Public Disclosure Authorized Public Disclosure Authorized Implementation Status & Results Kosovo Public Sector Modernization Project (P101614) Operation Name: Public Sector Modernization Project (P101614) Project Stage: Implementation Seq.No: 4 Status: ARCHIVED Archive : 01-Sep-2012 Country: Kosovo Approval FY: 2010 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key s Board Approval 04-Feb-2010 Original Closing Planned Mid Term Review Last Archived ISR 27-Dec-2011 Effectiveness 17-Jun-2011 Revised Closing Actual Mid Term Review Project Development Objectives Project Development Objective (from Project Appraisal Document) (a) To strengthen the performance of key budget organizations in budget formulation, budget execution, and public procurement; (b) To establish the foundations for fiscally sustainable payroll management and effective human resource management in the corecivil service; and (c) To create conditions for further automation of government work processes and for development of e-government applications. Has the Project Development Objective been changed since Board Approval of the Project? Yes No losure Authorized Public Disclosure Authorized Component(s) Component Name Component Cost Component 1: Improving public financial management performance in selectedbudget organizations 3.00 Component 2 - Improving payroll administration and laying the foundations for a professional civil 2.05 service Component 3 - Increasing the security and efficiency of government information systems 2.30 Component 4 - Project management, including project audit and evaluation 0.40 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Unsatisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview The project implementation so far has been slow and even though many procurement procedures for various activities have started(some of them quite a long time ago), Page 1 of 8
unfortunately no activity has yet been initiated (apart for some small TA). This is mainlyrelated with the weak capacities of the implementing units and their unfamiliarity with the World bank procurement and financialprocedures. Implementation progress and progress towards the project objectives have been moderately unsatisfactory. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Improved quality o f budget formulation and execution in the budget organizationsthat would participate in the proposed project Increased bidder participation in public procurement tenders and cost savings achieved through Quick Gains actions and e- procurement modules Text Value PEFA assessment 2009 indicators: # PI-1: score: C (actual expenditure deviated from budget by more than 15% in one of the last three years); # PI-12 (iii, iv): Multiyear perspective in fiscal planning, expenditure policy & budgeting # score: C PI-12 (iii) score: C; PI-12 (iv) score: D; # Only 3/7 quality indicators of budget submissions met by all 5 beneficiary BOs; no BO meets 3 quality indicators for budget execution 30-Jun-2009 30-Nov-2011 Text Value 8,270 bidders participated in procurement tenders in 2008 (1.7 bidders per contract); No electronic procurement transactions; QG study reports significant price disparities within procurement categories in the same year (2008): # Civil works/ roads: up to 90%; # Maintenance: 39% # Security: 41%; PEFA PI-1 score B; PEFA PI-12 (iii), (iv) score B; At least 4/5 beneficiary organizations meet at least 5/7 intermediate outcome indicators Bidder participation increases by 15% Price disparities in QG procurement categories do not exceed 10% in the same year Cost savings of at least 5% for each category achieved Page 2 of 8
Transparent and coherent pay and grading structure introduced in the core civil service supported by improved ICT systems that enable effective fiscal and management # Buildings rental 64%; # Food 95%; # Medicines 17-70%; # Office supplies 26%; # Fuel 9.3% in a year/ up to 31% in a month No electronic procurement transactions QG study reports significant price disparities within procurement categories in the same year (2008): # Civil works/ roads: up to 90%; # Maintenance: 39% # Security: 41%; # Buildings rental 64%; # Food 95%; # Medicines 17-70%; # Office supplies 26%; # Fuel 9.3% in a year/ up to 31% in a month 30-Sep-2009 31-Oct-2011 The new Public Procurement Law adopted in August 2011 renames the Public Procurement Agency as Central Procurement Agency, brings it under the MoF, and strengthens its role in consolidated procurement. The CPA has hired new qualified staff for this function. CPA is annually updating the data on price disparities paid by different contracting authorities. Text Value No grading system in the civil service; Wide pay variations among civil service bodies; 100% of permanent civil servants graded; Equal bases pay for posts of equal grade and salary step Page 3 of 8
controls in payroll administration Enhanced security and interoperability of government information systems (through centralized data storage and systems maintenance,and interoperability framework) PEFA indicator PI-18 (effectiveness of payroll controls) score: D+; No link between HRMIS, payroll, and Treasury 30-Sep-2009 Text Value No adequate, secure data storage and backup facility for major ICT systems; No interoperability between major ICT systems 31-Jul-2012 Draft regulation on job classification and the pay structure has been approved in March 2012 as a prior action for SEDPO 2 disbursement. across civil service bodies; Improved PEFA PI-18 score (C+ or above) 30-Sep-2009 31-Jul-2012 Data center is operational; Reduced risk of data loss; Improved access to data control and physical security; New systems developedaccording to interoperability framework Intermediate Results Indicators Page 4 of 8
Indicator Name Core Unit of Measure Baseline Current End Target Improved quality of budget and MTEF submissions of beneficiary budget organizations Improved budget execution rates by beneficiary budget organizations (BOs) Text Value Beneficiary BOs comply with 3 out 7 budget submission quality criteria (see comment for explanation) 30-Sep-2009 (a) Compliance with ceilings set by MTEF and MoF budget circulars. (5=NO) (b) Consistency with MTEF and sectoral policy priorities (5=YES) (c) Clear explanation of budget objectives and priorities (5=NO) (d) Fully developed cost estimates in budget plans for three separate, consecutive years. (5=NO) (e) Explanation and justification of proposed changes from previous budgets consistent with announced policies and MTEF. (5= YES) (f) Inclusion of all capital projects in PIP prior to their inclusion in budget submissions. (4/5= NO) (g) Compliance with deadlines set by MoF circulars. (5=YES) Text Value (a) Deviation from original approved budget expenditure by beneficiary BOs does not exceed 10 percent (in aggregate and by BO) for the year. (3/5=NO) (b) Variance in expenditure composition exceeds overall deviation in primary expenditure by no more than 5 percentage points for the 30-Nov-2011 All 5 beneficiary BOs meet the 7 quality criteria All beneficiary BOs meet the interim outcome indicators for budget execution Page 5 of 8
year. (5=NO) Status of public procurement activities is regularly monitored through contract management information system HRMIS functions as a civil service registry and online data links between HRMIS-payroll- Treasury systems enable effective fiscal and management controls in payroll administration Performance appraisal system is introduced and used as a basis for progression along salary steps Ministry responsible for public administration has necessary capacity to exercise key human resource management functions for the core civil service (c) Targets (expenditure and milestones) for at least 70 percent of projects in approved budgets are achieved. (5= NO) 30-Sep-2009 15-Sep-2010 Text Value No central capacity exists to monitor procurement cycle 30-Sep-2009 Text Value HRMIS does not include grade or salary step data; includes only personnel data for 3 civil service organizations 30-Sep-2009 Text Value No regular performance appraisal system or mechanism for salary progression 30-Nov-2011 SEPA system is being reviewed by counterparts PPA and PPRC use electronic system to regularly monitor public procurement activities by all contracting authorities in Kosovo 31-Oct-2013 HRMIS rolled out in all civil service organizations 31-Jul-2012 The consultant has prepared the functional requirements and the procurement process will be launched in September 2012. Managers trained (no.); Performance appraisal launched in pilot organizations 30-Sep-2009 31-Jul-2012 Text Value MPA Department of Civil Service Administration has 25 staff (14 in payroll unit) 30-Sep-2009 30-Nov-2011 Department responsible for civil service management has staff trained in all core HR functions Page 6 of 8
Civil service training based on training strategy and monitored according to training impact assessment methodology Centralized data management and systems maintenance leads to efficiency gains Text Value No civil service training strategy. KIPA training covers only basic needs of all public service. Training effectiveness not systematically monitored. 30-Sep-2009 Text Value Approx. EUR 0.15 million annual spending on duplicated maintenance, plus some EUR 0.4 million in duplicated equipment and development of stand-alone systems 30-Sep-2009 30-Nov-2011 Training impact assessment methodology developed; KIPA training program revised; MPA & KIPA staff trained in using the methodology ToR for the technical assistance that will support the MPA and KIPA have been submitted to the Bank for advance review. Cost savings from ICT systems maintenance of 30% (compared to stand-alone systems) 15-Dec-2011 Procurement of Government data center is currently underway. Most probably the Government and the Bank will agree to re-tendering. Data on Financial Performance (as of 07-Jun-2012) Financial Agreement(s) Key s Project Ln/Cr/Tf Status Approval Signing Effectiveness Original Closing Revised Closing P101614 IDA-46920 Effective 04-Feb-2010 10-Mar-2010 17-Jun-2011 P101614 IDA-H5450 Effective 04-Feb-2010 10-Mar-2010 17-Jun-2011 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P101614 IDA-46920 Effective XDR 2.90 2.90 0.00 0.00 2.90 0.00 P101614 IDA-H5450 Effective XDR 2.30 2.30 0.00 0.05 2.25 2.00 Disbursement Graph Page 7 of 8
Key Decisions Regarding Implementation During the missions of Sustainable Employment Development Policy Program (SEDPP) in March and Public Sector Modernization Project in April, the team was happy to learn that as part of the Matrix of the SEDPP, the Government has approved the relevant regulation on job classification, which includes the salary grid, and also the amendment on the Public Procurement Law. The Government has also adopted the regulation to authorize the Central Procurement Agency to conduct consolidated procurement for selected categories. The intention is to have new pay and salary system starting from early or July 2013. The same will apply for the centralized procurement in certain categories (to be decided from the Ministry of Finance), that is expected to start in early 2013. It has been decided that the closing date of the project should be extended until the end of December 2014, and this is mainly to make up for the time that was lost between the board approval date and the date the project became effective (around 14 months). The team is working to finalize the extension procedure within mid July 2012. Restructuring History Level two Approved on 23-Jul-2012 Related Projects There are no related projects. Page 8 of 8