Annex 1 Action Fiche for Solomon Islands 1. IDENTIFICATION Title/Number FED/2012/023-802 Second Solomon Islands Technical Cooperation Facility (TCF II) Total cost EUR 1,157,000 Aid method / Method of implementation 10 EDF contribution Project approach partially decentralised DAC-code 15110 Sector Economic and development policy / planning 2. RATIONALE 2.1. Sector context The vision of the Solomon Islands National Development Strategy (NDS) 2011-2020 is "A united and vibrant Solomon Islands" with the overarching focus area "To build better lives for all Solomon Islanders". The NDS defines the broad national development priorities of Government, provides a framework for costed multi-year sector strategies, macroeconomic planning, and medium term expenditure frameworks. It also defines institutional arrangements for implementation and monitoring of the NDS, including better collection of output data by the national systems. The Ministry of Development Planning and Aid Coordination (MDPAC) is tasked to coordinate the NDS process in close relation with the Ministry of Finance & Treasury, the Prime Minister's Office, the Ministry of Provincial Government and Institutional Strengthening and sectoral line ministries. This Government's endeavour is medium-term and will require the progressive enhancement of capacities of sector planners to produce rolling three-year implementation plans, including costing, and of monitoring officers to follow up in its implementation producing standard reports within a given monitoring framework. To this end an M&E and Provincial Feedback Unit with up to nine staff will be established in MDPAC. Since the onset of the Global Economic Crises in 2009 the Government is committed to structural reform and embarked in an Economic and Financial Reform Programme (EFRP) to restore macroeconomic stability, improve public financial management, revenue collection, transparency and accountability. It is the aim of Government to improve public service delivery to rural communities to achieve the country's development goals, make the country a reliable place to do business and invest, and ensure a balanced and sustainable budget that improves decision making processes. The Provincial Government Strengthening Programme (PGSP 1 ), implemented by UNDP, has provided support to Ministry of Provincial Government to clarify roles and responsibilities of 1 PGSP is co-funded by RAMSI (USD 6.4 M), EU (EUR 4.6 M from EDF 9), UNDP (USD 1 M), UNCDF (USD 1 M) and SIG (SBD 3.5M). 1
Provincial Governments, establish 3 year rolling plans within the context of longer term provincial strategic plans and strengthen capacities of Provincial Governments to formulate policies, improve public financial management systems, oversee provincial administration and monitor activities. Provincial Strategic Plans are part of the NDS implementation framework and provide valuable lessons learnt and synergies to the overall NDS implementation process. UNDP has provided further support to the Ministry of Development Planning and Aid Coordination in the establishment of the Development Assistance Database to strengthen the aid coordination capacity. The focal sector of the 10 th EDF, following the Mid Term Review is "rural development in the context of climate change", reflecting that up to 80% of peoples livelihoods depend on rural production which are increasingly vulnerable to the adverse impacts of climate change. Solomon Islands qualified in 2010 for EU general budget support (GBS) and has signed two programs with the EU, including the EUR 15.2 million Solomon Islands Economic Recovery Assistance Programme (SIERA) and the EUR 2.8 million Solomon Islands Climate Change Adaptation Programme (SICAP) program. Budget Support programmes by the EU and other development partners (Australia, New Zealand and Asian Development Bank ) have proven effective to strengthen policy dialogue on Economic and Financial Reform priorities, ownership by the Government and coordination among development partners. The economic and financial reform matrix 2012-2014 establishes clear performance indicators which are jointly reviewed on an annual basis by government and development partners to confirm eligibility to Budget Support. A number of performance criteria (prioritization of projects within a 3-5 year pipeline, annual monitoring and evaluation, rolling 3-year Medium Term Expenditure Framework (MTEF) and implementation plans) are already incorporated into the reform matrix which is being updated on an annual basis. 2.2. Lessons learnt The Technical Cooperation Facility (TCF) has proven an effective instrument to supplement weak institutional capacity for effective policy planning and implementation of the Government's policies and the EU Country Strategy Paper (CSP). The Facility offers the necessary flexibility to adjust to the Government's demands in terms of technical cooperation, training, participation in conferences and seminars and promotion of EU visibility. However, the ROM 2011 found that the TCF has lacked a detailed work plan focused on specific results that are integrated into a wider capacity development strategy. In the past, the TCF has not been based on a systemic review of institutional capacities. As a result, financial resources were not fully utilised and the instrument has been used ad hoc more than through a systemic plan or diffusion of information to potential beneficiaries. The Support Unit to the National Authorizing Office (NAO) 2 is committed to take these lessons on board and improve. 2.3. Complementary actions The Support Unit to the NAO complements this Technical Cooperation Facility II (TCF II). The Support Unit to the NAO assists the NAO to continue to carry out his responsibilities and obligations under the Cotonou Agreement by strengthening the Solomon Islands Government s capacities and capabilities to effectively programme, supervise implementation, manage, monitor and account for EDF-funded development programmes on time and following accepted standard procedures. While the Support Unit to the NAO is focused on assisting the NAO in implementation of EU cooperation, the TCF II pursues a 2 Strengthening the NAO system programme (FED/2009/021-487), funded from the 10 th EDF 2
wider capacity development approach to strengthen implementation and monitoring of the NDS as well as the coordination of MDPAC with line ministries. The ADB has made available to the Ministry of Development Planning and Aid Coordination a USD 0.6 million Technical Assistance Special Fund to "Support the Implementation of the NDS" to be implemented until January 2014. It contributes to the preparation of medium-term expenditure framework, templates for line ministries corporate plans, databases and templates to track progress against indicators of the NDS and a medium-term training programme. The ADB Technical Assistance will focus on internal MDPAC processes of the NDS implementation such as the Medium Term Expenditure Framework and Monitoring & Evaluation. The TCF II seeks to complement and sustain this support, given the importance and magnitude of the endeavour and the current capacity constrains, particularly in respect of the linkages between MDPAC, Ministry of Finance & Treasury, Ministry of Public Service and other line ministries. ADB and EU (through the previous TCF) have already provided complementary support during the formulation and consultation of the NDS during 2011 and the contracting of two Planners and three Budget specialists to support MDPAC in the planning and budgeting process 2012. 2.4. Donor coordination Solomon Islands Core Economic Working Group (CEWG 3 ) is being recognised as best practice donor coordination and dialogue structures in the Pacific (and beyond). The CEWG has been at the forefront of the recent efforts made by the Government of Solomon Islands to strengthen public finance management and develop a more private sector-orientated economy. The International Monetary Fund is closely associated to the CEWG. All parties have agreed to the need to have a common framework that would set out the Governments policy agenda and provide a foundation for budget support. The Minister of Development Planning and Aid Coordination chairs a quarterly SIG-Development Partner meeting to improve overall coordination and implementation of the NDS. A monthly donor coordination meeting and coordination meetings at sectoral level also exist. Policy dialogue meetings between Government and development partners are usually chaired by the Minister or Permanent Secretary of the respective line ministry. Development partners agree on a lead donor. For example New Zealand has taken lead in education, Australia in health, rural water and sanitation, and transport, EU in climate change, UNDP in the support to Provincial Governments and World Bank in energy and mines sector. 3. DESCRIPTION 3.1. Objectives The overall objective of the Second Technical Cooperation Facility (TCF II) is to build Government's capacity for service delivery to rural Solomon Islanders in alignment with the Solomon Islands NDS 2011-2020 and the principles of the Cotonou Agreement. The purpose of the TCF II is to provide technical and logistic support to the Ministry of MDPAC, line ministries and non-state actors to build and sustain more effective country systems for service delivery, policy coordination, budgeting processes and monitoring of outcomes. 3 CEWG is attended by Heads of Mission of Australia, New Zealand, World Bank, Asian Development Bank RAMSI and European Union. It is chaired by the Minister of Finance & Treasury. 3
3.2. Expected results and main activities Expected results and main activities include: Result 1: Improved capacities in MDPAC to fulfil its role in the implementation and monitoring of the NDS and coordinate with stakeholders o Enhance capacities of staff in MDPAC and line ministries' for sector policy development in line with the NDS and monitoring of NDS implementation. Three staff members will be recruited to strengthen the M&E Unit of MDPAC in line with the Organigramme foreseen in the NDS. The staff number financed under the TCF II will be gradually reduced as MDPAC absorbs the positions. o Coordinate and consult with key Government officials, line ministries, provincial governments, Non State Actors and development partners to further the Aid Effectiveness Agenda and ensure alignment of programming and budgeting with NDS priorities o Establish a monitoring and evaluation framework for the NDS and produce annual progress reports o Produce and update standard three-year rolling corporate plans (by line ministries) and a three-year rolling Medium Term Development Plan o Conduct analytical work to support NDS implementation, particularly in sectors where EU is active Result 2: Improved efficiency and visibility of EU-SIG cooperation o Produce and disseminate publication material and conduct visibility events on the EU-SIG cooperation and results o Undertake measures (incl studies, evaluations and audits) to ensure timely and effective management of the EU-SIG programming cycle o MDPAC, line ministries and Non-State Actors participate in consultations, seminars and trainings in strategic areas to further the partnership and cooperation between EU and SIG 3.3. Risks and assumptions Risks and assumptions include No reversion to civil unrest SIG is committed to the NDS as guiding development policy document, including following the change of Government MDPAC has sufficient leverage within Government and line ministries (Ministry of Finance & Treasury, Ministry of Public Service) to operationalize the NDS Counterpart staff will be made available by Government for capacity development and institutional reform, particularly in MDPAC and line ministries Other significant donors align to the NDS 3.4. Cross-cutting Issues Cross-cutting issues will be built into every step in the decision making process to bring technical expertise or undertake consultations, training, seminars and awareness. The TCF II aims at strengthening country systems for good governance in policy coordination, 4
monitoring and domestic accountability. The mainstreaming of democracy, gender equality, environment and climate change in policy coordination, monitoring and evaluation will be an integral part of the activities of the TCF II. 3.5. Stakeholders The key stakeholders include the MDPAC, the Ministry of Finance & Treasury, Ministry of Public Service, Prime Ministers Office, Ministry of Provincial Government, sectoral line ministries, non-state actors and development partners. The NAO office, which is progressively being integrated into MDPAC, will facilitate contracting procedures for the implementation of the TCF II. The NDS priorities and implementation arrangements are owned by the Government and provide a framework to enhance policy dialogue, develop inclusive and further transparency and accountability. The NDS process provides for coordination with non-state actors and will enable their increased participation in policy dialogue. 4. IMPLEMENTATION ISSUES 4.1. Method of implementation The funds will be administered by MDPAC 4 and assisted by the Support Unit to the NAO, which is to be integrated further in the MDPAC, and has gained experience in the management of Programme Estimates, tendering and assurance of quality of technical cooperation. Officials from MDPAC will be nominated Imprest Administrator and Imprest Accounting Officer. The project will be implemented under partial decentralised management through the signature of a Financing Agreement with the Government of Solomon Islands in accordance with Articles 21 to 23 of the Financial Regulation of the 10 th EDF: The Commission controls ex ante all the procurement procedures except in cases where programme estimates are applied, under which the Commission applies ex ante control for procurement contracts > EUR 50,000 and may apply ex post for procurement contracts EUR 50,000. The Commission controls ex ante the contracting procedures for all grant contracts. Payments are executed by the Commission except in cases where programmes estimates are applied, under which payments are executed by the beneficiary country for operating costs and contracts up to the ceilings indicated in the table below. The responsible Authorising Officer ensures that, by using the model of financing agreement for decentralised management, the segregation of duties between the authorising officer and the accounting officer or of the equivalent functions within the delegated entity will be effective, so that the decentralisation of the payments can be carried out for contracts up to the ceilings specified below. Works Supplies Services Grants < EUR 300,000 < EUR 150,000 < EUR 200,000 EUR 100,000 4 The Ministry of Development Planning and Aid Coordination (MDPAC) is the Solomon Islands National Authorizing Officer (NAO). 5
The change of management mode constitutes a substantial change except where the Commission "re-centralises" or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegate body under, respectively, decentralised, joint or indirect centralised management. 4.2. Procurement and grant award procedures / programme estimates 1) Contracts All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in article 20 of Annex IV of the Cotonou Agreement. 2) Specific rules on programme estimates: All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question (i. e. the Practical Guide to procedures for programme estimates). The EDF financial contribution covers the ordinary operating costs deriving from the programme-estimates. This includes local staff, consumables and equipment. 4.3. Budget and calendar The total project cost is estimated at EUR 1.157 million, of which EUR 1.157 million shall be financed from the 10 th EDF / NIP in the framework of the Cotonou Agreement. The Financing Agreement execution period will be 60 months, comprised of an operational implementation period of 36 months starting from the signature of the Financing Agreement and a closure period of 24 months starting at the end of the operational implementation period. The budget sets out as follows: Type of Contracting Authority EDF contrib. Total Activities Contract EUR (000) % EUR (000) Result 1: Improved capacities in MDPAC to fulfil its role in the implementation and monitoring of the NDS and coordinate with stakeholders Activity 1.1. Enhance capacities of staff in MDPAC and line ministries' for sector policy development and NDS implementation PE, SER NAO 320 27.7% 320 Activity 1.2 Coordinate and consult to further the Aid Effectiveness Agenda and ensure alignment of programming and budgeting with NDS priorities PE NAO 70 6.1% 70 Activity 1.3. Establish a monitoring and evaluation framework for the NDS and produce annual progress reports PE NAO 40 3.5% 40 Activity 1.4. Produce 3Y rolling corporate plans & PE NAO 40 3.5% 40 6
3Y rolling Medium Term Development Plan Activity 1.5. Conduct analytical work to support NDS implementation, particularly in sectors where EU is active PE, SER NAO 165 14.3% 165 Total Result 1 635 54.9% 635 Result 2: Improved efficiency and visibility of EU-SIG cooperation Activity 2.1. Produce publication material and conduct visibility events on the EU-SIG cooperation and results PE NAO 37 3.2% 37 Activity 2.2. Complement and ensure timely and effective implementation of NAO managed projects PE, SER NAO 110 9.5% 110 Activity 2.3. MDPAC, line ministries and NSA participate in consultations, seminars and trainings in strategic areas to further the partnership and cooperation between EU and SIG PE NAO 170 14.7% 170 Total Result 2 317 27.4% 317 Horizontal Activities External Evaluation and Expenditure Verification EU EU 100 8.6% 100 Contingencies ** 105 9.1% 105 TOTAL 1,157 100.0% 1,157 *PE = Programme Estimate, SER=Service Contract, EU = specific commitment managed by EU Delegation ** The EU contribution to the "Contingencies" heading may be used only with prior agreement of the Commission. Both results will be implemented through direct labour arrangements under programme estimates (PE) managed by MDPAC 5. It is foreseen to contract three national staff under the PE to strengthen the M&E unit at MDPAC. The Government is committed to gradually absorb these M&E staff into the Ministry and the number will be decreasing during implementation. Service contracts will be signed under the PE or through a specific commitment signed by MDPAC, depending on the amount of the contract. The purpose of these contracts will be different, inter alia, for supporting monitoring and evaluation of the NDS or for other specific analytical work in sectors where EU is active. The recourse to the framework contract upon MDPAC request is not excluded. The contracts for Evaluations and Audits (Expenditure Verification) will be concluded and managed by the European Commission. 4.4. Performance monitoring The Support Unit to the NAO will assist the NAO (MDPAC) in the management of this second TCF (TCF II), drawing on lessons learnt from TCF funded from the 9 th and 10 th EDF. Implementation of the action will be done through Programme Estimates and Specific Commitments (Service Contracts) following the Practical Guide to Procedures for Programme Estimates (project approach) as well as the Practical Guide to the financial and contractual procedures (PRAG). Annual reports to be drawn up at the end of each Programme Estimate will inform the NAO (MDPAC) and EU Delegation on implementation progress. One external Results Oriented Monitoring mission will be carried out during the life cycle of the project. 4.5. Evaluation and audit The Commission will carry out external evaluations via independent consultants. Possibly, a mid-term evaluation mission and a final evaluation, at the beginning of the closing phase; 5 MDPAC,is the National Authorising Officer (NAO) of Solomon Islands 7
audits will be conducted for Programme Estimates in accordance with the Practical Guide to procedures for programme estimates (project approach). 4.6. Communication and visibility A budgetary provision has been made for communication and visibility actions under Result 2. The Support Unit to the NAO will complement the promotion and publication of the TCF II activities in conformity with the Communication and Visibility Manual for EC External Actions. All activities supported under this initiative will highlight the EU s financial support. MDPAC together with EU will produce brochures and other promotional material. MDPAC will acknowledge EU support on its website and other new media as appropriate. MDPAC will further invite the EU to participate in press conferences related to the NDS. Press releases with information on the EU s funding support to the implementation of the NDS and development programmes in Solomon Islands will be issued to coincide with significant events. Banners and advertising will also be used as appropriate at conferences, seminars and training events. 8