The World Bank FOR OFFICIAL USE ONLYdocuments.worldbank.org/curated/en/... · The World Bank FOR OFFICIAL USE ONLY Report No: 59897-GD ... DA Designated Account ... E. Social (including

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 59897-GD

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 3.2 MILLION

(US$5.0 MILLION EQUIVALENT)

TO

GRENADA

FOR THE

SAFETY NET ADVANCEMENT PROJECT (SNAP)

May 27, 2011

Human Development Department Caribbean Country Management Unit Latin America and the Caribbean Region

This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective April 22, 2011)

Currency Unit = Eastern Caribbean Dollar

EC$2.7 = US$1 US$1.61 = SDR 1

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ACCA Association of Chartered Certified Accountants AGO Accountant General’s Office CBR Central Beneficiary Registry CCT Conditional Cash Transfer CDB Caribbean Development Bank DA Designated Account DLI Disbursement Linked Indicator DPL Development Policy Loan DRO District Revenue Office EU European Union FM Financial Management GDP Gross Domestic Product ICT Information and Communication Technology IEC Information and Education Campaign IT Information Technology IUFR Interim Unaudited Financial Report MDG Millennium Development Goals MIS Management Information System MOE Ministry of Education MOF Ministry of Finance MOH Ministry of Health MOSD Ministry of Social Development MOU Memorandum of Understanding NLTA Non-Lending Technical Assistance NF Necessitous Fund OECS Organisation of Eastern Caribbean States OM Operational Manual ORAF Operational Risk Assessment Framework PA Public Assistance PCU Project Coordination Unit PDO Project Development Objective PMT Proxy Means Test PS Permanent Secretary SEED Support for Education, Empowerment, and Development Program

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SIL Specific Investment Loan STA School Transportation Allowance TOR Terms of Reference RBL Results-Based Lending UNICEF United Nations Children Fund UNIFEM United Nations Development Fund for Women UN Women United Nations Entity for Gender Equality and the Empowerment of Women

Regional Vice President: Pamela Cox Country Director: Françoise Clottes

Sector Director: Sector Manager:

Keith Hansen Helena Ribe

Co-Task Team Leaders: Ludovic Subran and Karla McEvoy

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Table of Contents

I. Strategic Context .................................................................................................................................. 1

A. Country Context .......................................................................................................................... 1

B. Sectoral and Institutional Context ............................................................................................... 2

C. Higher Level Objectives to which the Project Contributes ......................................................... 5

II. Project Development Objectives .......................................................................................................... 5

A. PDO ............................................................................................................................................. 5

1 Project Beneficiaries .................................................................................................................... 6

2 PDO Level Results Indicators ..................................................................................................... 6

III. Project Description ............................................................................................................................ 6

A. Project Components ..................................................................................................................... 6

B. Project Financing ....................................................................................................................... 10

1 Lending Instrument ................................................................................................................... 10

2 Project Cost and Financing ........................................................................................................ 10

C. Lessons Learned and Reflected in the Project Design ............................................................... 11

IV. Implementation ............................................................................................................................... 11

A. Institutional and Implementation Arrangements ....................................................................... 11

B. Results Monitoring and Evaluation ........................................................................................... 12

C. Sustainability ............................................................................................................................. 13

V. Key Risks and Mitigation Measures .................................................................................................. 13

VI. Appraisal Summary ........................................................................................................................ 13

A. Economic and Financial Analysis ............................................................................................. 13

B. Technical ................................................................................................................................... 14

C. Financial Management .............................................................................................................. 14

D. Procurement ............................................................................................................................... 15

E. Social (including safeguards) .................................................................................................... 15

F. Environment (including safeguards) ......................................................................................... 16

Annex 1: Results Framework and Monitoring ............................................................................................ 17

Annex 2: Detailed Project Description ....................................................................................................... 22

Annex 3: Implementation Arrangements .................................................................................................... 47

Annex 4: Operational Risk Assessment Framework (ORAF) .................................................................... 64

Annex 5: Implementation Support Plan ...................................................................................................... 68

Annex 6: Team Composition ...................................................................................................................... 71

Annex 7: Economic and Financial Analysis ............................................................................................... 72

Annex 8: Mainstreaming the Boys at Risk Initiative in Grenada’s Safety Net ........................................... 77

Annex 9: Map No. 33412 ............................................................................................................................ 82

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PAD DATA SHEET

Grenada Safety Net Advancement Project

PROJECT APPRAISAL DOCUMENT

Latin America and the Caribbean Region

LCSHS

Date: May 27, 2011 Country Director: Françoise Clottes Sector Director: Keith Hansen Sector Manager: Helena Ribe Co- Team Leaders: Ludovic Subran and Karla McEvoy Project ID: P123128 Lending Instrument: SIL

Sector(s): Other social services (100%) Theme(s): Social safety nets (100%) EA Category: C Risk-Rating: Medium-I

Project Financing Data: Proposed terms: IDA Credit in Special Drawing Rights, 0.75 percent per annum service fee on disbursed balance, a final credit maturity of 40 years with a 10-year grace period, a commitment fee on the undisbursed balance within a range of 0% - 0.5% per annum.

[ ] Loan [ X ] Credit [ ] Grant [ ] Guarantee [ ] Other:

Source Total Amount (US$M) Total Project Cost: Co-financing: Borrower: Total Bank Financing: IBRD IDA New Recommitted

23.2 18.2 5 5

Borrower: Grenada

Responsible Agency: Ministry of Social Development (MOSD)

Contact Person: Mrs. Sandra Thomas, Permanent Secretary Telephone No.: 473-440-2255 Fax No.: 473-440-7990 Email: [email protected]

Estimated Disbursements (Bank FY/US$ m)

FY 2012 2013 2014 2015 Annual 1.0 2.0 1.5 0.5

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Cumulative 1.0 3.0 4.5 5.0

Project Implementation Period: September 1, 2011 –August 31, 2015 Expected effectiveness date: September 1, 2011 Expected closing date: December 31, 2015

Does the Project depart from the CAS in content or other significant respects?

○ Yes X No

Does the Project require any exceptions from Bank policies? Have these been approved/endorsed (as appropriate by Bank management? Not applicable Is approval for any policy exception sought from the Board?

○ Yes X No ○ Yes ○ No ○ Yes X No

Does the Project meet the Regional criteria for readiness for implementation?

X Yes ○ No

Project Development Objective The Development Objectives of the Project are to: (i) strengthen the basic architecture of the consolidated Conditional Cash Transfer (CCT) Program and the capacity of the Ministry of Social Development to implement it; (ii) improve coverage of poor households receiving cash transfers; and (iii) improve education outcomes of poor children and health monitoring of vulnerable households.

Project Description Component 1: Improving Conditional Cash Transfers (US$4.5 million). This Component will finance cash transfers to beneficiaries. Disbursements will be made against meeting performance milestones aimed at the gradual adoption of an overhauled business model in results areas including institutions; budget and coverage; beneficiary outreach and targeting; management information systems and making payments against co-responsibilities; communication; and monitoring and evaluation. Component 2: Improving Implementation Capacity of MOSD (US$0.5 million). This Component will provide technical assistance to the Ministry of Social Development (MOSD) for improving its management, coordination, supervision, monitoring, and evaluation of the newly consolidated conditional cash transfer (CCT) program, including the design of a PMT, a MIS, and an impact evaluation.

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Safeguard policies triggered Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)

○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No ○ Yes X No

Key Non-Standard Conditions and Covenants:

Financing Agreement Reference

Description of Condition/Covenant Date Due

Section I.A.3 of Schedule 2

The Recipient shall establish and thereafter maintain the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association

Not later than six months after the Effective Date

Section I.D.2 of Schedule 2

The Recipient shall ensure that under each budget proposal to its legislature for the corresponding year during Project implementation, adequate arrangements are made by the Recipient to assume such portion of the costs related to Cash Transfers and other Project costs, required to achieve the objectives of the Project

Each fiscal year of the Recipient

Section I.D.3(a) of Schedule 2

The Recipient shall have its Accountant General’s office conduct, under the terms of reference acceptable to the Association, annual audits for the purpose of verifying compliance with the Disbursement Linked Indicators

Not later than September 30 of each year

Section I.D.3(b) of Schedule 2

The Recipient shall have an external auditor verify - as part of the annual audits and under terms of reference and with a minimum coverage satisfactory to the Association - that; (i) provision of Cash Transfers to Beneficiaries meets eligibility criteria set forth in the Operations Manual; and, (ii) the Disbursement Linked Indicators have been complied with.

Not later than four months after the end of each fiscal year of the Recipient

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I. Strategic Context

A. Country Context

1. Strong growth in the 1980s and early 1990s led to achieving important human development milestones in Grenada. Member States of the Organisation of Eastern Caribbean States (OECS), including Grenada, rank highly on the United Nations Human Development Index compared to other countries at similar income levels. Although additional efforts will be needed to achieve the remaining Millennium Development Goals (MDGs) by 2015 and consolidate social gains,1 all have shown progress towards achievement of several MDGs, including universal primary education, gender equality, improved maternal health, and reduction of extreme poverty and hunger. In Grenada, primary education is universal and net enrollment at the secondary level stands at 78 percent (2007), infant mortality is low at 7–9/1000 live births, and average life expectancy is comparable to that of countries in the Organisation for Economic Co-operation and Development (OECD).

2. Substantial economic volatility, however, endangers poverty reduction and human capital accumulation efforts. High vulnerability to external economic shocks (including changes in terms of trade, declines in tourism), and natural disasters led to high variations in growth from 12.3 percent in 2005 to -7.7 percent in 2009, and have certainly had an impact on poverty, which rose from 32.1 percent in 1998 to 37.7 percent in 2008.2 Reduced Government ability to effectively address poverty and unemployment - much higher than the average for countries at similar income levels3 – is further challenged by significant drops in enrollment to 55 percent after 15 years old.4 Furthermore, absenteeism and tardiness continue to plague poor children in both primary and secondary education, with only 83 percent5 of children in the first quintile going to school all five days of the week, with financial problems being the second highest named reason for lack of attendance (after illness). Repetition rates are high at the secondary level, and the overall pass rate for college entrance rates is only 31 percent -- only 25 percent for boys.6 In health, malnutrition, if measured by low birth weight,7 is 9 percent. The age-standardized death rate caused by Non Communicable Diseases (NCD) stands at 79.8 percent,8 with half of the deaths due to cardiovascular diseases, a worrying trend common to all OECS Member States. Associated risks such as overweight and low use of health services in a preventive fashion are high.

3. The recent wave of crises in 2007-2010 has further affected poor households, and tight fiscal space and high debt levels prevent Grenada from implementing sound countercyclical social policies. In the absence of actual data, one can assume that lower levels of tourism revenues and transfers from abroad – including foreign direct investment and

1 The Millennium Development Goals in the Eastern Caribbean: A Progress Report, UNDP, December 2003, and Regional Partnership Strategy for the OECS FY10-14, World Bank, May 2010. 2 Final Report. Country Poverty Assessment: Grenada, Carriacou and Petit Martinique Volume 1 Main Report. Kairi Consultants Limited. 2008. 3 Non Lending Technical Assistance for the OECS Social Safety Net, World Bank, December 2009. 4 CPA 2008. 5 Ibid. 6 Ministry of Education, Education Statistics Digest, 2010. 7 World Bank Data Bank, WHO, WHO/PAHO, OECS Secretariat. 8 WHO Department of Measurement and Health Information, December 2004.

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remittances, combined with large negative commodity shocks (food and fuel) and natural disasters, have further reduced purchasing power among the poor, and raised unemployment levels. Grenada’s available social protection instruments are not entirely appropriate to mitigate the impacts of these shocks and constrained resources hampered investment in stronger programs and systems before the crises hit, resulting in a safety net that was unable to fully respond to the emergency or effectively promote productive investments amongst the most vulnerable.

B. Sectoral and Institutional Context

4. In Grenada, spending on social assistance is aligned with the regional average but highly variable, mostly depending on availability of funding. Social safety net expenditures are 1.6 percent of GDP in Grenada.9 However, as with other countries’ social assistance envelopes, the year-on-year budget allocation varies with revenues, including external budget support, and responses to shocks (relief programs). This translates into limited investment in building systems to better deliver targeted, cost-effective programs, such as direct transfers to households. Such intermittent funding for safety nets also results in low impact on reducing poverty and affecting positive behavioral change (accumulation of human capital and investment in productive assets) among poor households.

5. A Social Safety Net Assessment (SSNA) carried out in 2009 found that Grenada’s safety net needs improvement in several areas. First, there are a myriad of social assistance programs spread across several Ministries, which results in inefficient parallel systems. Second, household data and social workers’ assessments point to under-coverage among the poor and inclusion of non-poor households. Third, none of the programs have operational manuals to document their policies and procedures or reliable management information systems to track beneficiaries and payments. Also, some programs are only partially linked to positive behavioral change such as increased school attendance among poor children. Fourth, there is little communication about the programs. Last, monitoring and evaluation against clear objectives is scarce.

6. Grenada’s safety net includes three targeted cash transfer programs which could be consolidated into a consolidated conditional cash transfer (CCT) program. The Public Assistance program, implemented by the Ministry of Social Development (MOSD), along with the Necessitous Fund and the School Transportation Allowance scheme, operated by the Ministry of Education (MOE), are the country’s major social assistance programs. They are aimed at improving living conditions among poor Grenadians and are mostly categorically targeted (elderly poor, poor children in schools) and offer a promising entry point for achieving greater impact on poverty and positive behavior change among poor households in the country.

7. The Government of Grenada has begun preparatory work to facilitate the consolidation of its three main cash transfer programs. With support from the World Bank (OECS Social Safety Net Non-Lending Technical Assistance, and a US$8 million Development Policy Loan), in March 2010 the Government formed an Inter-Sectoral Steering Committee (which also included representation from NGOs) to guide the safety net reform effort. The Steering Committee prepared an Action Plan spelling out the Government’s priorities in this effort, the first of which is the consolidation of the three cash transfer programs (Public Assistance, Necessitous Fund, and School Transportation Allowance), and the development of an 9 Social Safety Net Assessment for Grenada, L. Blank, 2008.

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enhanced and unified targeting mechanism, possibly a Proxy Means Test (PMT), to transfer cash to poor families.10 Immediately after the elaboration of this plan, an Inter-Ministerial Technical Committee (TC) was formed, made up of representatives from the Ministries of Education, Health, Social Development, and Finance. The TC, endorsed by Cabinet along with the Steering Committee’s Action Plan, was charged with the day-to-day work involved in consolidating the three programs.

8. The Government of Grenada is seeking a quality jump to deliver a unified conditional cash transfer. This involves improving and sometimes constructing the basic architecture of a sound social safety net: more accurate and transparent targeting, information management systems to facilitate and reconcile payments, the introduction of co-responsibilities, well-documented policies and procedures for programs, stronger communication both internally and externally, and enhanced monitoring and evaluation systems.11 Below are some emerging findings on the issues and options for each of the forming blocks based on existing processes of the three source schemes:

(a) Targeting is currently based on a social worker’s assessment of living conditions. Harmonizing eligibility criteria and using a PMT could result in an efficient pre-screening to decrease errors of inclusion (non-poor benefiting from the program) and possible use of additional resources to reduce exclusion errors (under coverage of the poor) at enrollment;

(b) Information about programs is scattered and involves cumbersome triangulation for monitoring the flow of funds and program results. Setting up a Management Information System (MIS) for beneficiaries would be a major advancement in facilitating improved management practices and resulting in higher accountability in delivering the consolidated programs. For instance, the lack of clear policies and procedures leaves substantial room for discretionary decisions when it comes to entry and exit of the program. A recent review of the reporting for the School Transportation Allowance program showed that schools were given liberty to report on cash transfers, resulting in varied and inconsistent reporting formats that make comparison of transfers difficult. Additionally, reports from the Necessitous Fund were principally kept on physical copy.12 A recent audit of the Public Assistance program also revealed similar administrative and reporting problems, with inefficiencies noted in payment processes, payment reconciliation mechanisms, beneficiary record-keeping and eligibility monitoring;13

(c) Though the Necessitous Fund and the School Transportation allowance program include verification of children’s school attendance, this verification is often spotty and inconsistent.14 The Inter-sectoral Steering Committee, led by MOSD, pointed to the

10 The Action Plan also included: (i) the establishment of a cash grant unit in the MOSD to administer the newly consolidated cash transfer program; (ii) the creation of a Central Beneficiary Registry; and (iii) the formulation of a Social Protection (SP) Policy. The SP Policy is currently being financed by UN Women. 11 Annex 7 summarizes the characteristics of the three transfer programs as they are operated currently. 12 World Bank Mission to Grenada February 14-23, 2011. 13 Report of Social Development – Safety Net Programme January 2007 – August 2008. Office of the Director of Audit, Government of Grenada. 14 Grenada Social Safety Net Assessment, September 2009; Review of School Transportation Program, Auditor General’s Office, Grenada, 2009.

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remedial nature of social assistance, and the intent to focus on the promotion function of Government assistance, including increasing school attainment and completion and compliance with health protocols. Line ministries indicate that the supply-side is elastic enough to respond to the possible increase in the use of services, especially for vulnerable groups;

(d) Beneficiaries are not well informed about the rights and obligations of the transfer programs they receive and rarely are community-level activities organized among program participants. The public will benefit from a higher level of information about the objectives and the application process of the program to foster transparency and legitimacy; and

(e) Programs currently suffer from the absence of a monitoring and evaluation framework, and there is no impact data.

9. The MOSD’s capacity to deliver an improved program is limited and would benefit from additional expertise. Reviews of the administration of the three principal cash transfer programs reveal the need for the establishment of a MIS to more effectively deliver payments and track beneficiaries. Additional training and technical expertise will be needed to support the transition to deliver an upgraded flagship social assistance program in areas of targeting, monitoring of compliance with education and health co-responsibilities. Also, as part of the requirements to manage the unique transfer program, the establishment of a cash transfer unit, with district officers and trained staff, is an important organizational change. Additional material and guidance, based on international best practice, to retool their social workers and safety net officers, and bring in the necessary skills (such as a database manager) would facilitate the delivery of an improved program.

10. Strengthening the processes and the system to deliver social assistance in Grenada will help build a sustainable platform for other pro-poor programs, and resilience to crises. Other programs, from emergency response to development schemes implemented in the same ministry (additional benefits and articulation of services such as Early Childhood Development), partner ministries (health fee-waiver in Ministry of Health (MOH), school feeding in MOE respectively), and other ministries (such as Housing, Works, Energy, or Labor) could benefit from a Central Beneficiary Registry (CBR) of the poor, to enhance targeting, delivery and monitoring of their programs. Also, lessons from countries’ responses to the food, fuel and financial crises point to the importance of preparedness through stronger social protection systems beforehand to enhance response capacity and cushion more effectively the effects of these shocks on the poor.

11. Grenada has requested technical and financial support from the World Bank in improving the efficiency and effectiveness of the unified cash transfer program. Pursuant to the Cabinet Conclusion dated April 11, 2011, the program is known as the Support for Education, Empowerment, and Development (SEED) Program. Social protection is seen as a central part of the economic recovery agenda. Grenada has called for the World Bank’s expertise and financial support to ensure a high impact consolidation of the country’s three transfer programs on the efficiency of the system itself, as well as the human capital of the most vulnerable. The request for assistance from the World Bank, mentioned in the 2011 Budget Address on January 14, 2011, coincided with Government committing EC$9.6 million for Public

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Assistance, EC$1.7 million for the Necessitous Fund, and EC$1.3 million for the School Transportation Allowance respectively, which is roughly equivalent of what has been budgeted in past years.15 In line with the consolidation efforts, the Ministry of Finance (MOF) has prepared a Special Warrant to create a budget line for the program under MOSD, and a Reallocation Warrant would be prepared to merge the three programs into one budget line under MOSD’s Grants and Contributions budget vote. With Public Assistance falling under MOSD, the program will be moved to the SEED budget line created on April 15, 2011 by a Special Warrant. Once the Reallocation Warrant has been approved by Parliament all three Social Safety Net programs would be consolidated under the SEED Program. Parliament approval is expected by the end of May 2011.

C. Higher Level Objectives to which the Project Contributes

12. The proposed operation is consistent with the World Bank Group’s Regional Partnership Strategy (RPS) for the period 2010 - 2014 (Report No. 53762-LAC) discussed by the Executive Directors on June 8, 2010. The proposed Project is directly cited in the RPS, and responds to Grenada’s aim to strengthen safety nets in order to avoid potential declines in living standards while maintaining investments in human capital. The proposed operation fits under the second Pillar of the RPS, “Protecting and Improving Human Capital,” through the rationalization of social safety nets and the introduction of co-responsibilities to protect and build human capital in Grenada.

13. The proposed Project contributes to Grenada’s higher level objective to reduce poverty and improve equity and human capital development.16 It builds on a regional effort to strengthen social safety nets in the Eastern Caribbean. Linked to the regional work program, this operation will offer lessons for other countries with which the Bank is providing advisory services under the OECS Social Safety Net Strengthening Non-Lending Technical Assistance operation. The Social Safety Net Assessment for Grenada was funded in part by the NLTA, and was the first step in the safety net strengthening initiative. The demonstration and replication effect of the ‘how to’ improve each of the forming blocks of a modern CCT program will benefit other OECS Member States as well as similar Small Island Developing States with thin implementing capacity and proneness to external shocks. This operation also offers more opportunities for partners and donors to contribute to the social safety net advancement agenda as it supports the improvement of Grenada’s flagship program and outlines a work plan to develop the capacity of the MOSD.

II. Project Development Objectives

A. PDO

14. The Development Objectives of the Project are to: (i) strengthen the basic architecture of the consolidated Conditional Cash Transfer (CCT) Program and the capacity of the MOSD to implement it; (ii) improve coverage of poor households receiving cash transfers; and (iii) improve education outcomes of poor children and health monitoring of vulnerable households.

15 MOSD has requested additional resources for PA from EC$9.6 to EC$12 million as forward estimates for 2012 and 2013. 16 OECS Regional Partnership Strategy, 2010.

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1 Project Beneficiaries

15. The Project is expected to benefit roughly 8,000 poor families throughout Grenada, benefitting equally men and women. At least half of the beneficiary families have children aged 0-17.

2 PDO Level Results Indicators

16. The key performance indicators that will be used to track progress towards the proposed Project’s objectives are:

1. Increased percentage of households in the poorest quintile that receive the benefit; 2. Increased percentage of the program transfers reaching the poorest quintile; 3. Increased school attendance rates of children in beneficiary households; and 4. Increased percentage of beneficiaries receiving adequate preventive primary

health services.17

17. Indicators 1 and 2 are linked to the improved coverage of the program. Initial progress for these indicators is expected as of year 2 of implementation. Indicators 3 and 4 are linked to human development outcomes, specifically attendance of poor children and monitoring of compliance with preventive health care protocols for poor families. They are expected to show progress as of year 3 of implementation.

III. Project Description

18. The total amount for the Specific Investment Loan (SIL) is SDR 3.2 million (US$5.0 million equivalent), implemented over a four year period. The proposed Project will consist of two Components, described below. A detailed description of the specific activities and financing under each Component is available in Annex 2.

A. Project Components

19. Component 1: Improving Conditional Cash Transfers (US$4.5 million). The objective of this Component is to improve the delivery of cash transfers. Under this Component, cash grants will be financed and disbursements will be made against actual payment of benefits (which are eligible expenditures under the Credit) and the achievement of selected performance milestones in five results areas aimed at the gradual adoption of an overhauled business model.

20. The activities to be financed under this Component will focus on supporting actual beneficiary payments in a consolidated cash transfer program characterized by improved coverage and the undertaking of co-responsibilities by beneficiaries that facilitate improved human capital development of the poor. The co-responsibilities envisaged will be implemented through provision of CCTs in education and health to eligible beneficiary families. Co-responsibilities in education will include 90 percent attendance rates for children of beneficiary households aged 6-18 who are enrolled in schools. Co-responsibilities in health

17 Adequate is defined by the protocols established by the Ministry of Health. The MOH has protocols for pregnant and lactating women and children 0-5 years of age. It will develop protocols for children 6-18, and for the elderly prior to the introduction of co-responsibilities for beneficiaries. Protocols for the elderly will be based on whether they suffer from a chronic condition (and which one).

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include preventive health visits according to established protocols each year for particular categories of beneficiary household members, including pregnant and lactating mothers, the elderly, the disabled and the chronically ill.

21. The Project will help finance a baseline amount of conditional cash transfers, which will not be linked to performance milestones, at the level of US$250,000 per semester for the entire duration of the Project.

22. Component 1 will also finance an additional amount of the conditional cash transfers to support and encourage the gradual introduction of system improvements over year 1-4 in five key areas: A) Institutions, Budget and Coverage; B) Beneficiary Outreach and Targeting; C) Management Information System and Making Payments against Co-responsibilities; D) Communication; and E) Monitoring and Evaluation. Disbursement Linked Indicators (DLIs) for each results area are outlined in Table 1 with the corresponding amounts to be disbursed upon verification by the Bank. The target timing of the realization of the DLIs is indicative, but linked to the agreed phasing of the critical roadmap. Each DLI is worth a specific amount between US$250,000 and US$500,000.

23. There are eight milestones to be achieved under the Project. They correspond to the adoption of critical processes in target years for appropriate phasing, to advance the delivery of Grenada’s flagship social safety net. The detailed justification, roadmap to realization of the DLIs, including preparatory processes and activities, and the measurement of the DLIs being met are detailed in Annex 2: A.1) The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program; (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association; A.2) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the Proxy Means Test (PMT); B.2) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the PMT; C.1) A unified management information system is established and a single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program; C.3) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual; D.2) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program; D.3) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism; and E.4) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website.

24. The verification of these milestones for disbursement purposes will be made by the Accountant General’s Office (AGO). The proper attainment of the milestones would also be reviewed by an external auditor as part of the annual audit of the Project. In Annex 2, a DLI Measurement Strategy is presented. It includes the elements to verify; namely, assessing institutional arrangements, systems, and processes; the suggested tools - spot checks; data analysis and document reviews; and the need for expertise, to work with the AGO.

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Table 1: Disbursement Linked Indicators (DLIs) for Component 1

Results Area Disbursement Linked Indicators along Target Timing (in US$’000)

Year 1 Year 2 Year 3 Year 4 Nov. 2011* May

2012 Nov. 2012 May

2013 Nov. 2013 May

2014 Nov. 2014 May

2015 Non-DLI Disbursements 250 250 250 250 250 250 250 250

A. Institutions, Budget and Coverage

DLI A.1 (250) The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program; (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association

DLI A.2 (500) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the proxy means test

B. Beneficiary Outreach/Targeting

DLI B.2 (250) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the proxy means test (Baseline=0 in April, 1 2011)

C. Management Information system and Making Payment against Co-responsibilities

DLI C.1 (250) Unified management information system is established and single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program

DLI C.3 (500) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual (Baseline=0 in April, 1 2011)

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2012 Nov. 2012 May

2013 Nov. 2013 May

2014 Nov. 2014 May


D. Communication

DLI D.2 (250) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program (Baseline=0 in April, 1 2011)

DLI D.3 (250) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism (Baseline=0 in April 1, 2011)

E. Monitoring and Evaluation

DLI E.4 (250 ) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website

TOTAL 750 250 1,250 250 1,000 250 500 250

* Performance-based disbursement will not be made before the month of November of the target year as per this table.

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25. Component 2: Improving Implementation Capacity of the MOSD (US$0.5 million). The objective of this Component will be to bring the external knowledge necessary to improve the processes involved in the overhauled cash transfer program. Under this Component, technical assistance will be provided to the MOSD for strengthening its management, coordination, supervision, monitoring and evaluation of the CCT program at the central and local levels. The amount under this Component is relatively small and focused on supporting the quality design of key intermediate instruments and processes to meet the DLIs, the Government will provide additional resources for goods as well as the full implementation of the processes necessary for the advancement of the CCT.

26. The activities to be financed under this Component will focus on providing the human resources and technical support needed, mainly through consultant services, to ensure effective implementation of the consolidated cash transfer program. They are organized around the five results areas outlined under Component 1 and include consultant services for the: (i) preparation of a contingency plan for crisis response through the CCT; (ii) funding for external audits; (iii) design and piloting of a PMT; (iv) development of a MIS; (v) design of a CBR; (vi) design of materials and protocols for the educational workshop and training for beneficiaries; (vii) design of the training plan for MOSD and partner Ministries’ staff; and (viii) design of an impact evaluation and an enhanced process evaluation. The detailed description of the expected outputs are presented in Annex 2 and a full list of activities financed under Component 2 for the first 18 months of implementation is summarized in the procurement table in Annex 3.

27. This technical assistance component is intended to be flexible enough to respond to needs and demands formulated by the MOSD and could include further work on the scenarios for cost-impact for ramp up and additional benefits (a differentiated scheme, for instance).

B. Project Financing

1 Lending Instrument

28. The proposed Project would be financed through an IDA credit in the amount of SDR 3.2 million (US$5.0 million equivalent). Retroactive financing of up to US$750,000 – which corresponds to 15 percent of the credit – is being sought. It will be for eligible expenditures under Component 1 made between April 15, 2011, and the signing of the Financing Agreement.

2 Project Cost and Financing

Project Components Project cost (in millions of US$)

IDA Financing (in millions of US$)

% IDA Financing

Component 1: Co-financing of the Conditional Cash Transfers Component 2: Improving the Implementation Capacity of the MOSD

22.2

1

4.5

0.5

20.2

50

Total 23.2

5.0

21.5

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C. Lessons Learned and Reflected in the Project Design

29. The proposed Project’s design draws on lessons learned from other safety net improvement operations:

(a) Importance of strong recipient commitment, ownership and leadership. Major changes to a country’s safety net succeed best when there is commitment from the highest levels of government. The current administration in Grenada came into office on a platform of strengthening the country’s social safety net system, and it has been consistently engaged in the effort to do so over the past two years. The completion of the SSNA, the formation of an Inter-sectoral Steering Committee to spearhead safety net reform, and Cabinet approval of the consolidation of the three cash transfer programs, the adoption of a PMT, and the inclusion of co-responsibilities, are clear indications of the commitment to reform.

(b) Importance of accurate selection of beneficiaries. Internationally, the impact of family grants on poverty has been higher when there is an effective system for identifying and selecting poor beneficiaries. The introduction of a PMT helps ensure that the cash grants reach extremely poor families, and that targeting is focused on households instead of individuals, enabling the CCT to address family needs holistically (i.e., assessing the needs of the family as a unit).

(c) A MIS is critical. From enrollment to making payment, to monitoring and evaluating progress, the information platform is an important tool to correctly implement a CCT scheme. A design that is flexible (to articulate other services as needed) and user-friendly is very important for a full use of the MIS, and its potential as a CBR.

(d) Importance of staff training. The experience of similar programs as in Jamaica (PATH) shows that the training of social workers must be systematized in a curriculum that can be replicated to scale up the program and to ensure adequate quality. The capacity-building Component of the proposed Project includes resources to develop such a curriculum and to support the training of the staff of the MOSD.

(e) Information campaigns. International best practice also demonstrates the need for clear and consistent communication with stakeholders regarding changes in program objectives, eligibility, application processes, benefits, etc. The phased roll-out planned for the SEED program will ensure that an appropriate information and education campaign (IEC) will be carried out to minimize confusion and potential roadblocks to reform efforts.

IV. Implementation A. Institutional and Implementation Arrangements

30. The implementing agency for the Credit will be the MOSD with support from the Project Coordination Unit (PCU) in the MOF on the financial management aspects of the co-financing of the transfers, as well as the procurement involved in the technical assistance Component. In particular, the PCU will be responsible for the fiduciary aspects of the Project. In financial management, the PCU will work in tandem with the Finance Officer of the MOSD. The latter will help gather the financial information that the PCU would need to prepare the withdrawal applications for accessing Credit proceeds. The PCU will be responsible for putting together the documentation and reports, including the necessary approvals and signatures that

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would be needed for preparing and submitting the Withdrawal Application to the Bank. In procurement, the MOSD will prepare Terms of Reference (TOR) for consultancies while the PCU will carry out procurement and contracting of those services. Additional details on implementation arrangements can be found in Annex 3.

31. Within the MOSD, a Cash Transfer Unit is being created and should be fully operational by November 2011 (DLI A.1). It will be responsible for leading the implementation of the new cash transfer program. This unit will be composed of a small team (5 people in the central ministry and 10 district officers) with each member of the team in charge of a critical function for delivering the CCT. The unit will be supported by other departments in MOSD: technical colleagues, social workers, budget, and human resources staff. The team will work with MOF and the District Revenue Offices for payments. The Unit will also work closely with the Accountant General’s office for the financial consolidation. Close coordination on the information flows of compliance from education and health have been determined in the initial draft of the operation manual, were confirmed during appraisal, and are detailed in Annexes 2 and 3.

B. Results Monitoring and Evaluation

32. For the monitoring and evaluation (M&E) of the proposed Project, the Bank will support the MOSD in the design, development, and implementation of an improved MIS. The system will collect information, generate reports regarding the implementation of the CCT program (including payment lists), and serve as a tool to verify that the program is being implemented following the defined required procedures. The MOSD will gather data from MOSD District Offices and District Revenue Offices for the monitoring of the transfers. The MIS database will provide information to manage and support the implementation and phased roll out of the new program island-wide.

33. Project outcomes and results will also be assessed using data from various information sources and instruments including: (i) administrative data from education and health; and (ii) process and impact evaluations.

34. Evaluation strategy. The Project will support an enhanced process evaluation and a development impact evaluation. The enhanced process evaluation will consist of: (i) an assessment of the increased accuracy in targeting; and (ii) an analysis of the impact of the improved management of the operation such as the payment cycle. This evaluation is expected to help identify bottlenecks and adjust program blocks as needed. The impact evaluation strategy includes: (i) the collection of the baseline through the intake forms of applicants to the program in year 2; and (ii) the collection of an end-line after 1 full year of implementation based on MIS data for beneficiaries and additional data collected for non-beneficiaries (control). A quasi-experimental design (regression discontinuity) will help compare outcomes in education and health between households below and above the cutoff for eligibility into the program. Innovative features of the impact evaluation, compared to the existing literature on impacts of CCT, may include the estimated change on education transitions and NCD risks. Component 2 will be used to help with the design (indicators, data collection, and methodology).

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C. Sustainability

35. Several factors point to building institutional sustainability. The program supported under this Project builds on the harmonization and upgrade of the country’s social safety net, started two years ago, with the analytical work (SSNA), the NLTA work on consolidation of transfer programs, and the DPL. The institutionalization of the SEED unit in MOSD, along with adequate staffing, block-building (better targeting, more efficient payments, tracking tools such as the MIS), and increased transparency and accountability, supported under this Project are part of a long-term agenda of system building for efficient and effective social protection in Grenada. 36. The Project strongly emphasizes financial sustainability. The projected Project disbursements would represent roughly 15 percent of MOSD’s expenditures - which accounts for only 2.7 percent of the total Government expenditures including recurrent and capital (projected in 2011).18 With the consolidation, economies of scale in delivering payments will be realized, and therefore more resources could be spent on increased coverage of the country’s flagship transfer program.

V. Key Risks and Mitigation Measures 37. Project risk for implementation has been noted as Medium-I (M-I). Risks were identified during Project preparation and agreed upon with the Government. The Project includes activities and design elements that aim to mitigate the risks; both are summarized in the Operational Risk Assessment Framework (Annex 4).

VI. Appraisal Summary A. Economic and Financial Analysis

38. Three types of economic returns are expected from the intervention supported under the Project:

Income effect for families receiving cash transfers. Simulated consumption distributions show a significant direct impact, in that the poverty headcount in the six districts in Grenada could fall by between 6.6 and 19.1 percentage points due to the income transfer;19

Increase in future earnings along with the higher educational attainment of CCT beneficiaries and healthier lifestyles. Additional years of education will have a long-term impact on participants in terms of future higher earnings, since primary and secondary completion could respectively increase permanent wages by 20 to 60 percent with respect to those with incomplete primary education. Calculations point to aggregate net present economic gains of between US$24.4 million (for the group of children 13-17 years old) and US$34.4 million (for the 5-12 year old group). Also, preventive health check-ups are

18 Another important consideration for sustainability is the relative size of the cash transfer. In this case, the transfer is equivalent to about 15 percent of the total household consumption in line with the generosity of conditional cash transfer programs in other countries in Latin America and the Caribbean. 19 See tables in Annex 7.

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also expected to lower the cost of secondary and tertiary care and decrease morbidity risks; and

More efficient program delivery and accountability. The benefits of consolidating and improving delivery capacity include lower operating costs and increased legitimacy. With the improved operational cycle supported by the Project, the program will gain in overall delivery (mainstreaming procedures), transparency and accountability for Grenada’s flagship social program, though these benefits are not quantified.

B. Technical

39. The key technical design features of Grenada’s consolidated conditional cash transfer program are aligned with CCT best practice design such as:

Cash benefits are selected among the poorest as a result of the overall targeting approach, of which the PMT formula is an important element (Grosh et al., 2008; Leite, 2008).

A grievance system will be put in place to respond to beneficiary complaints to ensure a high level of social accountability. This approach maximizes targeting accuracy and is effective in channeling limited resources to the poorest.

The MIS will help track beneficiaries from entry to payments to exit, facilitate the payments of benefits while minimizing costs to both the program and the beneficiaries (del Ninno, 2008). The system will be compatible and integrated with other operational processes, such as the selection and registration of beneficiaries; the preparation of the list of people to be paid; and the reconciliation of accounts through the MIS.

The proposed Project envisages co-responsibilities in health and education to promote positive behavioral change (school attendance, preventive health check-ups) as well as the attendance of beneficiary families to educational workshops on parenting and healthy lifestyles. Several CCT programs include this type of co-responsibilities; its rationale lies in the active participation of beneficiary families in tailored activities to address information gaps and stimulate positive behavioral change.

C. Financial Management

40. A financial management (FM) assessment has been carried out to determine FM risks and the risks have been set at Moderate. The financial management aspects of the Project would be managed by the PCU currently located within the MOF. The PCU however would work in tandem with the Finance Officer of the MOSD who would be responsible for supplying the budget expenditure data that would be needed for disbursements. The accounting for the Social Safety Net Programs will utilize the Government financial management system (SmartStream) as disbursements for this Component of the Project will be based on a budget line representing eligible expenditures incurred during the reporting period. Accounting for the TA Component will utilize QuickBooks. Given the capacity constraints of the Audit Department, the Project accounts would be audited by a private audit firm to be competitively selected.

41. Disbursements under the Project will be report-based. There would be different disbursement arrangements for each of the Project’s two Components. Disbursements under Component 1 of the Project will be made twice a year: the first disbursement will be in May (covering the semester October to March); and the second disbursement will be in November

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(covering the semester April to September). The May disbursement will be documented by eligible expenditures that are made with respect to the consolidated budget line that will form the basis for Bank disbursements under the Project. The May disbursement will not be linked to any performance milestones. Disbursements in November would also be documented by eligible expenditures that are made with respect to the consolidated budget line that will form the basis for Bank disbursements under the Project. Part of the disbursements in November would represent the Bank’s on-going support for the SNAP program and thus would not be linked to any performance milestones. The remainder of the disbursements in November would be made subject to the attainment of key performance milestones or targets of technical improvements in the Safety Net Programs. If one benchmark is not met by the time indicated in the table, the amount could be paid in the next withdrawal application with the appropriate evidence. The Government would have one year to comply with any unmet benchmarks or the pro rata share of the Credit earmarked for that benchmark would be cancelled. The Office of the Accountant General has been designated as the entity to verify that the milestones and disbursement targets have been met before the November disbursements requests are processed by the Loan Department. The attainment of the performance milestones would be reviewed again by an independent auditor as part of the annual audit of the Project. Disbursements under Component 1 would be made directly into the Consolidated Fund. Disbursements under Component 2 of the Project will be made through periodic advances provided through a Designated Account (DA) to be opened in a financial institution selected in consultation with the Bank. The DA, which will be segregated, will be managed by the PCU on behalf of the MOSD. Details of the financial management and disbursement arrangements are contained in Annex 3.

D. Procurement

42. A substantial share of the Credit would not involve procurement, as the Bank would reimburse the Government for the conditional cash transfers paid to eligible families (Component 1). Procurement under Component 2 of the proposed Project would include primarily the following:

Consultancy Services: Technical assistance for the design of a(n): (a) MIS; (b) PMT; (c) CBR; (d) information and education campaign; (e) emergency contingency manual for the SEED program; (f) impact and process evaluations; and (g) financial audits;

Non-consultant Services: Including training on the SEED program and its policies and procedures, for MOSD staff; Central SEED Unit Staff; regional staff (social workers, District SEED Officers); MOE transportation officers; District Revenue Officers; and health care providers.

43. A procurement assessment has been completed and has rated the Project as Moderate. While Grenada has a qualified PCU that has good capacity and adequate controls in place, a Code of Ethics governing behavior and a Complaints Mechanism are lacking. A new procurement law is being drafted and will include both of these. A draft Summary Procurement Plan (SPP) for the proposed Project can be found in Annex 3.

E. Social (including safeguards)

44. The proposed Project does not trigger any social safeguard policies.

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45. A rapid analysis of the potential winners and losers from the overhauled targeting mechanism and risk mitigation measures for the envisaged friction in phasing out former beneficiaries and phasing in new beneficiaries are presented in Box 2.2 of Annex 2.

F. Environment (including safeguards)

46. The proposed Project does not trigger any environmental safeguards.

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Annex 1: Results Framework and Monitoring Grenada Safety Net Advancement Project

Results Framework

Project Development Objective (PDO): The Development Objectives of the Project are to: (i) strengthen the basic architecture of the consolidated Conditional Cash Transfer (CCT) Program and the capacity of the MOSD to implement it; (ii) improve coverage of poor households receiving cash transfers; and (iii) improve education outcomes of poor children and health monitoring of vulnerable households.

PDO Level Results Indicators C

ore Unit of

Measure Baseline

Cumulative Target Values Frequency

Data Source/ Methodology

Responsibility for Data

Collection

Description (indicator definition)

YR 1 YR 2

YR3 YR4

YR 5

Increased percentage of households in the poorest quintile that receive the benefit

Percentage 5.3 5.3 30 40 50 65 Annual MIS MOSD

Increased percentage of the program transfers that reach the poorest quintile

Percentage 20 20 30 40 50 60 Annual MIS MOSD

Increased school attendance rates of children in beneficiary households

X

Percentage TBD20 T BD Monthly MIS MOSD The proportion of school days attended over total school days in a given month

Increased percentage of beneficiaries receiving adequate preventive primary health services.21

X

Percentage TBD N/A22 5 20 25 30 Bi-Annually

MIS MOSD The proportion of household beneficiaries receiving preventive health check-ups over the total number of enrolled beneficiaries by Parish

INTERMEDIATE RESULTS

Strengthening the basic architecture of the consolidated cash transfers program and the capacity of MOSD to implement it.

20Baselines will be determined through the impact evaluation. Targets will be established once baselines are set. 21 Adequate is defined by the protocols established by the Ministry of Health. The MOH has protocols for pregnant and lactating women and children 0-5 years of age. It will develop protocols for children 6-18, and for the elderly prior to the introduction of co-responsibilities for beneficiaries. Protocols for the elderly will be based on whether they suffer from a chronic condition (and which one). 22 Co-responsibilities for health are only introduced in Year 2 of implementation; therefore this will not be tracked the first year.

18

The three cash transfers are merged institutionally and placed under MOSD budget

Text No merger of programs, separate budgets

1 (DLI A.1)

MOSD

Creation of a SEED unit in MOSD appropriately staffed

Text SEED program and unit does not exist

1 Once MOSD

Installation and implementation of a modernized MIS generating one beneficiary list and using one payment method

Text MIS does not exist

1 (DLI C.1)

Once MOSD MOSD Verified by MOSD reports and related procurement

Percentage of beneficiaries enrolled in the MIS who receive transfers based on their compliance with co-responsibilities

Percentage 0 0 50 70 (DLI C.3)

90 95 Annual MIS MOSD

Percent of beneficiary households in the MIS for whom co-responsibilities are verified and reported

Percentage 0 0 60 75 90 95 Annual MIS MOSD

Agreement between MOF, MOSD, MOH, and MOE on formula for PMT

Text Agreement

does not exist

1 Once MOSD

Pilot of PMT carried out in one Parish.

Number PMT not designed or piloted

1 Once MOSD MOSD

Percentage of households identified as eligible for the CCT based on the PMT

Percentage 0 0 70 (DLI B.2)

85 90 95 Annual MIS MOSD

Percentage of beneficiaries who received information about rules and

Percentage 0 60 70 (DLI D.2)

90 95 95 Once MIS MOSD IEC should be completed by August 2012, before the roll-out of the second phase of the SEED

19

procedures of the SEED program

program that will introduce additional co-responsibilities and the use of the PMT

Number of MOSD staff trained in SEED Program operations

Number 0 37 37 Annual MOSD MOSD Certificate of Completion

Number of other relevant Government Ministry staff trained in SEED Program operations

Number 0 68 21 89 Annual MOSD MOSD Certificate of Completion

Percent of complaints and appeals attended to and resolved, according to pre-defined standards

Percentage 0 30 50 70 (DLI D.3)

75 90 Bi-Annually

MIS MOSD The proportion of complaints and appeals resolved over the number of complaints and appeals received.

Percentage of execution of annual budget resources.

Percentage 0 70 80 90 90 95 Annually MIS MOSD

Results from Program Evaluation Disseminated

Text Evaluation not carried out

1 (DLI E.4)

Once MOSD MOSD

Improving coverage of cash transfers

Number of individuals who hitherto had never received cash transfers, receive cash transfers after their eligibility to become beneficiaries has been established through the PMT

Number 0 0 800 (DLI A.2)

800 900 1,000 Annual MIS MOSD

Improving education outcomes of poor children and health monitoring of vulnerable households.

Public primary school repetition rates of beneficiary children. X

Percentage TBD 5 Annually

MIS MOSD The proportion of students who repeat a grade of school over the total number of students completing a particular

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grade

Public secondary school repetition rates of beneficiary children.

Percentage TBD 5 Annually MIS MOSD The proportion of students who repeat a grade of school over the total number of students completing a particular grade

Percentage of elderly beneficiaries with chronic health conditions not previously receiving curative medical care, now receiving curative medical care according to MOH protocols

X

Percentage TBD TBD Bi-Annually

MIS MOSD

Percentage of poor adult beneficiaries (19-59 years of age) receiving annual check-ups

X

Percentage TBD 0 20 50 70 80 Annually MIS MOSD

Percentage of children 11-18 from beneficiary households receiving annual check-ups

X

Number TBD 0 20 50 70 80 Annually MIS MOSD

Percentage of children 11-18 from beneficiary households who attend healthy lifestyle workshops.

Percentage TBD 0 20 50 70 80 Bi-Annually

MIS MOSD The proportion of children 11-18 from beneficiary households attending health workshops over the total number of children 11-18 enrolled in the program

Percentage of beneficiary children 6-10 years receiving annual check ups

X Percentage TBD 0 20 50 70 80 Annual MIS MOSD

Percentage of parents of children 6-10 years in

Percentage 023 0 20 50 70 80 Bi-Annually

MIS MOSD Workshops will be coordinated with MOE

23 Baseline is zero as these workshops do not yet exist.

21

beneficiary households attending parenting and healthy lifestyle workshops

and MOH

Percentage of children 0-5 years in beneficiary households receiving vaccinations according to established MOH protocols

X Percentage TBD 0 20 50 70 80 Annual MIS MOSD

Percentage of pregnant women in beneficiary households receiving pre-natal care according to MOH protocols

X Percentage TBD 0 20 50 70 80 MIS MOSD

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Annex 2: Detailed Project Description Grenada Safety Net Advancement Project

1. This Safety Net Advancement Project (SNAP) will support the Government of Grenada (GOG), specifically the MOSD, to facilitate improved quality in the delivery of cash transfers to the poor through a consolidated conditional cash transfer program and improved implementation capacity of the MOSD and relevant agencies involved in the delivery of cash transfers. The Project is a direct response to a request by the GOG for technical and financial assistance, and will ensure more accurate targeting, better information management to make payments, the introduction of co-responsibilities, stronger communication both internally and externally, and enhanced monitoring and evaluation, policies, and procedures. 2. The Development Objectives of the Project are to: (i) strengthen the basic architecture of the consolidated Conditional Cash Transfer Program (CCT) Program and the capacity of the MOSD to implement it; (ii) improve coverage of poor households receiving cash transfers; and (iii) improve education outcomes of poor children and health monitoring of vulnerable households. 3. The key performance indicators that will be used to track progress towards the proposed Project’s objectives are:

1. Increased percentage of households in the poorest quintile that receive the benefit; 2. Increased percentage of the program transfers reaching the poorest quintile; 3. Increased school attendance rates of children in beneficiary households; and 4. Increased percentage of beneficiaries receiving adequate preventive primary health

services.24

4. Indicators 1 and 2 are linked to the improved coverage of the program. Initial progress for these indicators is expected as of year 2 of implementation. Indicators 3 and 4 are linked to human development outcomes, specifically attendance of poor children and monitoring of compliance with preventive health care protocols for poor families. They are expected to show progress as of year 3 of implementation.

5. A second tier of indicators could also be measured, but will not be used to monitor progress against the objectives. They include: (i) decreased primary and secondary school repetition rates of beneficiary children; (ii) increased percentage of children advancing from primary school to secondary school; and (iii) increased percentage of youth advancing from secondary school to Community College. Also some specific intermediate indicators for the development and adoption of critical processes and tools to deliver the enhanced cash transfer program are assembled per results area in the performance milestones to be met for disbursement under the Component 1 of the Project.

24 The Ministry of Health has protocols for pregnant and lactating women and children 0-5 years of age. It will develop protocols for children 6-18, and for the elderly prior to the introduction of co-responsibilities for beneficiaries. Protocols for the elderly will be based on whether they suffer from a chronic condition (and which one).

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6. The proposed Project will be implemented over a four year period, through a Specific Investment Loan (SIL) in the amount of SDR 3.2 million (US$5.0 million equivalent). Government counterpart funding for the Project will be provided in the amount of US$18.2 million. The proposed Project will have two principal Components aimed at improving the implementation capacity of the MOSD and at better linking cash transfers to human development outcomes.

Box 2.1: Context and Structure of the World Bank’s Support

Grenada currently implements three main cash transfer programs:

The Public Assistance program, implemented by the MOSD, which provides monthly cash grants to the poor (mainly the elderly, the disabled and the indigent poor);

The Necessitous Fund, administered by the MOE, which provides monthly cash grants to children of poor families; and

The School Transportation Allowance, also implemented by the MOE, which provides cash grants to support transportation costs for poor children.

Table 2.1 presents the operational characteristics of the three programs.

The Project will support five main results areas for improving the delivery of Grenada’s consolidated CCT program which are: (A) Institutions, Budget and Coverage; (B) Beneficiary Outreach and Targeting; (C) Management Information System and Making Payments against Co-responsibilities; (D) Communication; and (E) Monitoring and Evaluation. A critical roadmap under each results area is described below. It is based on an identification of the main areas for improvement; and the envisaged reform path (preparatory steps) for each area which are supported by Component 1 and 2 of this Project. It also summarizes the functioning characteristics of each of the forming blocks for the modern CCT program as per the Program operation manual, based on the best elements of each of the source schemes.

7. Component 1: Improving Conditional Cash Transfers (US$4.5 million). The objective of this Component is to improve the delivery of cash transfers. Under this Component, cash grants will be financed and disbursements will be made against actual payment of benefits (which are eligible expenditures under the Credit) and the achievement of selected performance milestones in five results areas aimed at the gradual adoption of an overhauled business model. 8. The activities to be financed under this component will focus on supporting actual beneficiary payments in a consolidated cash transfer program characterized by improved coverage and the undertaking of co-responsibilities by beneficiaries that facilitate improved human capital development of the poor. The co-responsibilities envisaged will be implemented through provision of CCTs in education and health to eligible beneficiary families. Co-responsibilities in education will include 90 percent attendance rates for children of beneficiary households aged 6-18 who are enrolled in schools. Co-responsibilities in health include preventive health visits according to established protocols each year for particular categories of beneficiary household members, including pregnant and lactating mothers, children, the elderly, the disabled and the chronically ill.

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9. The Project will help finance a baseline amount of conditional cash transfers, which will not be linked to performance milestones, at the level of US$250,000 per semester for the entire duration of the Project. 10. Component 1 will also finance an additional amount of the conditional cash transfers to support and encourage the gradual introduction of system improvements over years 1-4 in five key areas: A) Institutions, Budget and Coverage; B) Beneficiary Outreach and Targeting; C) Management Information system and Making Payments against Co-responsibilities; D) Communication; and E) Monitoring and Evaluation. Disbursement Linked Indicators for each results area are outlined in Table 2.2 with the corresponding amounts to be disbursed upon verification by the Bank. The target timing of the realization of the DLIs is indicative, but linked to the agreed phasing of the critical roadmap. Each DLI is worth a specific amount between US$250,000 and US$500,000. 11. There are eight milestones to be achieved under the Project. They correspond to the adoption of critical processes in target years for appropriate phasing, to advance the delivery of Grenada’s flagship social safety net. They are: A.1) The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association. A.2) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the PMT; B.2) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the PMT; C.1) A unified management information system is established and single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program; C.3) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual; D.2) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program; D.3) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism; and E.4) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website. 12. The verification of these milestones for disbursement purposes will be made by the Accountant General’s Office. The proper attainment of the milestones would also be reviewed by an external auditor as part of the annual audit of the Project. Table 2.5 presents a DLI Measurement Strategy. It includes the elements to verify: namely assessing institutional arrangements, systems, and processes; the suggested tools - such as spot checks; data analysis and document reviews; and the need for expertise such as consultants to work with the AGO.

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Table 2.1: Operational Comparison of the Three Cash Transfer Programs to be Consolidated

Program Outreach Enrollment Process Review and Compliance Payment Exit Key Issues School Transport Allowance (MOE) $1.4 million

Children 12 – 17 # 1,732 $80-$200 p month

- Principals select program beneficiaries.

- 7 Transport Coordinators and School Attendance Officers monitor compliance. - Schools submit attendance information to the MOE at the end of the school term.

- Payment is done daily and weekly. -Transfer amounts are determined by the distance to school. -Disbursed in cash at schools to students. -Fee waiver for School Feeding Program for some beneficiaries.

-Graduation from school. - Failure to collect after a period of time.

>No operational manual – only guidelines. >Checks made in principal’s name and fiduciary risk involved. >Reduced time to school administration by principals who usually only have a secretary as support staff. >Duplication of responsibilities with Transport Coordinators and School Attendance Officers. >Some schools that are perceived to be better are at times far distances from certain parishes.

Necessitous Fund (MOE) $1.6 million

Children 6 – 17 # 1,424 $100 p month

-Children of poor families enrolled in kindergarten, primary, secondary, tertiary and technical vocational schools. -In-take application form submitted to the MOE and School Attendance Officers. -Self-Referral or Social Worker Referral.

-School Attendance Officers monitor and make home visits

-Payment on the last Thursday of each month at DRO. -Collected by parents and students (usually older). -Payment lists are sent to MOF then to DROs 1 week before payment; then from DROs to the AG’s office then to MOE.

-Failure to collect.

>There are cases where some parents get both the NF and STA – however on principle, the parent should only receive one of these benefits.

Public Assistance (MOSD) $10.3 million

Elderly Poor 60+ (95%). People with Disabilities. Homeless Chronically Ill. # 4,300 $200 p month

-In-take application available through Social Workers, MOSD sub-offices in each parish.

-Social workers. -Life certificate needs to be processed twice yearly. -MOSD staff checks funeral home websites and televised death announcements to monitor elderly beneficiaries.

-Payment on the last Thursday of each month at DRO. -Collected by beneficiaries or designate. -Payment lists are sent to MOF then to DROs 1 week before payment; then from DROs to the AG’s office then to MOSD. -MOH’s Free Drug Program uses Public Assistance list.

-Death. -Failure to collect payment after a period of time. Suspension if: -Employed in Debushing program. -Engage in travel.

>Much of the working poor (people aged 18-59) are excluded from the program. >Upon death, a beneficiary’s spouse is supported for one year; the next eligible person in that parish only is given the benefit. >Ideas for improvement include: (i) Reduce life certificate requirement and replace with preventive health check-ups; (ii) Enrollment in burial society ($5 plan = $3,000 after three years, or $20 plan); and (iii) -Community activities to reduce social exclusion among elderly and people with disabilities.

26

Table 2.2: Disbursement Linked Indicators for Component 1



2012 Nov. 2012 May

2013 Nov. 2013 May

2014 Nov. 2014 May



DLI A.1 (250) The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association

DLI A.2 (500) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the proxy means test


DLI B.2 (250) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the proxy means test (Baseline=0 in April, 1 2011)

C. Management Information system and Making Payment against Co-responsibilities

DLI C.1 (250) Unified management information system is established and single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program

DLI C.3 (500) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual (Baseline=0 in April, 1 2011)

27



2012 Nov. 2012 May

2013 Nov. 2013 May

2014 Nov. 2014 May


D. Communication

DLI D.2 (250) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program (Baseline=0 in April, 1 2011)

DLI D.3 (250) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism (Baseline=0 in April 1, 2011)


DLI E.4 (250 ) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website

TOTAL 750 250 1,250 250 1,000 250 500 250

* Performance-based disbursement will not be made before the month of November of the target year as per this table.

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Results Area A: Institutions, Budget and Coverage 13. Institutional Consolidation under MOSD. Based on the recommendations from Grenada’s SSNA25 and as endorsed by Cabinet in November 2010, MOSD will serve as the main implementation agency for the consolidated CCT program which corresponds to the merger of the Public Assistance (PA), Necessitous Fund (NF) and School Transportation Allowance (STA) programs. The Ministry’s priorities include an integrated poverty eradication strategy, a comprehensive social security system and accessibility of social welfare services.26 The leadership of MOSD in implementing the CCT will allow for more administrative efficiency and harmonization of procedures to monitor and evaluate the program.

14. A new unit will be established to manage the implementation of the Consolidated Cash Transfer Program. The Inter-Ministerial Technical Committee has recommended the establishment of a new Unit within the MOSD to hold administrative responsibility for the consolidated cash transfer program. The proposed Unit will be led by a Manager and supported by staff members including a Policy, Planning M&E and Reporting Officer, a Payments Officer, an IT/MIS Officer and District Officers in each Parish (six parishes total). The proposed Unit is intended to enable the Ministry’s effective management of safety net programming, including preparing administration, program management, reporting, coordination, monitoring and evaluation. Details are available in Annex 3.

15. Inter-sectoral communication. Inter-sectoral communication will be essential to effective administration, management and implementation of the SEED program. Established during early consultations of the reform, the TC will be maintained during implementation. MOSD will lead Inter-sectoral communication arrangements, through the TC, and matters requiring decision making from various Ministries and Agencies will be addressed through the TC as well. The TC will also lead communication efforts to facilitate combined training activities for Ministry officials involved in SEED implementation, and to beneficiaries, who will be required to comply with co-responsibilities under MOSD, MOE and MOF. MOSD will also implement a Communication Strategy for ensuring that senior government officials are kept informed, and decide on, items related to SEED implementation. This platform will also be key to establish a partnership between Ministries around the CCT program during implementation (Memorandum of Understanding (MOU) for information flows for instance), and is already benefitting from the initial steps of consolidation to keep MOE informed about the transition of NF and STA to MOSD under SEED.

16. Budget Consolidation. Currently, the three programs to be consolidated are under two ministries and different budget chapters. Table 2.3 below summarizes the architecture and amounts of each source scheme. During budget consultations in the Fall of 2011, the unique line under recurrent expenditures of MOSD, called SEED will be submitted for approval.

17. It is important to note that the pooling of all three budget lines under a consolidated one emphasizes the focus on children (which, in terms of coverage, will represent half of the

25 Blank, Lorraine. 2009. Social Safety Net Assessment, Grenada (UNICEF, UN Women, The World Bank). 26 Functional Review of the Ministry of Social Development – Grenada. Noreen H. John, Commonwealth Secretariat 2009.

29

caseload of the program in its first phase) and the promotion function (as school attendance is checked for NF and STA).

Table 2.3: Envisaged Budget for the Consolidated Cash Transfer Program (2011-2015)

Program Budget Arrangements (Ministry; Chapter) Budget 2011 Estimates for

2012 and 2013

Public Assistance

MOSD; Recurrent Expenditures; 34404 - Grant to Senior Citizens & Necessitous 9.6

Necessitous Student Programme

MOE; Recurrent Expenditures; 34404 - Grant to Senior Citizens & Necessitous 1.8

School Transportation Programme

MOE; Capital Expenditures; Account 47001 (PetroCaribe GDA) 1.3

SEED Programme

MOSD; Recurrent Expenditures; 34404 - Grant to Senior Citizens & Necessitous+ [12.7;15.1]*

* The lower bound is the simple sum of 2011 for the three programs; the upper bound is with a forward estimate of EC$12 million for Public Assistance (as in the budget address for 2011). + It is also envisaged that a ‘Support to SEED reform under MOSD’ capital budget be added and linked to the recurrent expenditures budget line.

18. The transition to a full-fledged merger involves the adoption of both a Special Warrant and a Reallocation Warrant. MOSD has requested (on April 14, 2011 – effective on April 15, 2011) a Special Warrant to create a new line in the budget through which the program will be funded. Public Assistance, which already operates under MOSD will be moved to the program budget line. Following this, a Reallocation Warrant will be requested, through which, the programs under the MOE - STA and NF - will be moved to the program budget line under the MOSD. For the Special Warrant, MOSD will obtain Parliamentary approval after the process, while Parliamentary approval will be needed before the Reallocation Warrant can be obtained. Different scenarios for MOSD’s request to MOF are being discussed to ensure that: (i) consolidation under MOSD encompasses all three budget lines; (ii) the current recurrent lines are protected (instead of transitioning all amounts to capital budget); and (iii) there is a clear disbursement line for support by the World Bank. The warrants could also provide for the initial merger of both recurrent lines into one called SEED, with a support to SEED (corresponding to the former STA line) under capital of MOSD.

19. DLI A.1 (US$250,000). The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association. The initial area of support will be rewarding the actual institutional and budgetary merger of the three programs which consists of: (i) the adoption of the Special Warrant (adopted on April 15, 2011) and Reallocation Warrant (by end of May 2011); and (ii) the establishment and staffing of the SEED unit – Cash Transfer Unit – in MOSD, including in the Parishes.

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20. Addressing under-coverage. Based on the CPA (2008) data,27 the Public Assistance program and the Necessitous Fund program seem to cover less than 10 percent of the population, when we include all members of the beneficiary’s household among beneficiaries. Administrative records show an estimated total number of beneficiaries covered by all three transfer programs of 8,000, which is roughly 8 percent of Grenada’s population, while indigence stands at 15 percent of the population. By transitioning from individual-based to household-based targeting, 8,000 households (as there are currently a minimum number of families receiving benefits for more than one program because of the categories used in practice) represent 25 percent of the total households in the country and improving coverage of cash transfers to more eligible beneficiaries will therefore be an important objective this Project will support. It is expected that with the additional EC$2.5 million forward estimates initially budgeted under PA, an incremental 1,000 households could be enrolled thereby reaching a theoretical coverage of all poor families in Grenada, should targeting be perfect. Accounting for possible imprecision in the targeting there may be remaining poor households uncovered by the consolidated CCT (possibly up to 20 percent), even after this increase. 21. The consolidated program will improve coverage by targeting poor households, instead of targeting poorer individuals in specific categories such as enrolled school children, the unemployed, the disabled and the elderly. Many of the country’s poor tend to be working adults and only a fraction of them are benefitting from the current programs. Additionally, while the program will mainly start with a caseload composed of beneficiaries under existing programs (year 1 of implementation), it is expected that new beneficiaries will be phased in as part of the extension (under the revised, income-based eligibility criteria) and beneficiaries will be phased out (as they will be detected as non poor). 22. Based on the poverty line and household consumption aggregate, a minimum of EC$200 per family per month is adequate as per international metrics in CCT programs. An EC$200 transfer, which is the amount transferred under the PA program (and half of the NF or the STA amount), represents 13.5 percent of annual household consumption for quintile 1, and 10.8 percent of consumption for quintile 2. Likewise, it represents 7.9 percent of the consumption a typical household in quintile 1 would need to be above the poverty line.28 This level of generosity is in line with international practices (see Fiszbein et al., 2009), and also represents half of the monthly minimum wage (EC$400). The calibration of the quantum of benefits (flat amount or indexed on the number of children, maximum amount for large families e.g.) and the associated costs for the Government will be further discussed in the first year of implementation.

27 The CPA (2008) captures only two of the three main transfer programs in Grenada: PA for needy families, and NF (captured partially under the item ‘financial aid’) for children 6-17 enrolled in school. Due to its recent implementation, information about the STA has not been collected. Information on coverage, generosity, and targeting accuracy of these two programs has been analyzed with Adept-SP. The overall robustness of the figures is rated medium for possible misreporting and underrepresentation in the sample of safety nets beneficiaries; for instance, the current transfers aggregate from household data represents only one third of the total envelope devoted to this program in the budget. However, the information gives some elements for the rationale of the Project and the critical improvements supported. 28 For households in upper quintiles this transfer would represent smaller percentages of their average consumption, but larger percentages of their “poverty line” consumption, since richer households are typically smaller and thus require lower aggregate consumption to be above the poverty threshold.

31

23. DLI A.2 (US$500,000) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the proxy means test.29 The Project will help support an improvement in the coverage among the poor by providing resources for new beneficiaries, supporting an increase in the number of poor households receiving Grenada’s CCT program. This increase responds to the concerns from MOF and MOSD about exclusion errors. Appropriate funding sources (including external support), on top of the World Bank assistance and the estimated gains from consolidating, could help bridge the estimated gap. The trigger will be based on the newly enrolled beneficiary household members.

24. Transparent Rules and Procedures. The three cash transfer programs are run in parallel and still suffer from imprecise policies and procedures. Ensuring good and transparent governance and accountability structures is important to effective implementation of the Project. The first process of developing an operation manual for the program (rules and procedures) was launched to have an openly available guidebook to increase transparency and mainstream most processes, as well as to provide an objective basis for concerns and issues. Through a careful identification of each process - from enrollment to making payments to audit and control and program exit - it unveils the mechanics of the program and a basis for standardized tracking by several actors of the new operational management. This is a major step for Grenada as none of the existing safety nets have such an operating manual or clearly articulated and recorded guidelines. As far as governance is concerned, the Steering and Technical Committees, whose inputs and expertise were critical to the design of the Project, will continue to play an expert reviewer role. Additionally, governance structures are set up for the operation of the SEED program, with the creation of a dedicated Unit of Staff in a SEED Unit within the MOSD. 25. Audits and Controls. There are different levels of audits and controls envisaged under this Project: those led by the AGO and the Internal Audit Department on the one hand; the technical audits of the program on the other. The AGO will continue to carry out financial management audits of the Ministry and the program. The AGO will also lead the verification of the DLIs and the corresponding system improvements, and will be supported by experts for this task. Last, for the quality of the program itself, and in line with international best practice on minimizing Error, Fraud and Corruption (EFC), MOSD is expected to carry out spot checks on top of the MIS information to ensure the different processes such as targeting, compliance with co-responsibilities are verified internally. Under the Project, support from an external auditor on a yearly basis is also contemplated (see Component 2 and Annex 3).

Results Area B: Beneficiary Outreach/Targeting

26. Addressing Inclusion Error. Assessments of Grenada’s social safety nets have highlighted possible inclusion errors. Figure 2.1 points to good geographic coverage of Grenada’s safety net.30 However, as CPA data illustrates, coverage for PA beneficiaries in middle and upper income quintiles are still present - 11.6 percent of the third quintile receives transfers from the PA program.31 The TC called for the combination of an objective measure of

29 See linkage with DLIB.2 below and the roll out of the PMT. 30 Blank, Lorraine. 2009. Social Safety Net Assessment, Grenada (UNICEF, UN Women, The World Bank). 31 Calculations with Adept SP based on CPA data.

32

conditions of poverty (as direct income measurement is difficult) with the continuation of a role for social workers in diagnosing the risk situation of the household. Currently, most programs are based on an assessment either by social workers (PA) or by MOE officials (NF and STA), the latter being based on minimum level of information. To maximize the impact of the new program on the poorest, reducing inclusion errors to non poor is important, as well as standardizing the targeting process to minimize subjectivity or avoid interferences at different levels. 27. Supporting the use of a PMT. As part of the Project, a proxy-means test at the household level will be supported as the central piece to a revamped targeting system. In difficult cases and at the request of the safety net officer, social workers’ assessment (or a combination of social worker home visits and safety net officer means verification at enrollment) will be carried out. The initial year of the Project and as detailed in Component 2 will be used to design such an instrument from the correlates of poverty, and possibly combine the income score with a risk score (with a focus on boys at risk, other qualitative information as per social workers’ expertise) with a minimum level of subjectivity. This exercise will then help develop a new intake form and recertify all current beneficiaries as well as open, if attrition,32 certification/enrollment for new families. No vulnerability census (rapid sweeping) is contemplated but referrals and direct application (at the SEED District Office for instance) will be facilitated. Increased targeting accuracy is expected only by the end of year 2.

Figure 2.1: Comparison between Beneficiaries of Select Cash Transfer Programs and

Percentage of Poor by Parish

28. DLI B.2 (US$250,000) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the PMT (Baseline=0 in April, 1 2011). The Project will facilitate gradual improvement in the targeting accuracy of the consolidated cash transfer program through the use of a Proxy Means Testing to determine eligibility criteria based on an evaluation of various household criteria. The DLI allows for a margin of error (20 percent) as recalibration could be possible (as well as change in the cutoffs). This DLI is focusing on decreasing inclusion errors, and is paired with the DLIA.2 which aims to decrease exclusion error and under coverage.

32 Initial calculations suggest a possible turnover around 30 percent corresponding to the estimated inclusion error.

0%

5%

10%

15%

20%

25%

30%

35%

St Georges St Johns St Marks St Patricks St Andrews St Davids Carriacou

% of Public Assistance Beneficiaries % of Public Necessitous Fund Beneficiaries % of Poor

33

The revamped targeting mechanism supported in this DLI will be used to enroll new beneficiaries as supported in the DLIA.2.

Box 2.2: Minding in- and out-flows of Beneficiaries

The Project is financing the achievement of two performance milestones to improve targeting accuracy in Grenada’s consolidated conditional cash transfer program. These consist of: (i) decreasing errors of inclusion through the introduction of the PMT as an objective means-based targeting mechanism; and (ii) the improvement in coverage (reduction of exclusion errors) by enrolling new beneficiaries who were not covered before. Such transformation, in light of the international experience in countries like Argentina, Colombia, Mexico and Jamaica raise two kinds of concerns: (i) the overall caseload transition; and (ii) the risk mitigation measures to ensure a smooth refocusing of public benefits to the poorest, phasing out previous beneficiaries who are not deemed eligible under the revamped scheme. As discussed above, the total number of people covered under the three schemes is slightly below the estimated number of poor in Grenada. This under coverage could be addressed through the top-up of the financial allocation for social safety net in Grenada (fiscal constraint), and the calibration of the cutoff for eligibility with the PMT instrument. Initial evidence from household data and stakeholder consultations point to a possible fraction of beneficiaries who may not be eligible when a unified income-based targeting mechanism will be used to determine enrollment. There is no robust evidence of the magnitude of this segment of the current caseload though an initial estimate range could be between 10 and 30 percent. One of the main reasons would be that under the PA, an age criterion (of 60+ years old), though removed after the 2008 audit of the program, prevailed in practice, thereby focusing on the intake of the elderly, sometimes not as poor as other families without an elderly family member. Improved targeting in the case of Grenada therefore means that: (i) while continuing to serve the elderly poor, cash transfers could also cover more families with children and secondary school youth who are currently underserved; and (ii) a more transparent means-based approach to enroll beneficiaries to avoid inclusion errors. As for the former, some categories of beneficiaries are highly represented in poor households such as pregnant and lactating mothers, and children 0-5. Table A below shows the importance of this increased focus on human capital under the revamped program.

Table A: Percentage of Households (by Consumption Quintiles)

One 0-5 YO child

One 6-11 YO child

One 12-15 YO child

One 15+ YO pregnant woman

One elderly person (60+

YO)

Con

sum

ptio

n Q

uint

iles

1 63.6 50.9 60.1 0.0 19.7

2 43.8 51.1 40.2 0.8 29.9

3 35.7 28.9 37.4 0.9 43.7

4 20.7 22.6 22.4 0.5 45.0

5 8.3 10.4 9.4 0.0 52.3

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The TC has highlighted the steps and processes to manage the phasing out of non eligible beneficiaries and phasing in of new eligible households in the first draft of the program’s operation manual. In light of the Jamaican experience, and based on recommendations from audits completed between 2007-2009, the roll out of the PMT will include the following operational aspects:

1. During the design of the PMT, a pilot sample of information from current beneficiaries will be used for calibration. It will help get a sense of the magnitude of the inclusion of non-poor beneficiaries and help profile possible people to take out of the program.

2. Based on cost-impact analyses under the 2012 budget, the cutoff for the PMT will be established to ensure higher targeting accuracy.

3. All beneficiaries currently receiving benefits will have to re-apply by year 2 of implementation of the program. This screening exercise will objectively gather information of the current caseload and help identify all possible non-poor household.

4. The public information campaign will also stimulate the application of non beneficiaries to the program to decrease exclusion errors.

5. Based on the consolidated information at the beginning of year 2 (which will be entered into a consolidated database or MIS), discussions on additional measures during implementation of the full rollout of the new targeting will be taken if the magnitude of people to take off is relatively high.

6. The generic measures include when the beneficiary is informed of the decision of their exit from the Government benefit: (i) information about the appeal mechanism which will be set up in year 1 and fully operational by year 2; and (ii) a tailored case management/home-visit by the District Social Worker and the District SEED Officer to accompany the exclusion and potentially connect the former beneficiary to other services or programs.

7. If the magnitude of the potential losers is high, additional measures such as phasing out benefits (for a certain period of time up to one year after the roll out of the new targeting) could be envisaged.

8. As explained below, for the new beneficiaries, and the former ones whose benefits are continued under the new program, the information about the rules and procedures of the new program will be given at enrollment.

Also, the TC has already started envisaging a 4-year cycle for recertification the possible entrances and exits, which could follow the outlined plan for the mass certification exercise envisaged above.

Results Area C: Management Information System and Making Payments against Co-responsibilities

29. A critical block of the new program is the ‘how to’ make payments but also ‘how to’ track beneficiaries from entry to exit, which the MIS will facilitate. The MIS represents a vehicle for achieving proper caseload management, enabling payments (including payments which are penalized if households do not comply with co-responsibilities) through the consolidated lists of beneficiaries, and the reconciliation of the financial aspects. The gradual introduction of the improved management practices for each forming block will be accompanied by the development of specific modules for the MIS to facilitate the implementation of the improved operational platform of the CCT.

30. There is currently little information available on beneficiaries; the MIS will help address such gaps. Most elements are in social workers’ files, often archived. The MIS will help organize the information about beneficiaries and capture some additional elements at entry

35

(enrollment information), while in the program (compliance, payments), and upon exit. The Project will assist the Ministry in setting up the MIS system to more effectively manage administration of the Project, monitor compliance of beneficiaries and facilitate the implementation of health and education conditions tied to cash transfers, which are necessary for the Ministry’s move from a remedial approach to a preventive and human development focus.

31. Different phases of MIS. The MIS will be implemented in two phases. In the first phase, a soft launch of the program will be undertaken, creating a beneficiary registry of individuals who previously benefited from Public Assistance, Necessitous Fund, and School Transportation Allowance. In this phase, the lists for Public Assistance and Necessitous Fund will be harmonized, while beneficiaries of the School Transport Allowance will be required to re-register. The MIS will facilitate payments to these existing beneficiaries and will be developed to allow for phasing in of subsequent modules, such as co-responsibilities and compliance recording. The second phase is expected to start development in late 2011/ early 2012, facilitating mass recertification of all beneficiaries and inclusion of targeting mechanisms through a PMT. This second version of the MIS will be considered mature as it will facilitate payments based on compliance.

32. From Application to Enrollment. The envisaged process for applications and enrollment (after eligibility check based on the PMT) include the following steps: (i) beneficiaries to apply at SEED District Offices, with possibility of referrals; (ii) District SEED officers’ initial home visit to complete intake forms (based on questions critical for the verification of eligibility as per PMT formula and overall difficulty in assessing which will trigger a social worker home visit) – it also includes their providing any necessary documents such as school enrollment, which will also be used to track information on compliance; (iii) the data is entered into the MIS and based on score and cut-off, and a decision is made on their eligibility; (iv) a unique family identifier is issued (with sub-identifiers for those household members who are to comply with co-responsibilities); and (v) the household is enrolled into the system and initial payment can be made the next month. Such processes are based on the Jamaica PATH example and are detailed further in the program operation manual. This full enrollment process will be finalized and applied by the end of year 3.

33. Making payments. During the first phase of the program, beneficiaries from the three programs will receive payments from the MOSD through the current payment cycle used for PA. Students who previously received benefits under the STA will be required to re-register, as the payment mechanism for that benefit will vary from the previous arrangement. Payments under the SEED program will be made monthly in cash to the family representative for qualified and compliant beneficiaries in that household. The payments will be made at District Revenue Offices under the MOF. A detailed consolidated payment cycle is outlined in Box 2.3 below.

36

Box 2.3: The Envisaged Payment Cycle for the Consolidated Benefit – Thirteen Steps

1. The MIS generates the payment lists and amounts payable to each Family Representative. 2. The Payment Officer (PO) will obtain summary of payments from the MIS and prepare

request for funds accordingly to the Principal Financial Officer of the MOSD. 3. The Permanent Secretary, MOSD authorizes payments. 4. The Data Entry clerk enters the information in the Smart Stream System. 5. The Finance Officer requests funds from the MOF. 6. The payment list is verified and approved by the Treasury. 7. The SEED Payment Officer prepares cheques drawn on clearing account for the total sum

payable to beneficiaries for that period by Parish and lodges to the relevant District Revenue Offices (DROs).

8. The cheques, along with payment listings generated by the MIS, are given to the respective DRO managers, with copy to the MOSD Sub Offices.

9. DROs issue cash payments to beneficiaries. 10. At the end of the pay period, District SEED officers collect the pay listings along with all

listings of uncollected payments, and any other required report from the District Revenue Officer, and submit to the SEED Unit.

11. DROs repay uncollected cash benefits to the Treasury. 12. The PO lodges the payment listings status of all beneficiaries on the MIS. 13. The MOSD Financial Officer reconciles payments.

34. Also under Component 2, external audits will be supported in addition to the consolidation of payment cycles decided during Project preparation. This will be an important support to MOF internal audit services and AG’s Office; it complies with Bank’s fiduciary needs.

35. DLI C.1 (US$250,000) One unified MIS is established and a single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program. The Project will support the creation of the first phase of the MIS which will be considered accomplished if a unique payment list from the triangulated database from former programs (with names and amount) is generated for payment in November 2011. This will be a major step in using a unified platform and therefore ensuring better accountability. 36. Improved education and health outcomes are central to the Project. Grenada’s Social Safety Net Assessment found that safety net programs in the country could be better linked to investing in human capital. Lack of income hampers school attendance rates among the poor. Grenada’s School Transportation Allowance programs and Necessitous Fund are two important social assistance programs employed by the Government to address this issue and already involve soft monitoring of attendance. Furthermore, CPA data suggest remaining issues among the poor of absenteeism and drop out (around 8th grade, see cohort analysis in Annex 8), and the Government is committed to foster education attainment, especially at the secondary level. 37. In addition, stimulating demand for health of vulnerable groups (preventive checkups for the elderly, health monitoring for pregnant and lactating mothers and children under 5) is contemplated under this Project. Such endeavor aims at bending the risk factors for malnutrition (under nutrition and micronutrient deficiencies such as anemia for

37

pregnant and lactating women, as well as overweight and other risks for non-communicable diseases among elderly and teens). Table 2.4 below summarizes the activities (see below for workshops) and co-responsibilities envisaged in health and education by age group for SEED, this is based on MOH’s protocols and supply has been confirmed for the vulnerable groups.

Table 2.4: Envisaged Protocols by Age Group

Age/Status Education (monthly) Health (yearly) 1. Children 0 -1 year 4 visits 1-2 years 3 visits 2-5 years 2 visits 6-10 90 percent attendance 1 Check-up per year

Including medical and dental 11-18 90 percent attendance 1 Check-up per year

2 Health Workshops per year* 2. Women Pregnant 8 Postnatal 1 3. Adults Elderly (60yrs. & over) 1 Disabled 1 Poor Adults (19-59 years) 1 workshop per year 1 Chronically Ill (Diabetes and hypertension)

4

*Such workshops will be specifically tailored to address issues of teen pregnancy, boys at risk and unhealthy behaviors in Grenada. Component 2 will help develop material.

38. Non compliance and penalized transfer value. Before the transition to a full-fledged conditional cash transfer in year 3, consensus needs to be reached on the formula to be used to alter the benefit value based on non-compliance. This also needs to be communicated to the households. Also, supply constraints (such as holidays for school attendance) will need to be carefully factored in. Such steps will involve major Inter-sectoral coordination to collect and feedback information on attendance from providers (schools and health centers). Also, in light of international experience, more emphasis on transitions and boys may also be considered in the revised protocols. Last, clear protocols for suspension of benefits and triggered case management if severe non compliance will be developed during year 2 the design of which will be supported by financing under Component 2.

39. Flows of information and compliance checks in the MIS. Populating the MIS with timely information from both education and health Ministries will rely on a range of actors from school attendance officers to health centers’ personnel to provide District SEED officers with the information on their compliance for them to input into the MIS. This will then be consolidated at the central level to modify the value of the payments (in year 3). Preparation of these flows in previous years of implementation of the Project include: (i) the formalization of MOUs about the responsibilities and the format(s) for data reconciliation from MOSD and partner Ministries’ staff; (ii) adequate logistics flows for paper-based collection and digitalization of the

38

information; and (iii) risk mitigation measures should such flows be interrupted (by default, beneficiaries will receive benefits while information flows on compliance are restored).

40. DLI C.3 (US$500,000) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual (Baseline=0 in April 2011). The Project will support the full rollout of the CCT through demonstrated payment based on compliance with co-responsibility for 70 percent of the program caseload. This step, with the adequate information to beneficiaries, will mark a major acceleration towards systemic consolidation of the human capital focus. The 30 percent margin is to account for possible exceptions (untimely information flows from partner institutions such as MOE and MOH decentralized services for instance).

41. Exit and Graduation. As explained above, the month-to-month flows of entry and exit are determined by funding availability rather than clear rules for determining when a beneficiary is supposed to be taken off the program or moved to a different program. The current draft of the program operation manual outlines clear rules for graduation from the program such as: (i) death of the beneficiary elderly family member; and (ii) graduation of the beneficiary child. It also points to the triggering of home visits for instance, if payments are not collected, if compliance is not met for three consecutive months, or other issues which trigger suspension. It also gives possible orientation of beneficiaries to other programs such as the cash-for work (Debushing program), a seasonal benefit for poor household which have able-bodied household members.

Results Area D: Communication

42. The Project will include several audience and types of communication. Internal communication (or training) to staff and partners; internal communication to beneficiaries about the program; and external communication.

43. First, training for staff and partners has the broad objective of generating understanding, acceptance and cooperation among the staff in the agencies to be involved in/affected by the changes. Training for beneficiaries is aimed at generating understanding, acceptance, and cooperation among beneficiaries of the SEED programme (internal communication) and enabling qualified applicants/family representatives/ beneficiaries to become aware of their duties and responsibilities. Staff training will include training in SEED operations, the MIS and PMT. Staff from the MOSD and stakeholder ministries such as the MOE and MOH will also be required to undertake training. The MOSD will also lead the internal communication, ensuring that stakeholder Ministries, government officials and senior management remain informed of the Project goals and objectives and key changes in cash transfer administration.

44. Second, beneficiaries will receive training at enrollment, as well as tailored communication as part of the co-responsibilities in health. Compulsory training will provide an understanding of the new program, as well as rights and responsibilities. This training will include the requirements and operations of the SEED program; rights and responsibilities of the household and its representative; benefits and conditions of payments; procedures for accessing benefits; introduction to forms and conditions for compliance; steps in getting compliance

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validated; and appeals processes. In addition, co-responsibilities in the form of attendance to educational workshops will be undertaken for health.

45. DLI D.2 (US$250,000) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program (Baseline=0 in April 2011). As part of the demand for good governance agenda, the Project will reward the actual communication to at least 70 percent of the beneficiaries about the rules and procedures of the new program at enrollment. It will be measured through spot checks. 46. Information and Education Campaign (IEC). Public awareness of the changes in cash transfer administration, co-responsibilities and payment processes is important as the program is consolidated and rolled-out. A wide ranging IEC will be mounted, including advertisements in radio, television and print media; posters and flyers at schools and District Revenue Offices and through Social Workers as they prepare current clients for the revised arrangements under the SEED program. The campaign will be implemented in two phases, with the first phase requiring a soft public information campaign to facilitate awareness of the consolidation under the MOSD and understanding of new payment procedures where applicable. The second phase will feature a broader campaign with the design and implementation of various public information materials to facilitate awareness of the reformed program and its various Components. This first phase will be financed through Government counterpart funding. The Project will principally finance the second phase, namely through hiring of a Consultant to assess public information needs and design various public awareness materials which will be broadcast through various communication channels. 47. Grievance Mechanism. Beneficiaries and the community as a whole will be able to appeal decisions on their eligibility to the program, possible suspension, and the amount of benefits received, and have special cases reviewed by at least three independent Appeals Committees who adjudicate cases for different Parishes. The Appeals Committees will comprise representatives from the Ministries of Education and Health, a Community Representative and a SEED executive, who will serve as Secretary to the Committee. The Committee will have clearly stated governance structures, to facilitate transparent mechanisms for adjudication of grievances during the Project and to increase accountability. This is part of the initial design elements to foster the accountability and transparency agenda of the overhauled program, and the rules and procedures. The program operation manual already articulates the roles and responsibilities and the functioning of this grievance mechanism. It is expected that in the first phase, the Committee will review eligibility issues, especially when the recertification process will be carried out in the second year of implementation. By year 3, the grievance mechanism is expected to be fully operational. 48. DLI D.3 (US$250,000) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism. As part of the increased accountability and transparency agenda, the Project will reward the successful processing of appeals and complaints that is a fully functioning grievance system. Its functioning will be assessed through a mix set of

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instruments, including interviews with beneficiaries (spot checks) and the organizational review of the mechanism.

Results Area E: Monitoring and Evaluation

49. Results Monitoring Framework and Reporting. The principal tool for monitoring and reporting will be the MIS. It will be designed to generate reports to monitor progress against program’s objectives using indicators identified under the Project. The Planning and M&E Officer within the SEED Unit will work with Social Workers and District Office staff at the Parish level, as well as with the PCU to generate these monitoring reports. A monitoring and evaluation plan has been prepared during preparation and additional needs related to information collection (including baselines) have been identified. Biannual monitoring reports are envisaged as part of MOSD keeping the TC informed about developments against strategic and operational objectives of the program.

50. Impact and Process Evaluations. The Project will support the realization of an evaluation package including: (i) an enhanced process evaluation; and (ii) a development impact evaluation. The enhanced process evaluation will consist of: (i) an assessment of the increased accuracy in targeting; and (ii) an analysis of the impact of the improved management of the operation such as the payment cycle. This evaluation is expected to help identify bottlenecks and adjust program blocks as needed. The impact evaluation strategy includes: (i) the collection of the baseline through the intake forms of applicants to the program in year 2; and (ii) the collection of an end-line after 1 full year of implementation based on MIS data for beneficiaries and additional data collected for non beneficiaries (control). A quasi-experimental design (regression discontinuity) will help compare outcomes in education and health between households below and above the cutoff for eligibility into the program. Innovative features of the IE, compared to the existing literature on impacts of CCT, may include the estimated change on education transitions and NCD risks. Component 2 will be used to help with the design (indicators, data collection, and methodology).

51. DLI E.4 (US$250,000) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website. This DLI focuses on the actual completion and dissemination of the evaluation of the program. It is expected that at least the enhanced process evaluation will be carried out. Such results culture has proven very effective in building stronger CCT programs in the region, as well as fostering social acceptance of such public policies for the poor. DLI Measurement Strategy

52. The Accountant General’s Office will be the verifying agent with adequate support from experts, possibly recruited from a pool of national consultants, international consultants such as administrators of the Jamaican PATH program, staff from the OECS Secretariat and other Member States safety nets program administrators, and other agencies (NGOs, UN) working on safety net programs in Grenada. Financing for these technical reports will be provided by the Government with possible support from the Bank through the Technical Assistance component, if requested.

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53. A DLI Measurement Strategy has been devised to verify the achievement of specific DLIs and progress towards the Results Areas under Component 1. The table below summarizes the intended measurement strategy for each DLI. The measurement strategy includes verification through assessing institutional arrangements, systems, and processes, through tools such as spot checks; data analysis and document reviews. It is expected that the AGO will send to the Bank the TOR of the intended items to verify for each DLI for no-objection.

Table 2.5: DLI Measurement Strategy

Results Area DLI Measurement Strategy


Nov 2011: DLI A.1 (250K) The Recipient has taken steps to establish the consolidated CCT Program through: (a) approval of a special warrant creating a budget line dedicated to the CCT Program; (b) approval of a reallocation warrant to transfer funds to the CCT Program from two existing social safety net programs; and (c) establishment of the Cash Transfer Unit within the MOSD with structure, functions and responsibilities as well as resources acceptable to the Association. Nov 2012: DLI A.2 (500K) 800 individuals, who hitherto had never received Cash Transfers, receive Cash Transfers after their eligibility to become beneficiaries has been established through the proxy means test.

Verification of: (i) the effective budgetary merger through the approval of the Special Warrant and Reallocation Warrant; (ii) the institutional merger (staff from MOE working on this program reporting to MOSD); and (iii) the staffing of the Cash Transfer Unit (SEED Unit). Expert Support: institutional reorganization and budgetary framework. Verification of: (i) appropriate budgetary allocation for SEED in FY2012 to cover poor households who could not be served before; (ii) intake in the MIS against established baseline; (iii) payment lists sent to DROs; and (iv) reconciliation of payments received (aggregate and differential in the actual beneficiaries paid). Expert Support: MIS and payment.


Nov 2012: DLI B.2 (250K) 70 percent of beneficiaries are identified as eligible to receive Cash Transfers through the proxy means test (Baseline=0 in April, 1 2011).

Verification of: (i) amendment of operational manual to reflect new targeting mechanism; (ii) issue of a technical note about the targeting formula; (iii) evidence of the population of the MIS with over 8,000 beneficiaries; (iv) selection of the subset based on agreed cut-off; and (v) payment of the selected subset from MIS. Expert Support: PMT/targeting and MIS.

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Results Area DLI Measurement Strategy

C. Management Information System and Making Payment against Co-responsibilities

Nov 2011: DLI C.1 (250K) One unified management information system is established and single payment cycle is used for effecting Cash Transfers to beneficiaries under the CCT Program. Nov 2013: DLI C.3 (500K) 70 percent of beneficiaries are paid based on verification of compliance with applicable education and health conditions set forth in the Operations Manual (Baseline=0 in April, 1 2011).

Verification of: (i) one combined database of all three programs’ beneficiaries with adequate information to pay at the DROs; and (ii) all three benefits have been paid since September at the DRO with unique reconciliation. Expert Support: Financial auditor. Verification of: (i) MIS information from MOE and MOH entered; (ii) payment penalized based on non compliance; and (iii) information from MIS transmitted to DRO for payment. Expert Support: co-responsibilities and MIS.

D. Communication

Nov 2012: DLI D.2 (250K) 70 percent of beneficiaries have received critical information about the CCT Program including: eligibility criteria, enrollment procedures, conditions for payments, appeals and complaints procedures, and exit from the CCT Program (Baseline=0 in April, 1 2011).

Verification: randomized verification or spot check of knowledge of beneficiaries of: (i) their having received information about the program (at enrolment); and (ii) their knowledge of the program rules. Expert Support: field outreach and access to information.

Nov 2013: DLI D.3 (250K) 70 percent of complaints and appeals in relation to the CCT Program are attended to and resolved pursuant to standards and procedures of the CCT Program’s appeals and grievance mechanism.

Verification: (i) randomized interviews with beneficiaries; (ii) review of cases adjudicated; and (iii) organizational assessment of the process. Expert Support: field outreach and instruments to measure demand for good governance and access to appeals.


Nov 2014: DLI E.4 (250K) Evaluation report on the CCT Program, focusing on the impact of the program and its processes, is published on the MOSD website.

Verification of: (i) the reports for impact evaluation and/or process evaluation meet technical standards; and (ii) workshops on the results have been held to share results and information to Cabinet has been transmitted. Expert Support: Evaluator.

54. Component 2: Technical Assistance to Improve Implementation Capacity of MOSD (US$0.5 million). The objective of this Component will be to bring the external knowledge necessary to improve the processes involved in the overhauled cash transfer program. Under this Component, technical assistance will be provided to the MOSD for strengthening its management, coordination, supervision, monitoring and evaluation of the CCT program at the central, regional and local levels. The amount under this Component is relatively small and focused on supporting the quality design of key intermediate processes to meet the DLIs, as well as the knowledge creation in other areas which are not directly supported under Component 1. Government will provide additional own resources for critical goods as well as the full implementation of the processes necessary for the advancement of the CCT. Disbursements under Component 2 will be made as quarterly advances provided through a Designated Account

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(DA) to be open in a financial institution selected in consultation with the Bank, as per standard Bank financing.

55. The activities to be financed under this Component will focus on providing the human resource and technical support needed, mainly through consultant services to ensure effective implementation of the consolidated cash transfer program. They are organized around the five results areas outlined under Component 1 and include consultant services for: A.1) the timely review of process updates in the program rules and procedures; A.2) the preparation of a contingency plan for crisis response through the CCT (hurricanes, food and fuel shocks); A.3) the funding for external audits; B.1) the support to design and phase in the PMT; C.1) the support to develop the MIS (for each phase); C2) the design of a Central Beneficiary Registry or registry of the poor; D.1) the design of materials and protocols for the envisaged educational workshop and training for beneficiaries; D.2) the design of the training plan for MOSD staff and partner Ministries’ staff; E.1) and the design of an impact evaluation and an enhanced process evaluation. The detailed description of the expected outputs are presented in Annex 2 and a full list of activities financed under Component 2 for the first 18 months of Project implementation is summarized in the procurement table in Annex 3.

56. A technical assistance Component such as this is intended to be flexible enough to respond to needs and demands formulated by MOSD and could include further work on the scenarios for cost-impact for ramp up and additional benefits (differentiated scheme) for instance.

Results Area A: Institutions, Budget and Coverage

57. Review of the program rules and procedures, updating blocks. Component 2 will finance a review of the program’s rules and procedures to ensure continuous learning and adjustment. To ensure effective program impact for instance, the Project will finance a plan to adopt tailored case management to facilitate follow-up and support to beneficiary families, particularly families experiencing problems with program compliance and requiring additional support mechanisms. Social workers under the MOSD, with the support of District Officers who will assist with the administration of the program at the Parish level, will ensure effective follow-up at the local level to program beneficiaries.

58. Preparation of a Contingency Plan for crisis response. The Project will facilitate technical expertise to assist the MOSD to prepare a Contingency Plan for crisis response prior to the full roll-out of the program. This will ensure that mechanisms are in place to address potential crises that may arise as Grenada remains natural disaster-prone and vulnerable to imported shocks (food, fuel, financial crises). This will be a key Component for risk-mitigation. Susceptibility to economic shocks; natural disasters such as hurricanes generally trickles down to income pressures to the indigent and the near poor and scenarios including rapid compensation, possible increase in coverage of benefits (temporarily) need to be solidly grounded in operational processes. If Government resources are strained due to these or other crises, the effective implementation of Component 1 may be jeopardized. It will therefore be critical for Component 2 to facilitate improved capacity on the part of MOSD and other relevant agencies in formulating a Contingency Plan, particularly in light of the benefits of a preventive approach.

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59. Funding for External Audits. The Project will also support capacity building of MOSD through financing annual external audits. This will complement internal audit arrangements and is necessary due to the limited capacity to ensure timely auditing, given government staffing constraints. A private sector audit firm will be hired on a competitive basis. The annual Project financial statements will be audited in accordance with International Standards of Auditing and the World Bank’s guidelines on auditing as stated in the guidelines: Financial Management Practices in World Bank-financed Investment Operations (November 2005). The auditors’ TOR will be prepared by the PCU and cleared by the World Bank before the engagement of the auditor. The TOR will require the audit of financial transactions as well as a review of the internal control mechanisms and Project’s compliance with the requirements of the credit agreement. To support the Director of Audit office in its effort to improve the current capacity, a provision will be included to the external auditor’s TORs, requesting participation of one of the Director of Audit staff in the external audit process as an observer.

Results Area B: Beneficiary Outreach/Targeting

60. Support to design the Proxy Means Test. The Project will finance a consultant to lead the design and operational roll out of the PMT and related enrollment exercise to facilitate more efficient and transparent targeting based on an evaluation of various household criteria. The PMT will be linked to the MIS to facilitate more objective mechanisms for determining eligibility. Design of the PMT is expected to begin during the first half of fiscal year 2012. Ensuring that the PMT is tailored to the local context and adaptable, is also important. To ensure this, the PMT will be tested before complete roll-out and designed to facilitate continuous review of eligibility criteria as they relate to economic and social trends. Complete implementation of the PMT will be a key criterion for the second phase of the Project.

Results Area C: Management Information System and Making Payment against Co-responsibilities

61. Phased design of Management Information System. This Component will finance the design of an MIS system and related training to key Ministry staff in the use and upkeep of the system. The MIS system will be one of the first products of the Project and is expected to start development early in fiscal year 2012. Reviews of the administration of the three principal cash transfer programs reveal the need for the establishment of an MIS to more effectively deliver payments to beneficiaries. A recent review of the reporting for the School Transportation Allowance program revealed that schools were given liberty to report on cash transfers, resulting in varied and inconsistent reporting formats that make comparison of transfers difficult. Additionally, reports from the Necessitous Fund were principally kept on paper.33 A recent audit of the Public Assistance program also revealed similar administrative and reporting problems, with inefficiencies noted in payment processes, payment reconciliation mechanisms, beneficiary record-keeping and eligibility monitoring.34 Government counterpart will also be significant for this Component, through financing the initial first phase of the Project which principally features

33 World Bank Mission to Grenada February 14-23, 2011. 34 Report of Social Development – Safety Net Programme January 2007 – August 2008. Office of the Director of Audit, Government of Grenada.

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the harmonization of the beneficiary lists of the three programs and payments to current beneficiaries under the MOSD. Government-funded staff will also support this Component, namely through an IT Officer within the SEED Unit. The purchase of equipment for the MIS system will also be funded by Government. The Project will finance the hiring of an MIS Consultant to design the full MIS system in phase two of the Project, who will also provide training staff required to access the MIS system.

62. Plan for a Central Beneficiary Registry to extend the introduction of the MIS for SEED to a renewed positioning of MOSD in tracking vulnerable households in Grenada. The CBR, initially based on SEED MIS will be useful to link beneficiaries to other services and programs for which they may be eligible, thereby moving the safety net to a more integrated system. These programs include cash for work programs, such as the Debushing Program, and other safety net program such as the possible Energy for the Poor (US$8 million funded by OPEC). The improved targeting (by having an application/intake process beyond CCT) facilitated by a CBR will therefore enable the Government to more adequately respond to the needs of poor and vulnerable households. Such plan will help identify critical processes and inter sectoral arrangements to make such vehicle available and useful to other Ministries such as Works, and Labor.

Results Area D: Communication

63. Design education workshop and training protocols and material. This Component will help finance the design of the IEC for beneficiaries as well as educational workshop for health based on international best practice. beneficiaries will learn of the benefits, co-responsibilities, rights and roles under the Project. They will also be mandated to attend specific activities to address, through communication for behavioral change, some key challenges to human capital accumulation among beneficiaries. These include potential workshops tailored to Boys at Risk. These workshops will be important as boys have higher repetition rates when compared to girls and have lower achievement levels when compared to girls, particularly at the secondary level.35

64. Design of training for officers and partners. Building the capacity of staff in the various implementing Ministries is a critical Component of the Project. The Project will finance the design of the material to facilitate this training (including advice on the protocols, roll out). This will lead to appropriate training on the revamped rules and procedures for the program to staff in MOSD, MOH, MOE and DROs. Implementing Ministry staff and other implementing partners will also receive additional training on the MIS system, the design of which could be supported by the Project. This may include design of an MIS handbook to facilitate sustained learning unaffected by changes in staffing. Staff will also receive training in the PMT during its design.

35 Ministry of Education. 2010. Education Statistical Digest.

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Results Area E: Monitoring and Evaluation

65. Design of Impact and Process Evaluation. As explained under Component 1, the Project will support two evaluative mechanisms to measure the effectiveness and impact of the Project. Component 2 will help with funding two consultancies – one to support the design of the process evaluation, and the second one for the impact evaluation. The process evaluation will help assess processes and mechanisms to ensure effective targeting and coverage of the consolidated cash transfer program among other elements. This will aid with the iterative design of the Project. The impact evaluation will measure the development objectives of the CCT program and its design will be based on international best practice.

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Annex 3: Implementation Arrangements Grenada Safety Net Advancement Project

1. The Project will be implemented over a four-year period, building on and improving, existing institutional and implementation arrangements for execution and delivery of cash transfers in Grenada. The program will be implemented in phases. In the first phase, beginning September 2011, the three cash transfer programs will be consolidated into one program - SEED.36 Eligible beneficiaries will be individuals who previously benefited from Public Assistance, Necessitous Fund, and School Transportation Allowance. In this phase, the Public Assistance and Necessitous Fund will be harmonized, while beneficiaries of the School Transport Allowance will be required to re-register, to clean the list of school graduates. At this stage, the new CCT program will formalize the existing system of co-responsibilities in education – that is, attendance at the primary and secondary levels. From the single beneficiary list, a payment list will be generated from the new MIS, and payments will be made by one method (cash through DROs). 2. Before the third year of implementation of the support to the SEED program, it will expand to include the full scope of current reform initiative. That is, it will introduce co-responsibilities in health and it may include additional co-responsibilities in education. In health, Government envisions introducing co-responsibilities for pregnant women and children 0-5 on pre and post-natal visits and regular vaccinations; for children 5-11 co-responsibilities involving annual check-ups for children and parents participating in educational workshops on parenting and healthy lifestyles; for youth 11- 18, annual checkups and participation in bi-annual workshops on sexual health, nutrition, exercise, anti-bullying, and sessions designed to keep children from engaging in risky behavior;37 for the working poor adults, yearly visits to health clinics; and for the elderly, one annual visit to health clinics, or more if chronic illness is a factor, the number of which will vary according to chronic conditions. In addition, Government would like to introduce more co-responsibilities in education. These might be centered on increased benefit levels for upper secondary students. 3. Overall Responsibility: The MOSD will serve as the main implementation agency for the consolidated cash transfer program. The Ministry’s priorities include an integrated poverty eradication strategy, a comprehensive social security system and accessibility of social welfare services.38 As such, the Ministry will take the lead in managing the implementation of the consolidated cash transfer program. This institutional arrangement will allow for more administrative efficiency and harmonization of procedures to monitor and evaluate the program.

4. MOSD’s stated role is to provide equitable and sustainable improvement in the quality of life of all citizens, in particular the needy, elderly, families, victims of abuse, children, young offenders and persons in need of immediate financial and material assistance.39 The Ministry

36 Pursuant to Cabinet Conclusion dated April 11, 2011. 37 MOH wants to introduce co-responsibilities for children 0-5, but there is not currently a cash transfer program to cover that age cohort. 38 Functional Review of the Ministry of Social Development – Grenada. Noreen H. John, Commonwealth Secretariat 2009. 39 From the Government of Grenada.

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does this through developing social policy and delivering a range of social services. The Ministry’s services aims to: (i) resolve individual and family problems, (ii) alleviate poverty, and (iii) rehabilitate the disabled, disadvantaged and deprived, and those affected by natural disasters and other crises. The Ministry has a head office located in the capital, as well as sub-offices at the Parish-level, managed by a social worker.

5. The Ministry has several key divisions involved in the development, implementation and delivery of social policy and social services:

Social Services: The Social Services division holds responsibility for the country’s

Safety Net programs, which include the Public Assistance Program, Burial. Assistance, and the Disaster Fund. This division also holds responsibility for Child Protection, which investigates reports of child abuse, and oversees the Child Welfare Authority. The Division also oversees Family Services.

Gender and Family Affairs: This Division coordinates activities to create a gender balanced society.

Domestic Violence Unit: This Unit was established in 2003 to address increasing instances of domestic violence in country. The Unit provides protection and support structures to address domestic violence.

6. Ensuring that the MOSD has the human resource capacity to effectively implement the Project and analyzing the organizational structure that will best enable the Ministry to effectively implement the Project, and its other social programs and policies is an important consideration in the Project. The Ministry has evaluated potential structural changes prior to, and in light of, the current Project. A proposed organizational structure for the MOSD, taking into account, previous administrative evaluations and Project needs under the consolidated cash transfer program, has been developed. Under the proposed organizational structure, the Ministry will have four main divisions with different, yet inter-connected, responsibilities. Programming and policy will fall under the Social Services, Gender and Family Affairs and Safety Nets divisions, while an Administrative division will be responsible for Ministry’s planning, finance and overall administration. 7. Within the Ministry, a special unit will be created to administer and manage the consolidated cash transfer. This Unit will be responsible for all activities related to the targeting, compliance, enrollment, and payment processes and case management. The Unit will prepare all reports including the disbursement reports every two months and will coordinate with the consultants or external firms in charge of carrying out the operational audits and impact evaluation and monitoring studies. The Unit’s organizational structure has been designed to meet the requirements of the program (see Figure 3.1).

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Figure 3.1: Planned Organizational Chart MOSD

8. Support Roles and Responsibilities: Other Ministries and Government agencies will play critical supportive roles in implementation of the Project, and program as a whole. The consolidated cash transfer program will include two programs currently under the administration of the MOE which will fall under the purview of the MOSD after consolidation of the three cash transfers. Nevertheless, the introduction of school attendance conditions point to continued importance to the MOE to ensure effective delivery of these transfers, and to monitor and support the linkages between the transfers and fostering human capital development. The MOE will play an important function in overall coordination with schools and other educational institutions where school attendance is to be monitored. The Ministry will also have a major role in facilitating public awareness and stakeholder consent, and ensuring that schools are capable of facilitating school attendance. Likewise, the MOH will also have some responsibility, given the planned introduction of health conditions tied to transfers. MOH health staff, particularly at the district level will be involved in monitoring compliance with health conditions. Coordination between the Ministries will be essential to ensure roles and responsibilities are clearly identified, that effective strategies are in place to monitor compliance, and to avoid duplication of responsibilities.

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9. Supportive responsibility for financial and procurement arrangements under the Project will be principally provided by the PCU under the MOF. The PCU’s experience with World Bank projects will ensure effective implementation in line with Bank policies and procedures, while enabling the MOSD to focus on its principal role of delivery of the three cash transfers. The PCU’s role is discussed in more detail under the Financial Management section of this Annex. The MOF will also have an important role in accordance with its responsibility to fulfill the budgetary commitments of the GOG according to the requirements of the program. Additionally, DROs, where payments will be made to program beneficiaries, fall under the MOF. 10. Role of Partners: The proposed Project foresees no formal co-financing agreements with other donors or organizations at this time; however, it will work closely with UN Women, UNICEF, the OECS Secretariat and other stakeholders to support the MOSD in implementation and possible scaling up of the Project over time. Additionally, this coordination will assist with further replication of the model and sharing of best practices. It is also expected that the advancement supported under the program will leverage resources from other donors. Budgetary support to, or co-financing of the consolidated budget line for a CCT scheme supported under Component 1, and contribution to the technical assistance work plan for reforms under Component 2 will be important platforms for partners.

11. Project Planning Arrangements: An Inter-Ministerial Technical Committee chaired by MOSD is responsible for preparatory activities to ensure smooth transition of the consolidation of cash transfers, flow of information, and input from key line ministries. The representatives of the Technical Committee include representatives from the MOE, MOH and MOF. The responsibilities of the Committee include providing information and data relevant to the consolidation process, including but not limited to information on transfer amounts and beneficiary data for programs not under the MOSD. Additionally, Committee members will provide input into the feasibility and potential institutional arrangements for condition monitoring, and other administrative tasks that may fall under their purview with the new consolidated program. These include reporting arrangements for health and education conditions. Committee members will ensure a steady reciprocal flow of information between the Committee and their respective Ministries, and facilitate consultations with Ministers and other key staff. A key product of the Committee will be a Program Operational Manual which would provide a guide to the implementation of the new consolidated cash transfer system, therefore addressing deficits in program guidelines characterized by the three main cash transfer programs. The overall Project management arrangement is illustrated in Figure 3.2.

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Figure 3.2: Organizational Structure of Project Management Arrangements

12. The roles and responsibilities described in this Annex are illustrated in Figure 3.2. Under the Project management arrangements, the Inter-Sectoral Steering Committee, and more so, the Inter-ministerial Technical Committee will be at the apex of the organizational structure, providing coordination and advisory services during implementation of the Project. Both Committees will be chaired by MOSD, which serves as the principal implementation agency. MOH and MOE will both provide support to implementation. Financial oversight and support will be provided by the MOF and PCU respectively. Details on disbursement arrangements are provided in Figure 3.4. 13. Implementation and Execution of the Consolidated Conditional Cash Transfer System: An analysis by the Technical Committee revealed the need for the establishment of a Unit within the MOSD to administer and manage the consolidated cash transfer system. The proposed Unit will be led by a Manager and supported by staff members including a Policy, Planning M&E and Reporting Officer, a Payments Officer, an IT/MIS Officer and District Officers in each Parish. The Unit is responsible for all the activities related to beneficiary targeting, compliance, enrollment, and payment processes and case management. In particular, the overall management of the MIS and ensuring payments to beneficiaries will be the responsibility of this Unit. The Unit will also be supported by MOSD District Offices and Social Workers in each Parish. Support for executing payments at the Parish level will come from

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DROs, which fall under the purview of the MOF. The DROs will be linked to the MIS system to ensure easy payment reconciliation and reduce administrative error common in the previous payment methods employed. 14. The transfers will be made from the consolidated SEED budget line in MOSD. A Special Warrant submitted on April 14, 2011 (and effective on April 15, 2011) created the SEED budget line (and replaced the Public Assistance vote). With the Reallocation Warrant (expected by June 2011), the three lines will be unified into one placed under the responsibility of the MOSD. An initial Management Information System to store data related to beneficiaries and payments and the necessary changes in human resources to effectively implement the consolidated program are expected by November 2011 (first set of DLIs). A gradual process is envisaged, which will facilitate increased implementation capacity of the MOSD and increased coverage of beneficiaries over time.

15. Implementation of a MIS: The MIS system will be one of the first products of the Project and is expected to start development in mid-2011. The Project will assist the Ministry in setting up of the MIS system to more effectively manage administration of the Project, monitor compliance of beneficiaries and facilitate the implementation of health and education conditions tied to cash transfers, which are necessary to facilitate investments in human capital. A consultant/ company will be hired to set up the CBR and design the MIS at the start of the Project. This will be funded under Component 2 of the Project. Additionally, staffing of an IT/MIS officer is also planned to ensure the necessary support system to manage the beneficiary database and information system. Hiring of these personnel will be competitive and based on previous best practices in MIS design and implementation for CCTs, including but not limited to the PATH program in Jamaica.

16. Other sources and instruments will complement data generated from the MIS, including: (i) administrative data; (ii) audits; and (iii) impact and process evaluations. These instruments will contribute to overall monitoring and evaluation of the program, facilitating review and assessment both at the beneficiary level and ministry level. Beneficiary satisfaction surveys, a key accountability mechanism, will assess the consolidated program’s performance and implementation based on beneficiaries’ experiences. Such surveys will be an important source of information about service delivery, beneficiary constraints, receiving grants in a timely manner, among others. Audits will also provide the assessment necessary to evaluate the effectiveness of the consolidated program, particularly as it relates to resource allocation. 17. Operational Cycle of the Consolidated Cash Transfer Program: A tentative operational cycle has been developed in consultation with the Technical Committee. This operational cycle illustrates the planned execution of the cash transfer program from application to payment. It illustrates the role of officers within the planned Unit and the MIS system in determining eligibility of applicants. Arrangements for dealing with exclusion from the program, appeals to rejected applications and the role of social workers the review process is also illustrated.

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Figure 3.3: Operational Cycle – Application to First Payment

18. Financial Management: The financial management aspects of the Project would be managed by the PCU currently located within the MOF. The PCU however would work in tandem with the Finance Officer of the MOSD who would be responsible for supplying the budget expenditure data that would be needed for disbursements. The PCU has considerable experience with implementing the financial aspects of World Bank Projects in Grenada. It is currently implementing four Projects, not counting a small Telecommunications and ICT Project and a trust fund which was approved in December 2010 for a Small Farmer Vulnerability Reduction Initiative (P124107). The Technical Assistance Project (P101322) will be closing in October 2011, and the Public Sector Modernization Technical Assistance Credit (P082392) and the Strengthening Personnel Expenditures Management Project (P117873) are scheduled to close in 2012, and the OECS (Grenada) Skills for Inclusive Growth (P095681) is scheduled to close in 2013, for total Bank Group support of just about US$10.7 million. 19. Conclusions of the FM assessments and disbursement arrangements: The assessment covered staffing, budgeting, accounting, financial reporting, auditing, and internal controls. The conclusion of the assessment is that the financial management arrangements in place meet the bank’s minimum requirements under OP/BP10.02. In the past few years the PCU has accumulated significant experience with the implementation of the World Bank-financed projects. It has already established a well-functioning financial management system, and

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following the completion of the action plan proposed in this assessment, it will have in place adequate financial management arrangements, meeting the World Bank fiduciary requirements. The financial management risk of the Project has been assessed at Moderate.

Table 3.1: Financial Management Assessment and Risk Ratings

Risk Rating

Risk Mitigating Measures Residual Risk

INHERENT RISKS Country level Grenada is a middle income country. There are existing country public financial management systems in place, supporting certain level of accountability and internal controls.

M M

Entity level The proposed PCU has experience working with external donor-financed projects. Its performance in the past was satisfactory.

M Arrangements, including Bank capacity-building activities, will be made with the PCU to work closely with the Finance Officer of MOSD for undertaking the financial management aspects of the project.

L

Project level M L OVERALL INHERENT RISK CONTROL RISKS Budget M Disbursement would be based on expenditures which would

serve as an incentive to allocate sufficient resources L

Accounting M Internal Controls

S As the scope, complexity and number of operations managed by the PCU is growing, they need to assure that level of the existing internal controls continues to be adequate. The internal control challenges to be faced under this Project are going to be significant. However these challenges will fall primarily under the purview of the MOSD. A separate Operations Manual is being prepared for the Project that will outline the procedures to be followed. Periodic reviews of the process under the Project will be undertaken by the Internal Review Unit of the Office of the Accountant General

M

Funds flow M The Project will be using the report-based disbursements. The performance of the PCU fiduciary team has been consistently satisfactory in preparing reports, but this would be the first Project to utilize results based disbursements for which additional training has been provided.

L

Financial Reporting S The PCU will assume responsibilities for entering financial information relating to Component 2 directly to the Government’s accounting software (Smart Stream). While this will allow save time and eliminate duplication of work, the Project accountant will need to be adequately trained on how to use the SmartStream to be able to effectively perform her/his duties. This effort should be undertaken in coordination with office of the Accountant General.

L

Auditing M Bank to review TORs and measures L OVERALL CONTROL RISK M RESIDUAL RISK RATING M M-L

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Staffing

20. The financial management function of the PCU is currently being undertaken by three qualified accountants – the Finance Manager and two project accountants. The Finance Manager is a civil servant seconded to the PCU. She is responsible for the financial reporting and overall management of the PCU financial management function. The Finance Manager is a qualified and experienced project accountant. One of the project accountants is an affiliate of the Association of Chartered Certified Accountants (ACCA) and the other is currently at level 3 of the ACCA. Their responsibilities include various supporting tasks as well as financial reporting for their respectively assigned projects. In addition to assisting the World Bank-financed projects alluded to above, the PCU also works with the CDB and EU-financed projects. Given the impending completion of two of the World Bank financed projects, it has been determined that need does not exist for additional staffing on account of the proposed Project. The Finance Unit of the MOSD comprises two staff, a Finance Officer and a Votes Clerk, none of whom is a degree holder or has any significant finance or accounting qualifications. However both officials are experienced in utilizing the public financial management system and preparing budget expenditure reports.

Budgeting

21. The Technical Assistance Component of the Project will be approximately US$0.5 million over the Project implementation period of 3-4years. Ninety percent of the IDA Credit will be used to support Social Safety Net Programs whose funding by IDA would be directly linked to the approved budget for the fiscal year. Project annual budgeting for the Technical Assistance Component will be based on the cost tables and procurement plan, and will be regularly updated in the process of implementation. The annual budgets will be prepared by the MOSD and submitted through the PCU to the Department of Economic Affairs in the MOF. The approved annual budget will then be entered into the accounting system and used for periodic comparison with actual results as part of the interim reporting. The budget for the Social Safety Net Component will be prepared by the MOSD based on the annual instructions and guidelines for the preparation of budgets by Ministries and Departments. The execution of the combined budgets for the three Social Safety Net Programs to be supported under the Project will form the basis of disbursements (see paragraph 31 below).

Accounting System and Records

22. The accounting system for the Project will be bifurcated. The accounting for the Social Safety Net Programs will utilize the Government financial management system (SmartStream) as disbursements for this Component 1 of the Project will be based on a budget line representing expenditures incurred during the reporting period. As SmartStream still does not have sufficient capacity and the chart of accounts would not accommodate the TA Component, accounting for expenditures under the TA Component will utilize QuickBooks. The PCU is presently modifying its QuickBooks set-up to be able undertake the accounting under this Project using QuickBooks. While preparing accounting and financial information, transactions under the TA Component of the Project will be recorded as incurred, and all primary supporting documentation will be maintained to facilitate ex post reviews and the annual external audits. Such documents should

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be maintained for a minimum period of five years. The records with respect to Component 1 will follow the Government of Grenada budget expenditure and documentation procedures.

Internal Controls

23. The Project would support the consolidation of the three cash transfer programs, one currently in MOSD (the Public Assistance Program) and two of them (The Necessitous Fund and School Transportation Allowance Program) in the MOE. The Office of the Director of Audit of Grenada prepared a report on the Public Assistance Program of the MOSD for the period, January 2007 – August 2008. In addition a Review of the Necessitous Fund was undertaken by the Internal Review and Verification Unit of the Office of the Accountant General dated July 29, 2009 and a Review of the School Transportation Allowance Program covering the period January – October, 2010 was undertaken by the Office of the Accountant General dated December 9, 2010. All three reviews revealed severe internal control lapses in the programs and made a number of recommendations for improvement relating to eligibility criteria and allocation policies, documentation and reports, payment procedures and administrative controls. The Finance Officers of the MOE and MOSD as well as the Head of the Finance Unit have agreed to develop an action plan, in consultation with the Audit Department and the Office of the Accountant General, for addressing the recommendations of the three reviews and this plan has been taken into account in designing the policies and procedures of the combined cash transfer programs. The participation of the Audit Department and the Office of the Accountant General enabled these two agencies to be involved in the implementation of documentation and control stages at the design stage. It has been agreed that during the Project, the Internal Review Unit of the Office of the Accountant General will periodically review the expenditures under the budget line to be established and attainment of the milestones and disbursement targets to be agreed under the Project. 24. As part of the preparation of the Project a flow chart of the payment cycle, including documentation and reconciliation aspects, of all the three cash transfer programs was prepared to address the lapses, and redundancy in the current payment and documentation processes. This review facilitated not only the streamlining of the payment procedure, but also facilitated the closing of the existing gaps in the process and the amelioration of the identified deficiencies.

Interim and Annual Reporting

25. The PCU will be responsible for producing the Interim Unaudited Financial Reports (IUFRs) on a per semester basis to be submitted to the Bank. The first semester will cover the period April 1 to September 30 and the second semester will cover the period from October 1 to March 31. The periods for the semesters have been selected to facilitate the verification of the disbursement linked indicators. The IUFRs will provide required expenditure reports and monitoring information, including progress in attaining the milestones and performance targets that would be used for disbursement purposes. The IUFRs will include a narrative outlining the major Project achievements for the semester, the status of the Project milestones and disbursement targets, a detailed analysis of expenditures, Project cash forecast and bank accounts reconciliations. The IUFRs should be submitted to the Bank no later than 45 days after the end of each reporting period.

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26. The annual financial statements of the Project will be consistent in format with the IUFRs. In addition, they will include notes to the financial information and management representation letter. These reports will be prepared by the PCU, with information on Component 1 submitted by MOSD, and made available to the auditors after the end of each fiscal year.

External Audit Arrangements

27. The Audit Department’s work program40 for 2011 entails the review of three Government programs: Department of Youth; Social Safety Net Programs; and Hospitals. Original plans had called for undertaking the review of the Department of Youth first. In light of the tight time constraints to complete the preparation of the proposed Project, it was agreed that the Audit Department undertake the review of the Social Safety Net Programs first. This revision in the work program was particularly important as the most recent review of the Social Safety Net Programs undertaken by the Audit Department covered the period from January 2007 to August 2008. 28. Project financial statements will be audited annually. As in most OECS countries, the Director of Audit is responsible for auditing and reporting on the public accounts of the country, including Projects funded by international organizations, however, the existing (insufficient) capacity of this institution still does not allow for it to be the single external auditor of the Project’s accounts. As such, a private sector audit firm will be hired on a competitive basis. The annual Project financial statements will be audited in accordance with International Standards of Auditing and the World Bank’s guidelines on auditing as stated in the guidelines: Financial Management Practices in World Bank-financed Investment Operations (November 2005). The auditors’ terms of reference (TOR) has been prepared by the PCU and cleared by the World Bank. The TOR requires the audit of financial transactions as well as a review of the internal control mechanisms and Project’s compliance with the requirements of the Credit agreement. To support the Director of Audit office in its effort to improve the current capacity, a provision has been included in the external auditors TOR, requesting participation of one of the Director of Audit staff in the external audit process as an observer. 29. The annual audit report will include an opinion on the Project financial statements, including Designated Account Reconciliation, review of the internal controls, opinion on the Project’s compliance with the terms of the credit agreement, and a management letter. The Project’s annual audit report will be required to be submitted to the World Bank for review no later than four months following the end of the fiscal year (December-January). Following the preparation of the audit, the audited financial statements would be disclosed within Grenada in a manner acceptable to the World Bank. Furthermore, following the World Bank's formal receipt of these statements from the beneficiary, the World Bank would make them available to the public in accordance with The World Bank Policy on Access to Information.

40 The Audit Department prepares an audit of the Statements of Account of the Government of Grenada and then selects a limited number of programs that would be subjected to a detailed review. Unlike most of the Caribbean, it does not attempt to undertake a review of all the programs of all the Ministries every fiscal year. The most recent audit is for FY2008.

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Figure 3.4: Disbursement Arrangements and Flow of Funds

30. Disbursement arrangements under the Project have been designed taking into consideration the verification of the disbursement linked indicators. Disbursements under the Project will be reports-based. There would be different disbursement arrangements for each of the Project’s two Components. 31. Disbursements under Component 1: Disbursements under Component 1 of the Project (Improving Conditional Cash Transfers) will be made twice a year: the first disbursement will be based on the IUFRs documenting expenditures for the semester covering the period of October 1 to March 31 to be submitted by May 15; and the second disbursement will be based on the IUFRs documenting expenditures for the semester covering the period of April 1 to September 30 to be submitted by November 15. The May disbursements will not be linked to any performance milestones. The budget line will be formed from the amalgamation of the country’s three largest cash transfer programs into a single cash transfer program. The Ministry of Finance has prepared a Special Warrant to create a budget line for the program under MOSD and a Reallocation Warrant would be prepared to merge the three Safety Net Programs. The Reallocation Warrant is subject to Parliamentary approval. It has been prepared and approval is expected during the month of May, 2011. Setting the first disbursement in May would enable an assessment to be made of the expenditures that would have been undertaken during the previous fiscal year, even though documentation for the disbursement will straddle fiscal years. Part of the

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disbursements in November would represent the Bank’s on-going support for the SNAP program and thus would not be linked to any performance milestones. The remainder of the disbursements in November would be made subject to the attainment of key performance milestones or targets of technical improvements in the Safety Net Programs. The second disbursements under the Component 1 have been scheduled to occur in November of each implementing year because attainment of some of the milestones and targets would be best assessed only after the end of the academic year in June. The Office of the Accountant General has been designated as the entity to verify that the milestones and disbursement targets would have been met before the November disbursements requests are processed by the Loan Department. Disbursements under Component 1 would be made directly into the Consolidated Fund. 32. The initial disbursement under component 1 will be made in November 2011. The Bank’s disbursements would cover the eligible expenditures made by the Government from April 15, 2011 until September 30, 2011. US$250,000 would be made on the basis of the eligible expenditures and would not be linked to indicators. US$500,000 would be disbursed based on disbursement linked indicators. The entire amount of US$750,000 could be disbursed on the basis of retroactive financing, depending on the signature date of the Financing Agreement. Otherwise, only a pro rata share of the initial disbursement would disbursed on the basis of retroactive financing, with the exact amount of retroactive financing to be determined at the time of the preparation of the withdrawal application. With respect to unmet disbursement linked indicators, if a benchmark is not met by the time agreed with the Government, the amount could be paid in the next withdrawal application with the appropriate evidence documenting achievement of that benchmark. The Government would have one year to comply with any unmet benchmarks or the pro rata share of the Credit earmarked for that benchmark would be cancelled. 33. Disbursements under Component 2: Subsequent disbursements under Component 2 of the Project (Technical Assistance to Improve Implementation Capacity of MOSD) will be made through advances provided through a Designated Account (DA) to be opened in a financial institution selected in consultation with the Bank. Disbursements would be reports-based and would be documented on the basis of Project IUFRs submitted each semester as indicated above. The DA, which will be segregated, will be managed by the PCU on behalf of the MOSD. The PCU will operate a local currency account, to finance Project expenditures in local currency, where funds from the US Dollars Designated Account will be periodically transferred (funds sufficient to cover no more than 30 days worth of expenditures). This account will be operated in accordance with the procedures and guidelines set forth in the Bank’s Disbursement Handbook. As eligible expenditures are incurred, the PCU will withdraw the amount to be financed by IDA from the Designated Account (US$ or EC$) in accordance with the financing percentage agreed. Proceeds of the credit would be disbursed to the US Dollar denominated designated account managed by the PCU following effectiveness.

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34. Direct Payments. The Minimum Application Size for withdrawals directly from credit Account for payment of service providers and suppliers will be communicated to the Recipient in the Disbursement Letter. All withdrawal applications for direct payment will be supported by full documentation.

Financial Management Supervision Arrangements

35. As part of its Project supervision missions, IDA will conduct risk-based financial management supervisions, at appropriate intervals. These will pay particular attention to: (i) Project accounting and internal control systems; (ii) budgeting and financial planning arrangements; (iii) review of the Interim Un-audited Financial Reports; (iv) review of audit reports, including financial statements and remedial actions recommended in the auditor’s Management Letters; (v) disbursement management, status of disbursement linked targets, and financial flows, including counterpart funds, as applicable; and (vi) any incidences of corrupt practices involving Project resources. 36. Proposed supervision interval for this Project is twice a year during the first year of the Project implementation, and once a year thereafter.

Table 3.2: Financial Management Action Plan

# Proposed Action Responsible Party Status 1 Consolidation of 3 Cash Transfer Program to

one budget line MOSD Completed

2 Prepare a Project-specific Chart of Accounts and update QuickBooks

PCU

Completed

3 Develop Plan of Action to address recommendations of the Reviews of Transfer Programs

MOSD, MOE, AG, Audit Office

Agreed; final POA awaiting completion of audit of program in Carriacou

4 Develop Payment Cycles, including documentation and reconciliation processes

MOSD, MOE, AG, Audit Office

Completed

5 Determine that the Milestone and Targets for Disbursements under Component 1

MOSD

Completed

6 Determine the Cost Sharing percentage under Component 1 between IDA and the Government

MOSD, MOF Completed

7 Confirmation of the Government Entity to verify that Milestone and Targets have been attained

MOF

Completed

8 Advise the Bank of the Change of the Audit Department’s work program

Audit Department Completed

9 Prepare the external auditors TOR, ensuring that the auditor general representative is granted access to the Project audit process.

PCU

Completed

10 Hire an external auditor. MOSD RFP under preparation

37. Addressing Capacity Constraints. Two main areas were identified in terms of implementation capacity, namely administrative capacity constraints and financial management constraints. The proposed establishment of a Unit under the MOSD to manage the consolidated

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cash transfer program is a direct response to administrative capacity concerns. Effective monitoring of program compliance meant that support staff would be necessary to aid Social Workers who have a range of responsibilities. District Officers within the Unit will provide administrative and implementation support, allowing Social Workers to provide Case Management and support services needed under the reformed system. The management of the MIS system further highlighted a need to address the Ministry’s information management capacity. The establishment of an MIS officer within the Unit would enable the attention to detail necessary for effective management of the system and support to staff utilizing the system. Financial support from the PCU will be essential with limited staffing in the financial area at the Ministry’s disposal.

38. Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated January 2011; “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011; and the provisions stipulated in the Finance Agreement. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity.

39. Procurement of Works: No works under the Project is foreseen. 40. Procurement of Goods: No goods will be procured using Credit proceeds. Counterpart funds will be used to purchase computers, software, office space, office equipment, and other goods related to the elaboration and implementation of the MIS, CBR, PMT, and IEC campaign. 41. Procurement of non-consulting services (NCS): NCS under this Project would include training logistics, printing documents, etc. These would be financed using counterpart funds. 42. Selection of Consultants: Consulting services will be required for guiding the upgrade of the program and building the capacity of the staff of the MOSD, MOE, and MOH under Component 2. Short lists of consultants for services estimated to cost less than $100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 43. Operating Costs: These will include equipment, rental of office space, utilities, office supplies, and miscellaneous expenses, paid for by counterpart funds.

44. The procurement procedures and standard bidding documents (SBDs) to be used for each procurement method, as well as model contracts for goods procured, are presented in the draft Project Operational Manual that will be finalized during appraisal.

45. Assessment of the agency’s capacity to implement procurement. The procurement assessment for the proposed operation is complete and the PCU, who will be handling fiduciary aspects under the Project, has been rated as Moderate. This rating is based on the assessment

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which found that the PCU has the capacity to administer the procurement for the SNAP Project, but lacks a formal Ethics Guide and grievance mechanism. This is being developed under the country’s new Procurement Act.

Procurement Plan 46. The procurement plan for the first 18 months of Project implementation was agreed between the Borrower and the Bank on April 28, 2011, and is summarized in Table 3.3. The plan will be updated annually. The recommended thresholds for the use of the procurement methods specified in the Financing Agreement are identified in Table 3.4 of this Annex as the basis for the agreed procurement plan. Supervision of procurement will be carried out through prior review supplemented by supervision missions, with post review at least once a year.

Table 3.3: Summary Procurement Plan

Contract Type Description of Contract Estimated Cost (US$)

Procurement Method

Review by Bank (Prior/Post)

Estimated date of award

Consulting Services

MIS Consultant to Develop System (phase 2)

107,135 IC Prior Sept. 2011

Consulting Services

Consultant to develop pilot PMT

53,570 IC Prior Sept. 2011

Consulting Services

Consultant to develop IEC Campaign (phase 2)

53,570 IC Post Jan. 2012

Consulting Services

Consultant to develop Contingency Manual for Emergency Situations

10,000 IC Post Oct. 2011

Consulting Services

Process Evaluation 17,855 IC Post June 2012

Consulting Services

Impact Evaluation 50,000 IC Post Dec. 2012

Works None foreseen at this time Goods None foreseen at this time Consulting Services

Auditor 24,000 LCS Post Dec. 2011

Consulting Services

Project Accountant (PCU)Procurement Officer (PCU)

97,500

83,200

SSS

SSS

Prior Prior

Feb. 2012 Feb. 2012

TOTAL 496,830

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Table 3.4: Thresholds for Procurement Methods and Prior Review

Expenditure Category

Contract Value(Threshold) US $ thousands

ProcurementMethod

Contracts Subject to Prior Review

1. Works >1,500 ICB All

100-1,500 NCB The first contract

<100 Shopping None

Regardless of value Direct Contracting All

2. Goods >150 ICB All

25-150 NCB The first contract

<25 Shopping None

Regardless of value Direct Contracting All

3.Consulting Services

-3.A Firms ≥100 QCBS,QBS,FBS, LCS All

<100 QCBS,QBS,FBS,LCS, and CQS

First contract of each method

Regardless of value Single Source All

-3.B Individuals

Regardless of value Comparison of 3 CVs in accordance with Chapter V of the Guidelines

The first two contracts

Note: ICB = International Competitive Bidding - NCB = National Competitive Bidding QCBS = Quality- and Cost-Based Selection - QBS = Quality-Based Selection FBS = Fixed Budget Selection - LCS = Least-Cost Selection CQS = Selection Based on Consultants' Qualifications

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Annex 4: Operational Risk Assessment Framework (ORAF) Grenada Safety Net Advancement Project

Project Development Objective(s)

The Development Objectives of the Project are to: (i) strengthen the basic architecture of the consolidated Conditional Cash Transfer (CCT) Program and the capacity of the MOSD to implement it; (ii) improve coverage of poor households receiving cash transfers; and (iii) improve education outcomes of poor children and health monitoring of vulnerable households.

PDO Level Results Indicators:

1. Increased percentage of households in the poorest quintile that receive the benefit. 2. Increased percentage of the program transfers that reach the poorest quintile. 3. Increased school attendance rates of children in beneficiary households; and 4. Increased percentage of beneficiaries receiving adequate preventive primary health services.41

Risk Category

Risk Rating

Risk Description Proposed Mitigation Measures

Project Stakeholder Risks

M-I

Decrease in government commitment to reform of cash transfer programs, due to onset of a crisis, or national elections. beneficiaries may resist new payment methods during first phase of roll out. Current beneficiaries may be removed from program after recertification exercise and disrupt roll-out of new CCT program. There may be resistance to improved targeting as it removes discretionary power of politicians.

Project design calibrates disbursements against results achieved by the Borrower. Project will carry out an IEC campaign targeted to beneficiaries and wider society, which will include information on new payment procedures, advantages to program participants in terms of transparency, and benefits to the public in term so of more accurate record-keeping. There will be two IEC campaigns for each phase of the reform of the consolidated cash transfer program. The establishment of an appeals and complaints system will ensure that beneficiaries have a way of registering suggestions and complaints to SEED staff. The use of the PMT will establish a score against which beneficiaries will be deemed eligible. MOSD and MOE staff and social workers believe that this transparency will be respected by Grenadians and will reduce the number of complaints about losing benefits. Difficult cases will be referred to the Appeals Committee which will review complaints about exclusion from the program. Cabinet has approved a PMT which will be developed as part of the Project.

41 Adequate is defined by the protocols established by the Ministry of Health. The MOH has protocols for pregnant and lactating women and children 0-5 years of age. It will develop protocols for children 6-18, and for the elderly prior to the introduction of co-responsibilities for beneficiaries. Protocols for the elderly will be based on whether they suffer from a chronic condition (and which one).

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Risk Category

Risk Rating


Implementing Agency Risks

M-I

A formal Conditional Cash Transfer program is new to the country, and capacity to implement it (in terms of the basic architecture of this type of program and the trained staff to run it) is limited. Customized procurement and financial management arrangements need to be put in place to support the implementation of the CCT as Government has little experience with this type of program. The SEED Program is new and will include some staff already working in the MOSD, but others who will have just been hired. Clarity around roles and responsibilities in the new cash transfers unit is critical to ensuring a smooth roll-out of the SEED Program. Customized procurement and financial management arrangements need to be put in place to support the implementation of the CCT as Government has little experience with this type of program. All transfer programs carry risks of fraud and corruption.

Project design focuses on putting in place a modernized MIS that will generate payment lists and document co-responsibility compliance, as well as adequate FM and procurement arrangements. Along with this, extensive training to relevant personnel will be financed. The PCU in Grenada has been reviewed and determined to have adequate capacity to carry out this program. In addition, a process evaluation is planned under the Project to identify and mitigate bottlenecks to the compliance verification process. Project design focuses on putting in place a modernized MIS that will generate payment lists and document co-responsibility compliance, as well as adequate FM and procurement arrangements. Along with this, extensive training to relevant personnel will be financed. The PCU in Grenada has been reviewed and determined to have adequate capacity to carry out this program. An Operational Manual for the SEED Program has been completed by the TC. The OM includes a description of all the positions within the SEED, as well as the links and processes between SEED, the rest of the MOSD, the MOE, and the MOH. Project design focuses on putting in place a modernized MIS that will generate payment lists and document co-responsibility compliance, as well as adequate FM and procurement arrangements. Along with this, extensive training to relevant personnel will be financed. The PCU in Grenada has been reviewed and determined to have adequate capacity to carry out this program. The use of a PMT will limit the amount of discretion that social workers and others have to add beneficiaries to the list. Spot checks and supervision to the field will be made during implementation to cross check the payment list with those receiving the transfers, and there will be verification that families have complied with the co-responsibilities.

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Risk Category

Risk Rating


Project Risks Design

M-I

The proposed operation is a transformational project in that it formalizes and enforces co-responsibilities, and introduced a proxy means test as an objective, transparent targeting mechanism. It also links disbursements to performance. All of these aspects are new to Grenada, representing fundamental change in the implementation of its flagship social assistance programs. Capacity to manage this change, and the political will to see it through, both described previously, are risks to project success.

Mitigation Measure: MOSD, MOE, and MOH technical staff have been represented in the TC and have been the drivers for the consolidation process. Hence they are familiar with the objectives and design of the consolidated program, and will use that knowledge to train other staff. The TC has already elaborated an OM that details the processes and procedures of the consolidated program. Project design also includes training for MOSD and other relevant staff in the use of the MIS and PMT. In addition, the consolidated program will be rolled out in two phases, as described in the PAD, to ensure that the essential architecture (MIS, OM, trained staff) is in place and functional prior to the full roll out of the program.

Social and Environme‐ntal

No adverse impacts in this area. N/A

Program and Donor

L While every effort has been made to coordinate donor involvement, several other agencies are becoming more involved in social protection –which could lead to duplicative and even contradictory efforts in the sector.

Donors will continue to keep each other appraised of each others’ current work and new initiatives through regular meetings of the OECS Donor Working Group.

Delivery Quality

M-I M-I M-I

Budget allocations/counterpart funding may be insufficient to carry out reform efforts. There is a risk that Government may not have funds to continue the transfer program at the end of the Project. Good data and reliable M&E systems are critical to project success; these are typically weak in Grenada.

The Bank will work with MOF on preparing budget presentations making the case for social safety net improvement. Moreover, the key components of the program (MIS, PMT, etc.) are being financed under the Project. MOF has reiterated its commitment to funding the SEED program and noted that these programs have never suffered cuts in their histories. The establishment of a MIS and an Impact Evaluation are part of Project design. Both will include training for MOSD staff. A process evaluation of the program is also financed under the Credit, which will be used to identify weaknesses/bottlenecks to implementation, including that involving data analysis. Bank implementation support will include specialists in the area of MIS and M&E to provide continued support to strengthening this area and to ensuring that data is of high quality and that appropriate analysis is being carried out.

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Overall Risk Rating at Preparation

Overall Risk Rating During Implementation

Comments

L MI

The Project is the result of two years of dialogue and collaboration between the Bank and Grenada. The Social Safety Net Assessment co-financed by the Bank and UNICEF/UNIFEM (UN Women) identified gaps in the social safety net of the country. The Non-Lending Technical Assistance work provided by the Bank between 2009-2010 built the political consensus to start the reform of the safety net and supported the first steps to do so (namely, the consolidation of the three cash transfer programs). The Bank’s DPL for Grenada provided leverage to further the reform effort, and all three of these led to the proposed operation. Political will to undertake consolidation of cash transfer programs has been strong from the start. The current administration has requested it, and Cabinet has endorsed it through approving the creation of a Steering Committee to oversee social safety net reform; the consolidation of cash transfer programs; the formation of the Technical Committee to manage the consolidation process; and the establishment of a Proxy Means Test. Technical staff within the MOE and MOSD have also supported the consolidation, as have the Permanent Secretaries of both Ministries.

Legend: L - Low M-L - Medium, driven by likelihood

M-I - Medium, driven by impact H - High

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Annex 5: Implementation Support Plan Grenada Safety Net Advancement Project

Strategy and Approach for Implementation Support

1. The Strategy for Implementation Support was developed based on the nature of the proposed Project and its risk profile. It aims to make implementation for the Government of Grenada flexible and efficient, so that the Project Development Objectives are achieved. Furthermore, it focuses on implementing the risk mitigation measures articulated in the Operational Risk Assessment Framework. The following areas and actions have been defined as part of the strategy:

Financial Management: During supervision, the Bank will continuously review the MOSD’s financial management capacity, including but not limited to accounting, reporting, and internal controls to ensure that it is satisfactory to the Bank. The Bank will also hire technical staff to support the MOSD’s existing fiduciary capacity. Because more than half of the Credit is going toward transfers, the Bank will work closely with the MOSD to develop an appropriate mechanism to manage payments and accurately report the distribution of transfers, including ensuring: (i) that only eligible families are paid (those complying with the co-responsibilities); (ii) the verification of receipt of payment; and (iii) the reconciliation of payments.

Role of Partners: The proposed Project foresees no formal co-financing agreements with other donors or organizations at this time; however, it will work closely with UN Women, UNICEF, the OECS Secretariat and other stakeholders to support the MOSD in implementation and possible scaling up of the Project over time. The Bank will continue to work closely with other donors in the sector to ensure that there is harmonized support to the Government of Grenada in advancing improvements in its social safety net. The improvements supported under this Project will help the MOSD leverage other donors’ resources around a consolidated CCT budget line and a technical assistance work plan. Additionally, this coordination will assist with further replication of the model and sharing of best practices from other client countries. Budgetary support to, or co-financing of, the consolidated budget line for a CCT scheme supported under component 1, and contribution to the technical assistance work plan for reforms under component 2, will be important entry points for partners. The Bank will also work with the MOSD to replicate best practices and facilitate knowledge exchange. This will facilitate effective implementation of the Project, and build a model that employs lessons learned from previous experiences in Safety Net Reform, particularly with CCTs.

Implementation Support Plan

2. For the execution of the Implementation Support Plan, the Bank will provide support through virtual communication tools and routine follow-up with the MOSD to ensure timely, efficient, and effective implementation support for the Project. The Bank will also follow up on Project implementation during supervision missions. Detailed inputs from the Bank are outlined below.

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Technical Inputs:

a. Development and implementation of the cash transfers component. During the first 12 months of the Project, the Bank will work closely with the Government to ensure that the fiduciary staff has adequate capacity to manage the cash transfer component during the first phase of implementation. Activities supported under the first year of the Project include: creation of a consolidated cash transfer program and beneficiary registry from three previously separate cash transfers; the development of a mechanism to host a central beneficiary registry; facilitation of payments to beneficiaries; the design of a mechanism to verify receipt of the payment by the correct beneficiary; and the subsequent reconciliation of payments. This phase will also feature recertification of some beneficiaries and changes in payment mechanisms to re-registered beneficiaries. Preparation for the second phase of the Project will also begin in the first 12 months, including development of a mechanism to target and verify qualified applicants; identification of co-responsibilities; and mass re-registration of beneficiaries. The Bank will formally provide intensive technical assistance during the first 12 months to make sure that the processes are well defined and the activities are carried out in a manner acceptable to the Bank. Months 12 and 48 of implementation will begin with implementation of the second phase of the Project, with payment of transfers, verification of co-responsibilities, and exit from the transfer scheme. During this period, the Bank also anticipates monitoring and evaluating the implementation of these activities and processes through bi-annual supervision visits and occasional spot checks.

b. Implementation of the Capacity Building Component. During the first 12 months of the Project, the Bank will provide technical assistance to the MOSD for improving management, coordination, supervision, monitoring and evaluation of the newly consolidated CCT program. In particular, support will be provided to facilitate development of a MIS system, PMT and IEC to ensure public awareness about the consolidated program. From months 12 to 48 of the Project, the Bank will provide capacity building support through assistance to facilitate effective monitoring, evaluation and assessment of the Project through design and implementation of a process evaluation and an impact evaluation.

Fiduciary Requirements and Inputs: During preparation, the Bank identified training needs to strengthen financial management capacity. Therefore, the Bank will work closely with the team during implementation to ensure that monitoring of transfers and co-responsibilities is occurring. Formal supervision of financial management reports will be carried out semiannually, while procurement supervision will be carried out on a timely basis as required.

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Table 5.1: Focus in Terms of Support to Implementation

Time Focus Skills Needed Partner Role 0-12 months

MIS Implementation PMT Design Communications

Campaign Cash Transfers Financial Management

IT / Database Management

PMT Expert Communications

and Public Relations

Financial Management

Ensure staff needs are met and select relevant consultants

Monthly payments of benefits to beneficiaries

Tracking and achievement of DLIs, in accordance with set protocols

Financial Management and procurement

Inputs to project review documents Coordination with partner Ministries

and Agencies 12-48 months

PMT Implementation Cash Transfers Co-responsibilities to

Cash Transfers Case Management Appeals Management Process Evaluation Impact Evaluation Fiduciary Compliance Financial Management

Financial Management

Monitoring and Evaluation

Case Management and Social Work

Monthly payments of benefits to beneficiaries

Detailed program management, support and adjudication

Tracking and achievement of DLIs, in accordance with set protocols

Financial Management Inputs to project review documents Coordination with partner Ministries

and Agencies Assessment, monitoring and evaluation

Other

Table 5.2: Skills Mix Required

Skills Needed Number of Staff Weeks

Number of Trips

Comments

Social Protection 32 8 Relevant expertise includes CCTs, social safety nets, PMTs

Financial Management 10 8 Procurement 10 8

Monitoring and Evaluation 12 3 Two consultancies for process and impact evaluations

MIS/Database Management 12 4 Consultancy Communications 4 1 Consultancy for Information and

Education Campaign

Table 5.3: Partners

Name Institution/Country Role Ministry of Social Development MOSD, Grenada Principal Implementation Agency Ministry of Education MOE, Grenada Supporting Implementation Agency Ministry of Health MOH, Grenada Supporting Implementation Agency Ministry of Finance MOF, Grenada Client Oversight Project Coordination Unit (PCU) GOG, Grenada Financial and Procurement Support

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Annex 6: Team Composition Grenada Safety Net Advancement Project

World Bank staff and consultants who worked on the Project:

Name Role Unit Ludovic Subran Co-Task Team Leader LCSHS Karla McEvoy Co-Task Team Leader LCSHS Laisa Daza Program Assistant LCSHS Asha Williams Social Protection Specialist LCSHS Patricia Bernedo Sr. Program Assistant LCSHS Emmanuel Njomo Sr. Financial Management

Specialist LCSFM

David Warren Sector Leader LCSHD Helena Ribe Sector Manager LCSHS Ana Maria Oviedo Economist LCSHS Camilo Bohorquez Junior Professional Associate LCSHS Amer Hasan Economist LCSPP Maria Beatriz Orlando Sr. Economist LCSPP Erik Alda Social Development Specialist LCSPP Yingwei Wu Sr. Procurement Specialist LCSPT Svetlana Klimenko Sr. Financial Management

Specialist LCSFM

Joseph Kizito Sr. Financial Management Specialist

LCSFM

Evarist Baimu Sr. Counsel LEGAF Edith Mwenda Sr. Counsel LEGLA Miguel-Santiago Oliveira Sr. Finance Officer CTRFC Victor Ordoñez Finance Officer CTRFC Rolande Pryce Sr. Country Officer LCC3C Alan Carroll Country Operations Advisor LCC3C Sally Burningham Operations Advisor LCSDE William Wiseman Peer reviewer AFTSP Lucian Pop Peer reviewer HDNSP Tatiana Proskuryakova Peer reviewer LCC7C

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Annex 7: Economic and Financial Analysis Grenada Safety Net Advancement Project

1. This Annex presents the economic and financial analysis of the Grenada SNAP. It is organized in two sections: the first section provides estimates of the subsequent financial returns from the investment through the transfer function; and the second section looks at the indirect benefits from the SNAP in terms of gains in human capital.

2. Description of different modalities. Here we analyze the effects of different transfer modalities under two targeting quality scenarios on poverty and inequality. The indirect effects on human capital are discussed below. Four different modalities are considered in the table below. Under all modalities eligibility is determined solely on the basis of poverty status, and the transfer amount may vary with the presence of children. In the first modality the household receives EC$200 per month regardless of household size. Under modalities 2 and 3 the base EC$200 transfer is topped by a variable transfer of EC$50 per child (in modality 2 only children 5 to 17 years old are counted; in modality 3 all children 0 to 17 years old are counted, and transfers are subject to co-responsibilities); and modality 4 provides a flat $EC200 transfer plus EC$100 per child 0 to 17 years old.

Table 7.1: Transfer Modalities Flat transfer Children 5-17 years old

(enrolled in school) Children 0-17 years old (enrolled in school if school-age)

Modality 1 EC$200 Modality 2 EC$200 EC$50 per child - Modality 3 EC$200 - EC$50 per child Modality 4 EC$200 - EC$100 per child

3. Targeting scenarios. This analysis considers in a first stage a simple targeting scenario where beneficiaries are only selected according to their poverty status. The first scenario assumes “perfect targeting,” that is, only the 8,000 families with the lowest per capita consumption are selected. The second scenario assumes an inclusion error of 20 percent, that is, 80 percent correspond to poor households and 20 percent are non-poor. We also model these two scenarios under a larger coverage of 10,000 households. Table 7.2 below summarizes them.

Table 7.2: Scenarios for Coverage and Targeting Coverage Targeting Scenario 1 8,000 households Poorest Scenario 2 8,000 households 80% poor, 20% non-poor Scenario 3 10,000 households Poorest Scenario 4 10,000 households 80% poor, 20% non-poor

4. The direct impact of modality 1 transfer would produce a reduction in the poverty headcount of 7.8 percentage points with perfect targeting (under scenario 1) and 5.9 percentage points with an inclusion error of 20 percent (under scenario 2). This modality would also result in a reduction of the Gini coefficient from 0.307 to between 0.285 and 0.289.

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Expanding the coverage to 10,000 would further reduce the poverty headcount by 8.2 percentage points with perfect targeting and 6.6 points with an error of 20 percent. Because most poor families tend to have larger numbers of young children, modalities 2-4 would imply larger transfer amounts per family, hence the results on poverty reduction are significantly larger for those modalities. Indeed, poverty could fall by as much as 19 percentage points under modality 4 with 10,000 families covered and under a perfect targeting scenario. In addition, the Gini coefficient could fall to 0.266 in the best-case scenario. Looking at the costs implied by each of the modalities and scenarios, we find that each million spent in the program would reduce the poverty headcount by about 0.36 percentage points.

Table 7.3: Expected Impact of Modalities 1-4 under Scenarios 1-4

FGT(0): headcount

ratio (proportion

poor)

Percentage point

change in FGT(0)

FGT(1): average

normalised poverty

gap

FGT(2): average squared

normalised poverty

gap Gini

Average annual cost

per HH Total cost

(EC$)

Expected impact of Modality 1 (flat EC$200)

Scenario 1 0.299 7.8 0.072 0.027 0.285 2,400 19,200,000 Scenario 2 0.318 5.9 0.079 0.031 0.289 2,400 19,200,000 Scenario 3 0.295 8.2 0.071 0.026 0.283 2,400 24,000,000 Scenario 4 0.311 6.6 0.078 0.030 0.287 2,400 24,000,000

Expected impact of Modality 2 (EC$200 plus EC$50 per child 5-17)





Scenario 1 0.190 18.7 0.038 0.012 0.268 5,479 43,829,000 Scenario 2 0.224 15.3 0.051 0.018 0.276 5,090 40,721,032 Scenario 3 0.186 19.1 0.037 0.011 0.266 5,290 52,902,170

Scenario 4 0.226 15.1 0.050 0.017 0.274 4,848 48,480,230

5. Financial returns. To perform the cost-benefit analysis we do the following exercise. First, we estimate an earnings equation where the explanatory variables are education, experience (age), gender, sector of activity, and parish.42 To measure educational attainment we create three dummy variables, one for primary completion or less, one for more than primary completion and up to (and including) secondary completion, and one for more than secondary. Table 7.4 reports the regression results (coefficients for parish and sector are not reported). We

42 Because of problems in the reported earnings variable, we use average consumption as a proxy of earnings. Therefore we estimate this equation only for household heads who are employed.

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find that an individual with secondary or less earns on average 24 percent more than an individual with primary or less, and an individual with more than secondary earns 61 percent more. These coefficients provide the basis for calculating the expected gains from increasing enrollment and completion of secondary education for children in poor families in Grenada.

Table 7.4: Earnings Premia for Different Education Levels

Dependent variable: (log) average consumption per capita in household

Sample: employed household heads

Coefficient

Male 0.1443

Age -0.0182

Age squared 0.0002

Less than secondary (more than primary) 0.2402

More than secondary 0.6147

Number of observations = 13,287

R-squared = 0.2558

Notes: Additional controls include sector of activity and parish.

All coefficients are significant at the 1% level.

Source: Authors’ calculations using CPA (2008).

6. We find large potential private benefits of the program. Out of this total 5,941 children are between 13 and 17 years old, and therefore are (assumed to be) enrolled in secondary education. Approximately 14,643 children would benefit from the transfers. If these children were not to complete secondary education, their average income (lower bound) would be EC$643 per month; in contrast, if they were to complete secondary, they would earn on average EC$837. Hence, the aggregate additional income from shifting this group of beneficiaries to complete secondary would be approximately EC$13.8 million per year. To have an idea of the net present value of the lifetime gains, we assume that individuals in this group will have a productive life of 40 years and we use a discount rate if 5 percent per year. The aggregate net present gains are then around EC$78.6 million for this group. We compute the aggregate cost of the per-child transfers for this group by assuming that the program will support these children for the remaining years of school for each child, and by adding an annual interest rate of 5 percent, resulting in a total cost of EC$12.8 million for the per-child transfers of this group, resulting in a net present benefit of the program of about EC$65.8 million.43 Note that these calculations do not include additional economic gains to the country from poverty reduction and from improvements in public management efficiency.

43 We do not include potential additional transfers that may take place due to grade repetition.

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7. Assuming that the program continues to cover all children who are currently 5-12 years old, the potential economic gains are much larger. For this group of children (8,498 in total) the baseline average income if they don’t complete primary would be EC$581, barely above the minimum wage. If they were to complete secondary, on the other hand, they would in the aggregate earn about EC$32.4 million more per year, or EC$184.6 million over their lifetime. Given that the per-child transfer cost would amount to EC$91.8 million, the net economic gains for this group would equal EC$92.8 million.

Table 7.5: Net Private Gains from Higher Educational Attainment and Program Returns Children 13-17 years old 5,941

Average income without complete secondary education (baseline) - monthly 643

Aggregate baseline income (monthly) 3,817,774

Aggregate income if all [13-17] beneficiaries graduate from secondary 4,971,439

Social benefit (monthly) 1,153,665

Social benefit (annual) 13,843,978

Net present additional income (over 40-yr productive lifetime) 78,659,093

Net present total cost of program for this group (only the per-child benefit) 12,863,387

Net present benefit 65,795,706

Children 5-12 years old 8,498

Average income without complete primary education (baseline) - monthly 518

Aggregate baseline income (monthly) 4,403,984

Aggregate income if all [5-12] beneficiaries graduate from secondary 7,111,141

Social benefit (monthly) 2,707,157

Social benefit (annual) 32,485,885

Net present benefit (over 40-yr productive lifetime) 184,579,188

Net present total cost of program for this group (only the per-child benefit) 91,756,819

Net present benefit 92,822,370

Total annual transfers (including all children and flat household benefits) 27,955,160

Total transfers over 5 years 178,393,276

WB project funding 13,500,000

WB share of total transfers 7.6%

8. Benefits of consolidation and improved delivery capacity include lower operating costs and increased legitimacy. With the improved operational cycle supported by the Project, the program will gain in overall delivery (mainstreaming procedures), transparency and accountability for Grenada’s flagship social program, though cannot be quantified.

9. International evidence on human capital effects of conditional cash transfer programs. After the introduction of the conditional cash transfer programs in Mexico and Brazil in the 1990s, which were evaluated rigorously through pilot stage, CCTs have spread rapidly; currently about 33 developing countries operate some form of conditional cash transfer programs (Bassett 2008). Most of the CCTs have been implemented in middle-income countries where the

76

supply of services is adequate (i.e. enough schools, health clinics etc.) while demand may be constrained. There is a large literature, based on robust impact evaluations, which show that well designed CCT programs have significant impacts on poverty and human development outcomes especially for children (Fiszbein, Schady et al, 2009). The most significant impact can be seen in the areas of school attendance rates and enrollment with less clear impacts on health outcomes.

10. Even in low-income countries, there is growing evidence of significant effects of CCT programs on schooling and health of beneficiary families.44 The expenditure patterns for these cases show that in addition to spending on basic necessities (90 percent) households also spent on health and education. The proportion spent on education indicates that the transfers helped parents afford education for their children. The increased expenditures on food in all countries may have an indirect effect on schooling via nutrition and health improvements.

44 See for instance Deveraux et al. (2005) and Duflo (2003) for African countries and Martinez (2005) for Bolivia.

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Annex 8: Mainstreaming the Boys at Risk Initiative in Grenada’s Safety Net Grenada Safety Net Advancement Project

1. Analytical work by the World Bank on youth at risk in Latin America and the Caribbean shows that early drop-out and underperformance in school are behaviors that directly increase the risk of negative outcomes and engagement in other risky behaviors.45 There is a clear gender dimension to the problems of at-risk youth, since young boys and young girls tend to engage differently in different kinds of risky behaviors.46 This implies that programs and policies need to be designed and implemented with approaches and tools to effectively reach and benefit both girls and boys.

2. In the Caribbean, the school drop-out rate tends to be higher for boys than for girls: e.g. in Suriname, the ratio of female to male enrollment in secondary education was 138.9 in 2007, up from 116.3 in 2000. The Dominican Republic is another example with a 120 ratio of female to male enrollment in secondary education in 2006. While the regional average for Latin America and the Caribbean is 107.3, with much higher number for the Caribbean countries in general, the average for sub-Saharan Africa is 80.3, and for the Middle East and North Africa it is 91.5.47

3. It is in this context, that the World Bank is focusing on boys at risk in the OECS to help tackle development challenges such as school drop-out, crime and violence, male marginalization, and access to labor markets.48 The Boys at Risk initiative seeks to enhance local capacity for M&E of interventions working with at risk youth. It also proposes to evaluate prototypical interventions in the region to add to the evidence base for policy-makers. A scoping mission revealed that while there are a number of well-meaning and well-run interventions focused on boys at risk in the region, there is a great deal of ambiguity surrounding the eligibility and targeting criteria of these interventions. It also appears, that while interventions seek to achieve behavioral changes there is little capacity (or data) to monitor and evaluate beneficiary outcomes.

Gender Gaps in Grenada and Boys at Risk

4. Gender issues in Grenada seem to differ considerably by age group. A UNDP study using the CWIQ 2005 survey found that adult women and men share parity in current literacy rates at nearly 97 percent. However, adult women heads of large households are particularly vulnerable to poverty, mainly due to the burden of care provision for young children and elderly household members. The study concludes that it is crucial to take into account differential socio-economic

45 World Bank, 2005. Children and Youth a Framework for action. Washington, DC. The World Bank. 46 World Health Organization, 2008. Programming for Adolescent Health and Development Association for Young People’s Health. London. 47 Cunningham et al. 2008. Youth at Risk in Latin America and the Caribbean. Washington, DC. The World Bank. 48 The Bank is working with several partners on this front including Commonwealth Secretariat. Currently, the program for the OECS is funded through a Bank of Netherlands (BNPP) Trust Fund. For more information on Boys at Risk initiatives click on www.worldbank.org/lacgender.

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conditions, gender roles and needs of the sexes, so as to facilitate gender-appropriate interventions to meet and surpass the MDGs.49

5. On the other hand, younger cohorts, in particular adolescents, show a slight gender gap on school achievement, favoring girls. A recent UNICEF study, finds that the majority of adolescents who have finished secondary school are female.50 However, secondary completion shows a different pattern than grade by grade drop- out rates. The Figures below present the proportion of children of the cohort 10 to 19 year olds who have completed each grade until grade 12. The results of the survival analysis show that almost all 10 to 19 year olds have completed first and second grade. However, the proportion of students who complete 3 or more years of education progressively declines until reaching eight grade where only 53 percent of the 10 to 19 year olds cohort finishes eight grade (see Figure 8.1).

Figure 8.1: Cohort Grade Survival Analysis for 10 to 19 year olds

Figure 8.2: Cohort Grade Survival Analysis (by gender)

Figure 8.3: Cohort Grade Survival Analysis (by economic status quintile)

Source: Author’s calculations using 2008 Grenada’s CWIQ survey. 49 UNDP, 2006. Gender Dimensions of Socio Economic Conditions in Grenada. 50 UNICEF, 2008. The Missing Generation: A Situational Analysis of Adolescents (10-14) in the Caribbean Community.

0.1

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6. When data are disaggregated by gender there are virtually no differences in grade completion between boys and girls grade by grade (see Figure 8.2). Although grade completion is marginally higher for girls than for boys this difference is not statistically significant. This is a somewhat surprising result given that in the Caribbean the levels of underperformance seem to be higher for boys than for girls and in Grenada, completion of full secondary school is higher for girls. Thus, there may be issues regarding completing secondary school certification exams that affect boys and girls differently.

7. Differences in grade completion are significant when data are disaggregated by income quintiles of economic status. Whereas 70 percent of the 10 to 19 year olds from the highest quintile complete 8th grade only around 43 percent of the lower quintile completes the same grade. The analysis shows that the differences in grade completion between economic status quintiles become more evident as of 4th grade where the proportion of students from lower quintiles who do not complete a grade is higher than for the highest quintile. This gap continues to grow until grade eight and higher.

8. Based on the stylized facts above, further analysis is needed to examine gender gaps in school achievement by income level and other risk factors. In addition, further analysis is needed to understand the risks and opportunities that both boys and girls who are school drop-outs face in Grenada.

Options for addressing boys at risk issues through Grenada's CCT

9. According to the Bank’s analytical work, school drop-out is the single most influential risk factor for youth. Thus, the main policy recommendation from the Bank’s youth at risk framework is to keep children in school until they have completed secondary school. This recommendation includes, providing financial incentives to young boys and their families to promote staying until secondary school.51 In the context of the Grenada’s CCT program, the Bank will fully explore this option as well as the effectiveness of non-financial incentives to keep both boys and girls in school.

10. The first tool that the Bank will use jointly with our Government counterparts is high-quality targeting to reach the most at-risk youth. A second tool to be explored is higher transfers in situations where children and youth are most at risk: for boys, violent behavior and early school leaving in some countries. In the specific case of Grenada, and based on the section above, it will be key to emphasize program implementation during transition periods, more concretely when young students are moving up from 7th grade to 8th grade and in the process of secondary school certification exams. Program options could include increased resources for schools focused on making transitions easier and/or coordinating with accompaniment programs (health centers, sports center, community youth programs, and other complementary services).

11. To that end, mainstreaming the boys at risk initiative under the Grenada SNAP operation Could involve the following support:

51 Cunningham et al. 2008. Supporting Youth at Risk: A Policy Toolkit for Middle-Income Countries. Washington, DC. The World Bank.

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a. Provide technical assistance to the design and implementation of the CCT roll-out. The technical assistance will be centered on the development of a means-test aimed at identifying not only the correlates of risk but also various dimensions of what constitutes risk for boys and girls in Grenada.

b. Facilitate the collection of baseline data for an impact evaluation. To this end instruments that collect relevant and gender disaggregated information on potential beneficiaries of the CCT and their socio-economic outcomes of interest are currently being developed. The ideal impact evaluation will have a randomized design with baseline data being collected before transfers are disbursed. However, in the event that such a design is deemed infeasible by counterparts, the means-test can be used to develop a regression-discontinuity design for the evaluation. Furthermore, an information campaign can be designed alongside the CCT intervention to allow for an impact evaluation of the provision of a CCT coupled with information about the effects of risky behavior on youth in Grenada.

c. Develop a sustainable M&E system for the CCT program and other related interventions. A number of the programs working with boys at risk would like to implement a system for M&E but lack the technical capacity to do so. A by-product of the instruments developed for baseline data collection and tracking of CCT beneficiaries would be to have the basis of a standardized beneficiary intake form for these programs.

Developing a Risk Assessment Tool for the At-Risk

12. Proxy means tests have long been used to identify beneficiaries. In their simplest form, PMTs assign weights to a number of observable characteristics that are correlated with poverty. We propose an extension of this approach in the context of at risk boys.

13. Consider the example of dropping out of school. The analysis of household survey data can guide the initial selection of observable factors correlated with dropout. Piloting of the test on the ground can help bridge the gap between theory and realities on the ground. Review and comments by social workers will be imperative in ensuring that such a means test is not merely an academic exercise but is well grounded in field realities. The inputs of the social workers will also be useful to inform whether the means-test needs to be different for boys and for girls.

14. While the example presented above is for drop out, similar approaches could be used for attendance and other outcomes typically associated with at risk youth.

15. A means-test such as this can form the basis of M&E of interventions focused on at risk populations. It can help programs identify beneficiaries and it can help analysts identify comparable individuals in the population against whom to compare the effects of the programs.

Designing an Impact Evaluation

16. Experience suggests that the ideal impact evaluation of a CCT which also focuses on at-risk youth would have a randomized design. However, experience also suggests that this is not always feasible. To that end, the development of the means-test would be an important feature of a non-randomized evaluation. Further, randomized components could be added to an impact

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evaluation of the CCT by way of an informational intervention. Such an intervention would serve two objectives:

a. Provide evidence of the impacts of risky behaviors to parents, teachers and children (in and out of school). If implemented as a randomized control trial, the provision of such information could be a low cost intervention that could be combined with on-going programs and help in evaluating them.

b. Focus the debate among key actors on structural shortcomings of educational and social policies when it comes to boys at risk.

17. Developing a means test for boys at risk and measuring the effectiveness and usefulness of wide-ranging interventions will require building partnerships with a number of stakeholders. These range from but are not limited to civil society, government line ministries, local statistical authorities and the beneficiaries themselves.

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This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

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Documents

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