D R A F T A I D E - É M O I R E REPUBLIC OF LIBERIA Liberia: …documents.worldbank.org/.../1482533697342-0000A8056-ITM00267-P127319-… · for International Development (USAID)

D R A F T A I D E - É M O I R E

R E PUB LI C O F LIBE R IA

Liberia: Integrated Public Financial Management Reform Project (IPFMRP) –P127319

Eighth Implementation Support and Review Mission (November 7-11, 2016)

Aide Memoire No. 8

I. Introduction and Acknowledgements

1. A Joint Implementation Support and Review (ISR) Mission consisting of the World

Bank (WB), African Development Bank (AfDB), Embassy of Sweden/Swedish International

Development Cooperation Agency (SIDA), European Union (EU), and United States Agency

for International Development (USAID) was carried out in Monrovia for the Liberia Integrated

Public Financial Management Reform Project (IPFMRP), during the period November 7-

11,2016. The Mission team1 met with various officials from the Ministry of Finance and

Development Planning (MFDP), Civil Service Agency (CSA), Public Procurement and

Concession Commission (PPCC), Controller and Accountant General (CAG), General Audit

Commission (GAC), Internal Audit Agency (IAA), Liberia Revenue Authority (LRA), Public

Accounts Committee (PAC)of the Parliament, Legislative Budget Office (LBO), Financial

Management Training Program (FMTP), Liberian Institute of Certified Public Accountants

(LICPA), Liberian Institute of Public Administration (LIPA), State Owned Enterprises (SOE)

Financial Reporting Unit, and the Project Management Team - Public Financial Management

Reform Coordination Unit (PFM RCU).

2. The list of officials met is included in Annex 1. The Mission wishes to extend its

appreciation for the assistance and courtesy extended to it by the Minister of Finance and

Development Planning; Deputy Ministers of Finance for Fiscal Affairs, Economic Affairs, and

Budget and Development Planning; Auditor General; Comptroller and Accountant General,

Executive Director (ED) of PPCC, Director General of CSA, Commissioner General of LRA,

RCU Coordinator, and all other officials who attended the Mission.

II. Project Description

3. The project development objectives (PDOs) of the IPFMRP is: improved budget

coverage, fiscal policy management, financial control, and oversight of government finances

in Liberia. The project is expected to: (a) enhance budget planning systems, coverage and

credibility; (b) strengthen PFM legal framework, budget execution, accounting and reporting;

(c) strengthen revenue mobilization and administration; and (d) improve transparency and

accountability. The latest progress status on the key performance indicators, at PDO and

intermediate level, is included in Annex 2.

III. Project Implementation Status

1Messrs Donald Mphande (Task Team Leader, WB), Patricia Laverley (Principal Macroeconomist); Alex Yeanay (Senior

Social Protection Officer), Patrick Hettinger (Economist) AfDB, Marja Ruohomaki (Counselor/Senior Program Specialist

Democratic Governance, Embassy of Sweden/Sida), Grace Buencamino (Public Sector Reform Advisor, USAID), Pia Buller

(Attaché/International Aid and Cooperation Officer, EU), Andrew Asibey-(Monitoring and Evaluation Consultant-WB), Smile

Kwawukume (Senior Public Sector Specialist, WB), Moses Kajubi (Senior Public Sector Specialist, WB), Stefan Sjölander

(Consultant, Sida), Seifu Mehari (Consultant, WB), Saidu Goje (Financial Management Specialist, WB), Daniel Bokaye

Kwabena (Economist, World Bank), Komana Lubinda (Senior Procurement Specialist-WB), and Zoe-quoi Diggs-Duncan

(Team Assistant, WB).

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4. Overall Summary. The likelihood of the project achieving its development objectives

during the remaining implementation period remains positive. The Mission’s assessment of its

likelihood to meeting the original Project Development Objective is rated as Moderately

Satisfactory. Cumulative and periodic Implementation progress of agreed activities has been

rated as Moderately Satisfactory. Three out of the five project components have been rated

Moderately Satisfactory where two have been rated satisfactory.

5. Detailed assessment and assessment progress of previously agreed actions by

component is presented below in section V.

6. In consideration of the remaining project period and available additional EU financial

resources, a key priority of the project for the upcoming period is to reinforce the use and

functionality of the Integrated Financial Management Information Systems (IFMIS) in the 50

sites where the solution has been rolled out to. Implementation completion of the remaining

activities to stabilize the system should be central piece of focus. This includes the

implementation of the Budget Module, addressing aspects outlined in the IFMIS Independent

Review of August 2016, undertaking a critical self-assessment of the project implementation

to date, project impact on PFM architecture in Liberia and service delivery. Addressing

implementation of all strategic issues outlined in section IV should be another area of

convergence of implementation by the respective stakeholders and the RCU.

7. Key Project Data: Overall disbursement rate is 96.5 percent.

Project Data

Project Performance Ratings (no

formal rating for the current Mission) Financier Allocation

(US$m

Equivalent)

Disbursed

(US$m

Equivalent)

IDA

(Credit)

MDTF(Gra

nt)

AfDB

TOTAL

5.00

18.95

4.60

28.55

4.87

18.09

4.460

27.56

Summary Ratings: Last

Now Achievement of PDO: S

S

Implementation Progress: MS MS

IV. Key Strategic Issues

8. Implementing the laws and related regulations in Liberia: Whilst the GOL has put

in place a number of laws and regulations some of which contain sanctions for non-compliance

with them by public officials in the area of PFM, the Mission notes that these laws are not

executed as intended. This takes away core needed incentives to adhere with the laid out

government laws and procedures. A case in point is the lack of consistent serious

implementation of internal and external audit recommendations. The GOL PFM regulations

clearly stipulate in regulation K5 that the MFDP should withhold emoluments of any officer

who has not responded to GAC or IAA queries or implemented recommendations. This

regulation has been sparingly utilized and yet it would bring about the required compliance

with the law in public service. The non- compliance aspects of the law have henceforth

undercut the desired impact level of reform and change required in the PFM arena through

increased compliance.

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9. The mission recommends that a change of strategy to implore public officials to adhere

to promulgated laws and regulations be formulated by the RCU. Upon approval, the Minister

of Finance should issue a circular imploring all controlling officers to judiciously apply the

law as laid out. The suggested date for the circular be issued is by February 29, 2017.

10. Need for PFM Technical Working Group on Fiscal Decentralization: Whilst

government has made significant gains in the PFM reform arena, the gains have brought about

a number of technical issues that still remain unresolved. For example, defining procurement

staffing arrangements at county level within the ambit of de-concentration of the existing

functions require further clarification as to the model to be adopted. Resolution of these issues

can only be undertaken at technical level by making makes recommendations to senior

government officials of the core affected entities for approval. The outcomes of such

recommendations should feed into the upcoming PFMRs and get attention of government and

partners for support to strengthen institutional building.

11. The mission recommends that the Ministry of Finance proceed to set up a PFM

Technical Reform Working Group that oversees, discusses and resolves such emerging

technical issues. In order to do this, there will be need to identify the core stakeholders and

formulate requisite terms of reference for a committee that meets every quarter starting quarter

ending December 2016.The notice needs to be shared with all stakeholders accompanied by

the first agenda for the first meeting where the Ministry of Finance shall also provide

secretarial services and keep minutes of meetings held. This will act as a basis for advising the

Minister of Finance on available options to be explored.

12. Strategic Importance of the State Enterprise Unit: The government of Liberia

acknowledges the fact that it can maximize SOE contribution to its economic growth. It also

recognizes the need for public information and accountability in relation to SOE activities and

a requirement for central policy making in relation to the allocation of public funds.

Consequently, it has made good progress in establishing the SOE Unit which currently has a

total number of 4 staffs. The Unit is meant to be dedicated to SOE supervision pertaining to

financial reporting.

13. Proper and timely SOE reporting information would improve the ability of the state to

exercise ownership, determine the level of fiscal risks arising from SOEs, determine whether

the same are run efficiently and monitor companies under its ownership. The Unit is also

supposed to separate clearly policy, regulatory and shareholder functions to ensure greater

transparency and more conscious decision making where conflicts between goals exist. This

requires the development of specific and transparent mandates to ensure that SOEs have clear

objectives and targets, which can be monitored over time.

14. The mission was informed that the Unit’s ability to perform its supervisory function

through reporting is being seriously hampered. This is due to lack of cooperation by some

affected SOE executives. This development works to thwart what GOL intended in setting up

the unit. Provision of company accounts by SOEs annotating book value of fixed assets,

pension liabilities, guarantees and any other information is also impeded by this lack of

cooperation.

The mission recommends that the existing PFM Act be amended to accommodate specific

sanctions for CEOs of SOEs that do not comply with the requirement to timely submit the

required financial information within a stipulated timeframe. Alternatively, some of the

sanctions outlined in the PFM regulations should be applied judiciously and uniformly across

all SOEs. Further, there may be need for consideration for the Presidency to issue an Executive

Order to enhance SOE oversight responsibilities that focuses on imploring all officers to

comply with timely reporting aspects of the current law while awaiting the repeal of the decree

that created the BSE to enhance the functionality of the SOE unit

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15. The unit also needs to be given the rare mandate to evaluate the governance structures

and operational efficiency of the SOEs being monitored by clearly articulating a policy

statement which needs to be submitted to Cabinet for approval by March 31, 2017.

16. Migration of Budget Module onto IFMIS: Despite a number of attempts by the GOL

to embark on the migration of the budgeting system from the existing legacy system onto

FreeBalance Version 7 suite GRP, the attempts have not happened. This is owing to the

sensitivity of budget information. GOL wishes to be sure that the migration will work without

glitches where production of budget books will not be fraught with glaring glitches that may

jeopardize sensitive related government information.

17. Suggestions to visit countries where the FreeBalance solution version 7 GRP has been

implemented for budget have since been provided. This will give confidence to the venture

aimed at kick-starting the migration process within the remaining seven months. Note that the

system to be implemented is supposed to be integrated. The migration would allow for

prevention of possible interfaces which come with specific risks as is currently the situation.

18. The mission implores government to urgently embark on the migration exercise of the

Budget Module of the FreeBalance through working in partnership with the solution provider.

This can be done by using the specifications developed to guide the process. This may need to

be prefaced by one study visit to be financed by the project Core affected officials that are

critical to decision making will need to be part of this planned visit to a country that has

successfully undertaken the implementation of the solution in the area. The migration needs to

be undertaken by April 30, 2017 and subsequent quality assurance undertaken either before or

after the exercise.

19. IPFMRP II: During the October 2016 visit to Washington by Senior GOL officials

attending annual IMF/World Bank meetings, a formal verbal request for the Bank and its

partners to finance a second phase of the existing project which closes on June 30, 2017 was

made. These representations were echoed by the Deputy Minister of Finance responsible for

Administration who deputized for the Honorable Minister of Finance during the mission.

20. In response to the request, the Mission recommends that GOL officially submits a

written request confirming the earlier discussion by November 21, 2016.To cover for a

preparatory activities of the project, the GOL may also wish to apply for a Project Preparation

Advance (PPA) in the submission which will allow for implementation of critical requisite

preparatory activities to be implemented during the intervening period.

21. PFMRs: The mission was informed that a consultant has been engaged to assist GOL

in putting together a Public Financial Management Reform Strategy (PFMRs) for (2017-2021).

The New strategy would guide any future reforms and form the basis for a follow on IPFMRP

II being sought for by GOL.

22. The mission recommends that the draft strategy be shared with the partners before it is

finalized by December 15, 2016 for their inputs and consequently approved by Cabinet to

ensure requisite political buy in.

23. M&E Arrangements and Performance: The mission commends the Project

Coordination Unit for assigning a full-time M&E Officer to collate information from the

implementing units to prepare quarterly and annual progress reports. The mission reviewed

the FY2015/2016 Annual Progress Report and the compendium matrix on the status of

performance. While considerable efforts have gone into the preparation of these two

documents, there is no cross referencing to show how the full implementation of the reforms

are contributing to the achievement of the Project Development Objective (PDO).

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The achievements at the component and sub component levels are significant. However, the

overall rating remains Moderately Satisfactory. Equally, the 2016 PEFA Assessment rates the

PDO level indicators as Moderately Satisfactory.

The Mission advised that the FY 2015/2016 Annual Progress Report can be built into an end

of project evaluation to provide in-depth insights into the overall project effectiveness and

sustainability. The end of project evaluation should be a critical self-assessment exercise. The

Project Coordination Unit has the internal capacity to do so. The end of project evaluation

could provide in-depth information that can be fed into the Implementation Completion Report

and Results (ICR) to be undertaken by the Project as well as the Bank. The end of project

evaluation will provide supplementary information beyond the monitoring data by putting

emphasis on the following core issues:

• Appropriateness of project objectives and design

• Assessment of key factors affecting the effectiveness of project implementation

• Assessment of project efficiency

• Assessment of the robustness of the project development outcomes

• Assessment of risks to the development outcomes and sustainability

• Assessment of Bank and Borrower performance

• Key lessons learned, etc.

The mission recommends that the project team undertake a self-assessment in-depth

evaluation of project efficiency, effectiveness and sustainability by March 2017 before the

beginning of the internal and external ICR. The World Bank will be ready to provide the

required technical support. Annex 7 provides a tentative outline of the end of project

evaluation.

24. IFMIS In-depth review action plan: The August 2016 independent review of the

IFMIS implementation to date a number of observations noted that need attention within the

report. These include the need for the team to formulate a plan for fixing the poor relationship

with the solution provider, address solution sustainability and fixing functional issues. The

project team has provided comments on the findings although more work needs to be done.

25. The Mission recommends that an action plan with clear time lines for fixing the fixing

the observations be developed. Key amongst them is to renegotiate the contractual issues and

service provision. The action plan should be submitted to the partners by November 30, 2016.

26. The critical role of the Legislative Budget Office: Finding the rightful balance

between the executive and legislative prerogatives in the budget policy making is a difficulty

that is well acknowledged world over. In as far as Liberia is concerned, the LBO has played a

critical role to conduct Budget analysis when annual budgets are submitted to Legislature. The

Mission noted with concern is the fact that on a few occasions, the Legislature has overreached

its mandate to perform technical functions with some agencies where it has demanded more

revenue generation aimed at accommodating projected expenditures. Whilst the affected

agencies have at times complied with the requests and included the increased level of revenues

in the approved budget, some have faced serious problems to do so. This has led to frequent

annual budget revisions for such institutions which goes against the principle of budgeting

realistically for the short and medium term.

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27. Further, the decisions undertaken have not been underpinned by some robust and

detailed fiscal impact analysis on core decisions of the legislature.

The Mission was also informed that the operations of the LBO are therefore affected owing to

reduction in its budget allocations and consequently unable to undertake detailed analysis that

would further inform the legislature on additional decisions being taken.

28. The Mission recommends that the legislature be advised of how best to use the budget

analysis work that the LBO undertakes and ensure that any variant decisions are underpinned

by some solid technical analysis which can impact negatively on the validity of annual budget

revenue estimates and projections. In the same vein, the Legislature should also be reminded

to pass annual budget on time given the consistent delays in passage of such budgets over the

last three years despite the timely submission of annual budgets by the Executive as the Mission

noted.

29. Implementation of GAC and IAA internal control recommendations: The Mission

would like to point out that the benefits derived from internal and external audit findings is

not in the recommendations but in their effective implementation to bring about the impact of

intended reforms. Important measures of an audit ministries effectiveness are the type of issues

it tackles and changes/improvements it changes to bring about the desired reform.

30. Whilst the Mission was informed that some ministries and agencies do take some time

to implement such recommendations, the Mission recommends that the MFDP uses its Budget

release power to force effective implementation of the remnant and future recommendations

from external and internal audits. The MFDP should ensure that recommendations across

government agencies and ensure that each Ministry and agency is up to date in implementation

by June 30, 2017. This would be in line with the existing regulations on the subject matter.

V. Detailed Component Update

Component 1: Enhancing Budget Planning Systems, Coverage and Credibility

31. The overall implementation progress of this component is rated Moderately

Satisfactory.

(a) Enhanced Macro-fiscal framework: This sub-component is rated moderately

satisfactory in view of the need to improve economic monitoring and forecasting to

avoid consistent revenue shortfalls.

32. The Department of Economic Management (DEM) works in collaboration with the

Central Bank of Liberia and LISGIS on updating data on key economic activity in an

Excel database to inform forecasting. It receives complementary assistance in

forecasting from the International Monetary Fund (IMF). Turnover and departure of

staff for other departments and on study leave over the past two years has reduced its

macro-modelling capacity to support GDP estimation and forecasting. The mission was

informed that the department has relied on some capacity borrowed from the Ministry’s

newly created Liberia Macroeconomic Policy Analysis Center (LIMPAC). Revenue

estimates are prepared together with the Fiscal Affairs Department (FAD) and the LRA.

33. Following revenue shortfalls in FY2015/16, the DEM assessed a risk of US$70 million

in revenues for which a revised budget was prepared. Over the course of 2016, real

GDP growth forecasts have been revised downwards from 2.5% to -0.5%, and revenues

have fallen below forecasts in the first four months of FY2017/18 such that the national

budget is already expected to be recast only one month after it was signed.

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Combined with the additional revenues added every year to the resource envelope

during the Legislative approval process, this has consistently led to revenue shortfalls,

which undermines budget credibility and execution.

34. The country’s transition from low to moderate risk of debt distress and an ever

tightening borrowing ceiling underscores the need to improve the macro-economic

analysis capacity to play a pro-active role in macro-economic management. This

includes the prioritization of the borrowing program and analyzing debt sustainability.

35. The Mission recommends that the DEM increase efforts to enhance economic

monitoring and forecasting, while stabilizing staffing arrangements. The potential

overlapping activities and mandates with LIMPAC should also be clarified by January

15, 2017. The IPFMRP could support DEM capacity building activities, including

potentially long term TA.

Fiscal Reporting and Fiscal Policy Review:

Progress of implementation activities under this sub-component is rated as Moderately

satisfactory due to consistent delays in reporting quarterly and annual fiscal outcomes.

The SOE Unit of MFDP is responsible for reporting fiscal and final performance of

SOEs and evaluating the debt situation for purposes of contingent liabilities.Moreover,

despite the continued production of SOE financial reports, the State Owned Enterprises

(SOE) Financial Reporting Unit is hampered in its work due to lack of compliance from

SOEs and incomplete financial reports.Good financial information is essential for

decision-making about public finances namely for the corporations they own - the State

Owned Enterprises (SOE's) and the public accountability.

36. Quarterly outturn reports consistent with GFSM 2001 were prepared using IFMIS

generated data/information; however, reporting has not yet reached the desired level of

timeliness due to challenges in reconciling data and accessing data from CBL due to

reported infrastructure constraints. The PFM Act calls for these reports to be published

within 45 days of the end of the quarter. The FY2015/16 Quarter 1 Fiscal Outturn

(covering July to September 2015) was posted online on 4 January (one-and-a-half

month later than expected), the Quarter 2 Outturn (covering October to December 2015)

was posted on 12 May (almost 3 months later than standard), and the Quarter 3 outturn

was published on 1 July (one-and-a-half months late). The mission was informed that

the Quarter 4 outturn is expected to be published the week of 14 November 2016.

37. The SOE Unit has continued to produce its quarterly financial reports despite

constraints, having published the Q3 and Q4 FY15/16 reports. An additional one staff

member has been added, leaving a shortfall of only one staff. However, staff costs for

the SOE Unit are not covered in the national budget. The unit has received a budget

allocation of US$150.000 reportedly to be used e.g. for the launching of a website and

a regional benchmarking study.

38. The SOE Unit reported on continued and remaining constraints when compared to the

previous Aide Memoire from June 2016 which include the under listed issues:

Existing draft policies on Dividends, Corporate Social Responsibility and Subsidies

have still not been approved by the MFDP. In addition, a policy on Borrowing

regulations and Issuing of Guarantees from the SOEs needs to be introduced.

Reporting to the SOE Unit continues to come in late from the SOEs and in some

cases, no reports are submitted for some SOEs.

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Financial reports from the SOEs continue to be presented to the SOE Unit in

different accounting standards. This violates obligations to present accounts from

all SOEs in IAS/IFRS.

Reporting requirements in the PFM Act have still not been implemented at

important SOEs, implying that these SOEs do not prepare complete income

statements, balance sheets or asset registers.

Financial management competence remains restricted with several SOEs

employing staff that may not be competent to undertake requisite financial reporting

functions and consequently violating basic corporate governance principles.

Financial reports presented to the SOE Unit are unaudited and consequently posing

problems on their accuracy and veracity for core decision making by the

shareholder.

39. The SOE Unit is monitoring 13, to be expanded to 15, of the financially most significant

SOEs. Of the remaining 21 SOEs several are inactive, but still not closed, representing

possibilities of misuse of funds without any kind of financial control procedures or

monitoring of these enterprises. The SOE unit plays an important role in control of

public resources outside the budget and how subsidies from the budget to the SOEs are

being used, in this mitigating the financial risk of quasi-fiscal resources. The SOE unit

also contributes to accurate revenue forecasting and revenue mobilization through its

insight in SOE finances, maintain SOE costs, and possible dividend contributions to the

budget.

40. The SOE Unit will not be able to move forward in this process or even uphold its

current positions without some structural changes of its mandate and position such as

suggested below:

Policy guidelines are needed for the establishment of the operations and enhanced

mandate of the SOE Unit

Legislation guiding the operations of all SOEs need to be introduced and

appropriately implemented through the Bureau of SOEs as complemented by the

SOE unit within MFDP

Impose sanctions when SOEs do not comply with regulations or recommendations

from the SOE Unit need to be established and incorporated in the PFM Act in the

medium term. In the short term, there may be need to adopt the existing

regulations on withholding CEO emoluments where compliance issues are

violated

The SOE Unit needs broadened mandate to request information from the SOEs

and to recommend non-disbursement of budget subsidies at non-compliance with

regulations

SOEs should be required to train their appropriate staff in financial management

and to finance external audits of their financial reports.

The feasibility of the SOE Unit’s transformation to a semi-autonomous

government institution should be considered and considered

The transformation of SOE staff from donor financed contracts to the

government’s payroll should be considered to safeguard sustainability of their

work and the unit as a whole

The number of staff at the SOE Unit would need a notable increase to uphold the

intended purposes of the Unit’s activities.

The Mission recommends that the current position and status of the SOE Unit is

reviewed with the objective to create a sufficiently resourced organization

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supported through regulations providing sufficient mandate to uphold sound

financial management principles at the SOEs. This structural change of the

position of the current SOE Unit is necessary for continued effectiveness of the

unit.

To ensure sustainability of the function, there is need that GOL gradually takes on

staff emoluments for the SOE unit starting in 2017/2018 and gradually ensure

such salaries are fully funded within the GOL Budget.

41. (c) Enhanced Budget Framework.

Overall implementation progress of this sub component is rated Satisfactory.

42. The President signed the 2016/17 Budget but is yet to be published. With the first

revenue forecast figures for quarter one of 2016/2017 being below expectations, the

legislature is being recalled to recast the 2016/2017 budget.

43. The draft MTEF for the 2017/18 budget should, according to the Budget Calendar, be

presented at the latest October 31, 2016. The draft has however so far not been

presented. The planned Cabinet meeting to approve the Budget Options Paper and its

sector strategies will independent from this delay still take place as scheduled, putting

the budget process for the 2017/18 budget on track at this point in time.

44. The Budget Calendar has for the first time also been approved by the President giving

it recognition and acknowledgement throughout the administration. Despite revised

macroeconomic projections forcing the MFDP to recalculate the 2016/17 budget, the

budget planning process for next year’s budget has continued uninterrupted, a

significant procedural step forward. This is partly a result of the enhanced collaboration

and coordination of activities at the MFDP through the Budget Working Group.

45. Integration of the planning and budget procedures in the budget process have also

improved where already existing documentation from the line ministries is being used

to consolidate the material, rather than bringing in new requests. This way of operating

has also contributed to a stabilised budget dialogue in the Sector Working Groups. The

Ministry is also planning to reintroduce the budget hearings at the MFDP for the

2017/18 budget, including representatives from external government institutions, e.g.

the CSA.

46. The above improvements have strengthened the intended strategic phase of the budget

planning process, at the same time as operative resources in the budget have diminished

substantially over time and further cuts on operational and investment resources could

be expected. This imbalance reduces substantially the value of the intended strategic

phase for the purpose of defining priorities and implementation of policies: a situation

that can only be resolved through a revision of the current budget composition and its

dominating salary expenditure.

47. The following activities aimed at increasing transparency of the budget process are on-

going such as:

Lack of clarity in the use of the current budget classification are being reviewed

aiming at clearer definitions of subsidies, grants and debts in accordance with

internationally recognized economic classification, with emphasis on a clearer

division between recurrent and capital expenditure and a reconciliation of the

absence of functional classification in the Budget Book, parallel to its inclusion of

this classification in the government’s Chart of Accounts

The ministry is working on an introduction of a database run by PIU aiming at

capturing all PSIP projects from the fiscal year 2012/13 to 2016/17 with the

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ambition to align this information with the aid management database of externally

financed projects. This necessitates a codification of the government’s projects in

the PSIP before they can be registered on the IFMIS and in the Chart of Accounts.

On longer term this could be done for donor funded projects that, following

codification, as a first step, stepwise now will be brought on- budget for planning

and budget purposes only. The database and the further inclusion of donor funded

projects on-budget will make the process of selecting projects for budget funding

more transparent and the possibilities to implement polices more relevant.

48. Several constraints still affect the budget process such as the under listed issues:

The most critical of these is the inaccuracy in macroeconomic and revenue

forecasting, impacting severely on the possibilities to correctly calculate and

hence execute the budget. As a typical example, guarantee allotments in

accordance with forecasts are submitted or overall guarantee approved budget

allocations.

There is no information on quasi-fiscal activities in the Budget Book. This makes

it difficult to calculate the full extent of government assets and liabilities and

hence make priorities on budget allocations.

The MTEF is in practice not functioning. This is in the medium term a clear

restriction on the possibilities to execute policy planning.

The legislature has the right to introduce modifications to the draft budget

including on revenue forecast.

49. Migration to the FreeBalance Budget Module. Plans shared with the June 2016 and

previous missions for the Budget Department to migrate from their current bespoke budget

preparation system to FreeBalance budget preparation module have since stalled. Progress on

the subject would benefit MOFED by (i) improving accuracy and data integrity; (ii) improving

control in relation to budget allotments etc; and (iii) making budget information more

accessible to line ministries and on a timelier basis.

50. The Budget Department has prepared a specification for the module, which identifies

their requirements of the module and the outputs from the module required to allow the

publication of the budget documentations. A work-plan for migration has also been submitted

to the RCU. Terms of Reference have been prepared for the engagement of a FreeBalance

consultant to assist in this process but as yet, this has not proceeded to recruitment. However,

Budget Department staff expressed low levels of confidence that the transition would be

seamless and propose to run the legacy budget preparation system in parallel through the initial

implementation of the module. The Budget department has consistently requested to visit one

or two countries where the Free Balance budget Module version 7 GRP has successfully been

implemented so that they can learn lessons on how to proceed.

51. Specifications for enhancements of the budget module and the FreeBalance proposal to

migrate the data and re-implement the budget module on the FreeBalance V7 appear to be

appropriate. In the previous mission, the following additional requirements were suggested for

inclusion to make the terms of reference (TORs) more inclusive. These are:

The system should be able to pull information from the CSM module to obtain the

information on establishment estimates;

The system should be able to allow some text information for incorporating

information like objectives of a program under a budget proposal, etc. (desirable).

52. The Mission continues to reiterate the fact that the submitted estimate cost of around

US$203,000 (detailed in the FreeBalance proposal) seems a bit overpriced. This is because the

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budget module was already configured and tested, and it is not an entirely new implementation.

Therefore, the government is encouraged to negotiate with the vendor to bring the cost estimate

down, especially given the limited project funds available for the remaining period of the

project. The proposal does not include BI Jasper licenses, which it states are to be procured

separately.

53. The government is advised to negotiate a turnkey contract with FreeBalance, including

BI Jasper licenses, in order to avoid multiple procurements and responsibilities.

54. Further, the Mission recommends that Budget and IFMIS technical staff visit Jamaica

using project resources to see how the Budget Module version 7 GRP version of the

FreeBalance has been implemented successfully before December 15, 2016.The team should

produce a report to be shared with all stakeholders and partners upon its return capturing

lessons learnt that they could apply in the migration exercise.

55. Gender mainstreaming and gender based budgeting:

This sub-component is rated Moderately satisfactory

56. The pilot for gender budgeting at the Ministry of Health as announced in the June

2016.The Aide Memoire has not moved as planned. No introduction of gender

budgeting at the budgeting level for FY 2015/2016 has materialized. The envisaged

technical work on the budget (formulation of a program with objectives, indicators and

disaggregated budget lines), the announced expansion of the pilot to the Ministry of

Education, analyses of accessible necessary statistics and organized training have taken

place. Activities so far have been restricted to the formulation of Terms of Reference

for a consultant and the introduction of a Working Group which have not amounted to

much progress. This development is not encouraging and portends a seemingly lack of

interest in this activity throughout the whole project period.

The Mission recommends that the MFDP follows through on at least one fully structured

gender budget program, starting with fiscal year 2017/2018 Budget. This calls for the

Department of Budget and Planning to cooperate on this issue with the Ministry of Health in

the regular budget process and utilize the resources of the available consultant at the Mo to

resolve the issue.

57. Fiscal Decentralization.

The implementation progress of this activity is rated Moderately Satisfactory.

The MFDP has moved fast in deployment of staff to the four County Treasuries (in Bonga,

Grand Bassa, Margibi and Nimba) included in the pilot on deconcentration of budget resources

for goods and services and in establishment of registration of payments in the IFMIS system at

county level. The whole process from approval of allotments to payment registration and

consolidation of accounts for these budget resources, is now entirely handled at county level

with parallel information sharing to the respective ministries involved at the central level

(Ministry of Health and Ministry of Internal Affairs). Procurement officers are still not

deployed and yet these are core for budget execution.

58. According to the PPCC, deployment of procurement officers at the Country Treasuries

is illegal at this stage. The PPCC has alternatively suggested other models of supporting the

procurement process at the county level since procurement is core for budget execution.

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59. These technical and institutional achievements represent a significant step in the fiscal

decentralization process and a good base for a continued transfer of financial management

procedures to county level. Most of the technical constraints restricting the decentralization

process presented in the Aide Memoire from June 2016, however remain and include the

following:

There is fundamental lack of clarity in the division of different financial management

mandates between sector ministry representatives at county level, county

administration staff and staff at the County Treasuries, as well as on corresponding

ministries at the central level

Relation to and division of responsibilities between the county level and district level

need to be defined.

The budget structure and the structure of the Chart of Accounts need to be reviewed to

serve the purposes and intentions of the decentralization process. However, the

Missions understanding is that Counties use a similar chart of accounts with central

government.

The financial management manuals and instructions of the government need to be

consolidated, including the instructions to local government authorities

The budget planning process at the central and county level need to be adjusted to the

features of fiscal decentralization

Financial management regulations need revision to define mandates and division of

labour in the current financial management procedures and for those that will realize at

the more advanced stages of decentralization

A Training Program that includes representatives from all government institutions

involved in the fiscal decentralization process needs to be discussed and formulated

The extra budget resources needed for the reform (extra salaries, equipment at the

county level, etc.) need to be defined and included in the budget. This includes a clear

division of budget resources between the County Service Centres and the County

Treasuries.

Responsibility and use of revenue resources collected at county level need to be

defined.

60. Fiscal decentralization process is currently restricted by above mentioned annotated

constraints and the lack of preparation of the reform strategy inclusive of the subject matter

from the MFDP. These restrictions will be more severe in the future if not appropriately

addressed in the immediate future.

61. The lower House has passed the Local Government Act and a final approval of the Act

at the Legislature represents a fundamental step towards devolution with extensive impact on

government financial management regulations in the long term. This implies that MFDP now

needs to identify activities to meet both short term and long term needs in this process. This

process needs consolidation at each stage of implementation of technical proposals. The pilot

should for this and other reasons currently not be extended beyond the four counties currently

included.

The mission recommends that MFDP form a Technical Working Group (TWG) within MFDP

to focus purely on financial management issues related to fiscal decentralization. This group

should work under clearly defined Terms of Reference and serve all government institutions

concerned in the fiscal decentralization process.

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This TWG being proposed is different from the one already existing that coordinates functions

at the Fiscal Decentralisation Unit at MFDP and should preferably be headed by the

Department of Budget and Planning.

The Mission recommends that the ministry recruits a long-term external support with vast

experience on the subject to the activities of the TWG. Formulation of the long term TA should

be ready and shared with the partners by December 15, 2016 for comments.

Once the long term TA is on the ground possibly in 2017 the TWG should elaborate a medium-

term road map for the complete fiscal decentralization process.

62. Progress on PDOs. The two PDOs level indicators for this component are based on

PEFA scores. The draft 2016 PEFA report has been used to update the results table. The 2016

Public Expenditure and Financial Accountability (PEFA) reports on the three most recent

completed financial years and therefore covers 2012/13, 2013/14, and 2014/15. It should be

noted that these indicators have not taken into account the recent changes in the PEFA indicator

usage as reflected in the February 2016 Field Guide Book on the subject.

63. PI-12 from the old PEFA guide rates the system on the strength of the multi-year

perspective in fiscal planning, expenditure policy, and budgeting. The indicator rates sub-

components relating to: (i) multi-year fiscal forecasts and functional allocations; (ii) scope and

frequency of debt sustainability analysis; (iii) existence of costed sector strategies; and (iv)

linkages between investment budgets and forward expenditure estimates. Some improvement

was evident between the 2008 and 2012 PEFA assessments. However, no change was recorded

between the 2012 and 2016 assessments. The objective of improving these scores to a rating

of “B” by end June and October 2016 has not been met. It is worth noting that the 2016/17

budget has been prepared to include medium term estimates for each budget line. While it

appears that this has been a largely technical change (i.e. has had little influence on budget

policy) it is a significant step in the right direction. Over time, the MFDP needs to analyze and

challenge the outer-year estimates to ensure that they accurately reflect the future cost of

existing policy settings. This will require some capacity building for MFDP analysts and line

ministry budget committees.

64. PEFA Indicator PI-7 relates to the extent of unreported government operations. This

indicator is rated against two dimensions: (i) the extent of unreported government operations;

and (ii) income/expenditure information on donor-funded projects which is included in fiscal

reports. No improvement in the ratings for this indicator have occurred since the

commencement of the program.

The mission notes that the old PEFA PDO and intermediate level indicators will be retained up

to the end of the project which closes in June 2017 against which overall performance will be

measured.

Component 2: Strengthening PFM Legal Framework, Budget Execution, Accounting and

Reporting

The Overall Implementation progress against this component is rated Moderately

Satisfactory.

65. (a) Review of PFM legal framework. The previous mission reported on some progress

having been made towards finalization of the revision of the PFM Act. The revised act brings

some significant changes. Progress on draft amendments to the law prepared are still stuck in

the office of the Attorney General. Progress has also been hampered due to changes of

Ministerial holders at the MFPD.

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66. To unlock the stalemate, the Mission was informed that the MFPD has hired a

consultant. The TA will to arrive in Monrovia on December 3, 2016. This consultant will act

as an interlocutor amongst all parties involved and ensure that the draft amendments are

enacted by January 15, 2017.

67. (b) IFMIS Rollout to M&As. Overall progress under this key component activity is

rated Moderately Satisfactory.

IFMIS has been rolled out at 50 M&As. With the additional 14 sites on the original planned 36

sites, the project target for the roll out at the inception has been exceeded. GOL is preparing to

stabilize the system and discontinue the exercise till this objective is achieved. In the interim,

the team will be fixing remnant items within the system.

The 14 additional sites have since gone live. Resultantly, online expenditure coverage under

IFMIS would be increased to 70 percent at 50 M&As, against the targeted 40 M&As.

The mission, recommends formulation of a clear action plan by December 15, 2016 for

addressing remnant items and stabilizing the system at both the central government level and

county treasures where the system is currently operational.

68. The Mission was reassured that the 11 agencies that have been granted authority to

approve their purchase orders/commitments are currently operational. It was also informed that

the planned additional four agencies have not yet been granted similar authority. This is owing

to issues pertaining to resolution of treatment of advances. The Mission reiterated the need to

give authority to the line ministries to manage their budget within the allocation, and do away

with the practice of centralization of approval of purchase orders/contracts of the line ministries

at the MFDP. This practice potentially hinders efficient budget execution and dilutes the

responsibility of the ministries to manage their budget allocations.

69. The last Mission was reassured and informed that M&As have been formally given

authority, effective December 1, 2015, through a letter signed by the Minister. The letter,

designated the institutions to approve their purchase orders (granting of expenditure

commitment authority); within the allotments given to them. However, implementation of this

policy has been slow as evidenced by the slow uptake of the four additional agencies. The slow

uptake is attributable to weak control environment in the ministries and low capacity which

demand for a gradual and measured approach. These reasons have been cited for more than

three and half years, even though the recommendation to allow this authority is underpinned

by a detailed analysis through the PWC report approved last year. The Mission views the cited

control issues should be addressed through strengthening the internal audit inspections, rather

than centralization of POs at the CAGD.

70. A detailed implementation plan for the next ten additional agencies needs to be

submitted to the Bank with clear timelines and monitoring measures to be employed to ensure

that the process does not slow down. This plan needs to be submitted by November 15, 2016

and be effected by January 15, 2017.

71. The Mission was also informed like during the previous mission that the existing

Accounting Manual has not been updated and collated into one bound booklet. The last updated

manual was issued in 2013. Since then, several changes in PFM procedures and related systems

have been introduced, which need to be reflected in the revised Manual. The revised manual

should be web-published so that on-going improvements could be regularly incorporated into

one source document on the web. Printing of the manual could be done on periodic intervals.

The Mission was informed that the CAG plans to include the county treasury procedures in the

revised manual.

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72. The Mission recommends that the Manual updates be undertaken and approved by

January 31, 2017. The same should be shared with the partners for their records given the

inordinate time this simple exercise has taken to be completed.

73. The MFDP should issue the Financial Management Manual to be effective by March

1, 2017.

74. The use of FreeBalance Budget Module for FY 2016/17 budget cycle as agreed

previously has continued to be delayed. The Mission understands that this is owing to the need

for the Ministry to proceed cautiously on the subject. FreeBalance Technical experts have

advised that they do need to visit two countries where the Budget Module of Version 7 GRP has

been successfully implemented for gathering lessons to be learnt before embarking on

implementation.

75. The Mission was also informed that a plan of action which includes specifications and

timelines for the migration was developed to be implemented subsequent to the approved visits.

76. The Mission recommends that a total number of two technical experts and one senior

government official visits The Republic of Jamaica where the system has successfully been

implemented. The implemented system includes the version 7 GRP Budget Module. The visit

should be undertaken before December 20, 2016.

77. Record Management. The Auditor General has consistently raised weaknesses in weak

records management and archiving of the financial records. Two previous missions have

recommended that GOL embarks on the implementation of an Electronic Document

Management Systems (EDMS). The system, procured earlier to address these issues, has since

been successfully piloted, implemented and is live within the MFDP. Similarly, the system has

gone live within the ministries of – Public Works, Health and Education. The same system has

not been rolled out to the ministry of Agriculture which was earlier planned to come on board

at the outset.

The mission recommends development of a clear plan of rolling out the system to the next big

ten spending ministries. The plan should ensure the system has gone live to them before March

2017.This will allow for addressing the problems noted by The Auditor General.

78. FreeBalance Technical Support. The Comptroller and Accountant’s General

Department (CAGD) continues to be frustrated and informed the Mission about the slow

response time of FreeBalance on technical support requests. This has affected smooth operations

of the system after the upgrade to V7.

79. The Mission advised GOL technical team to develop an inventory/catalogue of issues

at hand that hamper proper operation of the solution. Thereafter, GOL should consult a legal

expert on contract negotiation to advise on how to renegotiate the existing contractual

relationship which should lead into development of a strategy by December 15, 2016. Once the

strategy is ready, the team should consult the senior management of FreeBalance, and

renegotiate the existing contract. Key negotiation points should include strengthening the

existing SLA. The negotiated SLA should introduce agreed service levels and penalty clauses

for non- conformity. It should also establish timeframes for responsiveness.

80. The renegotiation should take place before January 15, 2017 after which a report of

the outcomes should be submitted to Senior Management of MFDP with copy to the partners

for information.

81. In the meantime, the Mission has also advised the CAGD to work towards strengthening

their internal support arrangements and processes by deploying the SYSAID tool to capture all

support requests from internal users.

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This should also monitor the escalated support requests to FreeBalance.

82. The installation of the SYSAID should be undertaken by November 30, 2016 and

confirmation of having attained this aspect communicated to all stakeholders and partners by

the same date so that the service is adequately and appropriately usable.

83. The Mission recommends that the RCU Coordinator sends ten key staff of the M&As

on Microsoft and/or Cisco certification trainings to the private IT training institutes in

Monrovia by December 15, 2016. These staff will be provided with additional IFMIS training

to enable them provide on-site technical (networking, windows) support to IFMIS users in the

M&As. The earlier date for the completion of this activity should be February 28, 2017.

84. IT Security. The Information Technology (IT) Security Consultants, redeployed to

assess the implementation of their earlier recommendations, have noted marked improvements

in the security environment. Upon reviewing the corrective measures, they have observed that

18 nonconformities out of the 27 major nonconformities raised during the 2014 assessment had

been addressed fully whereas four had been addressed partially.

85. The total security score and impact is yet to be assessed in 2016. As per their report,

five nonconformities have not been addressed at all. This is largely due to structural issues at

the Data center and limited financial resources (biometric physical access controls, data center

environment controls, etc.). The Mission was informed that all remaining issues on the subject

have not been fully been addressed. The IFMIS team informed the Mission that it continuously

faces serious infrastructure challenges which hamper its operations.

86. The Mission recommends that a planned upgrade of the existing infrastructure be

developed and submitted to Senior Management by December 15, 2016.This should also be

accompanied by a request for budget to mitigate infrastructure challenges currently being

faced.

87. Helpdesk software, SYSAID, has been procured but not implemented. This delay has

arisen from minor contract payment issues with the vendor.

88. The Mission recommends that the IFMIS team deploys the tools to the M&As and train

the frontline IT support teams to strengthen the level of support by January 15, 2017.

89. Payroll. The CSA has carried out more rounds of field visits to verify – biometric

verification- the supplementary payroll, though pensioner verification has not been completed.

The CSA has written to the affected ministries on the subject matter. The supplementary

payroll, totaling 43,000 employees as of June 2016, comprising of pensioners, supplementary

employees of Ministry of Education and Ministry of Interior, and personal staff of the

legislature, is a legacy payroll running in parallel to the IFMIS payroll due to non-validation

of these employees. During the latest round of validations, five counties were visited.

Resultantly, 98 percent of the total number of 9,568 supplementary payroll of the Ministry of

Education and Interior have been biometrically enrolled and documented. The potential ghost

workers are around 189, as they did not show up for verification. The Mission was informed

that CSA is currently working on Teachers and Health workers clean- up. The CSA has also

acquired some five printers to assist with Biometric data. The CSA has also completed

development of manuals that clearly stipulate disciplinary manuals for people that

inadvertently put ghost employees on payroll. These manuals have been posted on the CSA

website.

90. The pay scales and allowances of the validated supplementary employees need to be

standardized before these could be brought on to the regular payroll. This requires some

budgetary provisions. The estimates of doing so have been submitted in the current year’s

budget proposals.

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The government has prepared standard structure of the collapsed, standardized payroll of

employees from Grade 1-4 and is currently working on grades 6-10 to bring them onto the

IFMIS. However, budgetary provisions are needed to implement this structure.

91. The supplementary payroll of the pensioners has not been cleaned up yet, and would

need a new validation exercise.

92. The Mission recommends that the Director General (DG) CSA completes the clean-up

exercise for the supplementary payroll by January 15, 2017.Subseqyuently, a parallel run for

the IFMIS for the supplementary payroll as part of the Government of Liberia (GoL) payroll,

within two months from the passage of the National Budget should be conducted. Without the

approval of the budget required for standardizing supplementary payroll, these employees

cannot be made part of the mainstreamed IFMIS payroll.

93. The Mission also recommends initiating the validation of the pensioners on an urgent

priority. The Mission reiterates that DG CSA issues a formal notification by December 15,

2016.The notification should describe the detailed steps, as well as the role of the Controlling

Officers, for enrollment on the payroll for Monrovia and non-Monrovia based employees, along

with associated sanctions for non-compliance.

94. Disaster Recovery (DR) Site and Business Continuity Planning, WAN Infrastructure

and other Infrastructure Issues. The IFMIS server infrastructure is over-due for replacement.

This is because they have completed their recommended lifecycle of three to five years. Due to

capacity bottlenecks, the server breakdowns are more frequent and are adversely affecting

availability of IFMIS to carry out operations. The mission views this as high risk.

95. The Mission therefore recommends that the procurement of the new IFMIS servers

through GOL financing as informed to the mission should be carried out as a priority.

96. (c) Strengthening Financial Standards, Accounting and Reporting. The draft

consolidated financial statements for FY2014/2015 were submitted to the GAC about 2 months

after the end of the fiscal year. This has given rise to a t2 month delay. Such delay is an

improvement over submission periods of the previous years.

97. The Financial statements were prepared largely in accordance with the IPSAS cash.

Thus government has prepared consolidated financial statements which encompass the

government and the entities which it “controls” – that is, entities whose financial and operating

policies the government has governed or direct for achievement of government objectives. The

statement of cash receipts and payments prepared by a government has therefore consolidated

the cash receipts, cash payments and cash balances of all the entities it controls. Other public

sector entities have been required to prepare consolidated financial statements which encompass

controlled entities though some principles pertaining to Modified Cash have been employed.

Thus government was allowed to pay for transactions ninety days after year end.

98. The Auditor General continues to issue disclaimer opinions on the government

accounts. This is largely again due to the lack of adequate documentation to support

expenditures of government forming the basis of the financial statements as well as non-

compliance with the governing existing PFM Act. The Act calls for the submission of the said

financial statements within four months after year end. The annual financial statements of

government failed to meet the desired position of not being qualified despite making significant

material improvements in the accountability arrangements of government.

99. The Mission recommends that the 2015/2016financial statements be submitted not later

than November 30, 2016. This will be four months after FY-end.

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100. The Mission further advised that the specified period of 90 days for booking obligations

that arose post end of the FY which need not be cause of delay in finalizing the draft financial

statements since the cash basis of financial reporting still expects a snapshot reporting of all

transactions, as they are were dead end of the FY only. The notes to the financial statements, as

well as the additional information that may be provided, could include the disclosure of

commitments and obligations as they stood at the end of the fiscal year and not beyond.

101. (d) Treasury, Cash, Debt, and Aid Management. The draft Memorandum of

Understanding (MOU) for operationalizing the TSA has been prepared and shared with the

CBL. The MOU has not been finalized. The draft envisages linking all the operational accounts

of the M&As in the Central Bank of Liberia (CBL) to the main Treasury Single Account (TSA)

accounts in this phase. The aggregate balance of all the linked accounts will constitute overall

cash balance of the government in the TSA. This arrangement does not need daily sweeps from

the linked accounts into the TSA accounts.

102. The Mission was informed that the commercial bank accounts would be tackled in the

next phase. This step would depend on IT interfaces between commercial banks and CBL to

enable daily sweeping of balances. The Mission recommended, instead, exploring the option of

operationalizing zero-balance accounts in the commercial banks. Under this option, the

commercial banks would get daily reimbursements from the central banks for the payments

made against the government issued checks. The CBL would pay the commercial banks out of

the TSA. This arrangement would involve MOU between the commercial banks and the CBL,

so that the commercial bank/s work as fiscal agents of the CBL, and charge fee for providing

these services.

103. The CAG has started collecting cash balance information from the commercial banks

manually, through letters and emails. However, this does not constitute aggregation and

fungibility of cash balances under the full control of the CAGD. The Mission could not get

information on the proportion of Government balances in TSA and outside the TSA. This is

important in order to monitor progress on this result indicator. Further the Mission was informed

that the system of collecting this information had been stopped in December 2015 although a

master list of Bank accounts was maintained by the CBL since the CBL moved to a new building

and is using a different system.

104. Treasury Management Committee has been set up and meets regularly to manage

overall liquidity policy and allotments. However, the linkage between available cash balances

and budgetary allotments still needs to be strengthened to improve predictability of cash flows

to the service delivery agencies.

105. Due to limited resource availability under the project, work on establishment of

interface between IFMIS and CS-DRMS, and commissioning of Domestic Debt Module has

been postponed. It is therefore periodically monitored for requisite implementation. These

activities, regardless of the current funding constraint, have been delayed for more than two

years. The Mission was informed how the first draft of the Debt Manual was not up to

expectations. The remaining contract amount should be actively managed to reach expected

outputs.

106. The Mission recommends the CAGD conclude the MOU with the CBL to link the

operational accounts of the agencies as an urgent priority.

107. (e) Establishment of Country Treasuries. The Government has appointed 12 staff at

four pilot counties to operationalize country treasuries which became effective from July 1,

2016. The counties include Grand Bassa County, Margibi County, Bong County, and Nimba

County.

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The staff at the county for treasury functions includes one each of the following categories -

Budget Officer, procurement officer, FMO and Internal Auditor (IAs) stationed at each county.

The appointment of procurement officers has not been done, as there is still divergence of views

on whether the procurements will be handled by the County Superintendent or the respective

sector in the county.

108. The Mission articulated the principle that whoever controls the budget should be

responsible for procurement. The CAGD has drafted detailed procedures for deconcentrated

fiscal operations at the county level. These were prepared in-house after consultations with the

Director Fiscal Decentralization Unit, respective sectors, MFDP, CAGD, and IFMIS team.

These procedures clarify steps for budgeting, allotments, expenditure recording, accounting,

and reporting. Two pilot ministries – Ministry of Internal Affairs and Ministry of Health – will

use these procedures, though MoH has been carrying out deconcentrated functions for the last

few years.

109. The IFMIS platform, through a web-based access, has been deployed to the 4 pilot

counties. It is being used to processing accounting transactions at the county level. Under these

procedures, the sector ministry disaggregates its budget for each county in its budget request.

The county staff of the sectors manage this budget through close supervision of the CS. The

county sector staff initiate allotment request, and submit it to the County Superintendent for

approval, after which it is forwarded to the County Budget Officer. The County Budget Officer

uses IFMIS to send this request to the Cash Management & Financial Approval Unit, MFDP,

Monrovia, for final cash allotment.

110. The allotted funds are transferred into a commercial bank account of the county. The

CTO issues the IFMIS-generated checks for payments, initiated by the sectors against these

allotments. The CTO and the BO are the primary users of IFMIS at the county level in addition

to a few other users. Check printers and computers for the counties have been procured and are

currently in use at county level.

111. Budgeting, allotments, and expenditure recording are currently done in the IFMIS.

The government has dropped the option of using e-transcript due to improvements in network

connectivity at the county level. This is further supported by the availability of web-based

access to IFMIS through upgraded V7. This is considered adequate to support low volume

transactions at the county level.

112. The Mission views the above described processes as good progress. The procedures are

being refined over time through an iterative process. Improvements will be undertaken

incrementally through learning on ground. However, it has been suggested that exploration of

the option of making allotments, without transferring actual cash to the bank accounts of the

counties be done. Instead, zero-balance account arrangement, as advised under the TSA section,

is being explored with the commercial banks. The banks should get reimbursement from the

CBL for the payments made. Issuance of checks to the local vendors, instead of sector

ministries, is being preferred. The counties are using a unified chart of accounts of the central

government, issued by CAGD. The process for recording commitments and making payments

is aligned to the one already in use by CAGD in Monrovia. This process is being used for goods

and services related budget, which is deconcentrated in this phase.

113. The Mission recommends completing IFMIS training to county staff, and

operationalizing four country treasuries, effective January 15, 2017.

114. Donor Project Financial Management/Use of Country Systems.

Progress under this sub-component is rated as Satisfactory. 30 projects have since gone live

on IFMIS. This go-live has entailed cutting over the parallel sun system for these 30 projects.

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The data of 30 projects has been migrated to the IFMIS system on a parallel basis. The technical

team has completed fixing a few errors in reports.

115. The mission recommends a detailed plan of how additional donor funded projects will

be brought onto the IFMIS within the next six months. A total number of ten to fifteen

should be explored and be on IFMIS by May 31, 2017.

Component 3: Revenue Mobilization and Administration

116. The overall implementation progress of this component is rated is Moderately

Satisfactory.

117. (a) Capacity Development of Customs: The European Union (EDF) funded program

deployed ECORYS Consultants to deliver Technical Assistance (TA) to the Customs services

department2 over a period of two years. A work plan for implementation of capacity building

activities has been approved. Over the reform period, the EDF program shall deliver TA to

strengthen the headquarters function3, improve customs compliance and enforcement4 as well

as deliver Centers of Excellence (CoEs). This shall start with the Monrovia Customs Port. The

mission was informed that risks to the achievement of TA intervention include lack of adequate

infrastructure such as classrooms and delays in recruitment of staff that need to be trained.

118. UNCTAD has delivered servers to support ASYCUDA implementation.

Complimented with servers that may be procured using the SOGEMA contract, LRA may have

enough storage and processing capacity to create redundancies and disaster recovery or failover

solutions. The mission team informed LRA of the government initiative to develop a new PFM

strategy and encouraged management to engage and articulate the gaps that may need further

support in the finalized document.

119. The mission recommends that infrastructure and related gaps be clearlyy articulated

in the modernization plan for discussion during follow on support projects. Further, LRA

management should request ECORYS to indicate and cost financial or in-kind resources

required to compliment the available TA. Discussions should be held with TA providers to

understand how the gaps can be covered or TA reprogrammed to fit existing LRA own

contributions (in-kind or financial) resources.

120. (b) Tax Automation (SIGTAS): The contract between GoL and SOGEMA

Technologies, Inc. was cancelled to pave way for a renegotiation. Focused and refined

requirements were developed. SOGEMA has submitted a bid and a team has been appointed

to evaluate the SOGEMA proposal. A Tax Administration Diagnostic Tool (TADAT)

assessment was completed in July 2016.It highlighted a number of issues5 related to SIGTAS.

LRA should leverage the SIGTAS upgrade contract to remedy the issues.

121. The mission recommends that Government completes bid evaluation and submits

evaluation report to the Bank for no objection by November 21st 2016.

122. The LRA should organize itself for success in the SIGTAS upgrade implementation.

The mission team received documentation that describe proposed existing organization

2 Due to funding constraints, LRA leadership management prioritized PFM funding to the SIGTAS

implementation. 3 Strategic planning, Time Release Study, enhance capacity of the training unit and develop management

capacity. 4 TA to strengthen Post Clearance Audits, risk management and anti-smuggling unit. 5 Example include inaccurate & unreliable taxpayer data base, no online filing and payment, almost all SIGTAS

functions are replicated manually, inadequate risk management, inadequate accounting and reporting of revenue

etc.

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arrangements. The mission team has analyzed the proposals and generated areas for

improvement accompanying Annex on the subject matter.

123. The mission recommends that LRA reviews the implementation structures and deploys

staff at the operational team levels by 15th December 2016 in preparation for the

implementation. To enable the project manager, fulfil his technical and administrative role, he

needs to be resourced with an administrative assistant.

124. The Mission was informed that the contract of the international consultant to mentor

the local project manager and provide quality assurance to the implementation expired. A

justification has been made to IPFMRP for a replacement. Terms of reference to reflect the

changed role of the international consultant have not been developed.

The mission observes that an implementation of this magnitude will benefit from independent

quality assurance of critical milestones such as a) the Contractor Project Plan, b) the User

Requirements specified and c) the tested application. The Mission is aware of the funding

constraints in the IPFMRP and encourages discussions with existing TA service providers to

mitigate lack of this expertise.

125. To this end, the Mission recommends that LRA should prepare the ToR for the

International Project Management and independent quality assurance roles. Using ToR

Government should discuss with available TA providers (IMF, USAID) to explore options for

availing people resources to mentor the project manager and provide quality assurance to the

implementation.

126. The ICT infrastructure assessments (excluding WAN) were completed and gaps

identified. System down times are still a major occurrence. The mission was informed that

LRA, through the UNCTAD support is expecting an un-interrupted power supply (UPS)

system to support ASYCUDA servers for 72 hours. Except for the UPS, nothing has been done

to remedy some of the issues observed in the data center during the June 2016 mission6 due to

limited funding.

127. In order to protect against loss of taxpayer data and business continuity, the mission

team recommends that Government prioritizes funds to remedy the risks facing the data center.

128. (c) Establishment of Revenue Authority: The Liberia Revenue Authority (LRA)

structures and systems are in place. The Authority has relocated to the new headquarter

building. A Five-year strategic plan setting out strategic direction for the period FY2016/17 –

FY2020/21 is approved and published.

129. The implementation status of the actions proposed during the previous supervision is

outlined below:

No

.

Proposed actions during the

previous supervision

Agency Implementation Status

1 Local consultant recruitment to be

completed.

LRA LRA has recruited a local project

manager who will serve as local

consultant, and will understudy the

SIGTAS implementation team

2 Renegotiate the SOGEMA SIGTAS

contract to get functionalities that will

deliver immediate value to LRA and

PMU/L

RA

Contract cancelled, fresh bids

submitted by SOGEMA and

6 Data center has no fire extinguishers, equipment does not sit on a raised floor, back up tapes not kept in

separate area, no dedicated power supply.

22

taxpayers, and save payment of

licenses and support fees before system

is in use.

renegotiation to follow based on

refocused user needs.

3 Given the critical phase for SIGTAS

upgrade, quality assurance needs to be

deployed beyond the existing contract

of the international consultant.

LRA Not Implemented due to actions in 2

above.

4 Quick measures need to be deployed to

mitigate common risks that face the

data center

PMU/L

RA

Not Implemented and constrained by

funding.

130. Progress on PDOs. The LRA posted improvements in revenue mobilization, recording

tax–GDP ratio of 19 percent in FY 2015/167. The performance was 92.5 percent of the budget

largely due to the falls in iron ore and rubber prices; and a slowdown in economic growth8.

According to the draft PEFA Assessment 2016, registered actual revenue out turns are between

94-112 percent of the budgeted in the years 2012/13 and 2014/2015. The improved

performance compared to budget is attributable to improved capacity gained by MFAU and

the automation of LRA which helped to strengthen controls.

131. Despite the improvements in actual performance compared to the budget, the increase

in customs and total revenues has fallen short of the target increase set by the project (Graph 1

below). This is largely due to the slowdown in the economy due to the Ebola crisis and the falls

in global commodity prices.

7 IMF Country Staff Report No. 16/236 July 2016 8 GDP growth dropped from 8.55% in 2012/2013 to 3.9% in 2015/16. Iron ore prices per ton dropped from

USD 97 (2014) to USD 47 (2016).

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Actual Target Actual Target Actual Target Actual Target Actual Target

2011/12 2012/13 2013/14 2014/15 2015/2016

Monitoring Intermediate Indicators

Growth Total Revenue Growth Customs Revenue

23

Summary of Recommended Actions

S/N Action Timeline Responsibility

1 Customs:

Request Technical Assistance Service

Providers to indicate and cost financial

or in-kind resources required to make the

TA effective to LRA. Discuss with

Stakeholders to explore options for

funding

LRA

30November 2016

2 SIGTAS

Complete Evaluation and Seek No

Objection from WBG 21st November

2016

Develop ToR for Independent Quality

Assurance Advisor plus TA to

enhance Project Manager’s ability.

Discuss with stakeholders (may

include IMF/ USAID e.t.c) to fund or

field people resources who will

execute the TA

Review and refocus SIGTAS project

implementation structures, deploy

people resources in the structure and

commence team formation activities.

Resource Local Project Manager with

Administrative Support

LRA/IPFMRP

LRA

LRA

LRA

LRA

21st November 2016

30th November 2016

30th November 2016

15th December 2016

21st November 2016

DATA Centre and ICT Infrastructure

Issues

Prioritize financial Resources to remedy

critical issues identified in the data center

i.e. Fire extinguishers, Storage of back up

tapes off-site, Power Back up

LRA

31 December 2016

24

Component 4: Enhancing Transparency and Accountability

The overall implementation progress of this component is rated Satisfactory because of the

remarkable improvements undertaken.

132. (a) Strengthening Public Procurement Oversight. The Mission noted with satisfaction

that the PPCC has continued to make steady progress under this sub-component. Consequently,

the implementation progress continues to be rated as satisfactory.

133. PPCC has undertaken core activities on the design of an e-Procurement system though

it has not yet undertaken the planned study tour on e-Procurement systems as recommended in

the previous two Mission’s AM. The tour did not take place due to the shortage of funds under

the Project.

134. The PPCC updated the technical requirements originally developed by the Ministry of

Finance and Development Planning and developed tender documents. It has also prepared a

strategy and roadmap for an e-Government Procurement which has since been posted on its

website.

135. A Consultant financed by the Bank in May 2016, submitted a draft final report on the

Procurement Professionalization System for Liberia which the PPCC has utilized to effect the

scheme for the adoption of a four pronged strategy. The strategy covers vertical, certification,

licensing and continued professional education. IPTP continues at the FM Training School.

136. Owing to concerns raised about sustainability, the GOL wrote to the World Bank that

it would provide budget for the sixth cohort as a first step towards subsuming the costs of

financing the training school. The PPCC CEO, stated that the project had strengthened its

capacity, raised confidence levels of its staff and helped increase transparency in public

procurement in Liberia through establishment of an online complaints handling mechanism.

137. Develop and Operationalize LAN. The PPCC used internal capacity to upgrade its

internet connectivity. The connectivity only cost US$10,000. The balance of the funds

originally allocated to this activity were reprogrammed and were partly used to pay for the cost

of clean power. PPCC has placed an order for a batter bank with inverters which it has

adequately utilized to install clean power at their offices. Additionally, PPCC also repurposed

some of this funding to establish a print shop for the production of training materials and other

publications.

138. Procurement Professionalization System. The mission was informed that Liberia

concluded the development of the professionalization of procurement. This led to the

establishment of the first certification program in collaboration with the UNDP and the

Chartered Institute of Purchasing and Supply (CIPS). 187 procurement staff from 120 GOL

agencies and other recipients of public funds have received CIPs Level II training within

Liberia. A study to professionalize procurement that addresses basic graduate and

undergraduate studies, certification, licensing, a diploma in procurement for technicians, and

in-service training was completed.

139. Capacity Building. In an attempt to improve procurement capacity a Hand Holding

center was established. This center provides real time hands on procurement services for

private, public and civil society. A help line and help desk has also been established where

procurement practitioners can quickly call into a designated number for support. A total

number of eleven workshops were held that trained 845 staff from private and public entities.

Six compliance officers received specialized training in standard concession procedures.

25

140. The Mission also obtained a copy of the procurement syllabus used by the Financial

Management Training School (FMTP), noting that it covers basic training for the procurement

of goods, works and consultancy service. There is some concern about the quality of instruction

given to the trainees. There are rules for mandatory attendance, continuous assessment and one

attempt to write comprehensive final examination. PPCC is of the opinion that the syllabus be

reviewed for quality and expansion of scope. The main concern of this training strategy is the

financial sustainability of the training school which is currently being addressed by thinking

outside the box by teaming up with the University of Liberia which would make the course

self- sustaining. By going this route, it is likely that owing to its benefits, students from within

and outside Liberia will be willing to pay for the cost of undergoing such training which will

lead to its self-sustenance.

141. Procurement Audit. Audit is one of the critical control mechanism in an effective

procurement system. The PPC Act also requires the PPCC to report regularly to the Legislature

but there has been no procurement audit since 2013. The Mission also met with the Auditor

General who mentioned that the office of the auditor general had been conducting some audit

of the procurements in the Ministry of Public Works, LEC and a number of agencies whose

outcomes have been shared with the PPCC. Until the PPCC acquires the capacity to conduct

procurement audits, it will have to rely on audits by the GAC. The mission learnt with

satisfaction that a National Integrity Forum has been formed in Liberia and has held a couple

of conferences to discuss common themes. This is an excellent platform for collaboration and

for bringing synergies between the GAC, IAC and PPCC as well as other members of the

Forum in the fight against corruption.

142. E-Government Procurement. PPCC has made significant progress in the area as

annotated above in developing an e-Procurement system. A strategy and road map is currently

in place. The strategy forms the basis for ensuring the integration of the e-Procurement system

with as many other e-Government systems as are relevant. On the other hand, the Road Map

as currently designed would assist in obtaining funding and monitoring progress of the system.

PPCC has requested assistance with financing the development of the preparation for the

strategy and road map. The Partners will ensure this request is accommodated within the

IPFMRP II planned for 2017 where the subject matter is intended to get a significant amount

of resources.

143. The existing website of PPCC, however, is functioning. A Vendor Registration system

and the posting of procurement plans and bidding opportunities is in place. The PPCC has

ensured that the e-Procurement system is a credible platform that links Procurement Plans with

Budgets, as well as with the payment system at the Ministry of Finance and Development

Planning, revenue system at the Liberia Revenue Authority and business registry at the

Ministry of Commerce and Industry.

144. The Mission recommends:

145. PPCC to develop a concept, core activities and indicators that will feed into a work

plan to be included into the IPFMRP II. These documents should be ready by December 24,

2016.

146. PDO: The procurement reform sub-component has intermediate level indicator that

expects deployment of 60 qualified procurement officers to M&As and the PPCC. With 112

IPTP graduates, now deployed in M&As and PPCC, the initially set target has been

successfully met and exceeded.

26

147. (b) Strengthening Internal Audit and Controls. The internal audit services are currently

in more than 45 M&As, which cut across 11 sectors categorized in the national budget. The

Mission noted the IAA is actively collaborating with other government integrity institutions

and agencies in carrying out its mandate. The Mission was also informed of the achievements

by the IAA in conducting specialized internal audit activities in payroll and fixed assets

verifications for the M&As. This has led to some benefits that have saved costs for the GOL.

148. Given that the GAC had issued disclaimers in the audit of the consolidated fund

financial statements in recent years due to lack of documentation and retirements, this Mission

is of the view that the presence of the IAA in the MFDP will be beneficial to the Government.

Whilst there is presence of the agency in the MFPD, its scope and coverage is somehow limited

in that it is not allowed to audit other areas of the MFPD.

149. Since MFPD is the champion of PFM reform, the Mission recommends that the IAA be

allowed to audit every part of the Ministry to enable strengthening of its internal controls. This

should start on January 2, 2017. Evidence that this process has started should be reflected in

the annual audit plan of the IAA which should initially be shared with all stakeholders within

MFPD.

150. The Mission was informed that the IAA has, since, developed its Strategic Plan for

2016-2020, which at the time of the Mission was discussed with the various stakeholders. Key

outcomes of the strategy are expected to inform part of the PFMRs being currently developed.

151. Although the GAC and IAA have differing clearly different roles as per INTOSAI GOV

9150, their collective purpose is to promote good governance through contributions to

transparency and in accountability for the use of public resources. This common agenda for the

two institutions also applies when it comes to promotion of efficient, effective and economic

public administration. Common areas of work performed by GAC and IAA offer opportunities

for coordination and cooperation. Through GAC and IAA cooperation, the efficiency and

effectiveness of both parties work can be improved. The Mission was informed that this

cooperation, owing to latent independence given to the IAA may not be appropriately exercised

for the desired common goal where the IAA does not routinely share their pieces of work with

the GAC.

152. The Mission recommends that closer cooperation between the GAC and IAA should be

the norm and put in practice. To make this happen, quarterly meetings between the two

institutions should start taking place from quarter ending December 31, 2016.

153. The last couple of Missions have recommended that some operational framework be

developed for validating payroll in the respective agencies before salaries are paid. This serious

recommendation has not been implemented.

154. The Mission recommends that given the pressures the payroll is impacting on the

National Budget, this particular recommendation be seriously taken on board starting quarter

January 1, 2017.

155. The Mission was informed that payroll exercises conducted in the Ministry of Health

have led to sizeable savings. Further, the DG of Cabinet was directed by the President to follow-

up on IAA recommendations in M&As. These recommendations would be incorporated in

individual M&A strategic plans to improve internal control environment though most

ministries and agencies do not make serious efforts to implement recommendations by the IAA.

156. The Mission, therefore, recommends that, starting with quarter ending March 31, 2017,

a summary of recommendations implemented for each Ministry be submitted to DG of Cabinet,

with a copy to GAC.

27

157. The Mission also recommends that the MFDP authorities should collaborate and

establish the IAA operational presence in the MFDP to cover Budget Department and CAG.

The IAA should be supported and allowed to assist with strengthening internal controls within

MFPD. Despite being independent, the IAA should also attempt to adhere to International

standards by sharing their copy reports with the GAC so that their work can proceed in a

complementary fashion.

158. (c) Strengthening External Audit. The GAC has made significant progress in reducing

the backlog of annual financial audits up to FY2014/15, making it current. Further, the Mission

was informed that the GAC has been audited by the Supreme Audit Institution of Kenya for a

period of six years. Plans have been put in place to ensure that KENAO undertakes the GAC

2016 financial statements audit.

159. The previous audited reports issued on the financial statements of the GAC have since

been published. Whilst four of the reports issued are of a disclaimed opinion owing to lack of

supporting documentation, the latest two have been qualified.

160. The Mission recommends that the consolidated report audited report for 2016 should

be published once ready to continue creating public awareness and increase in transparency

in the management of public funds by the GAC.

161. Although progress has been made in follow-up on audit recommendations, the Mission

was informed that the subject matter still remains a challenge in most M&As, as well as

clearing the backlog on county and social development fund audits.

162. The Mission recommends that follow-up on implementation of audit recommendations

be given the seriousness it deserves, to ensure that M&As are encouraged to meet over 75

percent of annual recommendations made, starting from 2015/16 audit reports in working with

individual M&A IAAs which should be tasked to conduct the continuous follow up. Requisite

sanctions should be applied where implementation of the recommendations should be taken to

accord with the existing laws and regulations that use withholding of emoluments on the

subject.

163. Despite undertaking serious reforms in the area of IFMIS implementation by the GOL,

the GAC has not yet started auditing through the established systems. Thus, currently, the

audits are undertaken by looking at outputs of the system.

164. Through usage of TEAM MATE or IDEA, the Mission recommends that GAC requests

to participate in the IPMRP Technical Committee to understand the reforms being undertaken

and consequently plan to start auditing through the systems starting with fiscal year 2017.

165. Enhancing Legislative Oversight. This sub-component continues to be rated

Highly Satisfactory.

The Mission was informed that a total of 135 audit reports were received. The number includes

80 backlog reports, 37 from 2014/15 and 18 current reports. Out of that number, a total of 80

reports, the PAC conducted 27 Public hearings on 18 government ministries, Agencies and

Public Corporations. It also received 55 new audit reports (64 backlog and 20 current reports)

which were analyzed by the secretariat of the Public Accounts Committee.

PAC also published reports for 2014 Ministries and agencies such as Ministry of Gender and

Development, Justice-prison System, Education-Primary and Compulsory Education, National

Port Authority-Landed Property and Roberts International Airport-all from 2014.The reports

published from 2015 include National Elections Commission, Ministry of Public Works,

Monrovia Consolidated School System, Liberia Telecommunication Authority and University

of Liberia.

28

A number of reports are pending for publication inclusive of those from Ministries of Public

Works and Special Procurement audit, Youth and Sports, Liberia Water and many others.

166. The Mission was also informed that through the Presidential Task Force, a number of

PAC reports have started being implemented by publishing names of those recommended by

the Committee to restitute. Within 30 days if these restitutions are not made, then those

individuals will be indicted for court proceedings.

167. The above achievements notwithstanding, the PAC has faced a few challenges some of

which include budget for live broadcasts for public hearings, cost of pursuing full media

coverage in print and electronic media and financing public awareness campaigns which

showcases the works of PAC. Coordination with other anti-graft institutions as well as

legislative enactment to mandate the executive to implement PAC recommendations are some

of the issues encountered. Software for recording and transcribing of Public hearing sessions

has also been problematic.

168. The Mission noted that the public hearings for the 2014/15 audit report have been held.

169. As result of the inability of the Ministry of Finance to honor a couple of invitations by

the Legislature, close to 23 reports on the Ministry have not been discussed which does not set

a very good example for a Ministry and agency that is supposed to spearhead PFM reforms.

The Mission was also informed that there are currently 35 backlog County audit reports not

implemented mainly pertaining to county development funds.

The Mission, therefore, recommends that the leadership of PAC meets with the leadership of

the MFDP to agree on a date and timetable for the hearings to be conducted to avoid giving

an impression that the MFDP is a high risk agency given the backlog of reports where hearings

have not been held.

170. The Mission was informed that the Legislative Budget Office (LBO) continues to

prepare its analysis on annual budgets submitted to the legislature. Very successful hearings

were held in September 2016 where the budget amount was increased by the legislature from

USD553M to USD600M.This budget has since been passed and approved by the President in

October 2016.

171. The mission was also informed that despite consistent timely submission of annual

budgets to the legislature by the Executive, such budgets are passed belatedly. Some members

of the legislature demand that some aspects of the budget be changed or county projects be

included in such documentation without taking into account the required fiscal impacts of such

demanded actions.

172. Revenue forecasts from some dividend providing SOEs have provided fertile ground

for pushing some SOEs to be requested to do more than what they are realistically capable of

generating. Some projects are included into the approved annual budgets without requisite

analysis owing to this situation.

173. In the last two years, the LBO has suffered reduction in their budget allocations which

impacts their operational capability. The mission was also informed that despite having a staff

complement of 33, capacity to adequately execute their mandate still continues to remain a

challenge to the LBO.

174. The Mission recommends that the Legislature be appropriately advised to desist from

undertaking technical work of analysis which lays within the ambit of the LBO. Further,

changes to the budget performed by them should be accompanied by serious fiscal impact

underpinning.

29

Going forward, the Legislature (PAC) and the MFDP authorities are advised to collaboratively

work more closely, as appropriate, advising on how the Parliament could best utilize the

technical work of analysis which the LBO undertakes in order to align the changes to the

budget to critical fiscal impact underpinning

175. (e) Civil Society and Social Accountability. The sub-component continues to achieve

Satisfactory progress given the implementation progress made against what was agreed during

June 2016. Review of the overall implementation progress since the last ISR revealed that six

out of the eight agreed actions were undertaken despite a shift in priorities owing to available

budget to undertake activities from the project.

Key achievements include: (i) finalizing the third round grant applicants selection and ensuring

timely grant disbursement which focused on expanding justice and police thematic area of the

operation in some selected counties; (ii)conducted regular monitoring exercises and tracking

work plan implementation progress of 13 grantees(iii) conducting results based management

training for second and third round grantees (iv) conducting grant management training for

third round grantees (v) community outreach and media coverages.

Three agreed activities not undertaken are planned to be completed by March 31, 2017.These

include (i) organizing quarterly multi-stakeholders dialogue (ii) conducting training for media

institutions on budget and service delivery coverage and(iii) conducting regional trainings for

NSAs on budget cycle, follow-up on audit reports and tracking revenues. Broadly,

collaboration with transparency institutions is something to be undertaken in future.

176. As a result of the activities undertaken under the NSA, a number of intermediate results

have begun to show. These include (a) Social Accountability structures at community level are

being established for improved service delivery (b) There has been an increase in women and

youth involved in developing setting resolutions (c) Establishment of accountability Score

board has started and (d) initiation of community monitoring by district counties.

177. Overall achievements of the NSA secretariats since the inception of grant activities

include: (i) prepared and disseminated county level fact sheets and budget guide booklets to

various counties and the public; (ii) conducted two training sessions and trained 42 people on

grant administration and build the capacity of CSOs on grant management; (iii) trained 36

women from 18 CSOs; (iv) total of 15 journalist from 15 media outlets have been trained; and

(v) created enabling environment and cemented partnership between grant recipient CSOs,

local authorities and frontline service providers.

178. Going forward, the Mission recommends that the NSA Secretariat, in collaboration

with OBI, CSOs, and other relevant partners should undertake the three remaining activities

as outlined above by March 31, 2017.

Component 5: Program Governance and Project Management

179. The cross-cutting sub-components under this component have, overall, achieved a

Satisfactory rating.

(a) Delay in release of EU Funds:

180. The EU has released the EUR 2.6 million, earmarked for components 1, 2, 4 and 5, as

previously reported. This Additional Financing was expected to have been finalized by end of

June 2016, with signing of the Grant Agreement between the World Bank and the GoL. It was

planned to become effective on July 1, 2016.Despite meeting this commitment, the mission

noted some internal processing delays within the Bank.

This has led to non-signature of the Grant Agreement as expected. This notwithstanding, the

mission was assured that the Grant Agreement would be ready for signature by November 15,

30

2016. Doing so would allow the PFMRCU access the available funds to enable smooth

implementation of the project in the last seven months.

181. The Mission recommends that the RCU team quickly assists with the signature of the

draft Grant Agreement upon receipt by the GOL so that it is sent back for Bank’s records before

November 30, 2016.

182. The current PFM Strategy for the GOL lapsed on June 30, 2016. The Mission was

informed that a consultant was engaged to assist GOL to develop a new strategy by November

30, 2016.

183. The Mission, therefore advised the Government to share the draft before it is finalized

and organize key stakeholders from which they would get inputs that would further inform the

action plan which should be ready by December 15, 2016 and share the same with the partners

and the World Bank. The Mission reiterates that the new Strategy shall serve and underpin any

donor participation in a possible follow-on PFM reform project.

184. Preparation of the IPFMRPII: In a meeting with the Deputy Minister of Finance for

Administration, government appealed to partners to consider seriously to work together

to design a follow on project. The project become effective by July 1, 2017.

185. The Minister reiterated that the core areas to be contained in the new project should

focus on the following areas (a) Improving budget credibility and comprehensiveness

by strengthening the institutional capacities for preparing revenue and expenditure

(recurrent and capital) estimates and bringing all donor financing onto the budget

(b)Mobilizing domestic revenue in the natural resource sector by building capacities of

the relevant stakeholder institutions (c) Tackling Cash management and Treasury

Single Account (TSA) arrangements issues to enhance predictability in budget

execution (d) Public Investment Management by integrating all externally-financed

projects (DFPs) with the domestically -funded public sector investment projects

(PSIPs) on a common platform (e) Improve fiscal reporting by enhancing data

collection and building the capacity of the SoE sector (f)Upgrading of the IFMIS

infrastructure to improve the system processing speed for expenditure control and

reporting. (g)The deployment of e-procurement systems, the establishment of an

interface between IFMIS and the debt management system -CS-DRMS and improved

reconciliation between the GoL's revenue management system- SIGTAS and IFMIS

186. Fiscal decentralization will continue to receive traction as evidenced by the roll-out of

IFMIS in four counties accompanied by the training and assignment of fiscal officers

allocated to the same counties. This was achieved through the IPFMRP.

187. Further, the Minister sought that the new operation takes a preferred funding modality

of being a grant.

188. The Mission recommends that government submits the request for a new project by

November 21, 2016 after which the partners will respond with a timetable that takes

into account the GOL request.

189. The Mission was pleased to have received a copy of the finalized copy of the 2016

PEFA report. The Mission recommends that core areas of weakness as identified by low scores

influence the formulation and inputs into the PFMRs and ensure that they are adequately

addressed.

31

190. The Mission was informed that the IAA had undertaken a risk assessment across

Government. The major risks were noted as lack of documentation and fixed asset

management.

191. Given that the IPFMRP has been instrumental in procuring a number of fixed assets,

the Mission recommends that the IAA, in conjunction with the RCU, records and verifies all

assets in the project. A list of the same should be shared with the GAC and a copy to the

partners, by December 2016.

192. (b) Institutional and Capacity Building. The Mission was informed that the seventh

batch of Master of Business Administration (MBA) cohort made up of 30 students were

recruited. Training has started in earnest after the GOL confirmed to the World Bank that they

would support the students through making a provision in the budget. Upon completion of this

batch, the FMTP will have churned 244 graduates of which 112 will be procurement graduates.

193. The FMTP has completed the recruitment of the first batch of the RPTP (procurement

training). Similarly, the Mission did not cite any report on the needs analysis for the PFM

practitioners that would inform Government of the need to continue the MBA training. The

mission was informed that requisite terms of reference to undertake this aspect for FM was

undertaken. The needs assessment for procurement has since been done. The mission was

pleased that efforts are underway within FMTP to articulate a transition plan of the FMTP

arrangement where the courses it runs would be rolled over into the University of Liberia

curriculum.

194. The mission recommends that, the MFDP consultation with other stakeholders, should

vigorously pursue the plans for the transition of the FMTP program onto the University of

Liberia, effective 207/1/8 academic year.

195. Monitoring and Evaluation and Change Management. The overall performance on this

sub-component is rated Satisfactory.

196. RCU regularly produces quarterly progress reports (the latest one being for the quarter

January-March, 2016), summarizing recent developments, including information on budget,

robustness of IT systems, revenue mobilization, enhanced transparency and accountability in

PFM, treasury management, and fiscal decentralization. Such report emphasizes the key

implementation challenges and provides status update on all issues, recommendations and

progress on actions agreed at previous ISR Missions, concerning all project beneficiaries.

197. Progress on achievement of the PDO is also captured under the updated results

framework and monitoring. It provides an update on the achievement of all PDO and

intermediate level indicators against the annualized and end targets. The latest status on

achievements against the project’s indicators is provided for in Annex 3 to this Aide Memoir.

198. (d) Project Fiduciary.

Financial Management. The overall FM rating remains Satisfactory.

PFMU continues to maintain a stable FM environment with project accounting conducted

electronically on Sun System accounting software in accordance with IPSAS Cash Basis

Accounting (which records revenue when received and expenditure when paid). The FM

arrangement for budgeting, accounting, financial reporting, internal controls, funds flow, and

external auditing is adequate. Overall, disbursement is Satisfactory and currently stands at

about 96.5 percent (from 85 percent during the November 2015 ISR Mission).

199. The project has been complying with the provisions of the financing covenant by

submitting the interim unaudited financial reports (IFRs) and the audited annual financial

statements of the project on timely basis.

32

Reviews of the submitted reports reveal the same are acceptable to the Bank. The FY15 AFS,

audited by the GAC and the PKF Liberia, revealed that the FY14 audit recommendations were

significantly implemented. This is a marked improvement in the project internal control.

200. The Mission recommends for the project to complete FY15/16 audit in timely manner

and for the audited financial statements to be submitted on or before the deadline of December

31, 2016.

201. The PFMU Financial Procedures Manual (FPM) was produced in July, 2013 and will

be due for review in 2016, i.e. every three years in a row to keep up with current trend and new

updates with FM in the control environment. As greed by the last mission, that the PFMU

Financial Procedures Manual (FPM) was produced in July, 2013 should be reviewed no later

than September 30, 2016. The mission note with satisfaction that the FPM review was

completed within the timeline of September 30, 2016. The current trend and updates for FM

control environment have been updated in the revised FPM.

202. Now that the project has been extended for a year, the Mission advises that the PFMU

staff make a concerted effort to exercise effective and prudent contract management principles,

to ensure that none are outstanding by project closure.

203. Procurement. Procurement. During the Mission, a Procurement Post Review (PPR)

was carried out. One out of the three completed contracts falling under post review threshold

was sampled. The Mission PPR found that the contracts had been procured following Bank

guidelines. However, the following areas of improvement were noted: RCU should improve

quality of evaluation reports; avoid unnecessary payment delays, and improve record keeping.

204. Due to the above areas of improved noted from the PPR, the procurement performance

rating remains Moderately Satisfactory, but the overall project procurement risk rating has been

upgraded from Substantial to Moderately Satisfactory, given the steady implantation progress

on various on various components. This risk will be mitigated by strengthening the contract

management capacity. This risk will be mitigated by strengthening the contract management

capacity of RCU.

205. The Mission recommends that the International Procurement Consultant should focus

on building capacity for contract management in the Project.

IV. Disclosure

206. The GoL confirms their understanding and agreement to publicly disclose this Aide

Memoire. The disclosure of this Aide Memoire was discussed and agreed to with project

counterparts and representatives of the MFDP, at the wrap-up meeting for the Mission that took

place on November 11, 2016 in Monrovia, Liberia.

V. Proposed Timing for Next Mission

207. The next Mission will be held at a date that will be agreed with the GoL.

VI. Summary of Key Issues, Recommendations, and Agreed Actions

No. Action Item Responsibility Date

Component 1. Enhancing Budget Planning Systems, Coverage and Credibility

Enhanced Budget Framework

33

Increases efforts to enhance economic

monitoring and forecasting, while stabilizing

staffing arrangements.

DEM January 15, 2017

Clarify the potential overlapping activities and

mandates with LIMPAC.

DEM/RCU January 15, 2017

Fiscal Reporting and Fiscal Policy

Publish the the FY15/16 Quarter 4 outturn. MFDP November 21, 2016

Review the current position and status of the SOE

Unit with the objective to create a sufficiently

resourced organization supported through

regulations providing sufficient mandate to

uphold sound financial management principles

at the SOEs.

MFDP Going forward

Gradually take on staff emoluments for the SOE

unit starting in 2017/2018 and ensure such

salaries are fully funded within the GOL

Budget.

MFDP July 1, 2017

Enhanced Budget Framework

The Budget and IFMIS technical staff visit

Jamaica using project resources to see how the

Budget Module version 7 GRP version of the

FreeBalance has been implemented successfully,

to understudy make operational the actual

operation of the module in Liberia.

RCU December 15, 2016

Follow through with the MoH, on at least one

fully structured gender budget program starting

with fiscal year 2017/2018 budget; and in the

regular budget process, utilize the resources of

the available consultant at the MoH.

MFDP April 30, 2017

Fiscal Decentralization

Establish a Technical Working Group (TWG)

within the Department of Budget and Planning in

MFDP, with a defined ToRs, to focus purely on

financial management issues related to fiscal

decentralization.

MFDP March 31, 2017

Submit the ToRs that will lead to the recruitment

of a long-term TA, with vast experience on the

subject to the activities of the TWG, to support

the fiscal decentralisation processes.

RCU/MFDP December 15, 2016

34

Component 2. Strengthening PFM Legal Framework, Budget Execution, Accounting and

Reporting

Review of PFM Legal Framework

Continue to pursue the enactment of the revised

law. This activity was due on 09/30/2016

MFDP January 15, 2017

IFMIS roll Out to M&As

Formulate a clear action that would address the

remnant items and stabilize the IFMIS system at

both the central government level and county

treasures where the system is currently

operational

RCU

Coordinator/

December 15, 2016

Submit detailed implementation plan for the next

ten additional agencies, with clear timelines and

monitoring measures to be employed to ensure

that the process does not slow down.

CAG January 15, 2017

Launch the actual implementation of the plan

for the next ten additional agencies, including

the clear timelines and monitoring measures to

be employed to ensure that the process does not

slow down.


Review the 2013 PFM Accounting Manual and

ensure the approval of the updated version, with

copies shared with the development partners.

CAG March 1, 2017

Rolled out the EDMS to the next big ten spending

ministries and ensure the system has gone live to

the next ten before, in order to address the issues

noted by the Auditor General.

CAG March 31, 2017

Strengthen, renegotiate and cause to be effective

the SLA for the Freebalance, introducing agreed

service levels and penalty clauses for non-

conformity with the renegotiated SLA.


Strengthen internal support arrangement and

processes by deploying the SYSAID tool to

capture all support requests from internal users

as well as monitor the escalated support requests

to FreeBalance.


Train ten key staff of the M&As on Microsoft

and/or Cisco certification trainings to the private

IT training institutes in Monrovia; these staff will

be provided with additional IFMIS training to

enable them provide on-site technical

RCU Coordinator February 28, 2017

35

(networking, windows) support to IFMIS users in

the M&As.

Develop and submit to MFDP Senior

Management the security strategy for the IFMIS,

to be accompanied by a request for budget to

mitigate infrastructure challenges currently

being faced

RCU Coordinator December 15, 2016

Deploy the SYSAID tools to the M&As and train

the frontline IT support teams to strengthen the

level of support

IFMIS team January15, 2016

Payroll

Complete the clean-up exercise for the

supplementary payroll.

DG CSA January 15, 2017

a parallel run for the IFMIS for the

supplementary payroll as part of the Government

of Liberia (GoL) payroll, within two months from

the passage of the National Budget should be

conducted

Issue a formal notification, describing, going

forward, the detailed steps, as well as the role of

the Controlling Officers, for enrollment on the

payroll for Monrovia and non-Monrovia based

employees, along with associated sanctions for

non-compliance.

DG CSA December 15, 2016

Disaster Recovery Site and Business Continuity Planning, WAN Infrastructure and

other Infrastructure Issues

Prioritize under the GoL financing, the

procurement of the new IFMIS servers.

MFDP Going forward

Strengthening Financial Standards, Accounting and Reporting

Submit the 2015/2016 2015/2016financial

statements to the GAC for audit purposes.

MFDP November 30, 2016

Treasury, Cash, Debt, and Aid Management

Pursue the signing of the MOU with the CBL to

link the operational accounts of the agencies as

an urgent priority.

CAG Immediate

Establishment of Country Treasuries

Complete the IFMIS training to county staff, and

operationalizing four country treasuries


Donor Project Financial Management

36

Formulate detailed plan of how additional donor

funded projects (at least ten to fifteen DFPs will

be brought onto the IFMIS within the next six

months.

RCU Coordinator May 31, 2017

Component 3: Revenue Mobilization and Administration

Tax Automation (SIGTAS)

Complete the bid evaluation and submits

evaluation report to the Bank for no objection

The SOGEMA contract.

LRA November 21, 2016

Customs:

Request Technical Assistance Service Providers

to indicate and cost financial or in-kind

resources required to make the TA effective to

LRA. Discuss with Stakeholders to explore

options for funding

LRA

November 30, 2016

SIGTAS

Complete Evaluation and Seek No

Objection from WBG 21st November 2016

Develop ToR for Independent Quality

Assurance Advisor plus TA to enhance

Project Manager’s ability.

Discuss with stakeholders (may include

IMF/ USAID e.t.c) to fund or field people

resources who will execute the TA

Review and refocus SIGTAS project

implementation structures, deploy people

resources in the structure and commence

team formation activities.

Resource Local Project Manager with

Administrative Support

LRA/IPFMRP

LRA

LRA

LRA

LRA

November 21, 2016

November 30, 2016

November 30, 2016

December 15,2016

November 30, 2016

DATA Centre and ICT Infrastructure Issues

Prioritize financial Resources to remedy critical

issues identified in the data center i.e. Fire

extinguishers, Storage of back up tapes off-site,

Power Back up

LRA

December 31, 2016

Component 4: Enhancing Transparency and Accountability

Strengthening Public Procurement Oversight

37

Continue the development of an e-Government

Procurement strategy and road map, ready for

inclusion in the follow on operations.

PPCC December, 2016

Strengthening Internal Audit and Controls

Allow for the IAA to audit every part MFDP in

order to enable the strengthening of MFDP

internal controls.

MFDP/ IAA January 2, 2017

Share with the development partners, the annual

audit plan of the IAA which include IAA internal

audit activities in the MFPD.

IAA January 2, 2017

Initiate, effective the quarter ending December

31, 2016, a quarterly meetings between the

GAC and the IAA in order to allow for the

opportunities for coordination and cooperation

between the two.

GAC/IAA March 31, 2017

Submit to the Cabinet, copying the GAC,

(effective quarter ending March 31, 2017), a

summary of audit recommendations

implemented by each Ministry and Agency.

Strengthening External Audit

Recommend for the application of the requisite

sanctions to the MACs who fail to significantly

(about 75%) implement the audit

recommendations (starting from 2015/16 audit

reports), and for the MFDP to implement the

GAC’s recommendations for sanctions.

GAC Going forward

Enhancing Legislative Oversight

Leadership of PAC needs to meet with the

leadership of the MFDP to agree on a date for

the hearings to be conducted on the reports on

the Ministry numbering about 23 which have

not been discussed.

PAC/MFDP As soon as possible

Work with the Legislature, as appropriate,

advising on how the Parliament could best utilize

the technical work of analysis which the LBO

undertakes in order to align the changes to the

budget to critical fiscal impact underpinning.

MFDP/LBO/PAC Going forward

Civil Society and Social Accountability

in collaboration with OBI, CSOs, and other

relevant partners should undertake the three

NSA secretariat/

RCU

March 31, 2017

38

remaining activities including (i) organizing

quarterly multi-stakeholders dialogue(ii)

conducting training for media institutions on

budget and service delivery coverage and(iii)

conducting regional trainings for NSAs on

budget cycle, follow-up on audit reports,

tracking revenues and on the broader roles and

collaboration with transparency institutions.

Component 5: Program Governance and Project Management

Reform Coordination

Submit the request for a new project after which

the partners will respond with a timetable that

takes into account the GOL request.

MFDP November 21, 2016

Ensure the signing of the draft Grant

Agreement, upon receipt by the GOL, and

submit the signed copy to the Bank.

RCU November 30, 2016

Institutional and Capacity Building

In consultation with other stakeholders, pursue

the plans for the transition of the FMTP

program onto the University of Liberia.

MFDP April 30, 2017

Project Fiduciary

submit the FY16 audited financial statements

for the year ended June, 2016

RCU/PFMU December 31, 2016

Annex 1

LIST OF OFFICIALS MET

Name Organization Position

Hon. Boima S.

Kamara

Ministry of Finance and Development

Planning Minister of Finance and Development Planning

Abubarkar Kiawu Debt Management Unit Director for Debt

Adwoa Prempeh Budget and Development Planning/MFDP Senior Budget Development Specialist

Agustine S. M.

Tamba FLY Head

Alhassan Bangura RCU/MFDP IFMIS Techno-Functional Specialist

Alieu Nyei Ministry of Finance and Development

Planning Assistant Minister for Expenditure

Amadu V. S. Kpahn MFDP Assistant Director for Policy and Coordinator

Amos N. Sando Budget and Development Planning/MFDP Statistician

Anthony G. Myers Budget and Development Planning /MFDP Director/Budget Policy & Coordination

Ariko Samson FMTP IT Lecturer

Arthur Fumba LICPA President

Augustus Zwamed YES-INC. Head

Baba S. Conteh Budget and Development Planning/MFDP Senior Economist

Benedict G. Fully States Owned Enterprise (SoE) Senior Economist

Carolyn M. Zoduah NSA/MFDP Coordinator

Dickson N. Williams CEMESP Finance Officer

Dr. Chris Sokpor PFMU Unit Manager

Dr. Moganas Flomo LCSP Head

Dr. Puchu Bernard Civil Service Agency Director General

Elfreda Tamba Liberia Revenue Authority Commissioner General

Emmanuel A. Wieh Debt Management Unit Director

Emmanuel Ozigbo RCU/MFDP Procurement Specialist

40

Emmanuel Togba RCU/MFDP Coordinator

Esther H. George IPFMRP Administration Officer

Eudora Blay Richard LICPA Executive Director

F. Julius Caesar Legislative Budget Office Executive Director

Frederick B. Krah Aid Management Unit Director for Aid Management

Gbilley Roberts RCU/MFDP National Procurement Counterpart

Gweh Tarwo Macroeconomic Policy Unit Director for Macroeconomic Financial Sector

Hanson Kiazolu Public Accounts Committee Secretariat Director

Harold M. Aidoo IREDD Head

Henry D. Z. Yanquoi Debt Management Unit Assistant Director for Financial Sector

Henry D. Z. Yanquoi MFDP Assistant Director for financial Sector

Herbert Soper RCU/MFDP Deputy Coordinator

Himmie E. Langford Public Procurement and Concessions

Commission Senior Compliance Officer

Hon. Alvin Attah Aid Management Unit Assistant Minister Ext. Resources

Hon. Augustine

Blama Budget and Development Planning/MFDP Assistant Minister for Budget

Hon. Oblayon Nyema Liberia Institute of Public Administration

(LIPA) Director General

Hon. Tanneh Brunson Budget and Development Planning/MFDP Deputy Minister of Budget and Development Planning

Jackson Speare NRM Head

James A. B. Brown COHADD Program Officer

James B. Korlon Non-State Actor (NSA) Grants Finance Officer

James Dorbor Jallah Public Procurement and Concessions

Commission Executive Director

James Fully Johnson YES-INC. Program Officer

Johnson S. N.

Williams Budget and Development Planning /MFDP Assistant Director/Budget Policy & Coordination Unit

Joseph Fahnbulleh RCU/MFDP Capacity Building Officer

Joseph Fahnbulleh RCU/MFDP Capacity Building Officer

Kaifa J. Konneh CSI Program Officer

41

Kehleboe Gongloe FMTP Director, FMTP

Kpambu Turay Comptroller and Accountant General’s

Office/MFDP Director for Cash Management and Financial Approval

Lady-Pokolo

Andrewson

Public Procurement and Concessions

Commission Procurement Manager

Lasana L. Capps Liberia Revenue Authority Sr. Graphic Technician

Lasanah A. Dukuly CODRA Head

Lawrence Taylor RCU/MFDP Public Financial Management Specialist

Madison C. Kegbeh

Sr. Debt Management/MFDP Senior Debt Analyst-Multilateral Institute

Martins Sopy Grassroot Head

Marvelous D. Weah County Treasuries/MFDP Sr. Financial Analyst

Matthew Mirecki Budget and Development Planning/MFDP ODI Advisor

Melvin T. Jimmie Public Accounts Committee Secretariat Deputy Executive Director for Operation

Michael M. Thomas Public Accounts Committee Secretariat Deputy Executive Director for Technical Services

Min Lee Budget and Development Planning/MFDP ODI Advisor

Momo Lombeh RCU/MFDP Monitoring & Evaluation Officer

Moses T. Cooper Legislative Budget Office Deputy Director

Moses Wreh Budget and Development Planning/MFDP Budget Consultant

Musah Dixon Budget and Development Planning/MFDP Assistant Director for Budget Strategy

Nahdi Kerkulah Budget and Development Planning/MFDP Special Assistant/DMB Office

Nana Asiedu-Kotwi Training Curriculum Specialist Financial Management Training Program(FMTP)

Naomi C. Walker Internal Audit Agency (IAA) Director of Communications

Nyda Mukhtar Budget and Development Planning/MFDP ODI Advisor

Oliver Rogers Liberia Revenue Authority Deputy Commissioner General

Othelo K. Weh CSA Deputy Director General for Administration

Papin Daniels Public Financial Management Unit (PFMU) Project Accountant

Paul Collins (Dr.) Internal Audit Agency (IAA) Director General

Peter James Jr. Aid Management Unit Administrative Assistant

Pindarous Allison AGENDA Head

42

Prince Lighe Comptroller and Accountant General’s

Office/MFDP Deputy Accountant a& Comptroller General

Robert Kamei Jr. Comptroller and Accountant General’s

Office/MFDP

Deputy Director for Cash Management and Financial

Approval

Roland Bishop Aid Management /MFDP Assistant director for Multilateral Aid

Romeo Gbartea Fiscal Decentralization Director

Ruby N. Nabie Public Procurement and Concessions

Commission Project Officer

Ruth Bropleh AGENDA Finance Officer

Saliah Hussein Public Financial Management Unit (PFMU) Senior Project Accountant

Sam S. Hodge RCU/MFDP Capacity Building Officer

Samuka B. Sannoh CSI’LOFA Head

Sedekie Kamara Budget and Development Planning/MFDP Assistant Director/Public Investment Unit

Sekou Sekou Sanoe Comptroller and Accountant General’s

Office/MFDP Comptroller and Accountant General R.L.

Sheikh Swaray RCU/MFDP Change Management Officer

Sheikh Swaray RCU/MFDP Change Management Officer

Siafa Chowoe States Owned Enterprise (SoE) Director

Spencer Weah RCU/MFDP Senior Financial Management Officer/IFMIS Lead

T. Herbert Johnson Public Procurement and Concessions

Commission IT Officer

Theo Addey Budget and Development Planning/MFDP OIC, Development Planning Division

Titus K. Tikwa Public Procurement and Concessions

Commission Staff

Victor Neeplo RCU/MFDP Data Center Manager

Victoria Wollie WANEP/WIPNET Head

Yusador S. Gaye General Auditing Commission Auditor General

43

Annex 2

ANNEX: IPFMRP Results Framework and Status of Performance as at June 30, 2016

No

.

Project Development

Objective (PDO)

Level Results

Indicators

Unit of

Measure

Baseline-

2007/200

8

2016

Targets

Achievements

as at 2016

PEFA

Assessment

Performance/Variance

1 Indicator One:

PEFAPI-7

Extent of unreported

government

operations

PEFA Score D+ B D+

Target not met. The sources and intent of unreported

revenue/expenditure remain much the same. It was not

possible to precisely establish the amounts of off-budget

expenditure funded by cash advances carried forward, but

controls on advances have strengthened.

Information on donor –financed projects have improved

considerably, but this is still limited to disbursements,

rather than expenditure, as required for a higher score

2 Indicator Two: PEFAPI-12

Multi-year perspective

in fiscal planning,

expenditure policy and

budgeting

PEFA Score D+ B C+ Overall performance from 2012 remains unchanged, though

rating for 2012 should have been C instead of C.

The MTEF was not shown in the FY 2014/15 budget and is

shown only on an economic classification basis in the FY

2015/16 budget, thus omitting the purpose of expenditure.

A DSA covering both external and domestic debt has been

conducted annually over the last three years by the staff of

the IMF and /or the World Bank, generally with GoL’s

concurrence.

3 PEFAPI-18

Effectiveness of payroll

controls

PEFA Score D+ B C+ CSMS is electronically linked personnel payroll and records

of non-military civil servants. The military payroll and

database are not covered by CSMS, thus limiting the overall

score to B.

44

Delay in processing personnel Action Notices are due to

capacity constraints and slow bureaucratic processes cause

the process to take up to 3 months. A new security policy

came into effect in 2015, but it is too early to assess its

effectiveness.

4 Indicator Four:

PEFAPI-20

Effectiveness of

internal controls for

non-salary expenditure

PEFA Score C+ B C+ Performance has not changed from 20112.

Effective commitment control measures exist through

IFMIS. Nonetheless some exceptions exist, for example,

emergency -related expenditure; implementation of IFMIS

has required extensive training, while high staff turnover

has been a major challenge. Compliance with financial

regulations appears to be improving but issues still arise, as

raised in the Auditor General’s reports (e.g use of

emergency procedures for procurement.

5 Indicator

Five: PEFA

PI-25

Quality and timeliness

of annual financial

statements

PEFA Score D B C+ The establishment of IFMIS has helped to improve the

quality of the annual financial statements, however,

information on donor projects and end of year outstanding

debt was not complete.

The consolidated government statement is submitted for

external audit within 10 months of the end of the fiscal year.

Statements are presented in consistent format over time

with some disclosure of accounting standards

6 Indicator Six: PEFAPI-26

Scope, nature and

follow- up of external

audit

PEFA Score D C+ D+ Increased compliance with INTOSAI standards: Increased

independence of GAC following new Audit Act, and greater

focus on systemic audit issues, despite capacity constraints;

GAC audit reports on the annual financial statements for FY

2011/12 and FY 2012/13 were submitted to the Legislature

more than 12 months after the receipt of the annual financial

statements from GoL;

45

There is little evidence of executive follow up on audit

recommendations. Internal audit units are beginning to

follow up on the implementation of CAG recommendations.

7 Indicator Seven: PEFAPI-28

Legislative scrutiny of

external audit reports

PEFA Score D C+ D+ Performance improved under dimensions ii) and iii):

Examination of audit reports by the legislature is taking

more than 12 months to complete;

Legislature now holding extensive hearings on audit

findings. Public hearings were held for 15 audit reports,

since published;

Actions are recommended, but are rarely acted upon by the

Executive

Intermediate Results

Project Development

Objective (PDO)

Level Results

Indicators

Unit of

Measure

Baseline-

2007/200

8

2016

Targets

Achievements

as at June 30,

2016

Performance/Variance

Intermediate Result (Component One): Enhancing Budget Planning Systems, Coverage, and Credibility

Indicator One:

Quarterly fiscal

Yes/No No Yes Yes Quarterly fiscal outturns are produced and published timely.

The FY2014/15 Annual Fiscal Outturn was published in

46

1 operations report

(FORs) generated

December 2015. FY 2015/16 Quarters 1, 2 &3 have were

published, while data for the annual report are being

reconciled due to the ’90-day window”. Consolidated

financial reports for 13 largest SOEs are published with

delays. FY2015/16 Quarters 1&2 are published in addition

to the annex to the FY16/17Annual Budget while quarter 3

is being finalized for publication.

2

Indicator Two:

Variance between

M&As appropriations

and actual

expenditures

% 10 5 12 Actual expenditure outturn for 2014/15 was less than budget

by 7%. Similarly, provisional June 30, 2016 figures show

that actual expenditure is less than budget by 12%, .

3

Indicator Three:

Variance between

revenue forecasts and

actual collections

% 5 3 9% Domestic revenue was realized in excess of FY2014/15

budget by 3%. Provisional figures for 2015/16 show a 9%

shortfall in domestic revenue.

Intermediate Result (Component Two): Legal Framework, Budget Execution, Accounting and Reporting

4

Indicator One:

Proportion of

Government balances

in Treasury Single

account

% 0 >60 All accounts in the CBL are linked to a single treasury

account that provide balances to government daily. The

CAG obtains information on government accounts balances

in commercial banks upon request, but commercial bank

accounts are not linked to the treasury account at the CBL.

47

5 Indicator Two:

Donor projects in

CAGD-based IFMIS

reports

Number 0 24 30 Transactions as at March 31, 2016 for Thirty (30) donor-

funded accounts have been uploaded onto IFMIS.

However, transactions are not executed on real-time basis

due to some technical challenges that are being resolved.

6 Indicator Three:

M&As generating

monthly expenditure

reports through IFMIS

Number 2 37 97 Ninety-seven (97) main budget line ministries and agencies

are generating quarterly IPSAS compliant financial reports;

fifty (50) of which are using IFMIS.

7 Indicator Four:

Annual financial

statements generated

through IFMIS after

FY end

Month 6 3 7 IPSAS - compliant financial statements for the consolidated

funds are due no later than October 31st (4 months after FY

ends). FY2013/14 statement was published on December

15, 2014, while FY 2014/15 was published on January 25,

2016. FY15/16 Statements are expected to be published by

end of October 2016.

Intermediate Result (Component Three): Revenue mobilization and administration

8 Indicator One:

Increase in customs

revenue collections

adjusted for inflation

% US$23 M

(FY11/10

baseline)

30 10

Customs revenue increased from US$155.2M in 2013/14 to

US$167.8M in 2014/15, and provisional figures for

FY2015/16 show an outturn of US$194M against a budget

of 176M, a performance of 10% over budget.

9 Indicator Two:

Increase in internal

revenues adjusted for

inflation

% US263 M

(FY10/11

baseline)

45 3.56 Tax revenue declined from US$395.9M in 2013/14 to

US$381.8M in 2014/15. Provisional tax revenue figure for

2015/16 is US$401M.

Intermediate Result (Component Four): Enhancing Transparency and Accountability

10 Indicator One:

Qualified procurement

staff in MDAs

Number 0 30 112 One hundred twelve (112) officers trained with Post –

Graduate Diploma in Procurement, and all deployed within

M&As.

48

11 Indicator Two

Internal Audit staff

holding professional

certifications

qualifications

Number 0 40 60 The number of certified auditors has increased by 66.6%

(from 36 in 2012/13 to 60 in 2015/16). This number

consist 2 ACCAs and 58 CFEs.

49

12 Indicator Three:

Benchmarks in budget

information from

MFDP meet out of

nine as defined by

PEFA PI-6

Number

3 6 6 Six key budget information documents are produced in

addition to the electronic billboard: 1) the budget book; ii)

Citizens’ Guide; iii) Budget Fact Sheet; iv) FAQs; v)

Budget Information Billboards; and vi) Posters.

13

Indicator Four:

Qualified external

audit staff in GAC

Number 10 150 54 This indicator is below target by 66%. However, 60 staff

are undergoing tutorials for their first sittings in December

2016: 2 candidates for CISA, 21 for CAAT and 37 for

ACCA certification.

Intermediate Result (Component Five): Program Governance and Project Management

14

Indicator One:

Annual PEFA self-

assessments

Yes/No No Yes Yes PEFA Self-Assessment was conducted in January 2014.

Report reviewed by PEFA Secretariat and then published

on the MFDP website in 2016.

50

51

Annex 4

Review of SIGTAS Implementation Organisation Arrangements

Description Key Characteristics Areas for improvement

1 Project Steering

Committee Chaired by CG

Composed of DCG,

leaders from MIS, DTD

& Customs, Ministries of

Finance, Transport,

Lands, Commerce,

IPFMRP, Chamber of

Commerce, telecom

operators and DPs.

To meet on quarterly

basis

ITAS Project Manager a

non-member

Given project schedule (6

months), need to sit on more

regular basis, say monthly;

Supplier of system not

represented and yet there is

need for Steering the

SIGTAS upgrade.Therefore

consider creating SIGTAS

steering Committee or

expand and include Supplier

representative9.

Many members some of

whom may have no direct

contribution to SIGTAS

implementation Steering.

Consider focussing

membership and relegating

some members to the lower

more operational levels.

ITAS Project Manager could

be appointed secretary of the

SC.

2 Project

Management Team

(PMT)

Chair is DCG TA

Composed of ACs of

LTD, MIS, TPS & MIS,

EdQUARD,

Modernisation, MIS

SIGTAS Super users,

representatives from

Banks, LBR, Chamber of

Commerce and National

reconciliation unit.

ITAS implementation

advisor and Supplier

representative are non-

members.

Designed to meet

monthly;

Project manager submits

report for discussion.

Given short implementation

timeframe, consider weekly

PMT meetings,

Membership not defined by

particular work areas

required for a successful

ITAS implementation. These

work areas include:

Procurement/Contract

Management, Business

Process Re-engineering,

Application implementation,

Training & Change

Management. Legal & Policy

plus ICT Infrastructure10.

LRA should consider

regrouping the membership

along the above

work/functional lines. Each

workgroup area leader

9 ASYCUDA will also need a high level. Supplier representative should be someone higher in rank than the

Supplier Project Manager 10 Annex 2: Indicates a typical organization structure envisaged plus various activities that each workgroup

would potentially be responsible for.

52


should lead a project team

along the lines recommended

in (3) below.

To enhance ownership,

leaders of each of the above

workgroup should submit

weekly reports for discussion

rather than the Project

Manager.

Consider making

Commissioner DTD a

member of this Committee.

Designate Project Manager

as Secretary for the PMT,

Design weekly project

reporting template which

leaders us to report at a

minimum the following (i)

work planned in the week, (ii)

work done in the week, (iii)

risks arising and mitigation

(iv) follow up of previously

agreed & assigned action

points

Keep log to record each

agreed action as a basis to

track resolution.

3 Project Teams Composed of

suppliers/developers,

Business Analysts and

end users

Project members are

assigned to

functionalities defined

for example, workflow,

interface, eservices to

carry out requirements

validation, User

Acceptance Training

(UAT) instead of

workgroups required to

make the system operate

(see row 2 above)

Contractual, Line and

Communication lines

between project teams

and supplier (SOGEMA)

not clearly defined. It is

important that these be

Need to reconfigure along

work areas such as

Procurement/Contract

Management, Business

Process Re-engineering,

Application implementation,

Training & Change

Management. Legal & Policy

plus ICT Infrastructure.

Clearly designate the Project

Manager as the only person

with Line and Contractual

authority over the Supplier.

All interactions between

team and supplier should be

considered as good as

communications necessary

for proper implementation

but not binding on the LRA.

PMT members highlighted in

2 above could lead/chair the

various workgroups and

53


defined and clearly

communicated to ensure

instructions or

communications from

staff in these teams are

not considered

instructions which have

contractual effect. Only

instructions from the

Project Manager to

SOGEMA should have

contractual effect.

generate issues for reporting

or discussion in the PMT.

The LRA project Manager

should establish weekly

meetings with the SOGEMA

Project Manager to manage

the implementation.

54

Annex 5

Proposed Governance arrangements and job descriptions

Part A: Implementation Structures

Key

Authority reporting lines

Contractual Reporting Lines reserved for Project Manager with

SOGEMA

Communication Lines

Tax Authority:

Program Steering

Committee

ITAS Project

Sponsor: CG

Chair: Project Owner

(DCGTA)

ITAS PMT (weekly

Committee meetings)

Chair: Project Sponsor (CG)

ITAS Steering Committee

(Monthly SC meetings) meetings

attended by SOGEMA Senior

Leader

TAX AUTHORITY

Project Manager Contractor

Project Manager

Implementation

workgroups

Contractor

Implementation

team

Program me

Steering

Project

Management

Steering

Project

Implementatio

n

55

Part B: Terms of Reference for Various Workgroups

1. Project Owner: ITAS Management Committee

Reports to the Project Sponsor;

Responsible for offering Strategic guidance and leadership to the ITAS

implementation;

Key Change Champion for the ITAS Implementation. In this role the Project Owner is

expected to be the key spokesperson and advocate for the ITAS initiative Creating

ownership and sustainability of the project within the users

Chair Weekly ITAS Project Management Committee: The Weekly ITAS Project

Management Committee shall:

o Consist of chairs of various workgroups (e.g. BPR, Change, Skills etc), Project

Manager ITAS and leaders in the Domestic Taxes Department.

o Receive weekly reports showing activities planned for the week, work done in

the week, issues or risks arising and activities planned for the following week.

(see attached reporting template).

o Maintain a list of actionable items plus the status. Workgroup chairs will be

required to make weekly reports on action items allocated to their workgroups.

o Make decisions to guide implementation of the ITAS including resolution of

risks arising that may affect timely, cost effective implementation of a quality

ITAS.

o Discuss and approve any proposals for changes in project scope. Where scope

changes impact the Modernisation Programme (costs, time, quality etc), make

recommendations to Cellule through the focal person.

Chair in the absence of the Project Sponsor of the Tax Authority/Contractor ITAS

Steering Committee. The Tax Authority/Contractor Steering Committee shall:

o Be chaired by Project owner and attended by Project Sponsors from both

Institutions. The meeting shall also be attended by project managers from both

Tax Authority and the Contractor.

o Tax Authority shall be the Secretariat for the ITAS Steering Committee;

o Receive periodic reports showing activities planned for the period, work done

in the period, issues or risks arising and activities planned for the following

period.

o Maintain a list of actionable items plus their status. Tax Authority/Contractor

officers responsible will be required to make reports or give feedback on

action items allocated to their workgroups.

Supervise workgroup chairs and project manager in the execution of their activities.

Collate ITAS implementation plan into a Domestic Taxes Departmental annual Work

Plan. Commits approved departmental resources to the project

Take necessary steps to secure any policy decisions or legislative amendments needed

to achieve programme objectives

Approves the accountability of the resources used on the project components

Escalate unresolved issues to the Project Sponsor (CG) for intervention and keeps the

Project Sponsor (CG) informed of the progress on the project;

2. Project Manager: ITAS Implementation

Reports to the Project Owner ITAS Implementation

Responsible for management of the day to day project implementation activities and

ensure ITAS implementation meets the time, cost and quality objectives. Direction

and control of all work performed within the framework of the Work Breakdown

56

Structure (WBS). The Project Manager has the authority for WBS element's task

assignment; control and assigns budgets; and master project schedule(s).

Contract Manager for the ITAS implementation. In this role the Project Manager is

expected to offer full contract management activities to the project including issuance

of acceptance certificates to the contractor;

Secretary to the weekly ITAS Management Committee;

Secretary to the Tax Authority/Contractor ITAS Project Steering Committee;

Chair the procurement and contract management workgroup;

Manager and Team leader for the staff deployed in the ITAS project office. In this

role Project Manager is expected to guide Commissioner Domestic Taxes in selection

and deployment of staff in the ITAS project, carry out staff performance management,

coordination and motivation activities.

Coordinate and synchronize activities of all workgroups in the ITAS implementation.

Coordinating review of consultant’s reports and advising the project owner on the

quality of the outputs, particularly as they pertain to the project goals and objectives.

Maintaining all project documentation and making them available to internal audit and

the auditor general to meet quality assurance requirements established by the

Government.

3. ITAS Implementation Core Team

This team is tasked with assisting the Project Manager in coordinating and implementing the

Project throughout its lifetime. In addition to the tasks assigned in specific Workgroups (e.g.

BPR or Change management etc), this team shall assist with the administrative procedures of

the project as assigned by the Project Manager from time to time.

Each team member could be assigned any of the following administrative responsibilities in

addition to workgroup activities:

Management of Project Records, ensuring maintenance of electronic and hard copy

(where applicable) records in approved standard formats. Ensuring the safe custody of

project records

Maintenance of Project Plans (updates, adjustments, etc) and core project

documentation. This includes routine maintenance of Project activity schedule and

Log Frame

Maintenance of Project Accounts and Expenditures, Project Office administration,

transport and facilitation. Co-ordination with Corporate Services department where

applicable

Communications Management, liaison with sister modernisation projects, Project

Reporting.

Co-ordination of ITAS Pilot Site and preparatory activities

4. ITAS Implementation Workgroups

The Project Owner will make appointments to the Workgroups.

Implementation Workgroups should strive to contain membership to numbers that are

effective for managing the tasks assigned to them. The ITAS Implementation Work Group

structure is not static; where opportunities for greater efficiency exist, the structures and

membership can be adjusted. Where required, additional resources to assist in carrying out

the tasks can be co-opted to the Implementation Work Groups.

57

4.1. Workgroup Chairs (normally a senior member of the leadership team in

domestic taxes or other functional leading area)

The workgroup Chairs will be responsible for:

(a) In consultation with the Project Owner, mobilization of necessary human resources

from outside the project to ensure the execution of tasks;

(b) Maintaining the balance between ongoing tax authority business activities and the

Project

(c) In liaison with the Stakeholder & Change Management Workgroup, the chairman shall

oversee the execution of change management activities related to the area that their

workgroup impacts. The Chair will appraise their mother departments of developments

within the project

4.2. Workgroup Task Leaders (Normally a full time member of the project)

The task leaders will be responsible for Managing the day to day implementation of

workgroup tasks

4.3. The workgroups

Workgroup

Name

Business Process Workgroup WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership

1. Full Time Task Execution Team (TBD)

2. Additional resources required on need basis (TBD)

General

Description

of

Workgroup

Role

This workgroup is responsible for designing and

implementing TAX AUTHORITY’s business procedures for

the administration of Domestic Taxes and Non-Tax Revenues.

Using the IFC/WB re-engineered processes as a basis, the

workgroup will design end-to-end business procedures and the

necessary organisation arrangements to effect these

procedures while taking into account TAX AUTHORITY’s

current business strategies. For purposes of ITAS

implementation, this work will be translated into the detailed

user requirement and gap analysis for the Custom Software.

During system implementation the workgroup will put the

revised procedure and organisation arrangements in place.

58

Specific

Terms of

Reference

1. In association with Contractor BPR consultants, carry out

a comprehensive analysis and design of business processes

for the administration of Domestic Taxes and Non-Tax

Revenues. Ensure that

a. DTD/TAX AUTHORITY strategic objectives

relating to improved customer experience,

reduction of costs, differentiation of compliance

approaches, risk management etc are taken care

of

b. all aspects of ITAS functionality as per the

Technical Requirements of the IFB are covered

c. Quality assures Contractor recommendations

for changes to Business Procedures (and the

related Critical Success Factors, Performance

Indicators/Metrics & others

d. In coordination with the Audit and Security

Workgroup, Identify and recommend the

appropriate security and internal controls to be

implemented in the course of the system and

procedures implementation.

e. Ensure that automated procedures and outputs

are capable of being audited

f. Assist Contractor to prepare end-to-end

Business Process Operating Guidebooks

covering process overview, role specific

instructions, user guide for the Application

Software, etc. as described the Technical

Requirements.

2. Redesign and recommend for consideration the DTD

Organisation Structure to tightly couple it with redesigned

business operations and to take maximum advantage of the

Information Technologies being implemented. Design

must take care of

a. Automated operations

b. Segmentation of taxpayers into Medium and

Small taxpayers and the related differentiation

of services

c. Create segregated HQ functions for managing

online risk management, System management,

and other new functionality as identified in

DTMP Log Frame and in the BPR exercise

d. Creation of a function for the specialised

taxation of mineral resources

3. Develop and implement a phased rollout plan for

organisation structures and business procedures. Ensure

alignment with ITAS implementation schedule.

4. Identify Policy, Legislative and Rule Changes for

escalation to the Policy Group. Policy Group will liase with

59

appropriate stakeholders, develop and ensure existence of

the necessary policy/legal framework.

5. Together with the ICT Technical Team, develop a Service

Level Agreement to cover the relationship between DTD

and IT after the project ends. This should cover

a. Post system implementation support (e.g.

manning of Help Desk function, escalation to

Configuration Management service, etc)

including response times

b. System Administration

c. Data Backups and disaster recovery

methodologies

d. Training

e. Procedures for managing changes of

[automated] business processes and the related

change requests for information systems

f. Hardware maintenance and replacement

g. Other IT infrastructure availability standards

and contingency provisions

60

Workgroup

Name

ICT Technical Team WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership


2. Additional resources required on need basis(TBD)

General

Description

of

Workgroup

Role

This workgroup is the TAX AUTHORITY ICT counterpart

team that will work with the Contractor in matters relating to

ICT skills acquisition, system execution, management and

ICT capacity building. The workgroup will ensure that TAX

AUTHORITY is in a position to sustain the implementation of

the technologies developed during the lifetime of the project.

On the hardware side, the team will ensure that the necessary

computer equipment and other IT infrastructure aspects

required before and during ITAS implementation (DATA

Centre, Local Area Networks, Wide Area Networks and

communication technology) are in place and are capable of

supporting the customised Software and related re-engineered

business functions. The workgroup will liaise with the

CONTRACTOR consultants in matters relating to technical

infrastructure installation and configuration and advise the

Project Manager. The team will also carry out site

implementations under the supervision of Contractor

Specific

Terms of

Reference

1. Observe the Contractor technical team and acquire the

skills necessary for post implementation maintenance of

the software, databases and other technical infrastructure.

In co-ordination with the Training and Skills Development

workgroup, facilitate the training of IT technical staff in

the technologies and configurations developed throughout

the project lifecycle. Ensure a critical mass of necessary

expertise in the following areas

a. Application Customisation

b. Systems and Database Administration

c. System Installation, Configuration and

Management

d. TAX AUTHORITY Help Desk service (as will

be described in Technical Requirement)

2. Assist/facilitate Contractor to carry out a review of TAX

AUTHORITY’s ICT infrastructure and related Service

Level Agreements

61

3. Review Contractor minimum specifications of Technical

Infrastructure make recommendation of findings to Project

Manager. Specifically

a. Assess conformity with TAX AUTHORITY

ICT Policy

b. Review any proposed changes to the TAX

AUTHORITY ICT Policy, draft any agreed

changes

c. Assess cost implications

d. Implement any approved changes

4. Ensure that all technologies meet or exceed standards laid

out in IFB Technical Requirement and certify the same to

the Test Team leader.

5. With the assistance of Contractor, develop, schedule,

execute and evaluate acceptance tests for Technical

Infrastructure configurations for the implementation of

ITAS. Carry out Acceptance Testing procedures for H/W

and other infrastructure procured for the implementation of

ITAS.

6. Carry out Just-In-Time installation of all hardware and

infrastructure for the rollout of the ITAS Software. Manage

any related Service Level Agreements and ensure that

services meet the agreed minimum requirement for ITAS

implementation.

7. Ensure the preparation of a System Implementation Guides

as detailed in the Technical Requirements for ITAS.

8. For each Site implemented by Contractor: -

a. review Site Configuration Management

Records and provide Go, No-Go feedback to

Project Manager

b. Liaise with Test Team leader on technology

related aspects of system Acceptance Tests.

Provide technical expertise on need basis.

9. Implement ITAS at Group rollout sites, including

a. Install/configure Custom Software and related

databases

b. Prepare Site Configuration Management

records

c. Liaise with TCS to certify site readiness for

acceptance testing

10. Assess any System/Technology implications of change

requests during the lifetime of the project and advise the

Project Manger accordingly. Specifically

a. Assess impact on infrastructure and software

b. Provide technical assistance (Systems Analysis)

to BPR team in drafting technical requirements

for the change

c. Liaise with BPR team in drafting the Change

Order Forms

62

11. Together with the BPR Workgroup, develop a Service

Level Agreement to cover the relationship between DTD

and IT after the project ends.

Workgroup

Name

Software Application Implementation/ Acceptance Test

Team

WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership



General

Description

of

Workgroup

Role

This workgroup, with the assistance of Service Provider, shall

develop and implement Acceptance Tests for the Application

Software and technologies supplied during the project. The

workgroup will also test the related business procedures.

Specific

Terms of

Reference

1. Carry out preparations for Acceptance Procedures for

ITAS Application Software:

a. Lead the TAX AUTHORITY in reviewing

Contractor documented understanding of user

requirements

b. Provide Contractor with any data that requires

conversion for testing purposes

c. Assist Contractor (in a consultation role) in the

preparation and implementation of data

conversion ware and conversion routines as

defined in the IFB.

d. Prior to each acceptance trial, ascertain that TCS

has produced the necessary certificate of

readiness for testing.

2. Develop acceptance trials and acceptance tests as defined

in the Technical Requirements. This task will include:

a. Detailed specification of each trial to be carried

out

b. Development of detailed testing schedule

c. Estimates of resources required (hardware,

personnel)

d. Methodology for recording test results

e. Assignment of specific responsibility for

persons to be engaged in acceptance trials.

3. Execute Acceptance Procedures/Tests in line with the

Approved Project Plan and system implementation

schedule, maintain a log of the procedures and report to

the project Test Committee through a formal Trial Report

63

4. Make preparations for and implement any Tests to be

conducted by external stakeholders (taxpayers, banks,

etc.), conduct any training that these stakeholders might

require to carry out these tests.

5. Make reports of tests executed, and seek approval from the

ITAS Management Committee for completed and passed

tests.

64

Workgroup

Name

Skills development, Training and knowledge management WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership


2. Additional resources required on need basis

General

Description

of

Workgroup

Role

This workgroup is responsible for coordinating and managing

the staff capacity building activities to ensure that the staff are

equipped with the skills necessary to sustainably implement

the revised business procedures and technologies developed

by the project.

Specific

Terms of

Reference

1. Carry out a Training Needs Assessment of all Domestic

Taxes Staff and key stakeholders affected by the ITAS

implementation.

2. In association with Contractor, coordinate the training of

Technical staff and end users in the management and

implementation of the ITAS application software and

related business procedures

a. Quality assure course specifications, training

materials and skills transfer plans prepared by

Contractors and ensure conformity with

Technical Requirements. Certify the suitability

(or otherwise) to the Project Manager

b. Co-ordinate the preparation and ensure the

readiness of training facilities.

c. Identify/recommend the Trainers to be used in

the “train-the-trainer” approach

d. For all training carried out by Contractor, ensure

that course assessments are carried out. Analyse

the course assessment information and

recommend appropriate remedial action to the

Project Manager.

e. Coordinate all end-user training carried out by

the Contractor-trained Trainers; identify staff to

be trained and prepare training schedules;

ensure coordination with rollout of Application

Software and Business Procedures. For each

Rollout site, certify to the Project Manager that

the required numbers of staff have achieved the

necessary level of expertise for system/business

procedure implementation.

65

3. Review current training programs for technical and soft

skills, update to suit/support re-engineered / automated

business procedures; coordinate the implementation of

those that are necessary during the lifetime of the project

a. Assess implications of the re-

engineered/automated business procedures on

current training programs and curricula.

b. Develop a training plan

c. Develop procedures for On the job training

(OJT)

d. Develop and implement training program for

any identified specialised skills that are critical

for the implementation of the project. Program

should include Basic ICT competency of a

critical mass of staff within Domestic Taxes

Department and key stakeholder groups affected

by ITAS implementation.

4. In association with BPR Workgroup, develop and

recommend HQ procedures (and supporting organisation

arrangements) for continuously reviewing and updating

training needs, materials and procedures and coordinating

knowledge management in the Department. Oversee the

implementation of the same during the

rollout/implementation of procedures and supporting

structure.

5. Develop and implement a departmental knowledge library

Workgroup

Name

Stakeholder Management, Change Management and

Communication

WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership



General

Description

It is recognized that the introduction of re-engineered business

processes in Domestic Taxes Department (DTD) and

66

of

Workgroup

Role

subsequently automating some as part of the transformation

process in TAX AUTHORITY calls for proper change

management and regular (and consistent) dissemination of

information to both internal and external stakeholders. This

workgroup has the primary responsibility of ensuring that any

identified stakeholders are actively engaged and are kept

abreast of events within the project. Ultimately, the

workgroup must ensure that there is awareness, a change of

minds and attitudes and that there is ownership of the solution.

Specific

Terms of

Reference

1. Carry out a stakeholder mapping identifying key groups

that are affected by the ITAS implementation change

initiative,

2. Development of a communication/sensitisation Plan,

implementation of the Plan and monitoring and assessing

the change management processes. Specific tasks will

include:

a. Carry out change readiness assessment

b. Develop Communication, stakeholder

engagement & change management strategies

c. Development of communication messages

d. Development of communication materials

e. Management of Communication channels

f. Evaluation of effectiveness of communication

strategies

g. Advise on transition tools

3. Quality assures the proposals made by the Contractor

change management consultant incorporate any approved

activities in the TAX AUTHORITY/Domestic taxes

Department and ITAS implementation

communication/change management plan.

4. Design/develop/maintain and distribute all project

communication materials (including public notices).

5. Ensure project benefits, process, legislative and regulatory

changes are effectively communicated to stakeholders.

67

Workgroup

Name

Office Infrastructure, (Workplace Health and Safety) &

Policy Workgroup

WBS

Cross

Reference

Chair TBD

Task

Execution

Leader

TBD

Other

Membership


General

Description

of

Workgroup

Role

This workgroup is responsible for assessing and defining the

infrastructure (non-ICT) needs of the department and ensuring

the implementation of the agreed changes. The Workgroup

will receive from all teams’ policy and legal changes required.

The workgroup will draft the necessary policy/legal

frameworks and cause them to be approved for

implementation by the relevant TAX AUTHORITY/Central

Government structures.

Specific

Terms of

Reference

1. Define minimum office infrastructure and health & safety

specifications for DTD offices. Liaise with the Quality

Services project to incorporate these in the TAX

AUTHORITY Office Standards.

2. Implement the standards so specified in DTD offices.

Coordinate the implementation with the Rollout plan for

ITAS ensuring that office renovations, furniture and

fixture installation etc. is done just-in-time for the roll out

of the new information system and procedures

3. Develop a Service Level Agreement to cover the

relationship between DTD and Administration Division

after the project ends. The SLA should cover all aspects

relating to the maintenance of the standards developed in

No. 1 above.

4. Identify required policy, legislative and regulatory

changes for the ITAS implementation. Designing work

plans to ensure delivery of the required policy or legal

changes. This workgroup will also be at the lead of making

sure manuals are developed for the ITAS implementation.

Workgroup

Name

Procurement and Contract Management Workgroup WBS

Cross

Reference

Chair Project Manager

68

Task

Execution

Leader

TBD

Other

Membership

1. Staff from the Procurement Directorate

2. TBD

3.

General

Description

of

Workgroup

Role

This workgroup is responsible for coordinating project related

procurements and expenditures.

Specific

Terms of

Reference

1. Compilation/completion of TORs/User Requirements for

project procurements. For TORs/User requirements

developed by other workgroups, this workgroup will

assure that they meet the project standards

2. Liaising with Procurement Unit for all project related

procurements

3. Manage project related contracts. Specifically, the

workgroup shall ensure that suppliers are meeting their

obligations/deliverables and that TAX AUTHORITY is

meeting her obligations and that the Project Manager and

Project Owner are advised accordingly.

4. The workgroup shall, based on their findings, recommend

any contract related payments that TAX AUTHORITY

needs to make.

69

Workgroup

Name

Audit and Security Workgroup WBS

Cross

Reference

Chair Head or some other Internal Audit Staff

Task

Execution

Leader

TBD

Other

Membership

1. Office of Auditor General Staff

2. Other TAX AUTHORITY staff with knowledge in audit,

internal controls and ICT security

General

Description

of

Workgroup

Role

This workgroup will ensure that the systems and procedures

developed are auditable by both internal and external auditors.

The workgroup shall also manage the necessary changes in

the audit functions to ensure their readiness to deal with and

use the new DTD systems and procedures.

Specific

Terms of

Reference

1. Liaise with the BPR Workgroup & the Acceptance Test

Team and advise on security and audit considerations.

Make necessary recommendations to the workgroup

Chairs and the Project Manager

2. As a result of changing DTD systems and procedures,

recommend necessary changes in Audit procedures and

systems to Head Internal Audit, external auditors or

Auditor General for implementation.

3. Determine capacity needs in Auditor General and Internal

Audit and ensure capacity gaps (competences and tools)

are delivered to ensure efficient audit of the system.

4. In liaison with Stakeholder Management, Change

Management and Communication Workgroup, Co-

ordinate/implement change management initiatives in the

areas of both internal and External Audit.

5. Provide on time embedded audit of the processes through

all phases i.e. procurement, design, development, testing

and commissioning.

Other Governance Arrangements

The ITAS Test Committee

Membership Project Owner (Chair), All ACs DTD, AC IT, PM-DTMP

any other members as may be required from time to time

WBS

Cross

Reference

Terms of

Reference

This Committee shall perform the role stipulated in the

Technical Requirements. Specifically, the Test Committee

shall within 2 working days of receiving an Acceptance Trial

Report from the Software Application Test Team

o Review the Acceptance Trial Reports and come

to a conclusion about the degree of success of

each test

o Award a Test Result for each identifiable

component of the test (pass/fail)

70

o Produce detailed minutes of the findings of the

Committee

o Advise the Project Manager whether to issue an

Installation (payment) Certificate (or a notice of

defects/deficiencies) as stipulated under

General Conditions of the Contract (GCC)

Reporting

The Project Manager shall produce the following reports routinely:

Report Name

Description

Report Description Frequency Recipient

1. Progress report (MS

Project)

This will be an updated

version of the approved

MS Project Plan

indicating completed

tasks

2. Progress report

(Narrative)

Description of milestones

achieved, challenges

faced, risks, lessons

learned, plans for

subsequent period

71

Workgroups shall produce the following reports routinely:

Report Name

Description


1. Progress report (MS

Project)

This will be an updated

version of the approved

MS Project Plan indicating

completed

tasks/milestones specific

to the workgroup. This

will be used to update the

overall project plan.

PM

2. Progress report

(Narrative)

Description of milestones

achieved, challenges

faced, risks, lessons

learned, plans for

subsequent period. This

will be a standard format

for all workgroups.

PM

The Project Owner shall produce the following reports:

Report Name

Description


1. Progress report

(Narrative)

The approved (by PO)

report on milestones,

challenges, risks, lessons

learned, etc. This report

accompanies and explains

the MS Project Report

issued by the PM.

Monthly MSC

Secretariat

72

Annex 6

Matrix of Development Partner Interventions at Liberia Revenue Authority (LRA)

Development

Partner

Intervention

USAID Financed TADAT Assessment

Support to enhance Transparency and Integrity

Support improved revenue policy environment

Support improved tax payer education and strategy11

UK (HMRC) TA on revenue forecasting and revenue statistics

Support on structuring the reform and modernisation program

GIZ Funding Technical assistance in setting up Natural Resources

Management unit

Funding LRA access to mineral pricing database

Interface between SIGTAS and MRAs IT system through the

revenue development fund

IFC Support in developing Transfer Pricing regulations which will be

effective July 1, 2016

Development of TP practice notes

IMF (Fiscal Affairs

Department) Support in developing strategic plan, human resources and

management information systems plans

Fund resident advisor for set up of Large Taxpayer’s office and

enhancing compliance management

IMF (West

AFRITAC)

WCO Customs performance measurement under the NORAD funding

Technical Assistance on valuation, classification and origin

Coaching 27 LRA customs staff

OECD Provision of Tax Inspectors Without Borders (TIWB)

ATAF Online courses to support development of Tax Treaty Agreements

OSSIWA Provided funding to support the taxpayer education program

including the taxpayer day scheduled for October 2016.

AfDB US$5.95 million committed to help resource mobilisation in the

Natural Resources Sector. Sub-components to be supported under

this funding include the Liberia Revenue Authority (LRA) Natural

Resource Tax Unit, Liberia Extractive Industries Transparency

11 USAID has concluded procurement of Development Associates International (DAI) to administer its program

in LRA.

73

Initiative (LEITI), Governance Commission (GC), Financial

Intelligence Unit (FIU), African Peer Review Mechanism (APRM)

Coordination Unit and the Reform Coordination Unit

UNDP Data centre and ICT equipment

Purchase of two airport scanners

Long term Technical Assistance support for MSME revenue

mobilisation

Fund support TIWB

Tax gap analysis and TA on domestic revenue mobilisation

EU Fund resident customs advisor

Technical Assistance and capacity building for customs centre of

excellence

Construction of customs centre of excellence

74

Annex 7

An Outline of the End of Project Evaluation-Self Assessment

• Background and Context: PFM Reform Strategy

• Appropriateness/Relevance of the PDO

• Achievement of the PDO Results Indicators

• Project Implementation and Results Per Component

• Overall Project Effectiveness

• Project Efficiency

• Risks to Project Outcomes and Sustainability

• Challenges and Mitigation Measures

• Lessons Learned

• Recommendations

Documents

D R A F T A I D E - É M O I R E REPUBLIC OF LIBERIA Liberia: …documents.worldbank.org/.../1482533697342-0000A8056-ITM00267-P127319-… · for International Development (USAID)