TWG Action Plan

152. The TWG reported that there were 254 actions that had been planned to be implemented, and satisfactory progress has been reported on 218 actions (86%); 36 actions were reported to be behind schedule. The TWG reported three reasons for the delay:

1. Extension of Platform 1 timeframe initially envisaged in 2004;

2. Some delayed activities are pending completion of pre requisite activities;

3. Delay in selection of technical assistance (negotiation process and approval taking longer time than expected).

153. TWG proposed the following recommendations:

1. Prepare a list of delayed activities and their pre requisite activities and send to Coordination Group to take action.

2. Develop further effective TA selection and coordination.

3. DP is working to improve the approval process.

154.  The following was reported as issues affecting the implementation of the Action Plan:

1. Platform 1 is now envisaged to be completed by 2007. It should be noted that the initial timeframe was overly ambitious and the time taken for the ramping-up phase was unforeseen at the time of reform programming. The PFMRP is now however, progressing well with sufficient momentum and support. This provides reasonable assurance that the revised timeframe is appropriate.

2. Preparatory work for Action plans and time frames of the Platform 1 priority areas are completed. TWG will agree new CAP & PIs for 2007 at its next meeting.

Joint Monitoring Indicators

155.  MEF continues to implement the PFM reform program (complete stage 1/platform 1 and begin implementing the action plan for stage 2, and monitor impact through the agreed PFM Performance Management Framework/ Indicators—by end of 2006.

1. Summary of draft 2nd Quarter PFM PIs: Pro-rata and 2nd quarter results are encouraging.

2. The action plans to complete stage 1/ Platform 1 have been finalized and implemented (there are good progress in expenditure process streamlining and capacity development).

3. Revised Consolidated Action Plan (CAP) and Program Indicators for 2006 has been discussed
   and going to be finally agreed in the next TWG meeting. .

Implementation status of the H-A-R Action Plan

National Strategic Development Plan targets are achieved (Indicator # 1)

156.  Within the framework of NSDP, sector ministries and agencies develop sector plans and prioritized results-based programs, and a sector MTEF (A.a.1). Public Financial Managment Reform Program (PFMRP) is being implemented. In summary this is a fiscal affairs sector plan with incorporating a prioritized results-based program with a medium term combinded sources budget. PFMRPs uses a "Platform Approach" to prioritization and results based programming. MEF's MTEF and Ministry Strategic Budget Framework (MSBF) are progressing well. MTEF and MSBF budget circular requirements provide the foundation for subsequent depending of MTEF/MSBF analysis. This will enable a better alignment of ministries' mandates and NSDP priorities with budgets in the 2008 Budget cycle and for improved linking of policy priorities to the budget in the 2009 Budget cycle.

157.  Based on prioritized programs of sector ministries/agencies, the three year rolling PIP is updated annually to feed into the national budget preparation process (A.a.2). The PFMRP has a five year rolling budget that incorporates capital investment activities (e.g. FMIS) and investment in capacity development and technical assistance. 2007 Budget call circular requires Budget submissions to be based on the NSDP. Three year PIP by sector need to be provided in a format consistent with the new CoA and within the context of the MEF's MTEF Strategy and MSBF. Enhanced coordination between CDC and MEF/Budget Department is needed. The MEF is considering recommendations related to the enhancement to the CDC's database, including multiyear and multi-dimensional classification functions.

Development partners base their support on NSDP priorities and PIP (Indicator #3)

158.  Development partners review their country assistance strategies and policies to align their assistance with NSDP priorities and sector development plans (B.1.a.1). PFM Development Partners contribute to development of joint assistance strategies and aligned assistance. The result is a Sector Wide Approach (SWAP) PFMRP. Pooled funds and coordinated country assistance strategies are key features. (See also A.a.1 above). Review of assistance strategies has been completed. This was conducted within the context of the SWAP based Public Financial Management and Accountability Project (PFMAP). This information fed into a joint review of the World Bank's country assistance strategy.

National public financial management and procurement systems that adhere to broadly accepted good practices (Indicator # 2)

159. MEF continues to implement the PFM reform program with targeted capacity development support from development partners to strengthen its PFM and procurement systems based on international best practices (B.1.a.2). Quarterly progress reports have been completed. (See also A.a.1 above) Enhancements to quarterly report format and scope are progressing well.

Increasing proportion of development assistance delivered through national institutions, systems and procedures. (Indicator #5)

160. Mutually agreed framework agreed. Result is the SWAP PFMRP. Negotiations on International Procurement Agent is near completion. A sector coordinated financial management and procurement supervision mission to occur in mid-October. The SWAP framework has produced a number of reliable assessments (CPAR, IFAPER, Joint Missions etc). RGC Procurement manual for external assisted projects is being followed. Procurement reform is a key aspect of the PFMRP. The vision of this reform is to have one procurement manual/law that applies to external assisted and government funded procurements. Similar approaches are planned in other aspects of PFM including budgeting and accounting reform. PRSO is supporting this approach.

Development partners release aid disbursements according to agreed schedules in annual or multi-year framework. (Indicator #7)

161.  Multi-year, combined sources (trust fund donors, bilateral, multilateral and government) has budget developed. MEF is working on mainstreaming the administation of the multi-year budget and procurement planning process.

The number of parallel PIU/PMUs for day-to-day management and implementation of external funded projects and programs steadily reduced (Indicator #6)

162. PFMRP PIU is fully integrated. Government employees are managing the program within a SWAP and multi-year context.

Capacity development issues are addressed in the formulation of Sector Plans and ODA supported programs/projects with development partners' financial support to achieve targeted development results (Indicator#4)

163. Initial capacity assessment has been completed as part of PFMRP, Mulit-Donor Trust Fund (MDTF) and PFMAP assessments. Detailed capacity development strategy is progressing. Merit Based Pay Initiave (MBPI) has been implemented with encouraging results. Training and scholarship program is on track. Capacity enhancement of the MEF training institute (EFI) is progressing. Counterparts and capacity building duties have been specified in ToRs and contracts for consulting services. Funding of around $12.5m (over 5 years) is provided for PFM training and capacity building provided through the SWAP-PFMAP, MDTF and Government Budget. This represents around 42% of
overall project financing (including government contributions). The remaining amount is systems development and technicial assistance.

Increasing proportion of ODA is delivered through Sector/thematic Programs, and other Program Based Approaches (Indicator #9)

164. PBA=SWAP=PFMRP=Pooled funds from multiple donors (MDTF and PFMAP) with additional direct coordinated bilateral and multilateral assistance. Partnership principles for PFMRP donors and development partner coordination mechanisms have been working well. Enhancement to coordination arrangements has been undertaken on an ongoing basis.

Steadily decreasing number of separate, duplicative donor missions and diagnostic reviews and studies (indicator # 10)

165. High level Economic and Sector Work (ESW), Analytical and Advisory Assistance (AAA) and supervision missions have developed within the project preparation and monitoring framework. Responsive and flexible systems are in place to adapt to changing circumstances. e.g. EITI/Oil revenue Management mission and forthcoming Financial Management and Procurement supervision mission coordinated with PFM development partners.

166. Development partners successfully implement their Action plans to meet the commitments of the Paris Declaration. Annual reports on PFM will be joint reports. These will feed into development partner country action plan reviews.

167. Strengthened application of EIAs and “strategic environmental assessment” approaches at the sector and national levels. MEF is considering establishing a working group to coordinate with relevant sectors. It is now awaiting consultation from lead agency. Possible areas for MEF contribution are: (i) specification of EIA requirements for new policy and new project proposals being brought forward by Ministers during the budget process (including mid-year reviews and ad-hoc spending submissions); (ii) provide comment on drafted policy and procedures, especially those with financial implications. MEF - Budget Department may consider providing training in understanding and interpreting EIAs.

168. RGC's sector ministries and development partners adopt harmonized approaches to tackle cross-cutting issues, such as gender equality. Cross-sectoral working groups have been established (e.g. Health, Education, MEF, DPs on Performance Indicator Review). EAP selection process is mindful of gender balance. MBPI monitoring includes gender balance review. Gender budgeting options are under review.

RGC and development partners use jointly agreed results-oriented reporting and assessment frameworks that have a manageable number of indicators to monitor progress against key dimensions of national and sector development strategies (Indicator #11)

169.  PFMRP Performance Indicator set has been agreed, reviewed and enhanced through a SWAP context. PRSO and PFMRP frameworks are mutually reinforcing. SOPs and NOGs have been developed within the PFMRP context. Compliance is monitored and supported.

Development partners provide timely, transparent and comprehensive information on aid flows to the RGC (Indicator #12)

170. DIC database enhancement and automation are being prepared. CDC database enhancement
is needed.

Resource mobilization

171. The TWG reported that it has been able to mobilize resources for the implementation of the Action Plan.