trained. Capacity to develop policy at the sector level has been enhanced through setting up dedicated Public Policy Analysis, Monitoring and Evaluation Units in line ministries and training their staff in applying new strategic planning instruments. After these institutional innovations were implemented, ministries primarily focused on developing policy and concentrated on aligning policy development with the budget planning. 47. The quality of strategic planning process has been improved with support of the project. The Moldova 2020 Strategy developed in , was adopted as law and now provides a policy framework for developing a medium-term expenditure framework. A number of new strategic planning and policy analysis instruments were introduced as a 42 CPS for the Republic of Moldova for the period FY The discussion of this section relies on the data, provided by the State Chancellery in the Project Completion Report (summarized in Annex 7), unless indicated by references to other sources. 16

31 result of project support, including: strategic development programs (SDPs); ex ante policy impact analysis; public policy proposals (PPPs) 44 ; and sector expenditure strategies (SESs) for Medium-term Budget Framework (MBTF) and program budgets. If in 2010 only 5 ministries used new strategic tools for SESs development on a pilot basis under parallel DFID funded project, CPAR MDTF allowed methodological support to implementation and roll out of new strategic planning tools in 13 ministries in the context of preparing MBTF SES development process continued after completion of the project support: in ministries and 2 CPAA s (Academy of Science and Tourism Agency) developed 16 SES (Ministry of Environment has 2 SESs and Ministry of Economy has 3 SESs) for the period A methodological framework for Ex-post Impact Evaluation was developed and piloted in three ministries 46. The State Chancellery intends to use the impact assessment methodology and guidelines to monitor implementation of Moldova 2020 National Development Strategy. 49. The project supported the institutionalization of CPAR reform management and significantly strengthened Government capacity to plan and implement PAR. From the project start, CPAR MDTF supported the Chancellery s PAR Unit by building the capacity of its staff. The PAR Unit remained the focal point for CPAR implementation before and after the change in Government in 2009 and the Government restructuring in The State Chancellery s lead role in developing the policy priority framework has been reflected in the CPA Law The Government introduced mechanisms to improve transparency in decisionmaking, obliging ministries to undertake inter-ministerial and public consultations on policy documents and draft legislation and establishing the National Participatory Council (NPC) in January 2010 ( 48. The NPC opened space for civil society input into the policymaking process. As a result, there were significant changes in Government culture: Government decision-making has become more 44 With support of CPAR MDTF 31 PPPs have been prepared and used for sector reforms; 50 SDPs developed in CPAAs and 450 civil servants trained in SDP development (Project Completion Report, State Chancellery, March 2014) 45 CPAR MDTF Result Framework, interviews with the World Bank team, Final Report on consulting contract Moldova: Support to Strengthen Policy Management Capacity, Ecorys, UK, November The Ex-post Impact Evaluation Methodology was piloted in the Ministry of Health: policy related to facilities offered to young health specialists in rural areas; Ministry of Economy: public policy on entrepreneurial patents; and Ministry of Environment: national program for the suppression of chemicals responsible for the depletion of the ozone layer (the Final Report on the consultancy Support to Strengthen Policy Management Capacity, Ecorys, UK, November 2012). 47 Law No. 98 On Central Public Administration in Policy Areas (CPA Law), article 16, paragraph 3 (c). 48 Law No. 239-XVI of November 13, 2008 on Transparency in Decision Making (in effect since March 5, 2009). 17

32 evidence-based and more transparent. The Government could still improve the disclosure of information and provide more time for discussion, particularly as regards the budgetmaking process. Stakeholders note, for instance, that the revenue budget has yet to be discussed properly, the 2012 budget was not presented in program format and in 2013 the time for public discussion was insufficient 49. Nonetheless, significant progress has been made: in 2013, Moldova received the UN Public Service Award, ranking first in Europe and North America in the category Fostering participation in the decision-making process through innovative mechanisms Strengthened institutional capacity for better implementation: Before the project, implementation capacity was hampered by a politicized civil service, excessive staffing levels, lack of focus on core functions, low salaries, low motivation and productivity amongst personnel, a failure to attract the best personnel, high levels of corruption and limited accountability The project addressed performance issues in Government agencies through a thorough reform and modernization of Moldova s civil service. Under the project new civil service legislation 52 was developed and implemented. This separated political and administrative positions and established the foundation for a merit-based professional civil service. The project introduced a modern human resources management (HRM) framework covering competitive recruitment, job descriptions, performance appraisal, continuous professional development, methodology for developing staffing schedules, and clarified rules for part-time employment. A Personnel Policy Division was established in the Government Office (currently State Chancellery) in which provides strong leadership and monitors implementation of the civil service law and HRM policy. Based on monitoring data, collected by the Division, in 2012, 82.4 percent of civil servants from senior management to specialists had their performance appraised, with 38.7 percent showing very good and 57.1 percent showing good performance. 49 Comments by the Chair of NPC and Director of the Resource Center for Human Rights (CReDO) Mr. Serghei Ostaf, ICRR data gathering mission in December The United Nations Public Service Awards, 2013 Winners, 51 Government-Wide Functional Review (Phase II), CPAR MDTF, Final Report, November 2006, DAI Europe Ltd. 52 The new legal framework on civil service and HRM includes Law No. 158-XVI of July 4, 2008 On the Public Function and Status of Civil Servant (enforced starting January 2009) and amended in 2012 and Government Statutory Act No 201 from March 11, 2009 (amended in ), approving 11 regulations on new HRM procedures. 53 In December 2012 Personnel Policy Division was transferred into Central Public Administration Reform Unit and joined to the Department for Public Policies and Foreign Aid Coordination and Central Public Administration Reform. The unit continues leading and monitoring implementation of HRM policy under civil service law. In addition it has undertaken responsibility for coordination of institutional reorganisations. Staffing has increased from 5 to 9 staff. 18

33 Out of 2,927 civil servants employed in 2012, 70.7 percent were hired based on merit (50.8 percent were hired through competition and 19.2 percent vacancies were filled through promotion). The number of merit-based recruitments has significantly increased since 2009, when merit-based principles were applied only to 16 percent of personnel 54. Through the project s assistance, the civil service classification and grading system were approved and a new unified salary grid was introduced in April The MDTF helped to create a more transparent and less arbitrary salary system in which base pay is more closely linked to job descriptions. Before the project, about 80 percent of total pay came from flexible elements, while the base element of remuneration, linked to job requirements, constituted only percent of the total salary. The new salary system just reversed this proportion, with base salary accounting for around 80 percent of the total remuneration. This is a significant achievement when compared with the situation in other ECA countries Following a delay caused by extended IT procurement process, the HRMIS Civil Service Register has been developed and launched 57. The Register optimizes the maintenance of staff records by HR Units in ministries and CPAAs and ensures that data is available for management decisions 58. Specifically, beyond creating personnel file for each employee, the Register allows the following functions: modelling the structure of public authority, public function (and positions); creation and modification of job contracts; tracking records of competitions, organized for public administration vacancies; establishing individual objectives for civil servants and filling in the performance evaluation form; tracking leaves, trips, disciplinary misbehaviours and disciplinary sanctions; creating annual planning professional development program in each authority, tracking records of training for every person from public authority. HRMIS has improved efficiency of reporting and management of decision making process, as it allows search, notifications, reports preparation and distribution of documents. 54 Civil Service in Figures, State Chancellery of the Republic of Moldova, Law No.155 of July 21, 2011 On the Approval of the Single Classification of Civil Service Positions and Law No.48 of March 22, 2012 On the Pay System in Civil Service, enforced in April E.g. recent survey under PEMPAL wage bill management working group revealed that base pay in Belarus, Kyrgyz Republic and Bosnia and Herzegovina (state level) is below 60% (PEMPAL, May 2014). 57 Government Statutory Act No 106 from February 11, 2014 On Approval of Regulation on Organizing and Use of Automated Management Information System Register of Civil Service Positions and Civil Servants. 58 In June 2014 the State Chancellery reported 7,458 personnel files entered into HRMIS. 163 HR units staff have received access to HRMIS reporting modules. 19

34 54. Most recently, the State Secretary position in for each ministry was introduced as the top civil service position 59 in order to strengthen ministries organizational management and implementation capacity. 55. Notwithstanding the HRM reforms supported by the project, the Government recognizes that civil service remuneration remains uncompetitive and this has a negative impact on the Government s ability to retain staff 60. Relatively high staff turnover remains a serious issue (in 2012 turnover of civil servants was estimated 10.7 percent 61 and in key ministries) and has a negative impact on the Government s capacity to sustain public administration reform. 56. Strengthened institutional capacity for efficient use of public resources: A parallel World Bank and donor-financed Public Financial Management Technical Assistance Project (PFMP) has supported reforms aimed at enhancing efficiency in use of public resources. However, CPAR MDTF has also contributed to this agenda. 57. The functional review helped the Government to reduce the number of CPAAs from 29 to 24 and the number of agencies from 16 to 8. The functional review also informed the new Law on Central Public Administration in Policy Areas (CPA Law) 62 which described the organization of the central public administration, clarified functional responsibilities and accountability for policy implementation. Staff downsizing in was estimated at the level of 37 percent 63, more modest achievement than the originally planned target, but prospects of larger staff cuts raised serious concerns of development partners 64.Following recommendations from the functional review to improve management planning, document management and reporting practices, the State Chancellery introduced the Consolidated Action Plan (CAP) to serve as the central instrument for Government planning and reporting. Following implementation of the CAP, the production of ad-hoc reports was reduced from 60 percent in 2010 to 20 percent 59 The amendments to the Law On the Public Function and Status of Civil Servant from 2012 laid the basis for State secretary position. The position was introduced by Government Statutory Act No 155 from February 28, 2014 On the State Secretary. 60 The Evaluation Report, assessing the Government CPAR results for (produced in 2013), states that trained professionals are leaving public authorities mainly because of low pay. 61 Civil Service in Figures, State Chancellery of the Republic of Moldova, Law No 98 On Central Public Administration in Policy Areas, signed on May 4, 2012, effective starting February 3, The Evaluation Report, assessing the Government CPAR results for (produced in 2013). 64 The analysis of the staffing levels in the Moldovan public administration and countries of the former Soviet Union, as well as some EU countries was done by the Bank staff and offered to an adviser to the Prime Minister so as to demonstrate that Moldova was on the par with some countries and had less public employees than other. Development partners expressed serious concerns of the ability to deliver their programs when staff was being cut from the ministries making them dysfunctional (based on the interview with Svetlana Proskurovska, TTL for CPAR MDTF in ). 20

35 in The medium-term CAP has become an integrated operational planning framework for all key government strategic planning documents. 58. Sector Expenditure Strategies (SES) have been introduced as a tool for linking the budget with policy development: 13 out of 16 ministries developed SES in 2012 and 12 ministries submitted SES to the Ministry of Finance to consider in development of MBTF. In SESs were developed by the ministries and CPAAs, covering the period It is however worth noting that, links between policy and budget remain weak, because MTBF for several budget cycles have not been formally approved by the Government Finally, efficiency in service delivery has become a central agenda in the reform on public services modernization. As a result of a review of public services conducted under the project, 568 services have been catalogued and recommendations on merging, discontinuing or reorganization have been developed. Three pilots 66 on public administrative service business processes reengineering and service reorganization led to improved efficiency and reduced the administrative burden: reduction of administrative burden after one year of reengineering was estimated MLD (-20.9) million, reduction of economic costs in 5 years was estimated MLD ( ) million 67. The Government plans to apply the methodology piloted under the Program and Action Plan for the Reform of Public Services for , setting targets to reorganize 10 percent of public services in 2014 with further targets of 30 percent reorganized in 2015 and 50 percent in Efficiency Rating: Substantial. 60. Economic Rate of Return: As an institutional reform project, where the PDO was formulated in qualitative terms, quantitative computation of the rate of return is not applicable. 65 MTBF is approved only by coordination working group, in the minutes of the working group meetings. 66 The pilots were conducted in cooperation with the Ministry of Justice, Ministry of Health and Ministry of Agriculture. The pilot services included apostyle certification (about 100,000 applicants in 2012), issuance of birth certificates and one time child benefit (41,991 applicants in 2012); payment of agricultural subsidies to farmers(4,698 service recipients in 2012). The pilot projects involved reengineering of the entire process of delivery of respective services and revision of the principles of setting tariffs for those services. 67 Government Program and Action Plan for the Reform of Public Services for Government Program and Action Plan for the Reform of Public Services for

36 61. Other Measures of Cost-Effectiveness: While the project struggled through a mix of implementation issues in the first years and the closing date was extended four times cumulatively for 62 months, implementation performance did improve and was sufficient for donors to support expansion of activities and provide additional funding to MDTF. The initial design evolved to accommodate changing demands on the political and administrative leadership of the country, demonstrating high level of responsiveness. The extensions of the closing date did not have negative impact on the project activity costs. The increase in expenditures was justified by the need for increased capacity building and the additional scope of activities. Actual expenditures on expenditure categories remained within the approved budget and savings were realized on incremental operating costs. Additional resources from exchange rate variations financed an expansion in the scope of activities without additional donor contributions 69 in December Project extensions have required increased budget for implementation support / supervision. However, Bank staff time and travel costs have been shared with parallel activities so as to contain costs. More details on implementation, impact of exchange rate policy and costs by component are provided in Annex Justification of Overall Outcome Rating Rating: Satisfactory 62. CPAR MDTF project s contribution to undertaking Government s first comprehensive public administration reform after independence, driven by an ambitious agenda and implemented in low capacity environment, cannot be underestimated and deserves satisfactory rating. The project has achieved its development objective as measured by PDO level and intermediary result indicators, supporting government restructuring and establishing legislative foundation and methodological framework for merit-based professional civil service, effective public administration and transparency in decision-making. Policy development and implementation capacity has been strengthened and the project has made significant contribution to improved efficiency in managing public resources. Shortcomings in achieving PDO indicators are associated with time delays in achieving the planned results. These delays were related to weak capacity and weak reform leadership at start-up, and the lack of government experience in implementing PAR. Low capacity was consistently addressed through an expanded scope of capacity building activities throughout the project implementation. The initial implementation delays eventually did not have negative impact on the cost of project activities and quality of outputs. By the closing date all results planned under the original 69 Following the World Bank risk mitigation policy for MDTFs with contributions in multiple currencies, the Grant was adjusted in December 2012 and the adjusted amount of the Grant appeared to be twice higher (US$1.55 million) than the amount retained to cover exchange rate risks at approval in 2006 (US$ 0.75 million). 22

37 and expanded scope of the project have been achieved and institutionalized. Looking beyond the MDTF Results Framework, there is still room for improvement in government effectiveness. Implementation of new policies and instruments requires consistent effort of all government stakeholders. The project has also revealed a few binding constraints which impact on public administration performance. These include uncompetitive salaries in CPA, resulting in high turnover of staff at certain key positions in ministries, and the lack of demand from politicians for evidence-based policy making. Still, this is an indication of the on-going need for public administration reform as an extension of results achieved under the project. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 63. There was no direct impact on poverty, gender or social development. However, by supporting development of the Government National Development Strategy Moldova 2020, the project contributed to better national development policy planning, prioritizing and planning implementation of the state interventions to deliver qualitative economic development and poverty reduction. The National Development Strategy and its consolidated action plan include measures to reduce inequality and address key crosscutting themes, such as social inclusion and gender equality 70. (b) Institutional Change/Strengthening 64. Institutional change was central to the project objectives and is discussed at length in the sections above. Continuity of the institutions created with support of the project is ensured through both the legal framework on civil service, public administration and transparency in decision-making 71 and the creation of units responsible for implementation and monitoring of new policies in the center of Government (State Chancellery). The sustainability of results still needs to be confirmed over time. The project was implemented with high level of external local consultants participation and performance may deteriorate as this support is scaled back. Nevertheless, the Government has increased the staffing of key positions relevant to policy coordination and civil service management. This provides a good platform for maintaining the level of central coordination and management of the public administration. Close integration of capacity building activities with government funded training organization (APA) allowed for integration of training modules, supporting implementation of institutional innovations, into the government funded training. Re-subordination of APA to the 70 Moldova Country Partnership Strategy FY Project Completion Report, State Chancellery, March

38 Government at the end of 2013 has allowed better alignment of APA trainings with Government PAR priorities. (c ) Other Unintended Outcomes and Impacts (positive or negative) 65. The project has significantly impacted the evolution of CPAR agenda, helping to identify gaps and priorities to be addressed, in the course of CPAR MDTF implementation. The need for modernization of public services emerged after functional review has been implemented and government restructured. Based on an analysis of results and lessons from CPAR implementation, the Government has developed a roadmap for the next phase of public administration reform, to be implemented in Supporting strategic planning instruments development across the government, the project had positive impact on policy development in all sectors, supporting development of 50 strategic development programs and 31 public policy proposals for sector specific reforms. No negative impact of the project was identified. 66. Looking beyond the project results, Moldova public sector performance, as measured by available international Governance Indicators, reveals improvement on government effectiveness and regulatory quality; however the implementation of policies remains relatively weak. The available data on Global Integrity indicator quality of public administration and professionalism for 2008/11 ranks Moldova (69) higher than ECA average (66) and low income countries average (60). However, performance on the indicator implementation gap for Moldova (30) is lower than ECA average (33) and low income countries average (34) 72. The analysis of World Governance Indicators (WGI) 73 for Moldova for , reveals that the country scores on government effectiveness and regulatory quality improved in 2012 as compared to 2005 (Figure 1). It is difficult to establish a precise causal chain between specific project interventions and scores on these dimensions. However, CPAR MDTF was the major facility, bringing international technical assistance to support government public administration reform starting in The Government s consistent effort on CPAR implementation has likely contributed to the improvement of these scores. 72 Governance at Glance, Actionable Governance Indicators portal, Republic of Moldova. 73 The Worldwide Governance Indicators Project ( World Bank. 24

39 Figure 1: Moldova Public Sector Performance as measured by Worldwide Governance Indicators (WGI) Source: WGI 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 67. No beneficiary survey or stakeholder workshop was conducted specifically for the purpose of reviewing project performance under preparation of ICRR, however ICRR team attended the final project workshop that summarized the results and lessons of CPAR implementation. The agenda of the final workshop, organized by the Government, is enclosed in Annex Assessment of Risk to Development Outcome Rating: Substantial 68. Most of institutional changes achieved under the project have been built into legislation, working methods and procedures, and the routine training of civil servants. However, new HRM practices still have to be translated in improved staff productivity and enhanced performance of Government ministries and agencies. Staff capacity at civil service continues to be undermined by uncompetitive pay and high turnover. The Government does not plan any significant pay increase in the short and medium term owing to fiscal constraints. Capacity constraints may come to the fore following the departure of relatively well paid and qualified consultants, even though the project emphasized the importance of knowledge transfer. All these factors may contribute to an increase in the gap between the laws and procedures adopted as a result of the project and their effective and full implementation. 25

40 69. Interviews with Government stakeholders in line ministries and international development partners 74 indicated that implementation of new institutional policies requires strengthening and some inconsistencies still have to be addressed. These include the need to review selected labor code policies, prevailing over civil service legislation, and the need for better synchronization of program budgeting initiative of the Ministry of Finance with strategic planning, coordinated by the State Chancellery. Though ministries and CPAAs continue developing sector expenditure strategies, it is not assuring enough that these SESs will be used continuously in decision making as the Government did not formally approve the MTBF in several budget cycles in the recent past. In the environment where ministries capacity for strategic planning is fragile and still developing, while the demand for evidenced based policy making from politicians and senior civil servants is weak 75, formal legal enforcement of MBTF is essential. Longerterm impacts from the new policies will require consistent monitoring and improvement of implementation practice, identification and addressing of implementation gaps through further refinement of Government functions and Government decisions. 70. Sustainability issues have been discussed with the Government by the World Bank Task Team throughout project implementation and some actions have been undertaken by the Government to diminish these risks 76. However, the continuity of these policies cannot be guaranteed following Parliamentary elections in November of Assessment of Bank and Grantee Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 71. The project preparation was undertaken by an experienced team, combining prior experience and knowledge on design and implementation of public administration reforms in other countries of ECA region and local knowledge. The team maintained effective dialogue with other donors in addressing Government request for support of CPAR and was entrusted by other development partners to design and implement the project as multi-donor trust fund, supported by three donors at the time of its establishment. The project development objective, design and mechanism remained relevant until the project closing for 8 years of the project implementation. At the stage of 74 The list of people met during ICRR data gathering mission is enclosed in Annex The Final Report on the consultancy Support to Strengthen Policy Management Capacity, Ecorys, UK, November ISR, December

41 the project design the Bank s trust fund procedures did not require development of project appraisal document, results matrix and operational risk assessment. However, monitoring and evaluation framework and risks were identified in the Program Brief. With introduction of ISR and ORAF requirements for trust funds, these documents were developed at the stage of implementation. (b) Quality of Supervision (including fiduciary and safeguard policies) Rating: Satisfactory 72. MDTF implementation was supervised on a regular basis as confirmed by the project Aid Memoires and combined implementation of Bank-Executed Trust Fund, active in The critical approach, strengthened emphasis on capacity development and relevant international experience mobilized by the World Bank team in the first years of the MDTF implementation (including involvement of OECD SIGMA), pushed the Government to progress on civil service legislation and implementation of functional review results. The mid-term review was conducted in May-June 2010, after the new Government took office in 2009, before making decision on the second 24 months extension and increasing the project scope. The Progress Review mission s report provides detailed overview of the project progress and justification for the project extension. The handover between TTLs in 2009 was effective, ensuring continuity of the task team 77. All project extensions and restructurings were managed effectively by the TTLs, in spite of changes in TF procedures in the middle of implementation and related administrative complexities in processing restructurings. Fiduciary issues were supervised effectively and reported in a timely fashion. No safeguard policies were triggered under the MDTF. (c )Justification of Rating for Overall Bank Performance Rating: Satisfactory 73. The Bank s performance was adequate and included necessary expertise to provide sound implementation support on substantive, operational and fiduciary issues. 5.2 Grantee Performance (a) Government Performance Rating: Moderately Satisfactory 77 The TTL, who took over the project was involved in the project from its very beginning as a team member. The outgoing TTL was retained as the team member and advisor to the new TTL. 27

42 74. Staring with prominent support for CPAR at the stage of approval of CPAR Strategy, Government support appeared to wane from 2006 through to Lack of strong political support, delayed decisions on key activities affecting initial achievement of PDO (such as implementation of functional review recommendations and approval of the civil service law). Implementation performance improved under the more reform oriented Government in spring 2008-summer 2009, and still further with the new Government taking office in 2009, when many technical documents and legal acts, drafted in , have been approved and enforced. Nevertheless, even at a later stage some of the relevant legal acts, related to results of CPAR, were approved with some delay: the Program for public services reform in , regulations on introduction of State Secretaries position in line ministries, and the launch of HRMIS Civil Service Register were only approved in February This highlights continued inefficiencies in interministerial coordination in legislation drafting and consultations. (b) Implementing Agency Performance Rating: Satisfactory 75. The performance of the Government Office / State Chancellery and its divisions responsible for different components of CPAR was satisfactory. The Government Secretary General (Minister of State) Head of State Chancellery has paid close attention to the project and followed up on recommendations of the World Bank Task Team. The PAR Unit 78 suffered from change of managers in the first years of the project implementation but gradually developed capacity in core CPAR thematic areas and acquired skills in planning, implementation and monitoring reform activities. Leadership of civil service component remained stable throughout the whole life of the project. This facilitated progress in developing and implementing new civil service legislation and HRM procedures, using diverse approaches to capacity building of the ministries HR Units (e.g. peer-learning approaches through regular meetings of CPAAs HR Units). Delays were associated with the lack of relevant capacity and no previous experience of implementing HRMIS, which extended the process of implementation and launch of Civil Service Register. But overall, the leadership of the State Chancellery and key divisions, responsible for the project results, revealed high interest and commitment to the project and readiness to learn in the course of implementation. This is one of the key factors of achieving the results planned under PDO. 76. Office of Administrative Support (OAS) has provided satisfactory support to the project implementation in procurement, financial management and project monitoring. 78 PAR Unit and the divisions, created based on PAR Unit after For the history of PAR Unit transformation please see reference 7 on page 4. 28

43 OAS has retained staff continuity to a great extent and, located in the State Chancellery, was well integrated into the project activities. The State Chancellery and OAS team are commendable for assuring smooth project management after the tragic loss of the project management in November OAS has successfully finalized the project under the leadership of the new Head of OAS, appointed in January The financial arrangements of the project have been rated satisfactory from the project start. The project final audit report, prepared in March 2014, contained unqualified audit opinion. (c) Justification of Rating for Overall Grantee Performance Rating: Moderately Satisfactory 77. The Government has managed to implement the project and achieve project development objective, however with delays, caused by the lack of political support to the project activities in the first two years of the project implementation. Implementation progress faced significant delays before 2009 and was rated moderately unsatisfactory until February Implementation performance and progress towards PDO were only upgraded to moderately satisfactory after project leadership had been strengthened under the new Government. Even then the project experienced delays in the approval of legislation and regulations due to poor inter-ministerial coordination in legislative drafting. Moderately satisfactory implementation performance rating was maintained until October 2012 when it was upgraded to satisfactory and the latest ISR rated implementation performance moderately satisfactory, reflecting the implementation progress over the whole lifetime of the project 79. Cooperation with the World Bank and other donors was satisfactory throughout the project implementation. 6. Lessons Learned 78. Strong Government ownership and commitment to CPAR proved to be essential for achieving results in the institutional reform project. The history of the project implementation revealed that progress in implementing institutional change is not possible without strong government commitment and political support. This is particularly true when the change if focused on and within a government s central administrative bodies. Even though special efforts were made to ensure communication of the reform to government and non-governmental stakeholders, consensus over new legislation was not easy to achieve without strong political will in support of CPAR objectives. Once a reform oriented Prime-Minister assumed leadership of the reform 79 ISR approved in December 2013 noted, the IP moderately satisfactory rating reflects the implementation progress over the whole lifetime of the project. The project experienced some implementation problems, especially during the first years of its implementation. 29

44 agenda in 2008 and with strong Government commitment to CPAR after 2009, the project started showing results fairly quickly. Committed implementation of HRM reforms, particularly, recruitment and promotion of technical staff with higher level of skills, supplemented the political drive for reform implementation. Government commitment to CPAR after 2009 was a key consideration for the World Bank Task Team and MDTF donors when deciding on whether to provide additional funding for the MDTF and expand the scope of activities. 79. Institutional reform such as CPAR depends on staff capacity to absorb and implement innovations: the importance of a capacity building strategy supporting implementation of CPAR reforms should not be underestimated. The lack of experience and weak capacity in reform implementation were acknowledged at the project design stage, but only in relation to the implementation of project activities. However, the early years of the reform implementation revealed that the lack of general understanding of modern public administration standards and institutional reforms objectives hindered progress. The State Chancellery tackled this constraint by building a pool of HR managers and policy analysis specialists, making skillful use of international consultants, organizing study visits, introducing regular peer-learning activities, and involving of Government training institution in implementation of the reform. 80. Long-term commitment in supporting government s reforms implementation process in the areas of institutional reorganization and capacity building bear fruit and have a greater chance to lead to more sustainable results. In the case of Moldova, the results of project interventions started showing after three years only, with increased attention and resources for capacity development. The capacity of technical and managerial staff kept improved along the reform implementation process. If at the beginning of reforms, analytical process and strategy development were mainly led by external experts, after 2008 the State Chancellery was increasingly in the position to lead CPAR processes and develop analytical and monitoring reports without additional external help. 81. Linking Government policies with the budget proves to be a challenging area and it is hard to make progress in environment, where demand for evidenced based policy making and budgeting is lacking 80. Though a notable progress was achieved first with DFID support and then with support of CPAR MDTF in formulating sector expenditure strategies and strategic development programs, MTBF strategy has not been formally approved during several budget cycles in the recent past, despite the fact that it was developed in line with the legal and regulatory framework and taking into account 80 The Final Report on the consultancy Support to Strengthen Policy Management Capacity, prepared by Ecorys, UK, in November 2012 indicated the need to focus on creating incentives for political and senior civil service to demand evidence based policies. 30

45 sector development programs. This slippage results in disconnects between government policy objectives and accountability for financial resources invested by the state in order to achieve these objectives. Over time, in order to further strengthen accountability and transparency of the use of public (and donors) funds, it is crucial to ensure that MTBF gets approved Advisory assistance in the design of public administration reforms and implementation planning is crucial when undertaking complex administrative reforms. The Government approach to the implementation of its CPAR Strategy changed following early donor engagement with the government 82, recognizing that the low capacity and lack of experience was an opportunity to step in. Parallel advisory services provided under the Bank-executed part of CPAR MDTF in , served as a catalyst for the reform 83 and ensured access to high-level international expertise, secured through the World Bank convening power, on the key priority areas of the reform. This contributed directly to shaping the new civil service legislation. 83. Effective donor coordination increases the impact of the development assistance on the institutional reform and reduces administrative burden on the Government. The coordination of international development partners was remarkable at the stage of the project design, enabling a rapid response to the Government request to support CPAR: UNDP and Sida funded the first advisory activities and phase I of the functional review, while the World Bank Task Team built on these interventions to continue institutional reforms. The MDTF, administered by the World Bank and funded by a variety of donors, strengthened the dialogue and coordination among donors. Through the MDTF instrument donors could pool resources in support of the Government s overall program for CPAR (as expressed in its CPAR Strategy) rather individually funding selected components and activities. The Government has acknowledged the role of CPAR donors as one of the most important in the whole CPAR implementation process: donors support to CPAR reform was critical in ensuring the continuity of CPAR implementation at the time of political change and the arrival of the new Government in Transparency in institutional reforms implementation is crucial for building consensus on new policies among Government and non-government stakeholders. Indeed, the changes planned under public administration institutional reforms affect a wide circle of stakeholders within and outside of the Government. Building consensus on the new policies and administrative procedures is crucial for the success of these reforms. 81 Comments on the draft ICRR for CPAR MDTF from Lilia Razlog, CPAR MDTF Task Team member. 82 Project Completion Report, State Chancellery, March Interview with Ms. Svetlana Proskurovska, Senior Public Sector Specialist, World Bank, TTL for CPAR MDTF in Project Completion Report, State Chancellery, March

46 Communication was recognized a crucial factor for implementation of institutional changes under CPAR and a separate component was designed as a part of CPAR MDTF to fund communication and consultations with Government and non-government stakeholders. Later the importance of consultations with stakeholders was acknowledged by the Government to the extent that it was incorporated into decision-making process on the new policies and national strategies (e.g. it was applied in developing Moldova 2020) and it was institutionalized through establishing of National Participatory Council. Feedback of NPC council leadership confirmed the positive impact of participatory and consultative mechanisms on the quality of government policy proposals. 85. Flexibility in implementation has contributed to successful completion of CPAR, but required a significant administrative effort by the Bank team constrained by a modest supervision budget. The Government appreciated the World Bank Task Team s responsiveness, accommodating changes in the timeline during the first years of implementation in order to adjust to low capacity, political change and staff turnover. Flexibility was also evident at later stages when the scope of the project was expanded (through additional donor funds) in light of the Government s increased experience in implementing reforms and results 85. Since the project was funded under MDTF, timely extensions and restructurings required a significant administrative effort for the World Bank Task Team. However, flexibility comes at a cost in terms of supervision time and effort. This should be taken into account in setting supervision budget allocations. In the CPAR case project s flexibility and responsiveness was ensured mainly through the dedication and focus of the World Bank task team since supervision budgets were systematically lower than standard coefficients for the region. In the future, the Bank should ensure that MDTF donors recognize the need to include a Bank-executed component that provides sufficient funding to cover the costs of fielding a fully engaged Bank team to provide the close supervision and technical oversight that MDTFs require. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 86. The State Chancellery confirmed that CPAR MDTF was reasonably efficient project which met its immediate and wider objectives and scored well on impact and sustainability. The important lesson of the project was that public administration reform was not a one-time exercise but a continuing process of institutional development and it remains highly relevant for Moldova on-going transition process. The Bank team fully supports that need to continue public administration reform and plans continuing cooperation with the Government under the World Bank-Moldova CPS for FY Project Completion Report, State Chancellery, March

47 87. The State Chancellery has clarified the history of transformation initially created PAR Unit in 2006 to the present Department for Coordination of Public Policies, Foreign Aid and Central Public Administration Reform. Though in December 2012 Personnel Policy Division was transferred into Central Public Administration Reform Unit and joined to the Department for Public Policies and Foreign Aid Coordination and Central Public Administration Reform, the unit continues leading and monitoring implementation of HRM policy under civil service law. In addition it has undertaken responsibility for coordination of institutional reorganisations and increased from 5 to 9 staff. Additional data was provided to supplement description of achievements under the Result Framework. Detailed comments, provided by the State Chancellery, are presented in Annex 7 of this report. These clarifications and additional information have been reflected in the final version of the report in the Result Framework, Annex 2 Output by Component and sections 1.4, 2.2, 2.5, 3.2 and 5.2. (b) Co-financiers 88. The Embassy of Sweden in Chisinau noted that the reporting of results in the Data Sheet Result Matrix are focused on outputs and should correspond more closely to the fuller outcome descriptions given in the text. The Data Sheet Result Matrix and section 3.2 have been revised to reflect this advice. The Embassy of Sweden in Chisinau also raised questions regarding the level of risk to the sustainability of the project outcomes. These concerns have been covered in the risk to the development objective section above. 89. The DFID expressed support to the report findings and raised two specific questions: the need to raise salaries across the civil service in order to ensure sustainability of reforms; and the Bank s continued interest and role in supporting Moldova s future public administration reform plans. In response, the Bank has noted that in light of Moldova s fiscal constraints, the Bank will need to conduct an analysis of the wage bill and pay issues in more detail, before coming to any conclusions on the feasibility of increasing public sector pay. The Bank also noted that the Bank s team is at the beginning discussions on support for a follow on project on public administration reform as part of the ongoing implementation of the World Bank-Moldova Country Partnership Strategy. This follow on work will be guided by the Moldovan Government s Public Administration Reform Strategy

48 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Expenditure Category Appraisal Estimate (USD million) Revised Appraisal Estimate under the Latest Restructuring (USD million) Actuals (USD million) Percentage of Revised Appraisal Consultants services, including audit % Goods % Training % Incremental operating cost % Unallocated Total Project Cost % (b) Financing Source of Funds Total Free-standing Single Purpose Multi-Donor Trust Fund (USD) Type of Cofinancing Appraisal Estimate (millions) Actual/Latest Percentage of Estimate Appraisal (millions) % Donor Contributions DFID (GBP) % Government of the Netherlands (EURO) % Sweden / Sida (SEK) % 86 Appraisal estimate was US$6,933, It was the result of the application of that exchange rate policy that the amount was reduced to US$ 6.15 million, representing only 85% of the appraisal estimate for recipient-executed activities. 87 DFID has withdrawn from CPAR MDTF as of December 31, 2010, because of the closure of the whole DFID program in Moldova. The amount indicated presents an amount transferred by the donor till the withdrawal date. 34

49 Annex 2. Outputs by Component A. Strengthening Institutional Capacity (Recipient-executed) 88 a) Institutional Reorganization Baseline: At the project start functions and legal status of government bodies were not aligned. Responsibilities for policy areas overlapped. Legal regulation for organization of public administration did not exist. As identified in 2012 and addressed in Restructuring of CPAR MDTF in December 2012: Multiple, sometimes overlapping or conflicting, services provided by various government entities in a non-transparent, inefficient and customer unfriendly manner. Indicators / Targets / Results Outputs Comments on Implementation and Results PDO Indicator (a): The institutional system is streamlined and consolidated around key policy areas, with Ministries playing a leading role in policy development and coordination of implementation. Target: Delineation of policy and implementation functions complete at central government level Intermediary Indicator: Reorganization of public administration has taken Report on functional review was completed in Functional review completion report was developed for 5 sectors: 1) justice and internal affairs, security; 2) Agriculture and Environment; 3) Social and education 4) Culture and Tourism; 5) Economic development. Implementation of functional review recommendations (2008): Toolkit for Institutional Development Planning at Central Public Administration Functional review: Implementation of recommendations was delayed. While IDPs development in 2008 absorbed 49% of the component funding, the results of functional review were taken into account after the new Government has taken the office and undertaken Government reorganization in winterspring Recommendations of the functional review 88 The outputs are presented based on the Project Completion Report, State Chancellery, March 2014 and Government s monitoring reports, available at 35

50 Indicators / Targets / Results Outputs Comments on Implementation and Results place in line with the principle of functional delineation and matching the role of government underpinned by national strategic documents Target: Recommendations for functional allocations in line with good governance principles and government strategies are formulated and reorganization plan is endorsed Results at closing: Largely Achieved. The Government reorganization undertaken in winter-spring 2010 was guided by the functional review findings (over 70% of recommendations were taken into account). In result, significant progress was achieved in consolidating the institutional system around key policy areas. 150 Government decisions related to reorganization were approved and 15 legal provisions were enacted by Parliament Number of Central Public Administration bodies was reduced from 29 to 24 Authorities (CPAAs) Methodology for Medium Term Institutional Development Plans (IDPs) IDPs developed in 28 CPAA Support to reorganization and optimization ( ): 150 Government decisions related to reorganization were approved and 15 legal provisions were enacted by Parliament Capacity building of PAR Unit ( ): Training activities for PAR Unit were undertaken in in the area of reform management, strategic planning, institutional development, ex ante impact assessment, communication and participation, and transparency. 36 have been taken to a large extent, but not all. There is a still room for improvement in matching staff levels and resources to government strategies.

51 Indicators / Targets / Results Outputs Comments on Implementation and Results The number of Government agencies was reduced from 16 to 8 Policy coordination units were created in the ministries Government Strategic Planning Committee has been reestablished and functioning PDO Indicator (c ): Legislation on civil service and public administration, compatible with EU practice, approved and implemented Target: Public Administration is regulated by law. Results at closing: Achieved. Law on Public Administration approved in April Intermediary Indicator: A program for improving the quality, transparency and Law No 98 On Central Public Administration in Sectors, signed on May 4, 2012, effective starting February 3, A study based on the good European practices in the field of administrative procedures was developed as well as an analysis of the appropriateness of a new law (code) on the administrative procedures was conducted. Recommendations for regulating the administrative procedures in Moldova aligned with EU norms and values were presented to the Government. Draft Code on administrative procedures (based on the new CPA Law in 2013) Modernization of public services in : Review of administrative 37 Law on Central Public Administration: Technical assistance work was completed in 2009, the law was signed in May 2012 and enforced in February Draft code on administrative procedures has been also designed in consultations with OECD SIGMA, to address the need for regulation civil servants behavior in making decisions regarding rights of citizens and businesses. It has not been approved yet, but it is rather an additional output, not initially planned under the project Modernization of public services: The methodology for

52 Indicators / Targets / Results Outputs Comments on Implementation and Results efficiency of administrative public services developed Target: A program for improving the quality, transparency and efficiency of administrative public services at national and sub-national levels developed. New service delivery model piloted. Results at closing: Achieved. As a result of the review, 568 services catalogued, recommendations on reorganizing, merging, and discontinuing services developed. The Program and Action Plan for Public Services Modernization in the Republic of Moldova for , approved by the Government Statutory Act #122 from February 18, New service delivery model has been piloted in three ministries. b) Government s Policy-Making Capacity services at the central level (2011). Vision document on modernization of public services Methodology for public services re-engineering Guidelines for managing the quality of services and methodology for setting tariffs for services Program and Action Plan for Public Services Modernization in the Republic of Moldova for , approved by the Government Statutory Act #122 from February 18, public services reengineering was developed based on 3 pilots in ministries - Justice, Health and Agriculture. The pilot services included apostyle certification (about 100,000 applicants in 2012), issuance of birth certificates and one time child benefit (41,991 applicants in 2012); payment of agricultural subsidies to farmers(4,698 service recipients in 2012). The pilot projects involved reengineering of the entire process of delivery of respective services and revision of the principles of setting tariffs for those services. The pilots established a basis for e-solutions for delivery of those services, planned to be developed with the support of the World Bank e-governance transformation project (to be completed in FY16). 38

53 Baseline: No formal policy coordination mechanisms or institutional system are in place. The MoE is responsible for national planning. New policies are approved regardless of fiscal implications As identified in 2010 and addressed in Restructuring of CPAR MDTF in March 2011: Only 5 line ministries prepared sector expenditures plans with the use of new strategic planning instruments with support from DFID project. National development strategy is outdated and does not provide a useful basis for Government medium term activity planning and budgeting. Only 2 ad-hoc National Participatory Council working groups created. Indicators / Targets / Results PDO Indicator (b): The GO and the MoF coordinate and control the quality of Ministries' policy proposals within a rolling MTEF. Policy management system established and functioning Target: Institutional system, including policy units, central policy coordination, and methodologies are established and operational Results at closing: Achieved. Policies, strategic planning and external assistance division established within the State Chancellery and is operational. Inter-ministerial Outputs Rules of Elaboration and Unified Requirements towards Policy Documents, approved by the Government Decision # 33, from January 11, 2007 Guidebook on the policy impact assessment, which contains techniques and procedures for planning and ex-ante and ex-post evaluation of the policy impact, and reporting (2008) The State Chancellery created a network of policy units and started to coordinate policy development, monitoring and evaluation processes. The Government Decision no.168 of March 9, 2010 was approved, along with the Framework for Regulation of a policy analysis, monitoring and evaluation unit in a central specialized body of public administration. This decision replaced the Government decision # 710 of June 23, 2006 on the policy analysis, monitoring 39 Comments on Implementation and Results

54 Indicators / Targets / Results Strategic Planning Committee established and is functioning. Policy Coordination Division plays a key role in preparing MTEF, in close cooperation with the MoF. Special technical committees on the sector level are also established for facilitation of an open dialog during the MTEF preparation. Proportion of ad hoc reports vs regular reports reduced from 60% in 2010 to 20% in Intermediary Indicator: Sector expenditure planning capacity at the line ministry level strengthened Target: Sector expenditures plans (SEP) for at least 8 line ministries are fully aligned with the tools for strategic planning, other ministries make good Outputs and evaluation unit in a central specialized body of public administration. Survey on the burden of reporting was developed and undertaken in 2010; a standard reporting model of reporting on the implementation of the aforementioned strategic documents was designed and put in place. Since start of CPAR reform State Chancellery twice carried out guillotine of outdated policy documents and other government decision, with over 200 items abolished. A new monitoring and evaluation system has been developed and implemented in State Chancellery and CPAAs. An informational M&E system as well as reporting system is used for Consolidated Action Plan of the Government Implementation. Capacity building support for policy analysis and coordination unit ( ): At least 50 SDPs developed in CPAAs More than 450 civil servants trained on SDP development Draft Methodological Guidebook on ex-ante policy impact analysis was piloted in five ministries: Ministry of Economy; Ministry of Justice; Ministry of Education; 40 Comments on Implementation and Results

55 Indicators / Targets / Results progress in their adoption. Results at closing: Achieved. Policy coordination units were created in the ministries. 17 line ministries attempted to use new strategic planning tools for development of sector expenditures plans with methodology support from CPAR MDTF Outputs Ministry of Labour, Social Protection and Family; Ministry of Health (2010) Training on ex-ante policy impact assessment has been provided to all CPAAs Technical assistance to strengthen government policy management capacity ( ): SEPs in all ministries are updated to be consistent with other key planning, monitoring and reporting tools 31 public policy proposals prepared and used for sector reforms Policy management capacity assessed Ex-post impact assessment methodology and guidelines developed A system of ex-ante policy impact analysis developed and introduced for selected policies Comments on Implementation and Results Intermediary Indicator: Strategic planning capacity in the Center of Government strengthened Target: New national strategic vision document finalized through participatory process and is under National Development Strategy Moldova 2020: National Strategy Moldova 2020 developed Through on-line consultations Moldova 2020 received 200 comments Support to strengthen policy management capacity: Action Plan for 2011, 2012 and 41

56 Indicators / Targets / Results implementation Results at closing: Achieved. Moldova 2020 national strategic vision document finalized through participatory process and is under implementation Intermediary Indicator: Mechanisms for National Participatory Council (NPC) operations developed and functioning Target: CPA's rules and procedures for cooperation with NPC's working groups agreed Outputs 2013 developed with recommendations for integrating activities designed to meet commitments made under the EU Association Agreement The monitoring and reporting software have been developed, all civil servants from Policy units trained and the new reporting system of the Consolidated action plan piloted MTBF and program budgets were updated to improve programming of national and international resources The State Chancellery staff was trained and coached in order to ensure its capacities to manage and roll out the Ex-ante Impact methodology and PPP process and to provide feedback in line ministries The "Better Policy Management" training program have been institutionalized; and the APA was assisted to run two further rounds of the training program Law No.239-XVI of November 13, 2008 on transparency in decision making (in effect since March 5, 2009) To support the central public administration in the enforcement of Law no.239-xvi of November 13, 2008, a methodological seminar was organized on February 20, 2009 with the participation of civil servants from policy analysis, monitoring and 42 Comments on Implementation and Results

57 Indicators / Targets / Results by all stakeholders (CPA, NCP) and formally approved by the Government. Results at closing: Achieved. CPA's rules and procedures for cooperation with NPC's working groups agreed by all stakeholders (CPA, NCP) and formally approved by the Government. On-line consultations have become a norm and are used by 24 CPAAs: the traffic has increased from 2,000 to 18,000in Outputs evaluation units and other units of CPAAs, in charge of ensuring transparency in decision making The National Participatory Council was created on January 19, 2010 Action Plan for the implementation of the Civil Society Development Strategy, approved by NPC on June 8, 2010; Civil Society Development Strategy, approved by NPC on October 25, 2010; A workshop was held to familiarize the NPC members with the Policy Ex-ante Impact Assessment Methodology, in order to build their skills in developing quality policy proposals (December 17, 2010); Guidebook on how to moderate public discussions was drafted to help the moderator of discussions; Website was designed and is updated on a regular basis. Government Decision No.96 of February 16, 2010 on the enforcement of Law no.239-xvi of November 13, 2008 on transparency in the decision making which: approved the Regulation on transparency procedures in the decision making; amended the Regulation on 43 Comments on Implementation and Results

58 Indicators / Targets / Results Outputs posting information on the official websites of public administration authorities, approved through the Government decision no.668 of June 19, 2006; stipulated that the State Chancellery would be in charge of monitoring the provisions of Law on transparency in the decision making. 22 tours for civil servants from 32 central public administration authorities were conducted (2010); Methodological guidelines on the calculation of indicators for drafting the decision making transparency report of a public authority were drafted and delivered to central public administration authorities and posted on the website The ministries and other central administrative authorities drafted and approved the internal rules for information, consultation and participation in the decision making in line with the new regulatory framework. Comments on Implementation and Results c) Merit-based Professional Civil Service Baseline: Civil service law (1995) does not require merit based competitive selection. The civil service management system is absent. 44

59 Appointments are non-competitive. A law on public administration absent Central civil service management capacity is absent. Central oversight and enforcement of civil service legislation does not exist. Indicators / Targets / Results PDO Indicator (c ): Legislation on civil service and public administration, compatible with EU practice, approved and implemented Intermediary Indicator: Civil Service legislation drafted Target: The new Civil Service Law, compatible with EU practices, is approved by Parliament and enforced. Results at closing: New Civil Service Law is in force since Secondary regulations for the Law implementation have been fully developed. Civil Service Classification and grading system developed and approved. PDO Indicator (d): Central civil service management instituted to Civil service law: Outputs Law no. 158-XVI of 4 July 2008 On the public function and status of civil servant, enforced starting January Amendments to the Law On the public function and status of civil servant, were approved in It addresses the gaps in regulation of HR management in public authorities and provides for the establishment of the secretary of state position in ministries as a top level civil service position and states the requirements to secretaries of state. Government Statutory Act No 201 from March 11, 2009 On 45 Comments on Implementation and Results Personnel Policy Division was established in the Government Office (currently State Chancellery) in 2008 and functioning. The challenge in implementation was related to limited staffing 4 people and lack of knowledge and skills in civil service management at the start of the project. However, both Government, World Bank team and donors noted, that strong and continuous leadership and exceptional management by the Head of the Division has contributed to successful implementation of the component. Due to limited staffing in the Division, the project contribution plaid a role of capacity substitution rather than capacity building in the State Chancellery, with local consultants implementing civil servants jobs, however the project activities did ensure capacity building in the CPAAs through a variety of forms.

60 Indicators / Targets / Results enforce merit based recruitment and promote effective personnel management practices Target: Central CS unit set up and its capacity to enforce civil service law and effective personnel policies created. Civil service register is operational and enables effective oversight of personnel policies Results at closing: Personnel policy division established within the State Chancellery and is functioning. The capacity to enforce civil service law and coordinate HR units is being developed through training and consultative support. Development of civil service register is completed; the register has been launched in February In 2012 over 70.7% of civil servants were employed based on merit principles. Competitive recruitment was applied to 50.8% Outputs Enforcement of the Law no XVI of 4 July 2008 On the public function and status of civil servant. With amendments made in , it contains regulations on: Competitive recruitment Probation period for civil servant Job description Rules for part-time employment of civil servant Methodology for staff schedule development Obligations of civil servant participant of the professional development programs, funded from the state budget Disciplinary Commission Performance appraisal HR Unit (functions, staffing, etc.) Continuous professional development of civil servant Staff profiles records keeping Monitoring reports on the implementation of Law no XVI of 4 July 2008 On the public function and status of civil servant and Government Statuary Act No 201 from March 11, 2009 (by-annual, ), available at Development of civil service classification, grading and remuneration system: Law No155 of July 21, 2011 On the approval of the single 46 Comments on Implementation and Results It is acknowledged by the Government that high personnel turnover remains a serious issue in implementation of innovations, introduced under CPAR. The implementation of HRMIS encountered substantial delays at the stage of procurement due to lack of relevant knowledge and skills in developing tender documentation. Therefore, implementation started in 2011, with substantial delays and required parallel capacity building of staff in the State Chancellery and CPAA HR Units. Delays in operational acceptance due to challenges in data entry in CPAAs in 2013 were the major reason of the final 2 months extension of MDTF in 2014.

61 Indicators / Targets / Results totally employed. Promotions rate increased and constituted 20% of employed and transfers accounted 24.9% of totally employed (in previous years, transfers were prevailing method of employment). As of January 1, % of civil servants at the central level had job descriptions. Outputs Classification of civil service positions Law No 48 of March 22, 2012 on the pay system in civil service, enforced in April Article 8 on performance pay elements enforced starting second half of Introduction of State Secretaries in CPAAs: Concept Paper on the Secretary of State Position (2011) Government Statutory Act No 155 from February 28, 2014 On the State Secretary (introduced State Secretary position in the ministries of the central Government) HRMIS Civil Service Register: Technical documentation for the design of the HRMIS software in compliance with the CPAA needs Relevant samples were developed for HR procedures to be incorporated into the HRMIS The first version of the software for HRMIS implementation was designed and piloted in CPAAs Relevant equipment was provided for the implementation of HRMIS and its connection with other state registers was made. The software has been operationally accepted. Government Statutory Act No 106 On approval of Regulation on organizing and use of Automated Management Information System 47 Comments on Implementation and Results

62 Indicators / Targets / Results Outputs Register of Civil Service Positions and Civil Servants was signed on February 11, The system has been officially launched on March , during the quarterly meeting with HR Managers of CPAAs and LPAAs. 22 ministries and CPAAs received training and consultations on the use of HRMIS by June ,458 personnel files entered into HRMIS and 163 HR units staff have received access to HRMIS reporting modules (June 2014). Capacity building by State Chancellery: A peer-learning network of HR Units is established, organizing 300 workshop during life of CPAR MDTF Capacity building to Personnel Policy Division on development of high quality policies, facilitating training and methodological guidance in HR units in CPAAs, managing HRMIS ( ) Newsletters Civil Servants Management (3-12 per year, ) Methodical recommendations Filling in and endorsement of staff lists Brochure Single classification of civil service positions Glossary Civil Service Dictionary 48 Comments on Implementation and Results

63 Indicators / Targets / Results Outputs Methodical recommendations Nonfinancial motivation of civil servants Methodological guidebook Professional development of staff in a public authority. Internal training 94 training events organized under CPAR MDTF in 2012, Academy of Public Administration courses (39%), HR quarterly meetings (8.9%), field courses (49.7%) and international conferences (1.9%) Modernization of Academy of Public Administration (APA) system ( ): Strategic Development Program (SDP) of the APA, has been developed based on functional review recommendations Civil Service Training Strategy developed APA developed training courses in the following fields: Models and Techniques of Development and Coordination of Drafts of Normative Acts; HR Management; Management and Strategic Planning; Organizational Management; Change Management and Institutional Development; Management and Program 49 Comments on Implementation and Results

64 Indicators / Targets / Results Outputs Development; Use of Informational Technologies; Risk Management; Ethics in Civil Service; Communication across Public Administration; Control and Internal Audit; Public Procurement; Civil servants trained by APA on CPAR themes: 2007: 390 civil servants 2008: 3600 civil servants 2009: 3500 civil servants, about 50% received 40 hours of training, required under the new civil service legislation 2010: 1081 civil servants, about 73% of civil servants received training of 40 hours, required by new civil service legislation 2012: employees, 59.8% of all staff (o/w civil servants 14,037), received training in % of civil servants received training of 40 hours, required by new civil service legislation Comments on Implementation and Results d) Change Management and Information and Communication Baseline: The Government does not have institutional capacity to implement public administration reform. 50

65 Indicators / Targets / Results Intermediary Indicator: The system of management of public administration reform is institutionalized Target: Sustainable capacity to implement public administration reform is established. Units set up, staffed and trained. Results at closing: Achieved. The capacity of State Chancellery for public administration reform management has improved after its 2010 reorganization. Central division for policy coordination was strengthened and formally assigned the responsibility for managing public administration reform under the leadership of the Secretary General of the State Chancellery. Outputs Public Administration Reform Coordination Unit established in 2006 (PAR Unit). Throughout the period of CPAR MDTF implementation it was converted several times. In 2012 it became the Department for Public Policies and Foreign Aid Coordination and Central Public Administration Reform and remained under that title until CPAR MDTF closing. Monitoring and Evaluation of CPAR ( ): Methodology for CPA reform monitoring and evaluation has been elaborated together with CPAAs in Field monitoring visits within CPAAs, carried out by PARU experts, together with the working body s members from within the CPAA; annual progress is established using performance indicators. Monitoring Reports are prepared annually and available on CPAR Evaluation Report ( ), issued in 2013 Ensuring transparency in Government activities ( ): Law No.239-XVI of November 13, 2008 on transparency in decision making (in effect since March 5, 2009) In 2013, 85% of documents approved by the Government were 51 Comments on Implementation and Results

66 Indicators / Targets / Results Outputs consulted with citizens and civil society. Recommendations accepted / received from NGO: 563/1463. Recommendations accepted / received from the public: 69/425 CPAR Communication ( ): Opinion polls in the process of development CPAR Communication Strategy (2007) CPAR Communication Strategy (2008) Quarterly meetings with NGOs, donors and government agencies on CPAR results ( ) Newsletters on strategic planning and civil service, available at (starting 2008) Implementation and development new PAR Strategy ( ) PAR Strategy for Comments on Implementation and Results e) Trust Fund Administration The administration support to CPAR MDTF implementation was provided by the Office of Administrative Support (OAS), established, in the Government Office (Government Decision No 1018 of September 5 th, 2006) and functioning until the project closing in February Procurement: For the life of the MDTF 126 tenders have been organized by OAS and approved by the World Bank. Financial Management: 52

67 Daily management of financial arrangements of the project. The latest FM supervision in December 2013 confirmed that the financial arrangements were adequate and financial control procedures were in place. Submission of semi-annual un-audited interim financial reports to the World Bank The project audited financial statements for FY06-FY12 were received on time and contained unqualified audit opinion with no internal control issues raised by the auditors. Tracking achievement of TF outputs: Contracts management under MDTF Semi-annual and annual reporting Project Completion Report B. Analytical Advice on Improving Policy and Accountability Framework (Bank- Executed Activities) will finance analytical and advisory services supporting public administration and civil service reform. The activities will include, where needed, support for Client Document Review (CDR) and Institutional Development Plans (IDP). (a)strategic policy framework Consultancy on the design of the system for strategic planning and policy coordination. These consultancies helped develop a proposal for mechanisms (procedures and instruments) for National Development Planning and develop capacity of public officials in the Government Office (later State Chancellery) and in line ministries. Two workshops were conducted in support of the TF goals: (I) on civil service practices in the EU and goals for Moldovan administration (attended by representatives of the WB, SIGMA/OECD/EU and EU member states, as well as participating donors) (ii)on the role of the center of government in policy coordination and its alignment with budget planning (attended by practitioners from Latvia, Romania, Lithuania, Canada and the Netherlands). (b)managerial controls and accountability This component was aimed at supporting specific change in the administration: institutional separation of policy making ministries from executing "agencies". However, the government did not demonstrate interest and readiness to implement such changes in the structure of public administration in , postponing implementation of functional review recommendations. As a result approximately US$17,000 of the Bank-executed financing was cancelled. 53

68 Annex 3. Economic and Financial Analysis Economic Rate of Return As an institutional reform project, where the PDO was formulated in qualitative terms, quantitative computation of the rate of return is not applicable. Other Measures of Cost-Effectiveness Project Implementation. The project was implemented 62 months (five years and two months) longer than initially planned, however the scope of work was expanded in March 2011 and December 2012 and the total amount of the Grant under MDTF increased by 86% 89 from US$6.15 million at the project start to US$11.45 million at the project closing (with actual expenditures of million or 99.93% of the total grant). The extensions of the closing date were associated with delays in procurement in the first years of MDTF operation and consequently delays in disbursement. In summer 2008, 6 months before the original project closing date, only 28.2% of the MDTF amount was disbursed 90, and at the project review, as of May 31, 2010, 58.4% of the grant had been spent and 70% of the grant was committed 91. It is worth noting, however, that delays were also explained by political context and difficulties in getting consensus around civil service and public administration legislation 92 during the first three years of MDTF implementation. After the change in Government, when the State Minister has undertaken responsibilities for project implementation in 2009, the project s implementation performance rating improved from moderately unsatisfactory to moderately satisfactory and by 2012 to satisfactory. While the project struggled through a variety of implementation issues in the first years and the closing date was extended four times, implementation performance improved and was strong enough for the donors to support expansion of activities and provide additional funding to MDTF. The extensions of the closing date did not have negative impact on the project activities costs. The implementation support / supervision budget was extended three times, but this was spread over five years. In fact the budget for supervision of MDTF was very limited and the World Bank Task Team was able to undertake supervision only because of the opportunity to share costs of the Bank s staff time with supervision of parallel activities. 89 At approval in 2006, 85% (US$6.15 million) of the estimated budget for Recipient-executed activities under CPAR MDTF were approved for disbursement, while 15% were retained for adjustment of the amount closure to the end of the project. 90 ISR, June 24, Aide Mémoire on CPAR MDTF, March 24 April 4, Aide Mémoire on CPAR MDTF, 2008May-June

69 Impact of the exchange rate risk mitigation policy. The MDTF benefited from favorable dynamics of the exchange rate. Following the World Bank risk mitigation policy for MDTFs with contributions in multiple currencies 93, the Grant was adjusted in December 2012 and the adjusted amount of the Grant appeared to be twice higher (US$1.55 million) than the amount retained to cover exchange rate risks at approval in 2006 (US$ 0.75 million). This allowed an expansion of the scope of activities without additional donor contributions. Component costs. Actual costs of components (a) Institutional Reorganization and (b) Government Policy Making Capacity were higher than budgeted primarily because of new activities and increased scope of capacity building. The use of resources on planned activities was efficient and did not deviate significantly from the original budget. The need for increased capacity building was recognized in the first years of the project implementation, as confirmed by documentations from the World Bank implementation support missions 94, therefore the increased actual cost on capacity building activities was justified. The actual cost of Component (c) Professional Merit-Based Civil Service was slightly less than initially planned even though all planned activities were implemented and result indicators relevant to the component were achieved. The creation of the HRMIS Civil Service Register and a related local consultancy on the Register implementation and software adaptation exceeded the originally budgeted amount only about 2.6%. Although delays in implementation of HRMIS was one reason for the extension of project closing date, this had only a marginal impact on costs. An increase in the expenditures on component (d) Communication and Transparency in Government Activities was related to the need for extensive CPAR communication at the project start with key stakeholders who were influential in decision-making on the reform. The efficiency of this component improved dramatically after institutionalization of transparency mechanism through the law on transparency in decision-making, establishing National Participatory Council and relying on ICT tools in communication. Implementation of Component (5) Trust Fund Management was cost-effective: the operating incremental costs were revised downwards during the Project Restructuring in December 2012 by percent. Actuals expenditures on TF management were 9 percent under the revised budget at the project closing. 93 In compliance with the mentioned policy, the grant amount in the Grant Agreement with the Beneficiary was determined as 85% of US$ equivalent of donor contributions, calculated with using exchange rates fixed at the time of Grant Agreement preparation. 94 Aide Mémoire on CPAR MDTF, January 15-24,

70 Bank-executed activities were planned as a part of MDTF to finance analytical and advisory services and support the Government in the first years of the MDTF operation 95. However, in the Government had not confirmed its readiness for institutionalization of managerial devolution and Bank-executed part was closed with 90 percent disbursement and 10 percent was cancelled Program Brief, CPAR MDTF, Key Risks and Mitigating Measures, March Completion Report, CPAR MDTF ( ), State Chancellery, March

71 Annex 4. Grant Preparation and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty MDTF Preparation Elena Nikulina Senior Public Sector Specialist ECSP4 Core Task Team Svetlana I. Proskurovska Senior Public Sector Specialist LCSPS Task Team Leader Viorica Strah Program Assistant ECCMD Team Assistant Anna Wielogorska Senior Procurement Specialist Procurement Cem Dener Sr Public Sector Spec. Core Task team Supervision/ICR Elena Nikulina Senior Public Sector Specialist ECSP4 Task Team Leader since FY2010 Svetlana I. Proskurovska Senior Public Sector Specialist LCSPS Task Team Leader before FY2010 Andrei Busuioc Financial Management Specialist ECCAT Financial Management Cem Dener Sr Public Sector Spec. Core Task Team PRMPS HRMIS Oxana Druta Financial Management Analyst ECSO3 Financial Management Knut J. Leipold Senior Procurement Specialist ECSO2 Procurement Lilia Razlog ETC PRMED Core Task Team Anna L Wielogorska Senior Procurement Specialist EAPPR Procurement Elena Corman Procurement Analyst ECSO2 Procurement Maya Gusarova Public Sector Specialist ECSP4 Task Team Leader for ICRR David Bernstein Lead Public Sector Specialist ECSP4 Team Member ICRR Kimberly Johns Governance Specialist ECSP4 Team Member ICRR Viorica Strah Program Assistant ECCMD Team Assistant (b) Staff Time and Cost 97 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) MDTF Preparation 0 0 Supervision/ICR FY MDTF preparation in and later supervision was co-funded with Civil Service Governance (P096982), Public Financial Management Mission (P082916), Support to Strategic Development of the Court of Accounts (TF ). 98 the data is presented by the World Bank Fiscal Year, July 1 June

72 FY FY FY FY FY FY FY Total:

73 Annex 5. Beneficiary Survey Results (if any) No beneficiary survey was conducted. 59

74 Annex 6. Stakeholder Workshop Report and Results No beneficiary survey or stakeholder workshop was conducted specifically for the purpose of reviewing project performance under preparation of ICRR, however ICRR team attended the project final workshop. The agenda of the final workshop, organized by the Government, is presented below. CENTRAL PUBLIC ADMINISTRATION REFORM Project closing event CPAR - results and perspectives AGENDA Date: 11 December 2013 Venue: Leogrand Hotel and Convention Center, 77, Mitropolit Varlaam Street. Goal: Presenting results achieved in central public administration reform ( ) and discussing future priorities of public administration ( ). Moderator of the event Victor Bodiu, Secretary General of the Government Registration of participants Welcoming speech Iurie Leanca, Prime Minister PAR as a pre-requisite for European Integration Representatives of the Donor Community (World Bank, Embassy of Sweden, UNDP, etc.) Presentation of the results in central public administration reform. Speaker: Liuba Cuznetova, Manager of the Office for Administrative Support in implementation of Public Administration Reform Strategy Discussions on achieved results Presentation of PAR priorities for Speaker: Victor Bodiu, Secretary General of the Government Discussions on further priorities Lunch-fourchette Vision of E-government Speaker: Stela Mocanu, Executive Director of E-Government Center 60

75 Public services future perspectives Speaker: Martins Krievens, CPM Consulting Civil service modernization Speaker: Tamara Gheorghita, Personnel Policy Division Discussions and conclusions Fourchette 61

76 Annex 7. Summary of Grantee's ICR and/or Comments on Draft ICRR Grantee s Comments on Draft ICRR This was a reasonably efficient project which met its immediate and wider objectives. It also scored well on impact and sustainability. For example the competitive and equitable remuneration and incentives policy became an integral part of personnel management systems across the entire administration. Modernizing the public administration system is a crucial element of the transition process in Moldova. The activities implemented under this project helped the Government of Moldova to make the first steps in transforming the state bureaucracy into a professional and neutral civil service that is oriented to providing high quality public services. The important lesson of the project is that public administration reform is not a one-time exercise but a continuing process of institutional development. A lot has been accomplished, but a great deal more needs to be done. Continue adaptation of public administration and its functions to the political, economic, and social conditions; Strengthen the capacity of local government to assume new managerial tasks and responsibilities in a decentralized government structure; Consolidation and improvement of the civil service training and development for effective decision-making and management; Improvement of the delivery of public services; Implementation of e-governance throughout the entire government. Our specific comments to the report are mostly clarification of information. They include: PDO Indicator 2 actual value achieved: Policies, strategic planning and external assistance division should be corrected to Department for Coordination of Public Policies, Foreign Aid and Central Public Administration Reform (according to the latest changes operated in 2013). Annually the State Chancellery prepares a policy priority framework, to inform MTBF is proposed to be corrected to Annually the State Chancellery prepares a policy priority framework, as a first step in MTBF process PDO Indicator 4 actual value achieved: Personnel policy division established within the State Chancellery please note that now it is called Central Public Administration Reform Unit, which is a part of 62

77 the Department for Coordination of Public Policies, Foreign Aid and Central Public Administration Reform. Intermediate Indicator 1 actual value achieved: The central division for policy coordination should be corrected to the Division for coordination of Public Policies, Foreign Aid and Central Public Administration Reform Intermediate Indicator 7 actual value achieved: 13 ministries used new strategic planning tools for development of sector expenditures plans with methodology support from CPAR MDTF in the context of preparing MBTF (dated 10/10/13) is proposed to be changed to later data available by project completion 02/28/14 In ministries and 2 CPAA s (Academy of Science and Tourism Agency) developed 16 SES (Ministry of Environment has 2 and Ministry of Economy has 3) for the period Intermediate Indicator 8 actual value achieved: Moldova 2020 national strategic vision document finalized through participatory process and is under implementation it is proposed to add number of the law, approving the national strategy the national strategy was approved by the Law No.166 of Main Beneficiaries Paragraph 10 Government Office (which became State Chancellery after 2010 Government restructuring), with emphasis on the Public Administration Reform Unit (later transformed into Division for Public Policies and Foreign Aid Coordination and Central Public Administration Reform) and Personnel Policy unit - CPAR includes the personnel policy, so there is no personnel policy in the name of the division. 2.2 Implementation Paragraph 29 (paragraph 30 in the final version) before reorganization of the Government Office into the State Chancellery, project implementation was supervised by the Head of Public Administration Reform Coordination Unit the correct title of the Unit at that time was Policy and Foreign Aid Coordination Unit 2.5 Post-completion Operation / Next Phase 63

78 Paragraph 39. Personnel Policy Division does not exist as a separate division, as personnel policy is a part of CPAR, the unit has been re-named into Central Public Administration Reform Unit. HR Units from each public authority continue to implement the civil service normative framework (personnel procedures) and develop their community of professionals. We suggest mentioning it in the paragraph. APA has incorporated training modules developed under CPAR in its curriculum which is now funded by the state budget In 2013, 1305 civil servants were trained at the Academy of Public Administration and in 2014, 1290 will receive training. 3.2 Achievement of Project Development Objective (Efficacy) Paragraph 46. Strategic Planning and Policy Analysis Units according to Government Decision 168/2010: Analysis, Monitoring and Evaluation of Public Policy Units. Paragraph 47. A number of new strategic planning and policy analysis instruments were introduced as a result of project support, including: sector expenditure strategies (SESs) for Medium-term Budget Framework (MBTF) ( ) - we would not specify to a certain period, especially that SESs were introduced before cycle. The process itself is important. If in 2010 only 5 ministries used new strategic tools for SESs development on a pilot basis under parallel DFID funded project, CPAR MDTF allowed methodological support to implementation and roll out of new strategic planning tools in 13 ministries in the context of preparing MBTF in 2014: 11 ministries and 2 CPAA s (Academy of Science and Tourism Agency) developed 16 SES (Ministry of Environment has 2 and Ministry of Economy has 3) for the period Paragraph 50 and establishing the National Participatory Council (NPC) in January 2010 ( - State Chancellery introduced the Participation module which is the technical solution for organizing public consultations online: simple and transparent. The correct web page is: 64

79 Paragraph 57 Sector Expenditure Strategies (SES) have been introduced as a tool for linking the budget with policy development: 13 out of 16 ministries developed SES in 2012 and 12 ministries submitted SES to the Ministry of Finance to consider in development of MBTF - in 2014: 11 ministries and 2 CPAA s (Academy of Science and Tourism Agency) developed 16 SES (Ministry of Environment has 2 and Ministry of Economy has 3) for the period Grantee Performance (b) Implementing agency performance Paragraph 75 (paragraph 74 in the final version) The PAR Unit suffered from change of managers. - There should be a clarification that PAR Unit, as a subdivision was only in Then it was transformed in 2 distinct divisions: Policy and foreign aid coordination division (names has been changed several times, for example: Division of analysis of policy coordination in 2007, Division for policy and foreign aid coordination in 2008, Division for policy coordination, strategic planning and foreign aid in 2010) and Personnel policy division. In December 2012 they were combined in one Department, for policy and foreign aid coordination and central public administration reform. Annex 2 Output by Component -(d)change Management and Information and Communication Outputs 80% of draft policy documents are being subject to consultations - In 2013, 85% of documents approved by the Government were consulted with citizens and civil society. Recommendations accepted / received from NGO: 563/1463. Recommendations accepted / received from the public: 69/425. Summary of Grantee s Completion Report The Central Public Administration Reform, launched in 2005, has put forward a comprehensive approach and systematic effort, and was targeted towards a transparent, predictable, responsible, and efficient public administration, which would meet the society s demands and correspond to the European standards. In December 2005, the Government approved a CPAR Strategy and a three-year ( ) Implementation Plan (Government Decision No.1402). At the Government s request, several development partners (the Government of Sweden, the Government of the United Kingdom and the Government of Netherlands) have 65

80 decided to allocate financial assistance to support the design and the implementation of the reform. The Multi Donor Trust Fund (MDTF), in the amount of US$6.15 million and administered by the International Development Association, was aimed at supporting the implementation of the reform program outlined in the Strategy and included several components: (i) institutional reorganization, (ii) Government s policy making capacity, (iii) merit-based professional civil service, (iv) management, information and communication, (v) TF management. The Trust Fund was to be disbursed during the period of July 2006 December The timeline for the MDTF coincided with the government term, and followed the electoral cycle. After three years the implementing team changed and it took some time for the new team to reach its optimal capacity. Thus, during the period of , the MDTF was amended several times with the extension of implementation period from three to seven years over February 2014, and the total budget of 11,450,000 USD..In 2011 and 2012 new activities to the planned support were added. Main Achievements: Reorganization of CPA The Project has conducted a horizontal functional review (HFR) of five big policy sectors, represented by all government ministries and approximately 160 subordinated government bodies. Recommendations for optimization of allocation of functions among government entities have been developed and partially implemented. The beginning of this activity was supported by the UNDP, which was able to quickly mobilize resources to start the HFR prior to MDTF approval. While the previous Government made limited use of the functional review recommendations, reorganization undertaken by the current Government in was strongly guided by the functional review findings. As a result, better separation of policy development from implementation function has been achieved. Consolidation of the Government structure was also achieved by cutting the number of central public administration bodies from 29 to 24 and the number of government agencies from 16 to 8. The rich analysis has become a useful basis for the development and promotion of the law on organization of the central specialized public administration, which was approved in 2012 and introduced a sound legal basis for the organization, subordination, monitoring and accountability of public administration authorities for their performance. The State Chancellery on a regular basis screens any normative draft to ensure that the organizational system adheres to the set of principles developed as part of the functional review. In addition, the government has realized the need to better regulate administrative functions of the government and together with the SIGMA Program s experts developed a concept of the law on administrative procedures that binds civil servants to adhere to the due process in making decisions regarding right of the citizens and businesses. 66

81 After the improvement of the Government structure as a whole, and improvements done in the structure of each public authority (regulations, division of functions, responsibilities, etc.), it has been decided to go further and to modernize the public service delivery process. Thus, with the MDTF support, a comprehensive review of public services was conducted, new Vision document on public services and the Government Program of public services modernization was developed, and is to be approved. Based on concepts and solutions identified in Vision Document, a draft Law on Public Services is now finalized (after consultations with the Department and the e- Government Centre). Such systemic law, according to the best international practice, is recommended solution to ensure a common legislative framework for the whole reform to be implemented in a uniform style. In parallel to setting up a comprehensive conceptual framework and tools for its implementation during , project experts have prepared Methodology for Public Service Reengineering, which provides a step-by-step guidance on how to approach reengineering process within any public administration institution providing services to citizens. Three pilot projects were carried out in cooperation with public institutions. Three public service reengineering plans were prepared as a result. Calculations based on proposed methodology suggest that if these reengineering plans would be implemented, a MDL 32,55 million/per year administrative burden currently placed on citizens and businesses would be removed. Investments needed to implement these measures are only MDL 6,65 million during the first year that are outweighed by cost reduction to clients and benefits from efficiency gains in public administration. So, the project s assistance ensured continuity and efficiency of the reforms and showed that it is needed to reengineer processes before they are digitized to avoid investment into badly formed and run public services. Main Achievements: Government s Policy Making Capacity Moldova has developed and introduced an effective strategic planning and policy coordination system. An institutional capacity, in terms of a dedicated policy coordination unit, has been established in the State Chancellery and competent staff has been hired and trained. Methodologies for development of National Development Strategy and sector strategies (linked to government policy priority goals) have been introduced. Each Central Public Administration Authority (CPAA) has developed and approved its Strategic Development Program, which includes policy objectives and institutional capacity building objectives. The National Development Strategy Moldova 2020 serves as a policy framework for developing a medium-term expenditure framework (MTEF). 67

82 A system of ex-ante policy impact analysis has been developed and introduced for most important policies. Prior to final approval, policy options are being discussed at the Strategic Planning Committee, chaired by the Prime Minister. The capacity to develop policy at the sector level has been enhanced through setting up dedicated strategic planning and policy analysis units in line ministries. The staff in these units has been trained in the Academy of Public Administration that offers a training module on strategic planning. Additional hands-on trainings on procedures introduced through new regulatory acts and methodologies have been conducted by the State Chancellery s staff and supporting consultants with minimal cost impact. It is to mention that the Academy of Public Administration prior to the MDTF has not offered any topical training course, but rather had delivered informational seminars to officials, mostly at the local government level. The capacity of APA was developed under the PFM Project, as well as with the support and guidance of the State Chancellery and contracting out trainings using the MDTF funds. Main Achievements: Merit-based Professional Civil Service Substantial progress has been achieved in the development of a merit based civil service. The new Law on Public Office and Status of Civil Servant, drafted in line with the EU good practice, was adopted in July 2008 and entered into force as of January 1, The main achievement of the law was to introduce a merit-based selection and promotion of administrative officials, and separating rules governing political and administrative officials. Implementing government regulations on competitive selection, performance appraisal, probation period, preparation of job descriptions, recruitment, etc. have been approved and are being implemented. In total, seven new human resource (HR) management procedures have been introduced. The current legislative framework presents a good basis for a modern Civil Service, according to the expert evaluators review, and is a significant step forward compared to the system that existed when the Strategy for Central Public Administration Reform was passed in The management of the civil service became transparent, rule based, with emphasis placed on professional development, performance and ethics. A Personnel Policy Division was established within the State Chancellery, and its capacity for enforcement of the civil service law and coordination of HR units is being continuously strengthened. A network of personnel managers has been established to facilitate a uniform implementation of civil service rules and procedures across the civil service. Training in application of new civil service rules has been implemented. More than 300 of workshops for HR personnel and for management and executive personnel were organized over the lifetime of the MDTF. 68

83 Main Achievements: Management, Information and Communication The MDTF supported the development of a communication program in relation to the Central Public Administration Reform to ensure awareness, understanding and support to CPAR measures aimed at improving transparency, professionalism, and ethics in the civil service. Routinely, the Government adopted annual plans for implementation of the CPAR and prepared annual reports on its implementation. The reports have been posted on the CPAR web page on the Government portal. During early 2008, quarterly meetings on PAR for the Government, NGOs and Donor Com- munity were organized to present the progress on PAR implementation. Later Governments did not continue with this practice. However, initially introduced as project activity, first consultants and then the staff responsible for public administration reform, started publishing regular bulletins on civil service, strategic planning, policy coordination, supplemented by an overview of international public administration reform practices. These bulletins are being disseminated electronically and posted on the CPAR portal. Thus the project helped institutionalize better transparency of the CPAR process and accountability to the public on CPAR implementation. Main Achievements: Trust Fund Management The project was well integrated into activities of the State Chancellery. It has benefitted from continuous necessary political support, as well as from close supervision by the Prime Minister through a designated advisor. The project steering arrangements have changed throughout implementation. Under the current arrangements, Government Strategic Planning Committee chaired by the Prime Minister plays the role of the steering committee for the project. The Office of Administrative Support (OAS) for the project, based on World Banks assessment and audit reports, has provided highly satisfactory support to Project implementation. The main functions that the OAS carries out are procurement, financial management, contract management and project monitoring. The continuity of the OAS staff has helped the State Chancellery to maintain satisfactory rating for MDTF implementation. Conclusions The understanding of the CPAR reform evolved during its implementation. Importantly, the technical leaders of the project have been the main drivers of the reform implementation. They were learning throughout the process and evolved as seasoned managers of the public sector management reforms capable of developing customized solutions for the Moldovan administrative and cultural environment. Given that the evolving vision presented more specific understanding on how MDTF (and 69

84 CPAR) objectives could be better attained, the World Bank s team supported changes to the initially agreed activities. Based on the Result Monitoring Matrix and the external assessment commissioned by the project, more than 90 percent of initially planned results and activities have been achieved. In cases when the result has been achieved much later than planned, the main reason was mostly a lack of political will or limited capacities of the counterparts. Better governed institutional system, enhanced transparency of the civil service management, enhanced skills in policy management, predictable human resource management framework, supported by the newly implemented HRMIS, ongoing improvements in service delivery, prioritized policies, qualitative ex-ante assessments and public policies, strategic planning systems at the level of central public authorities, as well as professional civil servants in CPAAs these are just a few results and outcomes of the central public administration reform implemented during

85 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders CPAR MDTF was funded by the DFID (UK), Sweden / Sida, and the Government of the Netherlands. Comments to the draft report have been provided by The Embassy of Sweden in Chisinau and DFID. These comments are summarized in section 7 of the report Comments on Issues Raised by Borrower/Implementing Agencies/Partners. Full version of the DFID comments is provided below. Comments from Brian Penny, Europe Department, DFID Thank you for letting me see this report. As you know DFID no longer operates in Moldova. I have read the document as you have requested. I no longer have the option of referring the draft to advisory colleagues so my comments below are simply observations on the document. Just the same the report is highly encouraging. It describes the situation in Moldova as I remember it at the time particularly the slow progress made at the beginning of the project and the subsequent improvement as the reform minded Prime Minster took office. The first few pages of PFO indicators set the tone of the report well with comments that nearly all the PDO indicators had been achieved compared to the original Baseline Value. The extent of the changes made as a result of this project seem to be impressive given the Government s limited capacity. The text describes some highly encouraging events during the course of the project notably the significant number of employees trained, the introduction of performance appraisal and that 70.7 % of civil servants employed in 2012 were hired based on merit (presumably this is a good figure). I was amazed that the project had to be extended four times and the final amount of funding at the time of project closure- albeit against the backdrop of a programme that was achieving results. Clearly the Government has not finished reforming yet with a PAR Strategy in place for The only concern I have is about staff salary. The report describes the introduction of a unified salary grid introduced in April 2012 but later in the text describes the high turnover of staff because of the low remuneration of staff and that this has a negative impact on the sustainability of the reform. Presumably the salary grid is fully operational and is effective in allocating pay awards according to responsibility is the point here that salaries really need to be raised across all grades? The Government is clearly looking to do more work on PAR but it s not clear whether the World Bank will continue its support beyond this project. Is it the World Bank s intention to continue to remain engaged with Moldova to build on what has already been achieved? I know from my role working on the European Neighbourhood Instrument that the EC will provide PAR assistance- is that in place of World Bank support or will it be 71

86 complementary? Presumably UNDP is also contributing. It would be useful to know where support for the strategy is coming from. Overall a good report and one that I m happy to support. 72

87 Annex 9. List of Supporting Documents Program Brief for CPAR MDTF, March 2006 Administration Agreements with DFID, the Governments of the Netherlands and Sweden (July 11, 2006) and amendments (December 2008, December 2010, May 2011, December 2012 and December 2013) Grant Agreement with the Government of Moldova (July 29, 2006) and amendments (December 2008, December 2010, May 2011, December 2012 and December 2013) Restructuring Papers on CPAR MDTF, approved in December 2010, March 2011, December 2012 and December 2013 Country Assistance Strategy to Moldova FY05-08, FY09-13 Progress Reports on IDA CAS Moldova Country Partnership Strategy FY14-17 Implementation Status Reports ( ) Aide Memoires for Implementation Monitoring Reports for CPAR ( Project Completion Report on CPAR MDTF, State Chancellery, March 2014 Government-Wide Functional Review (Phase II), Final Project Report, DAI Europe Ltd., November 2006 Evaluation of the Central Public Administration Reform Implementation in the Republic of Moldova and it s after New Developments and Dimensions, Corporate Public Management group, 2013 Moldova: Support to Strengthening Policy Management Capacity, Final Report, SPMC, November 2012 Institutional Development Outcome Evaluation, UNDP & UNFPA Moldova, February 2010 Report to DFID on Annual Review of the Moldova Programme of Support to Central Public Administration Reform, 2009 Program and Action Plan for the Reform of Public Services in Moldova for List of People Interviewed for ICRR, December 10-17, 2013 World Bank Elena Nikulina, TTL for CPAR MDTF in Svetlana Proskurovska, TTL for CPAR MDTF in Cem Dener, Senior Public Sector Specialist Elena Corman, Procurement Analyst, CPAR MDTF Oxana Druta, Financial Management Analyst, CPAR MDTF (consulted virtually) Government of the Republic of Moldova Mr. Victor Bodiu, Secretary General of the Government, State Chancellery Mr. Ion Gumene, Head of Direction for Policies Coordination and Strategic Planning 73

88 Mr. Ruslan Codreanu, former Head of General Division for Policy and Foreign Assistance Coordination and Central Public Administration Reform, State Chancellery (audio call) Ms. Tamara Gheorghita, Head of Central Public Administration Reform Division, State Chancellery Ms. Liuba Cuznetova, Head of CPAR Project Office, State Chancellery Ms. Natalia Gavrilita (Catrinescu), Advisor to the Minister of Education Ms. Eleonora Vasiliachi, Policy Unit, MTIC Mr. Oleg Balan, First Rector, Academy of Public Administration under the President of the Republic of Moldova Ms. Aurelia Tepordei, Director of Professional Development, Academy of Public Administration under the President of the Republic of Moldova Development Partners Mr. Jordi Rodriguez Ruiz, Projects Officer, EU Delegation Mr. Henrik Huitfeldt, Counsellor and Head of Development Cooperation, Embassy of the Kingdom of Sweden to the Republic of Moldova, Chisinau Ms. Nina Orlova, Senior Program Officer, Embassy of the Kingdom of Sweden to the Republic of Moldova, Chisinau Ms. Alla Skvortova, Assistant Resident Representative / Governance, Justice and Human Rights, UNDP Other Stakeholders Mr. Serghei Ostaf, Director of the Resource Center for Human Rights (CReDO), and Chairman of the National Participation Council (CNP) 74

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