FOR OFFICIAL USE ONLY RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE INSTITUTIONS BUILDING TECHNICAL ASSISTANCE PROJECT (IBTAL)
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1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES18226 Public Disclosure Authorized Public Disclosure Authorized RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE INSTITUTIONS BUILDING TECHNICAL ASSISTANCE PROJECT (IBTAL) TO THE REPUBLIC OF URUGUAY May 20, 2015 Public Disclosure Authorized GGODR LCR This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
2 ABBREVIATIONS AND ACRONYMS AF Additional Financing ASSE Administración de los Servicios de Salud del Estado (State Health Services Administration) BPS Banco de Prevision Social (Borrower s Social Security Fund) CEIP Consejo de Educación Inicial y Primaria (Primary Education Council) CES Consejo de Educación Secundaria (Secondary Education Council) CETP Administración Nacional de Educación Publica (Nacional Administration for Public Education) DGI Dirección General Impositiva (Directorate General of Taxation) INE Instituto Nacional de Estadísticas (National Statistics Institute) ISR Implementation Status and Results Report MEF Ministry of Economy and Finance MTSS Ministerio de Trabajo y Seguridad Social (Ministry of Labor and Social Security) MVOTMA Ministerio de Vivienda Ordenamiento Territorial y Medio Ambiente (Ministry of Housing, Land Management, and Environment) PAD Program Appraisal Document PDO Program Development Objective PIU Project Implementation Unit PNUD Programa de las Naciones Unidas para el Desarrollo (United Nations Development Programme) SSF Superintendencia de Servicios Financieros (Financial Supervisory Authority) Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Jorge Familiar Calderon Jesko S. Hentschel Mario Marcel Cullell Arturo Herrera Gutierrez Daniel Alvarez Estrada
3 URUGUAY Institutions Building Technical Assistance Project (IBTAL) CONTENTS A. SUMMARY 5 B. PROJECT STATUS 5 C. PROPOSED CHANGES 6 ANNEX 1: RESULTS FRAMEWORK AND MONITORING 9 3
4 DATA SHEET Uruguay UY Institutions Building TAL (P097604) LATIN AMERICA AND CARIBBEAN Governance Report No: RES18226 Basic Information Project ID: P Lending Instrument: Technical Assistance Loan Regional Vice President: Jorge Familiar Calderon Original EA Category: Not Required (C) Country Director: Jesko S. Hentschel Current EA Category: Not Required (C) Senior Global Practice Director: Practice Manager/Manager: Team Leader(s): Original Approval Date: Arturo Herrera Gutierrez Current Closing Date: Daniel Alvarez Estrada 30-May Aug-2015 Borrower: Responsible Agency: Republic of Uruguay Ministry of Economy and Finance Restructuring Type Form Type: Full Restructuring Paper Decision Authority: Regional Vice President Approval Restructuring Level: Level 2 Financing ( as of 03-Mar-2015 ) Key Dates Project Ln/Cr/TF Status Approval Date Explanation of Approval Authority: Signing Date Effectiveness Date RVP approval needed because extended closing date will be 5 years from original closing date. Original Closing Date Revised Closing Date P IBRD Effective 30-May Jun Aug Dec Aug-2015 P IBRD Effective 06-Dec Mar May Aug Aug-2015 Disbursements (in Millions) Project Ln/Cr/TF Status Currency Original Revised Cancelle d Disburse d Undisbur sed % Disburse d P IBRD Effective USD
5 P IBRD Effective USD Policy Waivers Does the project depart from the CAS/CPF in content or in other significant respects? 5 Yes [ ] No [ X ] Does the project require any policy waiver(s)? Yes [ ] No [ X ] A. Summary of Proposed Changes Proposed changes include 1) extension of closing date from August 31, 2015 to December 31, 2016, and 2) reallocation of a small fraction of undisbursed funds across components (and not expenditures categories), as well as minor changes in selected intermediate indicators. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ ] No [ X ] Other Change(s) Yes [ ] No [ X ] Appraisal Summary Change in Economic and Financial Analysis Yes [ ] No [ X ] Appraisal Summary Change in Technical Analysis Yes [ ] No [ X ] Appraisal Summary Change in Social Analysis Yes [ ] No [ X ] Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ] Appraisal Summary Change in Risk Assessment Yes [ ] No [ X ] B. Project Status The project has been performing well over the past years and the Project Development Objective (PDO) continues to be fully achievable if the closing date is extended. Implementation progress rating has been
6 downgraded to moderately satisfactory (MS) in the latest Implementation Status and Results Report (ISR) reflecting subpar performance of the newer components added with the AF. Procurement and financial management reviews have also been consistently satisfactory since project inception, while the Project Implementation Unit (PIU) within the Ministry of Economy and Finance (MEF) has shown strong institutional capacity throughout the life of the operation. C. Proposed Changes Project Development Objectives Original PDO Development Objectives/Results The objective is to improve the Borrower's public sector performance by: (i) supporting its public sector modernization program in the areas of monitoring and evaluation, performance-based budgeting, and e- government; and (ii) strengthening its institutions involved with the design and implementation of public policy reforms in the areas of taxation, promotion of the business environment, and social protection. Current PDO The objective is to improve the Borrower s public sector performance by: (i) supporting its public sector modernization program in the areas of monitoring and evaluation, performance-based budgeting, e- government, tax administration and statistics; and (ii)strengthening its institutions involved with the design and implementation of public policy reforms in the areas of taxation, promotion of the business environment, and social protection. Change in Project's Development Objectives Change in Results Framework Explanation: The restructuring entails minor changes in selected intermediate indicators to adapt the Project to the current institutional context without affecting the PDO nor the Project components. More concretely, the restructuring foresees amending the definitions of two intermediate results indicators and eliminating two intermediate results indicators. The definition of indicator Nr. 8 (Component 3) will be changed from "At least 80% of central government procurement of medicines and food is done through a transactional e- procurement platform (YR6)" to "Transactional e-procurement platform for purchases of medicines and food implemented in central government". This change is proposed due to the difficulty of measuring the exact percentage value of goods purchased through the e-procurement platform. Indicator Nr. 21 (Component 8) will be renamed from "Software to support the electronic accounting application developed and operating (YR7)" to "New governance model of DGI implemented with redefining of new processes (YR8)" due to the fact that the originally planned activity for this component was eliminated. Targets for both revised indicators are changed accordingly. Furthermore, intermediate result indicator Nr. 19 (Component 7) will be eliminated because no sufficient amount of cases has been produced since the implementation of the bankruptcy law to be able to conduct a valid impact evaluation. Indicator Nr. 22 (Component 9) will be eliminated because it seems unlikely that the intermediate results, as they are currently defined, can be achieved. Despite the elimination of intermediate results indicators Nr. 19 and 22, the integrity of the results framework is not affected. Change in Loan Closing Date(s) Explanation: Financing It is proposed to extend the closing date of this Project for 16 months, from August 31, 2015 to December 6
7 31, 2016, with the purpose of: 1) allowing for the full execution of the two components added to the Project through the Additional Financing (AF) approved by Board of Directors on December 6, 2011, and 2) providing the new administration with additional time to assess the Project strategically and allocate resources to consolidate progress on public sector modernization supported by the Project. Ln/Cr/T F IBRD IBRD Status Original Closing Date Current Closing Date Proposed Closing Date Previous Closing Date(s) Effective 30-Dec Aug Dec Dec-2011 Effective 31-Aug Aug Dec Aug-2015 Disbursement Estimates Change in Disbursement Estimates Explanation: The disbursement schedule was revised due to the extension of closing date and to better reflect the altered implementation schedule. Fiscal Year Current (USD) Proposed (USD) , , ,300, ,443, ,000, ,883, ,100, ,789, ,700, ,487, ,260, ,826, ,275, ,252, ,010, ,641, , ,410, ,100, Change to Components and Cost Explanation: Total 22,100, ,100, Components Project funds will be shifted from components with low probability of execution towards the ones that foresee new activities. More concretely, funds will be reduced for the components Capital Markets and Corporate Transparency (-340,000), Project Coordination and Strategy Development (-20,000), and National Tax Directory (-470,000), and increased for the components E-Government (450,000) and Support to BPS for institutional strengthening and implementation of tax and social protection reforms (380,000). 7
8 Component Name Original Project After 2010 Restructuring Additional Financing Reallocation of Current Original Loan 1 Cost Proposed Cost Action Customs Administration 2 750, , , ,930 No change Improving Institutional Planning, Monitoring, and Evaluation 1,210,000 1,210,000 1,000,000 2,210,000 2,210,000 E-Government 1,550,000 1,550, ,550,000 2,000,000 Revised Support to BPS for institutional strengthening and implementation of tax and social protection reforms Support for Capital Markets and Corporate Transparency Reforms Support for Bankruptcy Regulation Reforms Project Coordination and Strategy Development Support Institutional Strengthening of DGI Support Institutional Strengthening of INE 4,081,000 4,081,000 1,100,000 5,181,000 5,561,000 Revised 2,050,000 2,050, ,000-2,550,000 2,210,000 Revised 265, , , , ,000 1,622,000 2,218,070 3,000,000 2,363,070 5,363,070 5,343,070 Revised - 3,000,000-3,000,000 2,530,000 Revised ,000-1,100,000 1,100,000 Front-end Fee 30,250 30, ,250 30,250 Unallocated 541, , , , ,000 Total: 12,100,000 12,100,000 10,000,000-22,100,000 22,100,000
9 ANNEX 1: RESULTS FRAMEWORK AND MONITORING Project Name: Team Leader(s) : Product Line: UY Institutions Building TAL (P097604) Daniel Alvarez Estrada IBRD/IDA Requesting Unit: Responsible Unit: Country: Uruguay Approval FY: 2007 Region: LATIN AMERICA AND CARIBBEAN Project Development Objectives Original Project Development Objective: Lending Instrument: Project Stage: Restructuring Status: DRAFT LCC7C Created by: Till Johannes Hartmann on 09-Feb-2015 GGODR Modified by: Till Johannes Hartmann on 28-Apr-2015 Technical Assistance Loan The objective is to improve the Borrower's public sector performance by: (i) supporting its public sector modernization program in the areas of monitoring and evaluation, performance-based budgeting, and e-government; and (ii) strengthening its institutions involved with the design and implementation of public policy reforms in the areas of taxation, promotion of the business environment, and social protection. Current Project Development Objective: The objective is to improve the Borrower s public sector performance by: (i) supporting its public sector modernization program in the areas of monitoring and evaluation, performance-based budgeting, e-government, tax administration and statistics; and(ii)strengthening its institutions involved with the design and implementation of public policy reforms in the areas of taxation, promotion of the business environment, and social protection. Results Core sector indicators are considered: Yes Results reporting level: Program Level
10 Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Improvements in the design and management of monitoring and evaluation methodologies and tools for improved results budgeting in the Central Government Budget. E-govt strategy is implemented, ensuring connectivity through a common platform of the principal agencies, allowing safe, fast & easy exchange of info between agencies & between agencies & citizens. Text Value Seven priority areas and 31 expenditure programs have identified output and outcome indicators. 7 priority areas were maintained and 29 expenditure programs with identified output and outcome Date 31-Dec Apr Aug-2015 Text Value None. Target achieved. 105 Date 15-Jun Apr Dec-2012 Target met by AGESIC in The target value of 105 (wrongly indicated as 150 in previous ISRs) corresponds to the number of agencies connected to the e-govt strategy. The AF only foresaw a target value for
11 Entities responsible for policy reform initiatives in taxation, capital markets, social protection, and bankruptcy regulation have necessary technical tools to implement approved reforms. and no target value for the following years. This is why the end target reads 31-Dec Text Value Partial. Partial Full implementation of reforms. Date 15-Jun Apr Aug-2015 The current rating is indicated as partial because there are still some IT-related processes to be executed. Technical tools for Banco de Proteccion Social (BPS) implemented. Capital markets legislation has been approved. Bankruptcy law has been passed. Software development for social protection programs is under 11
12 The ratio of the yearly variation in the nominal tax collections over the yearly variation in the nomial GDP. Intermediate Results Indicators way and expected to be fully implemented by end of project. Percentage Value Date 31-Dec Apr Aug-2015 Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Methodology for use of Indicators, Log Frame, Information management and PMG has been definted and implemented in 3 pilot institutions included in the budget (YR2) and 6 additional institutions (YR5). Text Value None. Target Achieved Methodology implemented in a total of 9 ministries. Date 15-Jun Apr Dec-2012 The software for dashboards (tableros de control) has been installed in 9 ministries by the end of The AF only foresaw a target value for the year 2012 and not the following years. Therefore, the end target is indicated as 31-Dec End target date has been shifted out from year 4 or year 5 during the processing of the Additional Financing. 12
13 Number of Rapid Evaluations concluded (YR8). The budget decision-makers receive quality M&E information from at least 9 ministries to be used in the budgeting process for 7 programmatic areas. (YR5) Number of Budget Execution reports submitted to Congress, including data on indicators (YR7). Text Value None. 12 rapid evaluations completed so far. Date 15-Jun Apr Aug-2015 Target date was shifted out from year 4 to year 8 during the processing of the Additional Financing. Text Value No. Yes. Yes. 24 Target date was shifted out from year 4 to year 8 during the processing of the Additional Financing. Date 15-Jun Apr Dec-2012 Target met in The AF only foresaw a target value for the year 2012 and not the following years. Therefore, the end target is indicated as 31-Dec Number Value Date 31-Dec Apr Dec-2014 Target achieved in The AF did not foresee a target 13
14 Revised Transactional e-procurement platform for purchases of medicines and food implemented in central government including ASSE (YR 6). At least 80% of central government procurement of medicine and food, including ASSE, is done through a transactional e-procurement p latform. (YR6) Number of additional Government agencies that have data on their social programs' beneficiaries and benefits integrated in SIIAS (YR7). value for Therefore, the end target is indicated as 31-Dec Text Value No Yes Date 15-Jun Apr Dec-2015 Text Value 0% 0% 80% Date 15-Jun Nov Apr-2013 Target has not been met to date. The project was reprogrammed and it is expected that the system be initiated by next October. Number Value End Target date has been extended from 8/6/10 until 4/1/2013. Date 31-Dec Apr Dec organisms are currently in the process of integration: MVOTMA, MTSS, CEIP, CES and CETP. It is expected that 14
15 Private corporations are submitting financial reports according to the new strengthened statutory and institutional framework. (YR8) Incentive based performance has been implemented for Human Resources in Customs Administration. (YR5) the target of 8 will be met by the end of the project. The AF did not foresee a target value for Therefore, the end target is indicated as 31-Dec Text Value No. --- Yes. Date 15-Jun Apr Aug-2015 Key personnel at the Departamento de Sistema de Información de la SSF was capacitated. Text Value No. --- Yes. Date 15-Jun Apr Dec-2012 This indicator was originally under Component 1 but was shifted (and changed name slightly) to Component 7. The AF only foresaw a target value for the year 15
16 Marked for Deletion Revised Study has been presented on the impact of the new legal framework and the institutional strengthening activities supported by the project on times and costs for bankruptcy cases. Proportion of intensive audits generated by the risk management system audits over the total intensive audits (YR8). New governance model of DGI implemented with redefining of new processes (YR7). Software to support the electronic accounting application developed and operating (YR7) and not the following years. Therefore, the end target is indicated as 31-Dec Text Value No. No. Yes. Date 15-Jun Apr Aug-2013 Study has not yet been initiated. Percentage Value Date 31-Dec Apr Aug-2015 No progress to date in terms of the percentage value as the underlying IT activity is still under way to be processed. Yes/No Value No No Yes Date 31-Dec Apr Dec-2015 Yes/No Value No No Yes Date 31-Dec Nov Dec-2014 No progress to 16
17 Marked for Deletion Capacity building plan concluded and implemented in indicated percentages (YR7). Panel Survey of the most vulnerable population concluded (YR 8). date. Percentage Value Date 31-Dec Apr Dec-2014 Not initiated Yes/No Value No Yes Yes Date 31-Dec Apr Aug-2015 Target met. The data collection was completed and the data base made available to the University. 17
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