US$ 2,637,792 (US$211,800 has been pre-financed by the PSF Main Fund as a bridge financing for the top-up proposal)

Transcription

1 Field Operations and Governance and Fiduciary Support Quarterly Progress Report: April to June, 2013 Summary Information Status Activity Number Task Team Leader(s) Executing Agency(ies) Start date to Closing Date Geographic Coverage Active P (TF010808) Sentot Surya Satria PSF 26 September 2011 to 31 December 2013 (27 months) National Approved Budget US$ 2,530,000 Disbursements during the Quarter Cumulative Disbursements US$ 318,738 US$ 2,637,792 (US$211,800 has been pre-financed by the PSF Main Fund as a bridge financing for the top-up proposal) Progress Project Overview: The massive scale up of PNPM Mandiri since its establishment as a mainstream, nationwide program has increased the need for oversight and action by multiple stakeholders, but also put strain on the program s management and governance frameworks. The PSF provides additional supervision and reporting support to the Government of Indonesia (GOI) to strengthen the management and oversight systems of PNPM core and special programs and thus ensure full supervision coverage. A number of trust funds and teams contribute this objective. A dedicated team of Field Analysts was created in January 2010 to provide portfolio-wide implementation assistance and engage with local level project stakeholders. Its field-level analyses are aggregated to assist PNPM s oversight bodies, implementing agencies and development partners in identifying areas for strengthening and opportunities for pilot development. Organizationally, the Field Team works closely with the PSF s Governance and Fiduciary Team, which is funded through the same Field Operations and Governance and Fiduciary Support Trust Fund. The Fiduciary team routinely assesses the robustness of PNPM s formal and informal controls, supports the GOI in resolving complaints and corruption cases and

2 produces in-depth analyses on the program s governance framework to propose continuous improvements. 1 The Trust Fund also co-finances or provides field-level support for numerous thematic reviews led by other PSF teams on aspects of fundamental importance to the program s performance (e.g., local government integration, quality of infrastructure, revolving loan funds etc.), which complement the findings of routine supervision. The supervision and study findings are analyzed together with program stakeholders and translated into action plans and a program of follow-up technical assistance and implementation support. Overall progress towards development objective: The Project contributes to ensuring full supervision coverage of PNPM-Mandiri programs. This quarter alone, the Field Operation Analyst and Fiduciary teams covered 26 provinces, 48 districts, 95 sub-districts and 130 villages and visited 198 subprojects. The selection of supervised locations is prioritized on the basis of established risk factors. 2 The project continues to put special emphasis on involving local governments in field supervision and systems analyses to ensure their ownership over program improvement plans. This approach has paid off, with local governments having effectively delivered hundreds of corrective actions. Supervision findings are complemented by in-depth studies and thematic reviews on specific aspects of program governance and implementation performance. This trust fund has to date financed or co-financed exercises and reviews on a varied range of issues, including safeguards, gender inclusiveness, post-disaster and fiduciary. The findings and recommendations are analyzed together with national and regional stakeholders and translated into action plans and a program of follow-up technical assistance and implementation support. For example, the team has continued to provide technical assistance to PMD to overhaul PNPM Rural s complaints-handling system, which is now fully functional and web-based. The Technical Assistance project has also provided support to develop and update the SOPs of PNPM Rural and Generasi on internal audits, program guidelines and the revision of of PNPM Rural's technical operations. The team also has provided technical assistance to Pokja to develop a Risk Management frame work, too cold anti-corruption awareness activities attended by senior GOI officers, representatives of political parties, NGOs, legal aid services, community and mass media. The team has also provided technical assistance to TNP2K prepared the Road Map of Community Development program, particularly in the context of the integration of community development programs, governance and fiduciary agendas. This collaborative approach, based on knowledge gained through Field operations, has helped strengthen project oversight, fiduciary controls and the implementation of safeguards. Key developments during the quarter: This quarter, supervision was mostly conducted in districts and sub-districts that were not visited last quarter. Field visits covered a significant proportion of the PNPM portfolio, including: PNPM-Rural, PNPM-Generasi, PNPM-Respek, PNPM-IFAD, PNPM-Integrasi, PNPM Post Disaster, PNPM Peduli and PNPM BKPG in Aceh and other special programs, such as PAWE, the Barefoot Engineers program and others. A number of positive developments have been noted, including the following: In total, 287 new corrective actions or actions carried over from previous quarter have been agreed upon portfolio-wide. Of these, 42 % of have been completed, while the remaining 58% 1 Both teams coordinate their work with the PNPM Rural Implementation Support team, which provides national-level oversight and thematic reviews and engages in higher level policy dialogue with PNPM-Rural s implementing agency (PMD). 2 E.g. high disbursement, multiple block grants, high turn-over, remote areas etc.

3 are currently in process. Most of the actions are intended to improve Project Management and to strengthen the Fiduciary System. Some actions were delayed, as they rely on PMD actions to address project management issues (vacant positions and recruitment, provision of trainings, delay of facilitators and consultants salary and operational, etc.) and fiduciary issues, and on law enforcement agencies to sanction fraud cases; The PTO of PNPM Rural has been revised to incorporate operational recommendations and to integrate these recommendations with district government development planning processes; Provincial Consultants Empty positions have been filled, as have many facilitators positions; PNPM IFAD has reviewed results and agreed with PMD that PMD will take responsibility for 13 corrective actions in the areas of management and coordination, partnership with other programs, and improving the quality of facilitation and financial management system; There has been no significant impact as a result of environment safeguard issues. In many places, environmental and social aspects of the integrated into fed into 'one village' one planning' documents ( RPJMDes); A Governance Update has been issued to all JMC members; A Final MIS Blueprint for Rural has been made available. An IT Firm has been selected to develop the system; Workshops and discussions on issues related to the Roadmap have been conducted, with specific reference to the integration of community development programs, KPIs, Governance and fiduciary controls; The results of the 'Learning on Livelihood program' Program in South India have been shared with TNP2K and Pokja; Pokja has been assisted in the development of the Risk Management Framework for PNPM; Pokja has been assisted in the holding of anti-corruption awareness activities attended by senior GOI officers, representatives of political parties, NGOs, legal aids, community and mass media; Improvement in the complaints and case reporting systems have resulted in a higher number of complaints and cases being detected. This shows a high level of community participation in program oversight and good oversight by facilitators; The SOP for Generasi s Internal Audit has been revised to strengthen the process and to better control mitigation of fiduciary risks. Critical challenges: Despite these positive developments, supervision and implementation reviews show that the performance of PNPM Mandiri programs continues to face a number of constraints, including the following: Delays in the DIPA revision of PMD due to a delay in the DIPA revision process by non-pnpm units in PMD and a new system at MoF caused delays to the payment of salaries and operational allowances for facilitators for 3-4 months. This resulted in poor facilitation and supervision by facilitators at the district and sub-district levels during Apr-Jun 2013; PMD's slow approval of the Consultants' workplan caused a delay in actions to address the implementation issues and weakened the supervision and oversight system;

4 Poor performance of PT Macon (the firm managing RMC IV, which covers the most and the best locations, including DI Yogya, Central Java, East Java and Bali) resulted in weakened oversight and management of program at the field level. It also resulted in delays in reporting. PMD has terminated Macon's contract and shifted the management of RMC IV to other firms, who need time to adjust to the project; Missions continue to observe an increasing number of cases of misused funds. PMD is still responding too slowly to these received reports of fraud and/or misuse of funds; That has been a lack of technical assistance from NMC and RMC to support the overall field implementation, administration compliance focus and a top down approach. Activities planned during the next quarter: Continued joint field supervision and support based on risk assessment; Stock taking mission on the thematic issues, including the integration of PMPM programs, RLF, Livelihoods, etc.; Continued support for the Road Map agendas; Stakeholders workshop for Papua and West Papua; Finalization of the Risk Management Framework and Guidance for PNPM; Implementation support mission for RETFs, Generasi and Peduli; Thematic mission on RLF, Governance, Case Resolution; Review on Consultant ASF Firms performance; The provision of support to the PMD in the procurement of Consultants Firms (NMC and RMC), with the contract of current firms expiring in Feb 2014; The provision of support to PMD to transform the Early Warning System into an applicable Control Self-Assessment; The provision of support to PMD to implement a web-based CHS and Disbursement application; The provision of support to PMD to develop the MIS; The provision of assistance to PMD to address issues constraining the implementation of the MIS and to improve current MIS/database/reporting systems.

5 Key Performance Indicators Indicator Baseline Cumulative Target (to 2014) 3 Cumulative Achievements VAR Target for 2013 Achieved 2013 in VAR Remarks Project Development Objective: To respond to the increased need for oversight and action by multiple stakeholders under a scaled up program, while building government capacity to undertake integrated, risk-based supervision in support of its priority objectives # of corrective actions delivered -- 1, (or 63 % of 1525 in action plans) ( 43) delivered (out of 404 agreed) (+37) On track. # of meetings/workshops to discuss systemic implementation issues at national and regional levels (125 ) (24) On track. Component 1: Field supervision of overall implementation performance, inc. fiduciary, procurement and governance # of provinces, districts, sub-districts visited at least once during the year -- Each year 32 Provinces 150 District 300 Sub-districts In 2012: 32 Provinces 241 Districts 445 Sub-districts Over target last year 32 Provinces 150 District 300 Sub- 32 Provinces 108 District 191 Subdistricts (0) (42) (108) On track 3 Original targets have all been revised upward to account for the extension of the PSF to December 2014, as well as higher output levels than initially anticipated. These targets are not fully financed, however, their realization in 2013/4 would require additional financing.

6 districts # of joint-supervision missions involving GOI/LG # of thematic reviews (53) (10) On track (2) 3 1 (2) Component 2: TA and follow-up on systemic issues to strengthen management systems and capacity # of action plans/program quality improvement plans -- As needed 73 n/a As needed 8 n/a Web-based project performance management platform -- Fully functional by January 2013 Testing completed; improvement ongoing Two-month delay Redesign, testing and running Testing and improvement completed; Twomonth delay Delays because the platform needs to be further simplified # and type of sanctions applied as a result of findings (e.g. suspension of payments etc.) -- As needed Suspension of 2 districts & 30 subdistricts n/a As needed Suspension of 1 districts& 31 sub-districts n/a # and type of SOPs/Guidelines etc. revised with inputs from field supervision (1) 4 5 (+1) On track

7 GOI web-based complaints handling overhauled -- Fully functional by January 2013 CHS functional fully On target Up & running CHS up and y running On target Component 3: Stakeholder involvement in field supervision and governance and anti-corruption efforts. # and type field visit with Local Legislature, NGOs, CSOs, Media, University, # Regional Workshop with Local Government, Local Legislature, NGOs, CSOs, Media, University etc # and type of cross visit/comparative study (16) 4 0 (4) (4) 4 9 (+5) (16) 4 0 (4) Terms of Reference and planning are still being discussed with stakeholders Awaiting PMD s confirmation, particularly of cost-sharing arrangements