RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CAMBODIA EDUCATION SECTOR SUPPORT SCALE UP ACTION PROGRAMME (TF092097)
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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank RESTRUCTURING PAPER ON A Report No: PROPOSED PROJECT RESTRUCTURING OF CAMBODIA EDUCATION SECTOR SUPPORT SCALE UP ACTION PROGRAMME (TF092097) BOARD APPROVAL DATE April 10, 2008 TO THE KINGDOM OF CAMBODIA {December 14, 2010}
2 ABBREVIATIONS AND ACRONYMS AOP CAS ESSSUAP GDCC MBPI MoEYS POC RDJ RGC TLRB Annual Operation Plan Council of Administration Reform Education Sector Support Scale Up Action Program Government-Donor Coordination Committee Merit-Based Performance Incentive Ministry of Education, Youth, Sports Priority Operating Costs Receipt and Disbursement Journal Royal Government of Cambodia Transfer Letter Request to Bank Regional Vice President: James W. Adams Country Director: Annette Dixon Sector Manager / Director: Eduardo Velez Bustillo / Emmanuel Y. Jimenez Task Team Leader: Simeth Beng 2
3 CAMBODIA EDUCATION SECTOR SUPPORT SCALE UP ACTION PROGRAMME P CONTENTS Page A SUMMARY... B PROJECT STATUS... C PROPOSED CHANGES... 3
4 EDUCATION SECTOR SUPPORT SCALE UP ACTION PROGRAMME SUMMARY RESTRUCTURING PAPER The proposed restructuring reflects the Royal Government of Cambodia s (RGC) decision to cancel the Merit-Based Performance Incentive (MBPI), Priority Mission Group (PMG) and all other salary supplement and incentive schemes with effect from January 1, 2010, regardless of the source of financing, and to replace it with the establishment of Priority Operating Costs (POC). The Government-Donor Coordination Committee (GDCC) has indeed agreed on the following twin-track approach: Under track 1, a compensation reform is being defined in the short-term and implemented over the medium term, as part of the National Program for Administrative Reform (NPAR); Under track 2, a temporary scheme, also called Priority Operating Costs (POC) that addresses the short-term issue of service delivery and reform implementation has been agreed upon. Both tracks are expected to progress in parallel with regular reviews to (i) assess progress toward compensation reform; (ii) feed lessons from POC to compensation reform; and (iii) decide on the merits of revising, continuing, or stopping the POC arrangement. The framework for the second track is provided by the Government sub-decree approved on 12 th July, Under this framework, the POC embeds meritocratic, equity, and transparency principles. It applies to all development partners. It is explicitly conceived as a complement to track 1 of reform, i.e. a temporary mechanism that will be discontinued once the compensation reform takes over. The agencies where a POC scheme is established will ensure that it is unified across the various projects for which it is established. With regard to Ministry of Education, Youth, Sports, the POC scheme covers two projects supported by Education For All Fast Track Initiative Catalytic Fund and World Bank for promoting more efficient and effective human resource management based on result based performance evaluation at central and provincial levels. The proposed restructuring will allow for the financing of POC by (i) creating a new disbursement category for POC. A disbursement condition will be added for this new category, requesting that the POC arrangements (comprising terms of reference, management contract and implementation agreement as per the POC guidelines) agreed between the ministry and the Council of Administration Reform (CAR) and the Ministry of Economy and Finance (MEF), is acceptable to the Bank and will not be changed without prior consultation with the Bank. 4
5 PROJECT STATUS The Education Sector Support Scale Up Action Program (ESSSUAP) is a well performing project. The development objective of the ESSSUAP is to assist the Recipient to speed up progress towards improved grade 1 right-age entry, net enrollment, retention, progression rates and grade 6 completion rates in primary education. Following initial delays in the process of civil work sub-components, project closing date was extended for two years up to June 2012 to adjust to a revised implementation schedule. Currently the project implementation including sizable civil works is progressing well in accordance with the revised timeline. Other quality related sub-components are also moving along effectively in ways that will help meet the project development objective. Transparency and accountability continue to feature strongly in all activities, legal covenants are fully complied and a good governance framework is in place. The current amounts disbursed as of December 13, 2010 stand at US$17.36 million, which is approximately 30.24% of the total amount. PROPOSED CHANGES Financing o Reallocations 1. Good, Work, Consultants services, Training, Incremental Operating Cost There was no MBPI category in the original budget; however, the original program document indicated the possibility of MBPI financing; the arrangements for this to happen had not yet been set-up at the time when MBPI was cancelled. The POC fund of US$300, equal to 100% of the scheme comes from Unallocated expenditure category. Category of Expenditure Allocation (US$) % of Financing Current Revised Current Revised Current Revised 1. Good, Work, 51,850, ,850, % 100% Consultants services, Training, Incremental Operating Cost 2. School Improvement Grant 2. School Improvement Grant 480, , % 100% 3. Scholarships 3. Scholarships 590, , % 100% 4. Unallocated 4. Unallocated 4,480, ,179, N/A 5. POC n/a 300, n/a 100% 5
6 The following condition will apply for disbursement under POC category: No withdrawal under category (3) shall be made until POC arrangements (comprising terms of reference, number of positions, management contract and implementation agreement as per the POC guidelines), acceptable to the Association, are agreed between the concerned agency and the Council of Administration Reform (CAR) and the Ministry of Economy and Finance (MEF). Such arrangements will not be changed without prior consultation with the Association. Financial management Overall FM arrangements will remain unchanged. The Supplementary Financial Management Manual for the Project will be updated to incorporate the payment of POC. The POC will be audited as part of the project financial statements annually. 6
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