World Bank Documentdocuments.worldbank.org/curated/en/100101468263079015/pdf/multi-page.pdf · introduction of a Financial Management Information System (FMIS) to support the budgeting,

Document of

The World Bank

FOR OFFICLAL USE ONLY

Report No. 18742

IMPLEMENTATION COMPLETION REPORT

Jamaica

Financial and Program Management Improvement Project(Loan No. 3386-JM)

December 23, 1998

Public Sector Management (LCSPR)Poverty Reduction and Economic Management Sector Management UnitLatin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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CURRENCY EQUIVALENTSCurrency Unit: Jamaican Dollar (J$)

US$1 = J$35.7 (Oct. 1998)J$1 = US$0.0266 (Oct. 1998)

Fiscal YearApril 1 - March 31

LIST OF ACRONYMS AND ABBREVIATIONS

AGD Accountant General's DepartmentARP Administrative Reform ProgrammeASC Administrative Staff CollegeCAS Country Assistance StrategyCAST College of Arts, Science and TechnologyCPs Corporate PlansEFU Extemal Finance Unit (MOF)FACT Financial and Accounting College of TrainingFMIS Financial Management Information SystemFPMIP Financial and Program Management Improvement ProjectFPMU Fiscal Policy Management Unit (MOF)FSL Fiscal Services LimitedGOJ Government of JamaicaHRMIS Human Resources Management Information SystemIMCAR Inter-Ministerial Committee for Administrative ReformMDD Management Development Division of the Cabinet OfficeMIND Management Institute for National DevelopmentMOF Ministry of Finance and PlanningMPS Ministry of Public ServiceNIBJ National Investment Bank of JamaicaODA British Overseas Development AgencyOPM Office of the Prime MinisterOPs Operational PlansOSC Office of the Services CommissionPAMCo Project Analysis and Monitoring CompanyPB Program BudgetPE Public EnterprisePESAL Public Enterprise Sector Adjustment LoanPIOJ Planning Institute of JamaicaPIP Performance Improvement ProgramPMT Professional, Managerial, Technical PersonnelPS Permanent SecretaryPSC Public Service CommnissionPSIP Public Sector Investment ProgramPSMP Public Sector Management ProjectRDBMS Relational Data Base Management SystemSAL Structural Adjustment LoanSAP Structural Adjustment ProgramSBs Statutory BodiesTAL II Second Technical Assistance LoanTAXARP Tax Admninistration Reform Project

Vice President: Shahid Javed BurkiDirector SMU: Guillermo PerryDirector CMU: Orsalia KalantzopoulosResponsible Staff:Task Manager: Jit Gill

FOR OFFICIAL USE ONLY

IMPLEMENTATION COMPLETION REPORTJAMAICA

FINANCIAL AND PROGRAM MANAGEMENT IMPROVEMENT PROJECT(LOAN 3386-JM)

TABLE OF CONTENTS

PREFACE....................................................................................................................EVALUATION SUMMARY ...............................

PART I: PROJECT IMPLEMENTATION ASSESsMENT...................................1

A. Introduction/Background ............................. 1.B. Statement/evaluation Objectives ............................. 2C. Achievement of Objectives ........................... 2D. Major Factors Affecting the Project ......................... .. 8E. Project Sustainability ............................. 9F. Bank Performance ........................... 10G. Borrower Performance ............................ 11H. Assessment of Outcome ............................ 111. Future Operations ........................... 12J. Key Lessons Learned/Reconfirmed ........................... 14

PART II: STATISTICAL TABLES ........................... 16

Table 1.: Summary of Assessment ........................... 17Table 2: Related Bank Loans/Credit ........................... 19Table 3: Project Timetable ........................... 21Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual ................... 21Table 5: Key Indicators for Project Implementation ...................................................... 22Table 6: Key Indicators for Project Operation ....................................................... 22Table 7. Studies Included in Project ....................................................... 23Table 8: Project Financing ....................................................... 23Table 9: Economic Costs and Benefits ............................................. 23Table 10: Status of Legal Covenants .............................................. 24Table 11: Compliance with Operational Manual Statements . ........................................ 28Table 12: Bank Resources: Staff Inputs ............................................. 28Table 13: Bank Resources: Missions .............................................. 28

APPENDIX A: AIDE MEMOIRE ............................................. 30

APPENDIX B: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ........ 77

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization

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FINANCIAL AND PROGRAM MANAGEMENT IMPROVEMENT PROJECT(LOAN 3386-JM)

PREFACE

This is the Implementation Completion Report (ICR) for the Financial and ProgramManagement Improvement Project (FPMIP) in Jamaica, for which Loan 3386-JM in theamount of US$11.5 million equivalent was approved on June 27, 1991 and made effectiveon September 17, 1991.

The closing date of the loan was June 30, 1998 with a four month grace period endingon October 31, 1998. As of November 30, 1998 the value of the loan was US$11.5 millionof which US$11.49 million had been disbursed.

The ICR was prepared by Rita Parrilli, Senior Public Sector Management Specialist,Operations Support Unit of the Latin America and Caribbean Region (LCR) with supportfrom Jit Gill, Task Manager, LCSPR and Ali Hashim, ECSPE. It was reviewed by theCaribbean Country Management Unit (CMU).

Preparation of this ICR was begun during the Bank's final supervision/completionmission, June 8 to 12, 1998. It is based on material in the project file and discussions withthe Government and FPMIP financed consultants. The borrower has reviewed the Bank'sportion of the ICR and their evaluation of the project is attached as Appendix B.

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FINANCIAL AND PROGRAM MANAGEMENT IMPROVEMENT PROJECT(LOAN3386-JM)

Evaluation Summary

Introduction. In the late 1 970s and 1 980s many qualified staff left the civil service formore lucrative jobs in the private sector and abroad. The quality of services to the publicdeteriorated. Centralized structures, outdated systems, and cumbersome procedures sloweddown decision-making and program implementation, and the management of human andfinancial resources was adversely affected. The Bank supported the Government's structuraladjustment program in the 1980s through a series of Structural Adjustment Loans (SALs)which included an action program in public administration reform. This program wassupported by the Bank's Public Administration Reform Project (ARP 1), which was one ofthe first Bank projects whose aim was to improve central human resource and financialmanagement systems and procedures in an integrated way. The project was overly ambitiousgiven its four year time-frame, and was not successful for the most part in creating sustainedimprovements, due largely to changes in the government's and the Bank's commitment to thedirection of the reform initiatives. It did, however, have some successes and provided a basisfor some of the reforms supported under the FPMIP.

Project Objectives and Description. The FPMIP supported the efforts of thegovernment to improve the efficiency of financial and human resource management throughfive inter-related and mutually reinforcing components: (i) Financial Management--introduction of program budgeting, improving timeliness of budget preparation, linkingbudget to macroeconomic constraints, increased delegation of financial authority,strengthened internal auditing and improved financial reporting; (ii) Program Management--introduction of Corporate Planning, improved over-the-counter services and personnelmanagement to attract and retain qualified staff; (iii) Computerization--development andintroduction of a Financial Management Information System (FMIS) to support thebudgeting, accounting, cash management and financial reporting reforms and processes, anda Human Resource Management Information System (HRMIS) to improve personnelmanagement; (iv) Reform Management--strengthening of the Office of the Prime Minister(OPM) in providing policy direction and management of public sector reform projects; and(v) Training support for each of these areas. These objectives were realistic, important forthe country and consistent with the Bank's country assistance strategy.

Implementation Experience and Results. The project substantially achieved each of itsobjectives, and some were exceeded. Taken together, the advances described below haveenabled the Government to make more effective use of scarce resources and thus obtaingreater benefits from expenditures. These reforms are likely to be sustained.

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Financial Management: Program budgeting has been introduced throughoutcentral government; the new budget structure is fully operational in all ministries,and rolling three year plans help assure funding to bring activities to completion.The Government now has the capability to prepare informative, realistic andtimely budgets that reflect available resources and national priorities. The newaccounting system makes available accurate and complete data in a timelymanner. The Auditor General is now able to carry out performance and "valuefor money" audits. The Internal Audit Directorate in the Ministry of Finance(MOF) and internal audit units in line ministries and departments have beenestablished. The warrant system was reviewed and adjusted; financialmanagement of external assistance has been strengthened; financial decisionmaking powers have been delegated to match the autonomy of line ministriesunder program budgeting; and financial reporting is now timely, standardizedand codified, which has improved accountability and transparency of publicexpenditures.

Program Management: A beginning has been made to shift organizationalemphasis from inputs to outputs and outcomes through Corporate Planning andProgram Budgeting. Corporate Planning has improved managers' ability todefine the entity's objectives and priorities and link priority areas to the budget.Corporate Plans (CPs) and Operational Plans (OPs) are now required with budgetrequests. CPs are prepared on a three year basis for all ministries anddepartments (originally eight were targeted) and are updated quarterly, exceedingthe annual requirement. Human resource management improvements includedecentralization of personnel recruitment to line agencies, introduction of apoints factor evaluation system, and preparation and implementation of newprofessional, managerial and technical staff (PMT) salary scales. PMT salaryscales were adjusted in 1990 and 1994 and some PMT categories are now on parwith market rates. The number of qualified applicants has increased in recentyears and the vacancy rate has decreased. Eight agencies were selected to pilotthe Customer Service Improvement Program. This was increased to 25 agenciesand customer satisfaction increased in all participating agencies, including InlandRevenue, Customs, and the Post Office.

Computerization: Computerization has facilitated the above financial andpersonnel management improvements. The FMIS increased speed and coherenceby enabling the accounting, audit and cash management functions "to talk to oneanother" and the overall status of budget execution to be monitored government-wide. It provides a better basis to make cash allocations. By implementing thesesystems, the government has moved from a manual budget executing andaccounting system to a largely automated one. It has improved availability offinancial information to managers, increased the timeliness and accuracy offinancial reports, and improved the capacity to perform internal and externalaudits.

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The HRMIS gives line ministries a tool for human resource management anddecision making, including facilities for maintaining an up-to-date and completerecord of information on civil servants over the course of their careers. The civilservice establishment has information on levels, skills, numbers of employees,their ages and gender in order to know the trends. The HRMIS has already beenput to practical use. The system is user-friendly.

The Reform Management Component succeeded in strengthening theimplementation and monitoring capabilities of the Cabinet Office, the ARPSecretariat and Reform cell of the MOF. Training objectives were substantiallyachieved and in some cases were exceeded. Much of the training was carried outby the Management Institute for National Development (MIND), which wasitself strengthened under the project through an extensive program to train thetrainers and design of new curricula.

Future Operations. The Bank and GOJ agreed that several actions need to be taken tomaximize project benefits. OPs need to be more closely linked to CPs and the PB; a ProjectDatabank being developed by the Planning Institute of Jamaica (PIOJ) needs to beimplemented to capture data on capital projects; and a long-term computer systems strategyfor the future needs to be developed. The Public Sector Management Project (Ln. 4083-JM)will continue the reform effort, including by strengthening the Office of the Auditor Generalto audit computerized accounts; supporting development of a consolidated data basecontaining Government-wide financial data as part of a Executive Information System;supporting 25 additional agencies targeted for customer service improvement; converting 17pilot agencies into "executive agencies" giving them significant autonomy in personnelmanagement, including recruitment, firing and setting salaries in order to achieve agreedperformance targets, attract and retain scarce personnel; strengthening the policy formulation,monitoring and evaluation and corporate management capacity of three pilot ministries, andcontinuing the rationalization of public sector entities, including statutory bodies (SBs).

Key Lessons Learned. First, far-reaching institutional changes, such as those requiredfor financial and human resource modernization, require a long time horizon to showsustained improvements. This in turn requires a long-term commitment, consistency andcontinuity of approach on the part of both the Bank and the Government. Second, acomprehensive diagnostic and corresponding work plan is needed during project preparationto guide the project implementation, avoid implementation delays, ensure proper linkagesamong components and establish mechanisms for high level government involvement in theproject. Third, since government staff turnover adversely affects the sustainability of suchreforms, especially in technical fields such as public financial management, strategies need tobe developed to attract and retain skilled and trained staff. It is expected that the creation of"executive agencies" under the PSMP will enable individual ministries to make salaries morecompetitive. Finally, rapid changes in information technology necessitate continuousupgrading of computer systems. It is important to find ways of upgrading software, such aspurchasing off-the-shelf systems where possible, and building into the capital budget of eachministry the periodic upgrading of hardware. A high level entity, such as the Cabinet Office,would need to have oversight responsibilities.

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. Introduction/Background

1. Jamaica began the 1 970s with a strong economic performance, a trend that was reversedlate in the decade. Significant declines in virtually all economic indicators and the growth ofGovernment and expenditures characterized the remainder of the decade. Lack of confidence inthe late 1 970s caused considerable capital flight and deficits resulted in increasing levels ofpublic debt. Many qualified persons in the civil service left their posts for more lucrative jobs inthe private sector and abroad. Complete data was lacking on the actual number of civil servantsdue to an inadequate manual information system.

2. The quality of services provided to the public deteriorated significantly due to the flightof managerial, professional and technical staff from the public service. Over-centralizedstructures, outdated systems and cumbersome procedures slowed down decision-making andprogram implementation, discouraged initiative and demoralized staff. This affected themanagement of public finance, including the ability to allocate, utilize and monitor resources inan efficient and timely way. Structural Adjustment Loans (SALs) I and II, approved in June1983 and November 1984 in support of the Government's structural adjustment program (SAP),included an action program in public administration reform.

3. The technical assistance requirements of the SAP were met through two technicalassistance loans (TALs): TAL I for US$6.1 million approved in 1982 and TAL II for US$9.0million approved in 1985. TAL II financed institutional audits of financial and human resourcesmanagement in order to identify the problems impeding productivity and efficiency and todesign plans for reforms. These audits informed both thle SAP and the Public AdministrationReform Project (ARP 1 - Ln. 2423-JM) approved in May 1984.

4. ARP lwas one of the Bank's first public administration reform projects whose aim was toprovide an integrated approach to strengthening financial and human resource management. Itaimed to: (i) equip the Government's human resource management agencies with the capacity torationalize and manage the Government's compensation strategy and organizational structure,assist in the decentralization of key personnel responsibilities to line ministries; (ii) improveGovernment's financial capability by installing a performance budgeting system, strengtheningaccounting and auditing, developing a financial officers' corps, and strengthening the MOF; and(iii) restructure selected line ministries and pilot the reforms designed under the first twocomponents. The project was implemented from 1984-1987. It was overly ambitious given itsfour year time-frame, and it was not successful for the most part in creating sustainedimprovements. This was due in part to the tight fiscal position of the Government andopposition to salary increases for professional, managerial and technical staff by the civil serviceunions. The major factor, however, was due to changes in the government's and the Bank'scommitment to the direction of the initiatives undertaken. It had some successes and provided abasis for some reforms later supported under the Financial and Program ManagementImprovement Project.

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B. Statement of Objectives

5. The objectives and description of the project, as stated in the President's Report, were tosupport the efforts of the government to improve the efficiency of financial and human resourcesmanagement in the central administration to: (a) improve the program budget classification; (b)adjust the object codes (i.e. the breakdown of expenditures in terms of various items such assalaries, travel, equipment in order to indicate the nature of expenditures); (c) strengthen thebudget process by improving timeliness of preparation, linking the budget more closely tomacroeconomic constraints, and introducing forward planning of requirements beyond thebudget year; (d) strengthen the accounting and cash management systems with special emphasison the management of external assistance; (e) improve program management and introducechanges in selected ministries to align them to program structures; (f) improve over-the-counterservices in selected agencies; (g) introduce a points factor evaluation system; (h) introducerevised salary scales linked to the adjusted post classifications; and (i) implement (g) and (h) inthe selected ministries contingent on initiation of corporate planning.

6. These objectives were more clearly focused during project implementation. For example,the Financial Management Component aimed to introduce a budget system based on a ProgramBudget structure and program classification, strengthen accounting and cash managementsystems and adapt/link them to the revised budget model; increase delegation of financialauthority, strengthen internal auditing, and improve financial reporting. The ProgramMfanagement Component sought to implement a program to attract and retain skilled staff. TheComputerization Component aimed to develop a Financial Management Information System(FMIS) to support the budgeting, accounting, cash management and financial reporting processesintroduced by the Financial Management Component, and implement a Human ResourceManagement Information System (HRMIS) to improve personnel management. The ReformManagement Component sought to assist the Cabinet Office to improve its capacity for reformmanagement, preparation of policy measures, the and monitoring of project implementation.The Training Component, was designed to provide extensive training to GOJ staff in the areassupported by the project as well as assistance to strengthen the Management Institute forNational Development (MIND), the Government's umbrella training organization and thesuccessor organization to the Administrative Staff College and the Financial and AccountingTraining College.

7. The project's objectives were realistic, important for the country, and consistent with theBank's country assistance strategy. A robust public sector was essential for the success andsustainability of Jamaica's economic reform program, which has been supported by a number ofBank operations. Consequently, public sector reform and institutional strengthening were keyobjectives of the Bank's Country Assistance Strategy (CAS). GOJ's Medium-Term PolicyFramework also emphasized the need for greater administrative efficiency, improved publicservices and a new role for the public sector as facilitator of private sector-led growth.

C. Achievement of Objectives

8. The project substantially achieved each of its five development objectives. Although thecriteria for judging effectiveness of the project were not fully articulated in the President'sReport, they became clearly focused during implementation, per the summary below.

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9. Financial Management Component

(a) Program Budgeting has been introduced throughout central govemment since1994/95 and the new budget structure is fully operational in all ministries anddepartments. The effect has been improved government capability to prepare informative,realistic and timely budgets that reflect available resources, and national priorities. Thecurrent budget structure clearly indicates to Parliament the purpose for which thebudgeted funds will be used and enables ministries and MOF to prioritize expendituresby providing details of competing programs and projects and the levels of physicaloutputs expected for a given level of inputs. Ministries now have improved control overfunds transferred to SBs and autonomous institutions. It is also now possible for theAuditor General to carry out performance audits and "value for money" audits.

Training. Over 4,000 managers and staff have been trained in program budgeting andrelated changes in accounting. In addition, 190 staff from all ministries and departmentshave been trained in financial modeling. Staff in all ministries and departments nowprepare Corporate Plans and use Program Budgeting.

(b) A sustainable Program Budgeting (PB) Process has been established and planninghas been improved due to the longer time horizon -- three-year rolling plans have beenintroduced and implemented throughout government. Corporate Plans (CP) andOperational Plans (OP) are now required with budget requests, although stronger linkagesare needed between CPs, OPs, and the PB. The timeliness of budget preparation showsimprovement: for the last three years, the budget has been presented in April of eachyear, whereas earlier was presented in June. A Fiscal Policy Management Unit (FPMU)was set up in MOF. Its functions include setting the overall financing framework overthe medium term, in line with macro-economic objectives, and establishing annualbudgetary ceilings. Regular, meetings are held between the FPMU and CashManagement Unit (CMU) of the MOF to match revenue and expenditure projections andrevise budget ceilings.

(c) The accounting system was revised to adapt to the program budgeting structure.At the outset of the project timely preparation of comprehensive and accurate monthlyexpenditure reports and of annual appropriated accounts was considerably delayed due topoor management and monitoring of imprest accounts, difficulties in bank reconciliationand clearing advances, unsatisfactory project accounting, shortage of trained personneland poor supervision. These problems contributed to poor execution of externally fundedprojects by slowing down disbursements, even where aid agencies had provided specialaccounts.

A new chart of accounts was developed. The accounting manual was updated.Improvements were made in the monitoring and collection of non-tax revenue andcontrol over imprests and advances. Bank reconciliation was improved through theFMIS. To control expenditure commitments and improve cash management, aCommitment Control Module' of the FMIS has been developed and is ready forimplementation. The timeliness of monthly financial statements of line ministries has

The Commitment Control module will enable the ministry to record commitments and subsequently check for theexistence of a prior commitment before authorizing a payment.

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improved from an average lag of 3 months before the project to an average lag of 6weeks currently. Some agencies are producing statements within 10 days. However,some delays are still experienced due to problems unrelated to the new program budgetstructure or the FMIS. These are mainly supervisory and management related, e.g.delays in preparing adjustment/journal vouchers. In the Accountant General'sDepartment (AGD) monthly Consolidated Fund Statements are prepared within threeweeks after the end of the month to which they are related. Public Debt Statements arenow available on line.

Training. Formal financial management training was provided to 34 middle and seniormanagers and 830 staff in all government ministries and departments have been trained inAccounting Levels 1 & 2. Seventy eight auditors have been trained in basic andadvanced audit techniques, focusing on value for money rather than compliance andimpact and benefit of expenditure.

(d) Cash Management. The cash management or warrant system had been rigid andoverly centralized often resulting in delays and disruptions of development projectimplementation. A ministry sometimes received only 20% of its approved capital budgetin the first six months of a year and the frequency and timing of releases often did notmeet the requirements of project implementation. The warrants system was reviewed andadjusted. For the six month period ended September 30, 1998 about 75% of warrantallocations were actually fimded. The FMIS now provides a better basis to make cashallocations. Delays, however, may persist due to cash shortages, rather than to systemicproblems. The Debt Management function for external loans was transferred from theBank of Jamaica to the MOF and is supported by a system for managing Short TermLoans and the Commonwealth Debt Management System (CSDRMS).

The Cash Management Unit, in the Ministry of Finance, was strengthened throughreclassification and regrading of posts, training in use of computers, closer workingrelationships with line ministries for adjustment and monitoring of cash flows, improvedmatching of revenue and expenditure projections by the FPMU and availability of FMISreports on actual expenditures. The staff of the AGD were provided on-the-job trainingin FMIS and financial management. A Wide Area Network has been developed to enableconsolidation of accounts at the AGD. Cash management is expected to improve furtherwith the implementation of the Consolidation2 and Commitment Control Modules.

(e) Financial Management of External Assistance has been strengthened with thecreation of the External Finance Unit (EFU) in the MOF to monitor and prioritize projectexpenditures. A Manual for management of external assistance was developed and isbeing implemented. Special accounts were integrated with the general accountingsystem. Procedures for opening and operation of special accounts were standardizedacross projects. Also, standardized procedures for processing of reimbursement claimswere introduced. This has resulted in improved timeliness of release of funds for projectexpenditures. A significant improvement in financial reporting of externally financedprojects was effected and the timeliness of project audits has improved. The Planning

2 The Consolidation Module will enable a consolidation of information from spending agency systems to a centraldata base and automatic production of overall budget execution reports for the MOF.

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Institute of Jamaica (PIOJ) is developing a Project Databank that will be linked withFMIS. This will further enhance monitoring of externally financed projects.

(f) Delegation of Financial Decision-making Powers has increased to match theautonomy of line ministries under program budgeting. A Handbook of delegated powersin financial management has been issued, including revised financial regulations andinstructions. Internal audit arrangements in ministries have been established along withthe Internal Audit Directorate in MOF. Finance and Accounting group positions havebeen reclassified and upgraded. Duties and required qualifications have been enhancedand Principal Financial Officer positions have been created in ministries.

10. Program Management Component

(a) Corporate Planning. Public entities have been governed by rigid rules ofbusiness, which take precedence over achievement of organizational objectives. Abeginning has been made to shift organizational emphasis from inputs to outputs andoutcomes through Corporate Planning and Program Budgeting. Corporate Planning3 wasto have been introduced into eight ministries and related critical SBs. These targets havebeen exceeded. Corporate Plans are now prepared on a three year basis for all ministriesand departments and are updated quarterly, exceeding the annual requirement. Allministries, therefore, are eligible for the new post classification and compensationpackage, per the original project objectives. Corporate planning has informed therationalization of the relationship between ministries and SBs. Overall 43 (70%) SBsfalling under the umbrella of Ministries have been involved in reviewing and establishingaccountable management structures and identification and elimination of overlaps. Inparticular, 15 of those entities have been restructured and are now operating at a higherlevel of efficiency. Further, 3 SBs have been privatized and removed from the budgetwhile 6 are in the process of being privatized. Work continues with the remainingentities through NIBJ, MOF, and the PSMP.

The disconnect between Corporate Planning and Program Budgeting experienced earlierin the project is currently being overcome per the section below on "Future Operations."The key link between the two is the Operational Plan (OP) which requires continuedemphasis. The OPs set out in measurable terms major tasks for each project, specificoutput targets to be achieved and the cost. This forms the basis for the budget and cashflow requests. It also facilitates quarterly monitoring and review by the ministries(enabling them to respond to slippage in a timely way), Value for Money Audits, andprovides base data for the Project Databank under preparation by the PIOJ.

Training: Thirty eight people were trained in Corporate Planning at MIND and over1,200 became familiar with the use of Corporate Plans through half day training sessions.A Corporate Planning Manual was developed and disseminated.

(b) Personnel Management reform was intended to attract and retain qualifiedprofessional, managerial, and technical (PMT) staff through decentralization of personnelrecruitment procedures to line agencies, introduction of a point factor evaluation system,

3 The international consultant for Corporate Planning was financed by the British Overseas Development Agencyfrom 1995 to 1997.

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and preparation and implementation of new PMT salary scales. An Australian PointsFactor Evaluation System for classification of posts was introduced at the seniorexecutive level and at the level of Senior Managers, Legal Officers, and ProgramManagers; about 30-40% of PMT staff are covered by this system. Somedecentralization in personnel management authority was made e.g. for disciplinaryactions and appointments of support services staff. PMT salary scales were adjusted in1990 and 1994. Improved compensation packages were implemented for 399 persons inthe professional, 788 managerial, and 162 technical areas. Some PMT categories are nowon par with market rates, such as legal officers, and communications specialists, butmany are not, particularly computer specialists, engineers, scientists, and health/medicalspecialists. The number of qualified applicants for civil service positions has increased inrecent years and the vacancy rate is only at about 10%, except in the health field where itis about 50%.

Training: Staff of line agencies have been trained by MIND in personnel classification(management analysts and job analysts) in anticipation of additional delegation. Eighteenparticipants from 14 ministries participated in 12 week courses in human resourcemanagement including analyzing staffing and jobs, employee development,compensation and benefits, job evaluation and classification, employee and laborrelations and human resource personnel and development.

(c) Customer Services were to have been improved in priority agencies in order tohelp mobilize support for the government's overall administrative reform program. Eightagencies were selected to pilot the Customer Service Improvement Program, andmeasures were designed and implemented to improve effectiveness. Customer serviceimprovements were instituted in 25 agencies, exceeding the original target. Before andafter customer perception surveys revealed increased customer satisfaction in allparticipating agencies, including Inland Revenue, Customs, Post Office, and NationalInsurance.

Training: Over 412 public servants and managers have been trained by MIND. Theproject also funded the training of 25 MIND trainers for this purpose.

11. Computer Component

(a) A Financial Management Information System (FMIS) has been designed andimplemented to support the budgeting, accounting, and cash management reforms in theMOF and selected line ministries. The core expenditure management system has beencompleted. The system checks payment requests against budget appropriations, warrantsand cash availability, processes the transactions, and issues checks. It automaticallygenerates expenditure accounts, enables bank reconciliation and prepares standardizedreports required by the MOF. The primary modules of the system have beenimplemented at 17 sites encompassing all ministries. However, at present the system ismainly operational at ministry headquarters, where spending unit transactions aregenerally processed. Installation in subordinate spending units will be continued underthe PSMP.

Several agencies operate an automated payroll system to calculate the total amounts forpay and emoluments due to their employees in a given month. The FMIS then processes

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this as a payment request and produces a check for the agency to cover its payroll. Abudget preparation module was planned under ARP 1 and completed in the presentproject. This system enables the MOF to consolidate budget proposals from spendingagencies and prepare the final government submissions for Parliament.

By implementing the core systems mentioned above, the government has moved from amanual budget execution and accounting system to a largely automated system. TheFMIS has resulted in improved availability of financial information to managers. It hasincreased the timeliness and accuracy of financial reports, enhanced control overgovernment bank accounts, improved the capacity to perform internal and external auditsand has automated the labor intensive, high volume check issue process. Moreover,timely production of financial and accounting reports, which are now standardized andcodified, has improved accountability and transparency of public expenditures.

Training: The implementation of these systems has required the training of a largenumber of staff in the use of automated accounting systems. Three hundred staff at 16sites in 13 ministries (including Offices of the Auditor General and the AccountantGeneral) have been trained in chart of accounts, budget structure, and new budgetexecution procedures and the operation of the integrated financial management system.An additional 700 received on-the-job training. Fifteen persons were trained as FMISManagers (super-users) and 30 senior managers were "sensitized" to the objectives andbenefits of the FMIS.

(b) Human Resource Management Information System (HRMIS) was set up in theMPS and in selected line ministries to give human resource managers a tool for HRM anddecision making, including the facilities for maintaining an up-to-date and completerecord of information on civil servants over the course of their careers. It captures andmaintains data related to: basic personal information on a civil servant, includinginformation related to his/her education, training, skills, payroll and pension relatedinformation, disciplinary actions if any, separation from service, and the complete servicerecord, including all personnel actions during the course of his/ her career. The prototypehas been deployed at 34 sites across government and contains data on about 25,780 civilservants out of a total of about 36,000. Although a prototype, the HRMIS system isalready proving useful to HR managers at both the line agency and the central levels inthe performance of their functions.

Training. One hundred thirty six senior managers and 74 application managers weretrained. Over 100 were "sensitized" to the system's capabilities and about 300 staff atfield/user sites were provided with operational training and support.

12. Reform Management Component: The objective of strengthening administrative reformimplementation and monitoring capabilities in the Cabinet Office, ARP Secretariat, and Reformcells of the MOF and MPS were met. A network, with 12 work stations, was established in theCabinet Office to facilitate Reform Management. An Evaluation Committee to evaluateCorporate Plans has been set up in the Cabinet Office. A retreat of Permanent Secretaries wasorganized in October 1997 to develop strategies for the implementation and sustainability ofpublic sector reforms. The Project Secretariat and Reform cells in the MOF and MPS (and laterthe Cabinet Office) were adequately staffed throughout the project with an appropriate mix of

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local and international consultants and GOJ staff specializing in areas such as ProjectManagement, Financial Management, Human Resource Development and Computerization. Toenable GOJ to deal with the Year 2000 problem, a consultant was engaged to review the extentof the problem and recommend a strategy. A Secretariat for the purpose has been established atthe Cabinet Office.

13. Training Component. A total of about 7,000 persons were trained in all areas of therefonn. Component specific training activities are described above and in detail in the matrixattached to the final supervision mission's aide memoir (attached). In addition, the trainingcomponent provided seminars to familiarize Cabinet, MOF, and PSs with the objectives andscope of the administrative reforms. Training objectives were substantially achieved and insome cases were exceeded. Much of the training was carried out by MIND. MIND/MDD werestrengthened through the training of 73 trainers and new curricula were designed. Ninemembers of the teaching staff were sent on short courses; 4 were trained in the FMIS andHRMIS and training equipment was acquired under the project.

D. Major Factors Affecting the Project

14. Achievement of the project's objectives has been substantially facilitated by the stablestructure of the public sector in Jamaica, which follows closely the Westminster model. Thecivil service serves the governnent of the day, regardless of which party forms the government.It is expected to provide objective and impartial advice to the political executive branches andhelp formulate policies in accordance with the priorities of the government. The service isaccountable to Parliament through the Ministers. This tradition helps assure independence,freedom from political influence and continuity of reforms, such as those supported under theFPMIP and related operations.

15. In addition, both GOJ and the Bank benefited substantially from the positive and negativeexperience of ARP 1. For example, the strengths of ARP 1 that later impacted on the FPMIPincluded the following: (a) the design recognized the need for an integrated approach to publicadministration modernization, i.e. one that closely linked human resource and financialmanagement reforms; (b) the importance of generating a series of early short-term tangibleresults was recognized, e.g. reducing significantly the pension backlog under ARP I; (c) aHuman Resources Policy Statement was approved by Cabinet in 1986 (where there had beennone previously) setting the stage for future reforms; (d) the first comprehensive survey ofprivate sector/government compensation was conducted and MPS staff trained to carry outsimilar surveys in the future; (e) a standard employee records system was introduced providinga foundation for computerized HRMIS; (f) significant restructuring within the MPS occurredpaving the way for future delegation of authority to line ministries; (g) restructuring of the MOFand the computerization of key financial management systems (budget, accounting, cashmanagement, debt) took place; (h) the role of the Financial Secretary was strengthened and theposition and remuneration was upgraded to the highest level in the civil service; (i) the much-needed new post of Senior Deputy Financial Secretary was created at the level of PS; (j) theFinancial Officers Corps was established upgrading financial and accounting staff throughout theGovernment; and (k) a computerized Public Debt Management Information System wasinstalled.

9

16. Unlike ARP 1 the FPMIP: (a) had the direct and continued involvement of the CabinetOffice in supporting the project from late 1993 through its completion, which gave the reformprogram the authority and credibility needed; (b) received considerable Governmentparticipation at the working level in its preparation and was characterized by a high degree ofgovernment ownership following the establishment in late 1993of the IMCAR Working Groupunder the Chairmanship of the Cabinet Secretary as Head of the Civil Service; (c) hadconsultants working as a team and together with counterparts, further ensuring sustainability; (d)treated training as a primary activity, again helping sustainability; and (e) during the second halfof its implementation was marked by strong technical supervision from the Bank that remainedstable and supportive.

17. There were, however, delays in implementation early in the project, mainly due to theneed to completely redesign and rewrite the FMIS application software. This in turn was due inpart to the absence of adequate early diagnostic work (para. 23) This was a learning experienceand the problems were eventually overcome.

E. Project Sustainability

18. The impact of the achievements under the FPMIP are already visible and it is likely thatthe successes of the project will be sustained per the sections of this report on fulfillment ofobjectives and the future operations. In this respect, the Government has a clearly articulatedpolicy for public sector modernization: (a) improving quality of service provided by essentialgovernment agencies to internal and external clients: (b) enhancing the efficiency andeffectiveness of central government Ministries; (c) rationalizing the size and scope of the publicsector by privatizing entities and contract out services; (d) enhancing transparency andaccountability in government procurement, contracting and financial management; and (f)improving tax administration. GOJ is also developing an Information Technology Policy whichincludes: (i) Y2K policies and specific activities related to both the Public and Private Sectors;(ii) Information Technology procurement standards, currently under review by the InformationProcurement Policy Committee of the Cabinet Office; and (iii) networking standards.

19. The Government and the Bank embarked on two operations complementary to theFPMIP: the Tax Administration Reform Project (TAXARP) approved in 1994 and the PublicSector Management Project (PSMP) approved in 1996. The TAXARP aims at broadening thetax base, facilitating voluntary compliance, and improving the effectiveness of the taxadministration in assessment and collection of taxes and control of tax evasion. This project isproceeding satisfactorily and will have a direct impact on the FPMIP's program budgetingprocess as it relates to matching revenue and expenditure projections.

20. The $57.0 million PSMP ($25.6 million Government, $28.4 million Bank, and $3.0million ODA) will help take the reforms introduced under the FPMIP to the next stage asoutlined in the Future Operations section. It will ensure that the introduction of computerizedfinancial and human resource management systems are carried to their logical conclusion.

21. The project's impact on day to day financial management may be at risk due to somedeterioration in staff skills due to attrition and the difficulty in recruiting qualified new staff dueto continued differentiation between public sector and private sector salaries, especially in thefields such as finance and IT, and obsolescence of computer hardware and software. However,

10

the salary related risk is likely to be mitigated by public sector modernization process supportedunder the PSMP. The first stage would concentrate on modernizing a small number of pilotentities. The selected entities would be given increased autonomy, in exchange for meetingagreed performance criteria. Improvements in staff remuneration would be linked toperformance and would be self-financed by the entities through downsizing, efficiency gains andself-generated revenues, where applicable. It is expected that this approach would reorient theseentities to focus on outputs and quality of service and lead to perceptible improvements in theirperformnance, while keeping the wage costs in check. In the second stage of the modernizationprocess, these reforms would be extended to other public entities.

22. The risk of computer obsolescence would be mitigated by the procurement of off-the-shelf software in respect of the FMIS and HRMIS, which the Government has underconsideration. In addition, updated computer hardware will be purchased under the PSMP toreplace obsolete equipment currently in use. Individual ministries will then be charged with theresponsibility of including provision for maintenance and upgrading of computer equipment intheir own budgets. The Cabinet Office will have central coordination and oversightresponsibilities.

F. Bank Performance

23. The Bank's performance between the close of ARP I in 1988 and approval of the FPMIPin 1991 was deficient. The lapse of time between the first Bank preparation mission (July 1988)and loan negotiations (May 1991) was excessive given the extent of the preceding work. Thereversal of the Bank's previous intensive support for the administrative reform program is likelyto have contributed to a temporary loss of momentum. In addition, there were major deficienciesin the project design and early implementation. First, although the overall assessment of theareas of focus was correct, there was inadequate diagnostic work to provide the basis for clearimplementation planning and targeting. Second, while the goal of the project was integratedpublic administration reform, adequate linkages among the components were not established.For example, it appears that the corporate planning concept and methodology did not include theprocesses by which the plan was to be linked to the budget. Planning as a means to inform thebudget process was not stressed. These linkages were only begun to be put into place toward thesecond half of project implementation, coinciding with the shift in responsibility for Banksupervision to the SMU.

24. The overall performance of the Bank during later supervision, however, has been highlysatisfactory. Bank missions adopted a problem solving approach and, together with the Jamaicanauthorities and counterparts, tried to find workable solutions to difficulties encountered. In mostcases concrete remedial actions were agreed. Project relationships were generally very positive.The Bank enjoyed a close rapport with GOJ officials at all levels. The Bank followed standardprocedures during the supervision of the project. Supervision missions were regular andenhanced by the fact that the related TAXARP and PSMP operations benefited from the sametask management as the FPMIP. This helped ensure consistency of approach and frequency ofcontact.

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G. Borrower Performance

25. The overall performance of the borrower was satisfactory for both preparation andimplementation. GOJ complied with all loan convenants; project management completed all itsundertakings, including reporting and accounting responsibilities, and also followed theprocurement procedures specified. Although an adequate structure did not exist early in theproject to ensure high level support, the FPMIP enjoyed strong and continuous political supportfrom the GOJ from late 1993 onward due to the direct involvement of the Cabinet Office. Thiswas one of the major reasons for the project's success in implementing institutional reforms.The project also benefited from the direct and consistent support of IMCAR4 , and a competentand adequately staffed Project Implementation Unit. The IMCAR Working Group, under theChairmanship of the Cabinet Secretary as Head of the Civil Service, was established in late 1993to provide policy direction, review progress, and resolve problems. Quarterly and annual reportswere prepared which provided a continuous update on the progress of the project. The quality ofnational and international consultants selected and their outputs was generally high.

26. In addition to the actions described in para. 18 GOJ has taken various steps beyond theFPMIP and later the PSMP to support the reforms: (i) streamlining and restructuring ofMinistries; (ii) appointing the Cabinet Secretary as Head of the Civil Service to improve thequality of advice available to the Prime Minister and Cabinet; (iii) disbanding of the MPS in1995 and the Office of the PM being made responsible for its human resource, corporateplanning, and HRMIS functions; (iv) moving MPS' industrial relations and payroll functions toMOF; (v) establishing the Efficiency and Reform Directorate, now the ManagementDevelopment Division, which included successful efforts to recruit senior executive staff; (vi)and adopting a Citizen's Charter in pursuance of which pilot entities having extensive publicdealings were targeted for customer service improvement. The staff unions have also beenregularly apprised of the strategy of this project and of the PSMP as they evolved.

H. Assessment of Outcome.

27. The project's objectives have been largely achieved, and some have been exceeded, e.g.the Program Budgeting, Corporate Planning, and Customer Service components. The expectedbenefits from the project have been mostly derived. The Government has the capability toprepare informative, realistic and timely budgets that reflect available resources and nationalpriorities. The new accounting system makes available accurate and complete data in a timelymanner. The project has provided ministries with a methodology to manage programs andprojects more efficiently. Computerization facilitated financial and personnel managementimprovements and enabled GOJ to move from manual budget and accounting systems to alargely automated one. Critical linkages are being established between corporate planning andperformance budgeting and need to be strengthened. The corporate planning exercise hascontributed to the rationalization of SBs and is being carried forward under the TAXARP andPSMP through the NIBJ. For example, the Revenue Board has been folded into the MOF, andthe PIOJ, JAMPRO, and JAMPRESS are to be converted into executive agencies. Proper gradesand classification are now available for PMT, the HRMIS has been put to practical use and the

4 IMCAR, the Inter-ministerial Committee for the Administrative Reform, is the highest political body for thefornulation and implementation of reforms in the area of public sector management. It is chaired by the PM andincludes ministers and selected Ministers of State.

12

system is considered user-friendly. Taken together, these changes have enabled the Governmentto make more effective use of scarce resources and thus to obtain greater benefits fromexpenditures. The outcome of the project, therefore, is satisfactory.

I. Future Operations

28. The Bank and the GOJ agreed on the following actions to maximize the project benefitsand ensure their sustainability. Activities that will be supported under the PSMP are indicated.

29. Financial and Program Management Components:

(a) Improve the quality of OPs prepared by ministries and departments to link tightlyto CPs and the PB and continue to emphasize the importance of CPs, OPs andPBs as day to day managerial tools and create incentives for managers to do so.The Cabinet Office is working with the Ministry of Finance and line ministries toforge stronger linkages between CPs, the PB, and OPs. Currently a specialistconsultant is working with the Ministry of Agriculture on a pilot basis to improvethe FY2000/2001 output. It is expected that all ministries will have establishedthe expected linkages by FYOO-01.

(b) Improve the capacities of ministries to monitor and evaluate performance ofdepartments, agencies, and SBs with reference to CPs, OPs, and the PB. It isproposed to strengthen this capacity in three pilot ministries through the PSMP.Parallel initiatives would be taken for other ministries in Stage II of themodernization process i.e., following completion of the PSMP.

30. Financial Management Component

(c) Further improve monitoring by MOF of submission offinancial statements byministries to reduce delays. Strengthen the Financial Management Division of theMOF.

(d) Further strengthen the Internal Audit function through the PSMP to sustainincreased delegation of financial decision making powers.

(e) Development of a more full function budget preparation system by the BudgetDivision of the MOF through Fiscal Services Limited (FSL). This will give theMOF and ministries enhanced capacity to develop and analyze budget proposals,carry out "what if' analysis based on alternative scenarios prior to finalizing thebudget, and ensure fill compatibility with Program Budgeting methodology andthe FMIS Database structure.

(f) Strengthen the office of the Auditor General and provide it with the capability toaudit computerized accounts. This would be done under the PSMP.

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31. FMIS

(g) Extend the core system modules to spending units so that payment/receipttransactions can be directly processed at these units. This is to be done under thePSMP.

(h) Implement the Commitment Control Module of the FMIS. This will begin onceMOF identifies a pilot agency in which to test the module. The pilot test isscheduled for February 1999. The Consolidation Control Module is expected tobe up and running by end-November 1998. The Telecommunications Providerhas to rectify a number of line faults that affect the Wide Area Network. Thiswork is in progress and the software has been implemented at several sites.

(i) Develop a consolidated data base containing Government wide financial data witha Web interface and user friendly data access tools that form a part of anExecutive Information System for finance mangers in Government. This will bedone under the PSMP.

(j) Implement the Integrated Project Databank being develped by the PIOJ to capturedata on capital projects. The data on expenditures already incurred on theseprojects resides in the FMIS data base. An electronic link is planned betweenthese systems to enable the Government to monitor both the financial and thephysical aspects of these projects. This would further enhance monitoring ofexternally and internally financed projects. It is intended that the FMIS take overthe Databank for conversion of the prototype to a full production system as anintegral part of the Integrated Financial Management System (PSMP).

(k) Review the FMIS and HRMIS experience and develop a long term systemsstrategyfor the future. This would define the next generation of softwarerequirements including the degree of integration required between varioussystems modules and related systems such as tax and customs administration. Itwould also determine the most appropriate implementation strategy for puttingthese systems in place, including the possibility of using off-the-shelf applicationsoftware for some functions. The PSMP could finance such a review.

32. HRMIS

(1) Procure a payroll system to link the FMIS and HRMIS under the PSMP.

(m) Complete the review of the HRMIS and investigate whether an off-the-shelfpackage could be used to provide enhanced functionality required from the newsystem. The system currently records personnel actions after they occur. HRmanagers are looking for enhancements that will enable the system to carry outthe business processes related to personnel management and to producesimultaneously all related information. A more robust industrial strengthRelational Data Base Management System (RDBMS) compared to the currentparadox based platform is needed. This could be supported under the PSMP.

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33. Program Management Component

(a) GOJ has targeted 25 additional agencies for customer service improvement.Under the PSMP, 17 pilot agencies would be converted into Executive Agenciesto improve the quality of service.

(b) GOJ proposes to convert most of its policy implementation agencies intoexecutive agencies based on experience gained in the pilot entities included in thePSMP. These entities would have significant autonomy in finance, operations,and personnel management, including recruitment, firing and setting salaries inorder to achieve agreed performance targets. This would help bring salaries ofpublic servants further in line with market rates.

(c) PMT salary scales were adjusted in 1990 and 1994. Some PMT categories arenow on par with market rates (e.g. legal officers, communications specialists), butmany are not (computer specialists, engineers, scientists, health/medicalspecialists). Coopers and Lybrand are conducting a study with a view torecommending to Cabinet a Job Evaluation and Management System (JEMS)which is expected to address this problem since all PMT positions will becovered.

(d) Corporate planning has informed the rationalization of the relationship betweenministries and SBs. This work is continuing under the auspices of the NationalInvestment Bank of Jamaica (NIBJ), MOF and the PSMP.

34. Training

(a) Continue to train senior managers, finance managers and staff engaged in finance,planning, and monitoring and evaluation functions to maximize the benefits fromthe new financial management arrangements and systems. Training in financialmanagement would be carried out under the FMIS component of the PSMP.Training in Corporate Planning could be done by MIND with its own resources.

(b) Improve underlying financial management and accounting skills of staff byrecruiting qualified staff or seconding staff to UWI.

J. Lessons Learned[Reconfirmed

35. Achievement of complex and far-reaching institutional changes, such as those requiredfor financial management and human resource modernization supported under the FPMIP andthe PSMP, require a long time horizon to take root and yield fruit. This in turn requires a long-term commitment, consistency and continuity of approach and support on the part of both theBank and the Government, sometimes spanning changes of Government and more than oneoperation and task manager. The FPMIP had this commitment, whereas ARP 1 did not.

36. Comprehensive diagnostic work should be completed during the project design toprovide a clear basis for implementation planning and targeting, ensure that the proper linkagesare established among project components, and help ensure that mechanisms are in place to

15

facilitate high level Government support. GOJ and Bank efforts later compensated fordeficiencies in these areas at the design and appraisal stage.

37. Government staff turnover adversely affects the sustainability of reforms, especially intechnical fields such as public financial management. Suitable human resource policies andmechanisms should, therefore, be devised to ensure that: (a) staff remain in the positions forwhich they have been trained for a reasonable period; and (b) the compensation system, at leastfor highly skilled jobs, is such that qualified persons can be attracted and retained in publicservice. One of the objectives of creating "executive agencies" under the PSMP is to enableindividual ministries to make salaries more competitive

38. Rapid changes in information technology necessitate continuous upgrading of computersystems. Systems developed under the aegis of a particular project are likely to become out-dated within two to three years. To avoid this, it is important to devise mechanisms to enable theborrower to finance the regular upgrading of the systems, without depending on a successorproject. The FPMIP has the PSMP to finance the enhancement of its systems, at least for thenear term. In the longer term, one option may be acquisition of "off the shelf' systems whichhave already been developed and which come with the possibility of continuous upgrades. Thishas been recommended by the Bank and is under consideration by GOJ.

39. Local ownership of reforms is imperative for their success. Leadership of the reformmust be the responsibility of the government, rather than the consultants, as happened duringARP 1.

40. Institutional change is facilitated by early successes. The importance of buildingsuccesses in the short-term and gaining public support was recognized and acted on (the over-the-counter service improvements).

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PART II: Statistical Tables

Table 1: Summary of Assessment

Table 2: Related Bank Loans/Credits

Table 3: Project Timetable

Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual

Table 5: Key Indicators for Project Implementation

Table 6: Key Indicators for Project Operation

Table 7: Studies Included in Project

Table 8: Project Costs and Financing

Table 9: Economic Costs and Benefits

Table 10: Status of Legal Covenants

Table 11: Compliance with Operational Manual Statements

Table 12: Bank Resources: Staff Inputs

Table 13: Bank Resources: Missions

17

Table 1: Summary of AssessmentsJamaica - FPMIP Loan 3386

A. Achievement of Objectives Substantial Partial Negligible Not applicable

Macro Policies aO ElSector Policies O O ElFinancial Objectives E O O ElInstitutional Development El °l ° Physical Objectives o O ElPoverty Reduction o 0 O ElGender Issues o O O ElOther Social Objectives 0 O ° In

Environmental Objectives a ElPublic Sector Management El O O oPrivate Sector a O ] ElDevelopment

Other (specify) Dl O El

Likely Unlikely Uncertain

B. Project Sustainability (1) (/)

E0 o G

HighlyC. Bank Performance satisfactory Satisfactory Deficient

(1) (V') (1/)

Identification E E ElPreparation Assistance E E ElAppraisal E E ElSupervision El E E

HighlyD. Borrower Performance satisfactory Satisfactory Deficient

(Pa) (/) (E)

Preparation El 0l

18

Implementation El O

Covenant Compliance 0El Operation (if applicable) 0El

Highly HighlyE. Assessment of Outcome satisfactory Satisfactory Unsatisfactory unsatisfactory

0/) 0/) ( El

19

Table 2: Related Bank Loans/CreditJamaica - FPMIP Loan 3386

Loan Title Purpose Year of approval Status

Preceding Operations

2105-JM Structural Adjustment Structural Adjustment aimed at fostering export-led growth and 1982 Fully disbursedLoan I ($76.2m) the private sector through attention on the need for public sector

savings, public investment restructuring to favor infrastructure,and deregulation. Non-traditional exports, agricultural, andmanufacturing received particular attention.

2106-JM Technical Assistance The project's intent was to support the recently initiated and 1982 Fully disbursedLoan (6.1m) ambitious SAP program of the GOJ and the broad SAL of 1982

through the provision of consultants for studies and high-levelexperts for key advisory positions and training of localmanagers.

2315-JM Structural Adjustment Structural Adjustment was intended to deepen initiatives 1983 Fully disbursedLoan II ($60.2m) undertaken under SAL I with the additional inclusion of action

programs to improve public administration

2478-JM Structural Adjustment Structural Adjustment loan continued to focus on the medium 1984 Fully disbursedIII ($55m) term but included measures aimed at achieving the stabilization

program, including criteria for financial performance of publicenterprises, a new energy program, budgetary reforms, arevised PSIP, and enhancement of export developmentprograms.

2507-JM Second Technical The objective of the loan was to provide technical assistance to 1985 Fully disbursedAssistance ($9m) help GOJ to implement its structural adjustment efforts by

providing consultants, equipment and training for: (a)institutional development, (b) export promotion, and (c) humanresources development.

2423-JM Public Administration ARP I aimed to improve the central human resource 1984 Fully disbursedReform (ARP I - management and financial management systems and procedures$4.5m) of the Jamaican public service, including through restructuring

the MOF, with the aim of achieving efficiency andeffectiveness in public service performance.

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Loan Title Purpose Year of approval Status

2849-JM Public Enterprise The objectives of the loan were to support the SAP of the GOJ 1987 Fully disbursedSector Adjustment by improving the fiscal performance of enterprises throughLoan-PESAL ($20m) improved monitoring and control, improved operating balances,

the elimination of government arrears, and a reduction in thesize and scope of the public sector.

FOLLOWING OPERATIONS

3758-JM Tax Administration To increase the govermment's tax revenues through broadening 1994 Closing Datethe tax base; improving the efficiency and effectiveness of the 12/31/2000Tax Administration; improving control of tax evasion;improving tax collection systems; and facilitating taxpayers'voluntary compliance with the Tax Legislation.

4083-JM Public Sector To assist the government in its efforts to improve the quality of 1996 Closing DateModernization service provided by Agencies; enhance the efficiency and 6/30/2002

effectiveness of Ministries; reduce the size and scope of thepublic sector by: (i) fostering private participation in the waterand sewerage sector; (ii) privatizing agencies or contracting outtheir services and/or management with the private sector; (iii)enhancing the transparency and accountability in the area ofprocurement/contracting of goods and services by the publicsector; (iv) strengthening the Government's internal control andexternal audit functions; (v) enhancing and expanding thecoverage of the FMIS and HRMIS; and design; and (vi)developing a follow-up stage of the Government's public sectormodernization

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Table 3: Project Timetable

Jamaica - FPMIP - LN 3386-JM

Steps in project Cycle Date Planned Date ActualIdentification March 1990 April 3, 1990Preparation/Appraisal November, 1990 November 14-30, 1990Negotiation May, 1991 May 30-31, 1991Board Presentation June, 1991 June 27, 1991Signing June, 1991 June 28, 1991Effectiveness September, 1991 September 17, 1991Project Completion June 30, 1998 June 30, 1998Loan Closing June 30, 1998 June 30, 1998

Table 4: Loan Disbursement, Cumulative Estimated and Actual(US$ million equivalent)


FY 92 93 94 95 96 97 98

Appraisal Estimate (Cumulative) 1.6 4.7 7.7 10.2 11.0 11.5 11.50

Actual (Yearly) 0.91 2.25 1.60 2.31 1.50 1.02 1.91

Actual (Cumulative) 0.91 3.16 4.76 7.07 8.57 9.59 11.50

Actual as % of Estimate 57% 67% 62% 70% 78% 84% 100%

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Table 5: Key Indicators for Project Implementation


I. Key ImplementationIndicators in SAR/ Estimated ActualPresident's Report

INDICATORS NOT AVAILABLE IN PRESIDENT'S REPORT

SEE MATRIX ATTACHMENT TO AIDE MEMOIRE FOR ESTIMATED ANDACTUAL ACHIEVEMENTS

Table 6: Key Indicators for Project Operation


I. Key Operating Indicatorsin SAR/President's Estimated ActualReport l

INDICATORS NOT AVAILABLE IN PRESIDENT'S REPORT

SEE MATRIX ATTACHMENT TO AIDE MEMOIRE FOR ESTIMATED ANDACTUAL ACHIEVEMENTS

23

Table 7: Studies Included in the Project


Study Purpose as defined at appraisal/redefined Status Impact of Study

Study Purpose NOT APPLICABLE I

Table 8 Project Financing


Appraisal Estimate (US$M) Actual/latest estimate (US$M)

Local Foreign Total Local Foreign TotalCosts Costs Costs Costs

IBRD 2.1 9.4 11.5 2.8 8.7 11.5Government 4.1 0 4.1 3.5 0 3.5Total Project 6.2 9.4 15.6 6.3 8.7 15.0

Costs

Table 9: Economic Costs and Benefits


An economic rate of return was neither estimated at the time of appraisal nor calculated after itsclose. Estimates would be difficult to mate for this type of project. However, as most of theproject targets have been achieved, and in some cases even exceeded appraisal targets, there is astrong indication that the project has been implemented in a cost-effective manner.

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Table 10: Status of Legal Covenants


Agreement Section Covenant Status Orig. Description of Covenant CommentsType Date

Loan 3386- 2.02(b) 5 C Borrower to open and maintain in Complied with. Account was moved toJM dollars a special deposit account in the National Commercial Bank.

its Central Bank.3.01(b) 5 C (i) Reform cell of Borrower's (i) Reform Cell of MOFP in place. (ii)

Ministry of Finance, Development, The Ministry of Public Service wasand Planning to coordinate abolished. Subsequently, reformsactivities related to financial reform relating to corporate planning and humanunder Part A of Project. (ii) resource management were coordinatedReform cell of Borrower's Ministry by the Efficiency and Reform Directorateof Public Service to coordinate and MIND. The project as a whole wasactivities related to corporate coordinated by the Director of Policyplanning and adjustment of post Coordination in the Cabinet Secretary'sclassifications under Parts B and Office.D.3 of Project.

3.01(c) 10 C Borrower to: (i) prepare for release Complied with.of staff to undergo training infinancial techniques and computerutilization under Part D. (ii) furnishARP, through corresponding P.S.evidence of commitment to releasestaff in question not later than twomonths prior to beginning ofapplicable training.

3.01(d) 5 C Borrower to ensure: (i) meeting of Complied with.Working Group every 60 days toreview project implementationstatus; (ii) general meeting IMCARas required; (iii) establishment ofplanning and budget unit in selectedMinistries; and (iv) qualifications I

25


and experience of Project Managersand coordinators satisfactory toBank.

3.02(e) 10 CP Borrower shall take such actions as Partly complied with. The Corporatenecessary to rationalize functions of Planning exercise informed theStatutory Bodies by: (i) removing rationalization of some SBs. However,unnecessary overlap of activities; this work will continue as part of Stage II(ii) establishing accountable of PSMP.management structure; (iii)introducing MIS; (iv) improvingtask performance; and (v)introducing cost recovery principlesfor those SBs engaged incommercial activities.

3.02 5 C Borrower shall: (i) maintain Complied with.adequate personnel in Projectduring execution; and (ii) consultBank before making any ProjectManager or Coordinatorappointments

3.03(a) 9 C Borrower shall carry out jointly The mid-term review was carried outwith Bank a comprehensive mid- February 13-28, 1994.term review on progress of Projectbased upon performance criteriasatisfactory to Bank.

3.03(e) 5 C Borrower shall make such Complied with.modifications in Project necessaryin Bank's opinion for achievementof project objectives.

3.05(a) 10 C 10/31/1991 Borrower shall appoint all Complied with.managers and staff for Parts A,B. 1and B.3 of Project.

26


3.05(b) 10 CP 07/31/1992 Borrower shall: (i) complete Down-sizing exercise occurred inpreparation of adjustments to post 1992/93, and the re-classificationclassifications and accompanying exercise using the Points Factorsalary scale for Part B.3 and for Evaluation System was completed inSelected Ministries; and (ii) begin April 1994 for Senior Managementimplementation of post adjustments Group. Post Audit completed.and salary scales uponcommencement of corporate plans The number of ministries has beenfor Selected Ministries and reduced to 12. Significant salarycompletion of any requisite increases through market adjustmentsrestructuring and organizational have occurred for some groups.changes.

3.06 9 C (i) Reform cells will prepare and Bank received reports on a quarterlyfurnish to ARP and Bank monthly basis.status reports on Parts A and B; and(ii) Borrower will furnish toWorking Group and Bank, throughARP, detailed monthly report onProject status, including separatetechnical report for Part C.

4.01(a) 2 C Borrower shall maintain or cause to Complied with.be maintained records and separateaccounts adequate to reflect inaccording with sound accountingpractices the operations, resources,and expenditures in respect of theProject of the responsibledepartments or agencies of theBorrower.

27


4.0(b) 1 C Borrower to: (i) have the records Audit report for fiscal year ending Marchand accounts referred to in (a) 1998 has been received. A separate auditincluding those for the Special covering the period through June 30,Account for each Fiscal Year 1998 will be prepared and forwarded toaudited, in accordance with the Bank.appropriate auditing principlesconsistently applied, byindependent auditors acceptable tothe Bank; (ii) furnish to the Bank assoon as available, but in any casenot later than six months after theend of each such year, the report ofsuch audit; (iii) furnish to the Banksuch other information concerningsaid records and accounts and theaudit thereof as the Bank shall fromtime to time reasonably request. I

Type of Covenant Present status1: Accounts/Audit C = Covenant Complied with2: Financial performance/revenue generation CD = Complied with after delay3: Flow and utilization of Project funds CP = Complied with partially4: Counterpart funding5: Management aspects of the Project or its executing agency6: Environmental covenants7: Involuntary resettlement8: Indigenous people9: Monitoring, review and reporting10: Implementation11: Sectoral or cross-sectoral budgetary or other resource allocation12: Sectoral or cross-sectoral regulatory/institutional action13: Other

28

Table 11: Compliance with Operational Manual Statements


Statement Number and Title T Describe and comment on lack of complianceNo known lack of compliance

Table 12: Bank Resources: Staff Inputs


Stage of Project Cycle Weeks Actual

Preparation N/A N/A 120.0 263.9Appraisal through Board N/A N/A 21.6 43.7ApprovalSupervision 27.2 50.8 84.8 184.0Completion 5.0 15.3 0.7 1.9Total 32.2 66.1 227.1 493.5

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Table 13: Bank Resources: Missions


Stage of Project Month/Year No. of Days in Specialized Staff Performance Ratings Types of ProblemsCycle _ Persons Field Skills represented* **

Implem. Status Dev.Objective

___________________________ 5 ___________________________sIdentification not available not not available not available

availablePreparatiorn not available not not available not availableAppraisal available ___ L

Supervision _I November 1991 4 7 TM,II May 1992 2 5 TM, ITF Specialistm April 1993 2 10 TM, ITF Specialist S S B, C, JIV September 1993 2 8 TM, ITF Specialist S S B, C, JV October 1993 3 TM S B, C, JVI February 1994 5 11 TM, ITF Specialist S S H, JVII November 1994 4 5 TM, 1TF Specialist S S Hvm June 1996 2 5 TM/Financial Mgt., S S H

Proi. Mgt.SpecialistsIX June 1997 3 5 TM, Financial and S S H

Proj.Mgt. SpecialistsCompletion June 1998 4 5 TM, ITF Specialist, S S

I__ __ __ __ __ I___________ I_______ __ PSM Spec.

*PF: Public Finance Spec** Types of Problems:a/ Counterpart Funds e/ Environment i/ WID Impactb/ Project Management f/ Environmental Plan j/ Monitoring and Evaluationc/ Procurement g/ Financial Covenantsd/ Resettlement h/ Other Legal Covenants

30

The World Bank 1818 H Street N.W. (202) 477-1234INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRADINTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS

June 22, 1998

Dr. Carlton DavisCabinet SecretaryOffice of the Prime Minister2, Devon RoadKingston Jamaica

Dear Dr. Davis,

Subject: Jamaica Financial and Program Management Improvement Project -Final Supervision Mission

Please find enclosed the Aide Memoir of the Final Supervision of the project that was thatcarried out from June 8 to June 12, 1998.

The project has substantially achieved its development objectives. This is the result of thecontinued commitment and support provided to the project by GOJ, especially through the CabinetOffice and the Ministry of Finance. It is also the result of the dedication and hard work of the projectstaff and consultants. A detailed review of the project would be found in Annex 1 of the AideMemoir.

At this time the following actions need to be taken:

* Review Annex 1 to the Aide Memoir to ensure that it fully and correctly records the projectexperience. The Aide Memoir will be attached to the Implementation Completion Report(ICR).

* Prepare an Operational Plan for the implementation phase of the project, indicating how theproject initiatives are proposed to be supported and sustained. It is requested that the Planmay be sent to the Bank by July 31, 1998.

* Prepare the ICR of the project. As discussed, the ICR will include one portion written by theBank and the other by GOJ. We expect to complete the Bank's portion by September 30,1998 and send it you for comments. We would appreciate if GOJ could do the sameregarding its portion.

* Adjust the Categories of Expenditure to accommodate final payments. A proposal to thiseffect may please be sent to the Bank by June 30, 1998.

* Finalize and close project accounts.

31

With the highest regards,

Sincerely,

Jit GillSenior Public Sector Management Specialist

Poverty Reduction and Economic Management UnitLatin America and the Caribbean

cc.I. Ms. Shirley Tyndall, Financial Secretary, Ministry of Finance, Government of Jamaica.2. Ms. Kirby Clarke, Director, Policy Coordination and Information Systems, Cabinet

Secretariat, Office of the Prime Minister, Government of Jamaica.3. Dr. Wesley Hughes, Director General, PIOJ, Government of Jamaica.4. Ms. Loraine Bucknor, Project Director.5. Ms. Patricia Sinclair, Project Director, PSMP.

32

Jamaica: Financial and Program Management Improvement Project

Final Supervision Mission June 8-12, 1998

Aide Memoir

1. A World Bank Mission consisting of Mr. Jit B. S. Gill, Task Manager (LCSPR), Ms. RitaParrilli (LCOSU), Mr. Ali Hashim (ECSPE) and Ms. Sharon Spriggs (LCSPR) visited Kingston,Jamaica from June 8 - 12, 1998 to carry out the final supervision of the Financial and ProgramManagement Improvement Project (FPMIP). Since the loan is closing on June 30, 1998, the Missionused the opportunity to review the project as a whole, to facilitate the preparation of theImplementation Completion Report (ICR) that would be published by December 31, 1998.

2. The mission met with Dr. Carlton Davis, Cabinet Secretary; Ms. Shirley Tyndall, FinancialSecretary; Ms. Kirby Clarke, Director, Policy Coordination and Information Systems, CabinetSecretariat; Mr. Adrian Strachan, Auditor General; Mr. Diaz, Accountant General; Ms. LoraineBucknor, Project Director; Mr. Joseph Manley, Program Director (Computerization); Mr. StephenKnight, Program Manager, Financial Management Information System (FMIS) Unit; Ms. BerylMiller and Mr. Berome Edwards, Financial Management Reform Unit; Mr. Winston Oliver, HumanResources Management Information System (HRMIS) Unit; Ms. Claire Spence, Dean, MIND; Ms.Claire McKee Senior Director Finance, Ministry of Transport and Works; Mr. Winston Wright,Principal Financial Officer, Ministry of Health; Staff of the Budget Division, Cash Management Unit,Fiscal Policy Management Unit, External Finance Unit and Financial Management Unit of theMinistry of Finance and Planning; Ms. Bennet, Director Management Services Branch of theManagement Development Division and staff of the MSB, The mission would like to thank GOJand the Project Coordination Unit (PCU) for the many courtesies extended to it.

A detailed review of the each component of the project was carried out with reference to itsObjectives, Proposed Activities, Expected Results, Achievements and Future Operations. The resultsof the review are presented in Annex 1 and summarized below.

I. PROJECT OBJECTIVES

The objective of the project was to support the efforts of the government to improve theefficiency of financial and human resources management in the central administration. It consisted offive components. The Financial Management Component aimed to introduce Program Budgeting;strengthen the budget process by improving timeliness of budget preparation, linking the budget moreclosely to macroeconomic constraints and introducing medium-term planning; strengthen accountingand cash management systems, with a special emphasis on management of external assistance;increase delegation of financial authority, strengthen internal auditing and improve financialreporting. The Program Management Component, sought to introduce Corporate Planning in eightministries; improve the quality of over-the-counter service provided by a selected number ofgovernment agencies; and improve personnel management by introducing a new system forclassification of posts and assisting the government in preparing and implementing a program forattracting and retaining skilled staff. The Computerization Component aimed to develop a FinancialManagement Information System (FMIS) to support the budgeting, accounting, cash managementand financial reporting processes introduced by the Financial Management Component, and

33

implement a Human Resource Management Information System (HRMIS) to improve personnelmanagement. The Training Component, was designed to provide extensive training to GOJ staff infinancial management, program management, customer service improvement and in the FMIS andHRMIS. Finally, the Reform Management Component sought to assist the office of the PrimeMinister in monitoring project implementation and improve its capacity for reform management andpreparation of policy measures.

II. PROJECT ACHIEVEMENTS AND OUTCOMES

The project has substantially achieved its development objectives.

(i) Financial Management Component:

(a) Program Budgeting:

Program budgeting has been introduced through out Central government since 1994/95 andthe new budget structure is fully entrenched in all ministries and departments. The program budgetformat gives details of recurrent and capital expenditures according to ministry, department, program,sub-program, project and activity. In addition, it provides details of the nature of expenditure throughobject codes (old line item classifications). Further, it contains a narrative description of theobjectives, activities and outputs of each ministry, program and project.

The current budget structure:

a Focuses attention on outputs of programs and projects instead of on inputs;3 Clearly indicates to Parliament, the public and government agencies, the purpose for which

budgeted funds would be used;* Enables ministries and MOF to prioritize expenditures by providing details of competing

programs and projects and the levels of physical outputs expected for a given level of inputs;D Allows more equitable funding of ministries and departments and avoids overfunding.

Enhances control of line ministries on the results achieved by statutory bodies andautonomous agencies with the money transferred to them.

* Allows aggregation of recurrent and capital expenditures of individual programs to facilitateevaluation.Enables quick regrouping of budgetary expenditures in line with changes in organizationalstructure of the government (the budget was easily adjusted and produced on time despiterestructuring of ministries early this year).Makes it possible for the Auditor General to carry out performance audits and 'value formoney' audits.

(b) Budget Process:

The budgeting processes was reviewed and streamlined. Corporate Plans and OperationalPlans are now required with budget requests. The timeliness of budget preparation showsimprovement: for the last three years, the budget has been presented in April of each year, whereasearlier it used to be presented in June. Three-year rolling plans have been introduced andimplemented throughout government. A Fiscal Policy Management Unit (FPMU) was set up in

34

Ministry of Finance. Its functions include setting the overall financing framework over the mediumterm, in line with macro-economic objectives, and establishing annual budgetary ceilings. Regular,twice-weekly meetings are held between the FPMU and Cash Management Unit (CMU) of the MOFto match revenue and expenditure projections and revise budget ceilings.

(c) Accounting:

The accounting system was revised to adapt to program budgeting structure. A new chart ofaccounts was developed. The accounting manual was updated. Improvements were made in themonitoring and collection of non-tax revenue and control over imprests and advances. Bankreconciliation was improved through the FMIS. To control expenditure commitments and improvecash management, a Commitment Control module of the FMIS has been developed and is ready forimplementation. The timeliness of monthly financial statements of line ministries has improved froman average lag of 3 months before the project to an average lag of 6 weeks currently. Some agenciesare producing statements within 10 days. Timeliness of annual statements has also improved forsome ministries. However, some delays are still experienced due to problems unrelated to the newprogram budget structure or the FMIS (e.g. delays in preparing adjustment vouchers). In theAccountant General's Department monthly Consolidated Fund Statements are prepared within 2months of end of month, whereas earlier they used to take up to 3 years, for example, the MonthlyStatement for April 1998 has already been prepared. Annual Consolidated Fund Statements are nowprepared within 6 months of year closing, as against 3 years before. Public Debt Statements areavailable on line.

(d) Cash Management:

The Warrants System was reviewed and adjusted. The FMIS now provides a better basis tomake cash allocations. The Cash Management Unit, in the Ministry of Finance, was strengthenedthrough reclassification and regarding of posts, training in use of computers, closer workingrelationships with line ministries for adjustment and monitoring of cash flows, improved matching ofrevenue and expenditure projections by the FPMU and availability of FMIS reports on actualexpenditures. The staff of the Accountant General's Department (AGD) were provided on-the-jobtraining in FMIS and financial management. A Wide Area Network has been developed to enableconsolidation of accounts at the AGD. A system for managing Short Term Loans was acquired andthe Commonwealth Debt Management system CSDRMS is being installed at the AGD, through GOJfunds. Cash management is expected to improve further with the implementation of theConsolidation and Commitment Control modules.

(e) Management of External Assistance:

An External Finance Unit (EFU) was created in Ministry of Finance to monitor and prioritizeproject expenditures. A Manual for management of external assistance was developed and is beingimplemented. Special accounts were integrated with the general accounting system. Procedures foropening and operation of special accounts were standardized across projects. Also, standardizedprocedures for processing of reimbursement claims were introduced. This has resulted in improvedtimeliness of release of funds for project expenditures. A significant improvement in financialreporting of externally financed projects was effected and the timeliness of project audits hasimproved. The PIOJ is developing a Project Databank that would be linked with FMIS. This wouldfurther enhance monitoring of externally and internally financed projects.

35

(6 Other Financial Management Improvements:

Delegation of financial powers was increased. A Handbook on delegated powers in financialmanagement was produced and implemented. An Internal Audit Directorate in Ministry of Financeand internal audit units in line ministries and departments were established. A separate classificationfor internal auditors was developed to attract and retain skilled staff. Finance and Accounting grouppositions were reclassified and upgraded. Principal Financial Officer positions were created inMinistries. Financial reports were standardized and codified. These are supported by the FMIS.

(ii) Program Management Component:

(a) Corporate Planning:

Corporate Plans are now prepared on a three year basis for all ministries and departments andare updated quarterly. An Evaluation Committee, including representatives from the concernedagency, Cabinet Office, MOF and Management Institute of National Development (MIND), reviewscorporate and operational plans.

(b) Customer Service Improvement:

13 agencies were initially selected to pilot the Customer Service Improvement Program.Customer perception survey, conducted before and after the project interventions, reveal increasedcustomer satisfaction with services rendered in high visibility agencies such as Inland Revenue,Customs, Post Office and National Insurance.

(c) Personnel Management:

An Australian Points Factor Evaluation System for classification of posts was introduced atthe senior executive level and at the level of Senior Managers, Legal Officers, and ProgramManagers; about 30-40% of Professional, Managerial and Technical (PMT) staff are covered by thissystem. Some decentralization in personnel management authority was made e.g. for disciplinaryactions and appointments of support services staff. Line agencies have been trained by MIND inpersonnel classification (management analysts and job analysts) in aniticipation of additionaldelegation. PMT salary scales were adjusted in 1990 and 1994. Some PMT categories are now onpar with market rates, such as legal officers, and communications specialist, but many are not,particularly computer specialists, engineers, scientists, and health/medical specialists.

(iii) Computerization Component:

(a) Financial Management Information System (FMIS)

The design and development of the core expenditure management system incorporating therequired functionality has been completed. The system checks payment requests against budgetappropriations, warrants and cash availability, processes the transactions and issues checks. Itautomatically generates expenditure accounts, enables bank reconciliation and prepares standardizedreports required by the Ministry of Finance. The primary modules of the system have beenimplemented at 17 sites encompassing all ministries. However, at present the system is mainly

36

operational at ministry head quarters, where spending unit transactions are generally processed. Twoelements of the system functionality have been developed but not implemented so far. These are (a)the Commitment Control module that will enable the ministry to record commitments andsubsequently check for the existence of a prior commitment before authorizing a payment; and, (b) aConsolidation module that will enable a consolidation of information from spending agency systemsto a central data base and automatic production of overall budget execution reports for the MOF.These modules are expected to be commissioned shortly. Several agencies operate an automatedpayroll system. They use this system to calculate the total amounts for pay and emoluments due totheir employees in a given month. The FMIS then processes this as a payment request and produces acheck for the agency to cover its payroll. A budget preparation module was planned under ARP I andcompleted in the present project. This system enables the MOF to consolidate budget proposals fromspending agencies and, after a series of iterations between the MOF and spending agencies, preparethe final government submissions for presentation to the Parliament.

By implementing the core systems mentioned above, the government has moved from amanual budget execution and accounting system to a largely automated system. The implementationof these systems has required the training of a large number of staff in the use of automatedaccounting systems.It has also enabled the government to get a better idea of the exact functionality that is required foreach of the areas covered by the systems modules. This has been a learning process and has requiredthe systems modules to be modified periodically to accommodate new requirements as these emergeafter actual use of systems. The government has reached a stage where these requirements have nowbeen largely firmed up.The FMIS has resulted in improved availability of financial information to managers. It hasincreased the timeliness and accuracy of financial reports, enhanced control over government bankaccounts, improved the capacity to perform internal and external audits and, has automated the laborintensive, high volume, check issue process.

(b) Human Resource Management Information System (HRMIS):

A prototype of the HRMIS has been developed to capture and maintain data related to thefollowing areas: basic personal information on a civil servant; information related to his/hereducation, training skills, payroll and pension related information, disciplinary actions if any,separation from service, and the complete service record, including all personnel actions during thecourse of his/ her career. The prototype has been deployed at 33 sites across all government andcontains data on about 25, 780 civil servants out of a total of about 36,000 civil servants employed bygovernment. Although ostensibly a prototype, the HRMIS system is already proving useful to HRmanagers at both the line agency and the central levels in the performance of their functions. It has,therefore, in effect become a production version of the HRMIS. The prototype is also being used toestablish further user requirements. It is expected that after this process is complete the currentsystem will be replaced by a new system that incorporates more enriched functionality and is basedon a more robust industrial strength RDBMS compared to the current paradox based platform

(iv) Training Component:

Courses were developed at MIND in areas such as Program Budgeting, Finance for Non-financial Managers, Accounting, Basic and Advanced Auditing Techniques, Auditing Contracts, theCorporate Planning Process, Corporate Planning & Program Budgeting, Corporate Planning -

37

Strategies and Performance Measures, Creating a Corporate Planning Workshop, Corporate Planning- Financial Modeling on Spreadsheets etc.. 5,000 persons were trained in Program Budgeting. 190staff were trained in financial modeling. 830 staff in all government ministries and departments weretrained in Accounting Levels 1 & 2. 400 staff at 16 sites in 13 ministries (including the AuditorGeneral and Accountant General) have been trained in chart of accounts, budget structure, and newbudget execution procedures and the operation of FMIS. 15 persons were trained as FMIS Managers(super users). 78 Auditors were trained in basic and advanced audit techniques. 38 persons weretrained in corporate planning in MIND and over 1,200 took MIND's 1/2 - 1 day workshops in use ofcorporate plans. Over 25 MIND trainers and 4,000 public servants in 16 Government departmentswere trained by MIND in customer service improvement. 18 participants from 14 ministriesparticipated in 12 week courses in Human Resource Management including analyzing staffing andjobs, employee development, compensation and benefits, job evaluation and classification, employeeand labor relations and human resource personnel and development.

(v) Reform Management Component:

A network, with 12 work stations, was established in the Cabinet Office to facilitate ReformManagement. Corporate Planning Manual was developed and disseminated. Strategic Planningworkshops for Corporate Planners and Permanent Secretaries were conducted. A system for regularreview and evaluation of Corporate plans has been developed and an Evaluation Committee toevaluate Corporate Plans has been set up in the Cabinet Office. A retreat of Permanent Secretarieswas organized in October 1997 to develop strategies for the implementation and sustainability ofpublic sector reforms. The project Secretariat and Reform cells in the MOF and Ministry of PublicService were adequately staffed throughout the project with an appropriate mix of local andinternational consultants and GOJ staff specializing in areas such as Project Management, FinancialManagement, Human Resource Development and Computerization. To enable GOJ to deal with theYear 2000 problem, a consultant was engaged to review the extent of the problem and recommend astrategy. A Secretariat for the purpose has been established at the Cabinet Office.

(III) PROJECT ADMINISTRATION

The project has spent US$ 10.2 million out of US$ 11.5 million. The remaining expenditurehas been committed and the whole loan amount is expected to be disbursed. Procurements anddisbursements under the project have been done in line with Bank Guidelines. Project audits are upto date, with unqualified opinions. Some reallocation of expenditures between categories is likely tobe necessary. The PCU will submit the reallocation request for Bank approval by July 10, 1998.

(IV) FUTURE ACTIONS

To make the most of the achievements of the project and ensure their sustainability, variousactions need to be taken in the future. Some of these are or could be covered under the Public SectorManagement Project (PSMP). These actions are summarized below:

Continue to emphasize the importance of making Corporate Plans, Annual Operational Plansand Program Budgets, an integral part of day to day public sector management. Createincentives for managers to encourage them to do so.

38

* Continue the process of evaluation of Corporate Plans and Operational Plans with reference toProgram Budgets, to improve their linkages.

* Improve the capacity of ministries to monitor and evaluate performance of attacheddepartments and agencies with reference to the Corporate Plans, Operational Plans and theProgram Budgets. This would be done for three pilot ministries covered under PSMP.Parallel initiatives would be needed for the other ministries in Stage II of the modernizationprocess.

* Continue training of senior managers, finance managers and staff engaged in finance,planning, monitoring and evaluation functions. Training in financial management could becarried out under the FMIS component of the PSMP. Training in corporate planning wouldneed to be done by MIND with its own resources.

* Improve underlying financial management and accounting skills of staff by recruitingqualified staff or seconding staff to UWI.

* Improve monitoring by MOF of submission of financial statements by ministries to reducedelays. Strengthen Financial Management Division in the Ministry of Finance. This could bedone under the FMIS component of the PSMP.

* Continue emphasis on increasing the quality of service provided by public sector entities totheir customers. GOJ has targeted 25 additional agencies for customer service improvementduring FY99. Under the PSMP, 17 pilot agencies would be converted into ExecutiveAgencies. One of the primary objectives of this conversion is to improve quality of service.GOJ has decided to eventually convert most of its policy implementation agencies intoexecutive agencies based on the experience gained in the pilot entities included in the PSMP.These entities would have significant autonomy in personnel management, includingrecruitment, firing and setting salaries in order to achieve agreed performance targets. Thiswould help in bringing salaries of a bulk of GOJ staff in line with the market, in a phasedmanner.

* Implement the Commitment Control and Consolidation modules of the FMIS. Alsocommission the system in all spending units so that payment/ receipt transactions can bedirectly processed at these units. Develop a consolidated data base containing Governmentwide financial data with a Web interface and user friendly data access tools that form a part ofan Executive Information System for finance managers in Government. This is proposed to bedone under the Public Sector Modernization Project (PSMP).Develop a more full function budget preparation system. This is being done by the MOFthrough Fiscal Services Limited (FSL).

* Implement the project data base being developed by the PIOJ to capture data on capitalprojects. The data on expenditures already incurred on these projects resides in the FMIS database. An electronic link is planned between these systems to enable the Government tomonitor both the financial and the physical aspects of these projects.

* Procure a pay roll system to link the FMIS and HRMIS. This would be done under thePSMP.

* Review the FMIS experience and develop a long term systems strategy for the future. Thiswould define the next generation software requirements including the degree of integrationrequired between various systems modules developed under this project and related systemssuch as the tax and customs administration systems. It would also determine the mostappropriate implementation strategy for putting these systems in place, including thepossibility of using off-the-shelf application software for some of the functions.

39

* Complete the review of the HRMIS that is currently underway. Since the prototype systemhas enabled the government to get a better idea of the real user requirements, it is anappropriate time to investigate whether an off-the-shelf package could be used to provide theenhanced functionality required from the new system.

* Further strengthening the Internal Audit function through the Public Sector ModernizationProject (PSMP).

An Operational Plan for the implement phase of the project needs to be prepared by thegovernment indicating therein how project initiatives are proposed to be supported and sustained. itwas agreed that GOJ would submit the Operational Plan to the Bank by July 31, 1998.

(V) PREPARATION OF THE ICR

The mission discussed the preparation of the ICR with GOJ. Details of the contents of theICR and its format were also provided. It was agreed that the Bank would send its part of the draftICR to GOJ by September 30, 1998 and GOJ would likewise send its part of the draft ICR to theBank by the same date. The ICR would be finalized by December 31, 1998.

40

Annex 1

Project Review

Jamaica: Financial And Program Management Improvement Project: Loan 3386-Jm

I. FINANCIAL MANAGEMENTCOMPONENT

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS FUTUREOBJECTIVES RESULTS OPERATIONS

(i) Introduce Program Introduce Program * Improved Expected outputs met. . Improve quality ofBudgeting: Budgeting that would: government Program budgeting Operational Plans

* Clearly define capability to prepare introduced through out (OP) prepared byobjectives and informative, Central government ministries andexpenditures of realistic, and timely since 1994/95. New departments togovernment budgets that reflect budget structure fully tightly linkprograms, projects available resources entrenched in all Corporate Plansand activities; and national ministries and (CP) and the

* Standardize program priorities; departments. Program Program Budgetclassifications for * Clear indication of budget gives details of (PB).similar activities the purpose for recurrent and capitalunder recurrent and which funds are expenditures according * Emphasizecapital budgets; allocated; to ministry, department, importance of CP,

* Highlight allocations * Improved ability to program, sub-program, OP and PB asfor important prioritize allocation project and activity. In managerial tools.programs; of scarce funds; addition, it provides

* Provide a common . Improved control of details of the nature of * Improve capacity ofcode for programs ministries over funds expenditure through ministries to monitorrelevant to several transferred to object codes (old line and evaluateministries so that statutory bodies and item classifications). performance of

41


funds provided for autonomous Further, it contains a attached departmentssuch programs are institutions. narrative description of and agencies withclearly identifiable; the objectives, activities reference to the

and outputs of each Corporate Plans,ministry, program and Operational Plansproject. The current and the Programbudget structure: Budget. For three* Focuses attention on pilot Ministries: the

outputs of programs Ministry ofand projects instead Environment andof on inputs; Housing, the

* Clearly indicates to Ministry ofParliament, the Transport and Workspublic and and one, as yet,government agencies unidentifiedthe purpose for ministry, it iswhich budgeted proposed tofunds would be strengthenused; monitoring and

* Enables ministries evaluation capacityand MOF to through the Publicprioritize Sectorexpenditures by Modernizationproviding details of Project (PSMP).competing programs Other ministries willand projects and the follow in the Phaselevels of physical I.outputs expected fora given level of * Continue training ofinputs; senior managers,

* Allows more finance managers

42


equitable funding of and staff engaged inministries and finance, planning,departments and monitoring andavoids overfunding. evaluation functions

* Enhances control of to maximize theline ministries on the benefits from theresults achieved by new financialstatutory bodies and managementautonomous arrangements andagencies with the systems.money transferred tothem. * Improve underlying

* Allows aggregation financialof recurrent and management andcapital expenditures accounting skills ofof individual staff.programs tofacilitate evaluation.

* Enables quickregrouping ofbudgetaryexpenditures in linewith changes inorganizationalstructure of thegovernment.(Budget easilyadjusted andproduced on timedespite restructuringof ministries early

43


this year).* Makes it possible for

the Auditor Generalto carry outperformance auditsand 'value formoney' audits.

Over 4000 managersand staff trained inprogram budgeting andrelated changes inaccounting.

(ii) Improve the Strengthen budget * Sustainable program * Budgeting processes . ContinueBudget Process process to: budgeting system. reviewed and improvements in

* Establish a more . Improved planning streamlined. linkage betweenrealistic budget due to longer Corporate Plans and Corporate Plansframework. planning horizon. Operational Plans (CP), Operational

now required with Plans (OP) andbudget requests. Program Budget

(PB).

* Improve timeliness of * Timeliness of budget * Continue training ofbudget preparation. preparation management and

improved. For the staff.last three years thebudget has beenpresented in April ofeach year, whereas

* Introduce three year . earlier it used to be

44


rolling financial presented in June.planning framework.

* Three-year rollingplans introduced and

Make budget ceilings implementedmore realistic. throughout

government.

* Fiscal PolicyManagement Unit(FPMU) set up inMinistry of Finance.Its functions includesetting the overallfinancingframework, in linewith macro-economic objectives,over the mediumterm, andestablishing annualbudgetary ceilings.Twice-weeklymeetings heldbetween FPMU andCash ManagementUnit (CMU) tomatch revenue andexpenditureprojections andrevise ceilings.

45

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS FUTUREOBJECTIVES RESULTS OPERATIONS(iii) Improve Improve classification * Adaptation of * Accounting systemAccounting and coding of vouchers. accounts to program revised to adapt to

budgeting structure. program budgetingstructure.

* New chart ofaccounts developed;

* Updated accounting * Updated Accountingmanual. manual prepared.

* System upgraded,* Reduced lag in comprehensive

reconciliation of database establishednon-tax revenue facilitating bettercollections. monitoring and

collection of non-tax revenue.

. Bank reconciliation* Improved forms part of the

reconciliation of accountingbank accounts, component of theimprests and FMIS. Monthlyadvances. accounts are

supported by bankreconciliation.Control overimprests improvedas imprest accountsneed to be clearedbefore they can bereplenished. The

t__ FMIS generates

46


Status Reports onadvances, which also Improve monitoring bysupport the monthly MOF of submission of

. Improved accounts. This financial statements bycommitment allows ongoing ministries to reduceaccounting. monitoring of delays. Strengthen

advances and Financial Managementenhances control. Division in the Ministry

* Reduced delays in of Finance.monthly and annual * A Commitmentaccounting Control module ofstatements. the FMIS has been

developed and isready forimplementation.

* Timeliness ofmonthly financialstatements of lineministries improvedfrom average lag of3 months beforeproject to an averagelag of 6 weeks,currently. Someagencies producingstatements within 10days. Timeliness ofannual statementsimproved for someministries.

47


However, somedelays are stillexperienced due toproblems unrelatedto the new programbudget structure orthe FMIS (e.g.delays in preparingadjustmentvouchers). In theAccountantGeneral'sDepartment monthlyConsolidated FundStatements areprepared within 2months of end ofmonth, whereasearlier they used totake up to 3 years.Monthly Statementfor April 1998prepared. AnnualConsolidated FundStatements preparedwithin 6 months ofyear closing, asagainst 3 yearsbefore. Public DebtStatements availableon line.

48

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS FUTUREOBJECTIVES RESULTS OPERATIONS(iv) Strengthen Cash * Review Warrants * Warrant systemManagement System and introduce reviewed and

operational adjusted. FMISimprovements. provides a better

basis to make cashallocations.

Strengthen CashManagement Unit. * Cash Management

Unit strengthenedthroughreclassification andregarding of posts,training in use ofcomputers, closerworkingrelationships withline ministries foradjustment andmonitoring of cashflows, improved

* Strengthen Treasury match betweenOperations. revenue and

expenditureprojections by theFPMU andavailability of FMISreports on actualexpenditures.

Staff of AccountantGeneral's

49

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS ' FUTUREOBJECTIVES RESULTS OPERATIONS

* Improve Departmentpredictability of cash provided on-the-jobflows. training in FMIS and

* Improve matching of financialthe frequency and management. Widetimeliness of Area Networkreleases of funds developed to enablewith project consolidation ofimplementation accounts at the -

needs. AGD. System formanaging ShortTerm Loansacquired andComnmonwealthDebt Managementsystem CSDRMSbeing installedthrough GOJ funds

. Cash managementwill improve furtherwith theimplementation ofthe Consolidationand CommitmentControl modules.Cash flowdifficulties stillexperienced due toconstraints imposedby exogenous

50


macro-economicfactors.

(v) Improve Financial Streamline budgeting, External Finance UnitManagement of accounting and (EFU) created inExternal Assistance monitoring of external Ministry of Finance to

assistance monitor and prioritizeproject expenditures.

* Manual on * Manual developedinternationally and beingfunded projects. implemented.

* Integration of special * Special accountsaccounts with integrated withgeneral accounting general accountingsystem. system. Procedures

for opening andoperation of specialaccountsstandardized acrossprojects.

* Improved reports on * Standardizedexternally funded procedures forprojects. processing of

reimbursementclaims introduced.Claims vetted andforwarded by EFU.

* Significantimprovement in

51


financial reporting ofextemally financedprojects.

* More timelyauditing.

* Improvement intimeliness of releaseof funds for projectexpenditures.

* PIOJ developingProject Databankthat would be linkedwith FMIS. Thiswould furtherenhance monitoringof projectperformance.

(vi) Increase Delegation * Improve delegation * Revised financial * Delegation ofof Financial Decision- of financial powers to regulations an financial powersmaking Powers match autonomy of instructions. increased.

line ministries to Handbook ofincreased delegated powers inaccountability under financialprogram budgeting. management Further strengthening of

produced. the Intemal Auditfunction being done

. Strengthen internal . Establishment of * Internal Audit through the Publicaudit arrangements in strengthened internal Directorate in Sector Modernizationministries. audit units. Ministry of Finance Project (PSMP).

and internal audit

52


units in lineministries anddepartmentsestablished. A Accelerate training toseparate match new job functionsclassification for and new systems.internal auditorsdeveloped to attractand retain skilledstaff.

Strengthen project * Upgraded positions * Finance andmonitoring and remuneration for Accounting groupmechanisms. Finance and positions reclassified

Accounting group. and upgraded.Duties and requiredqualificationsenhanced. PrincipalFinancial Officerpositions created inMinistries.

PIOJ periodicallyreviews projectimplementation.Financial aspects ofprojects monitoredby EFU. ProjectDatabank beingdeveloped.

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COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS FUTUREOBJECTIVES RESULTS OPERATIONS(vii) Improve Financial Improve system of Financial reports Done.Reporting financial reporting and standardized and

flow of information to codified. Supported byeliminate duplicate FMIS.returns and increasetimeliness of reports. I

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II. PROGRAMMANAGEMENTCOMPONENT

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS COMMITMENT/OBJECTIVES RESULTS/ FUTURE

OUTCOME OPERATIONS(i) Introduction of (i) Recruit staff for (i) Efficiency and Corporate plans are now Linkages between theCorporate Planning in 8 corporate planning in effectiveness of selected prepared on a three year corporate plan,ministries (MOF, MPS, each ministry. ministries improved by basis for all ministries operational plans andConstruction, Education, improving managers' and departments. Initial the budget need to beHealth, Agriculture, (ii) Introduce Corporate ability to define the targets, therefore, strengthened andIndustry, Production and Planning. institution's objectives exceeded. managers (PSs) need toCommerce, and & priorities, develop make this a priorityInformation and structures to support Plans are updatedCulture,) & related program delivery, and quarterly, exceeding thecritical SBs link priority areas to the annual requirement.

budgetEvaluation Committee

(ii) Rationalization of includingrelationship between representatives from theministries & SBs concerned agency,

Cabinet Office, MOF(iii) Staff trained in and MIND reviewdevelopment of corporate andcorporate plans and their operational plans, whichuse when well done, can

easily identify budgetpriorities

(iii) Include a review of 38 people trained instatutory bodies (SBs) corporate planning incritical to the ministries MIND and over 1,200as part of the Corporate have taken MIND's 1/2Plan. On this basis - I day workshops in use I

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OUTCOME OPERATIONSrationalize SBs of corporate plans.(including possibleconsolidation or Rationalization of SBs isprivatization) by: continuing under the* removing auspices of NIBJ and the

unnecessary overlap Public Sectorof activities; Modernization Project.

* establishing an Corporate planning hasaccountable mgt informed this process tostructure; some extent.

* introducing an MISto enable the timelyprovision ofinfornation to therelevant ministries;

* improvingoperational efficiency

* introducing costrecovery principlesfor those SBsengaged incommercial activities

(ii) Improve Over-the- (i) Identify priority Counter-act perceptions 13 agencies were The emphasis onCounter Services to the agencies for review of of deterioration in public initially selected to pilot increasing the quality ofgeneral public their over-the-counter services and contribute the Customer Service service provided by

services to the mobilization of Improvement Program. public sector entities hassupport for the been a primary

(ii) Design and government's overall Customer perception motivation for GOJ's

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OUTCOME OPERATIONSimplement measures to administrative reform survey, conducted decision to convertimprove the efficiency program before and 'after the certain departments intoand effectiveness within project interventions, Executive Agencies.selected government reveal increased This is being done underagencies customer satisfaction the PSMP.

with services renderedin high visibility An additional 25agencies such as Inland agencies have beenRevenue, Customs, Post targeted for customerOffice and National service improvementInsurance during FY99.Over 4,000 publicservants have beentrained by MIND todate, includingsensitization ofmanagers and staff tothe need for efficiencyand effectiveness (turn-around time shortened inmost agencies) andcustomer needs

The project financed thetraining of 25 MINDtrainers.

Citizens charters havebeen developed and,together with the

57


OUTCOME OPERATIONStraining, havecontributed to thesuccess of the program.

(iii) Formulate and (i) Decentralize (i) Shorten the time (i) Someimplement a program to personnel recruitment required to take decentralization hasattract and retain procedures to line decisions and actions taken place, e.g. forqualified professional, agencies -- in order to concerning promotions, disciplinary actions andmanagerial, and develop more flexible recruitment, and appointments of supporttechnical (PMT) staff. appointments procedures, creation of new posts . services staff. Some

the PSC will review the line agencies have been1961 Public Service trained by MIND inRegulations with a view personnel classificationto standardizing selection (management analystsmethods and delegating and job analysts indecision-making to PSs (ii) A more transparent anticipation of

system with factors additional delegation.quantified

(ii) Introduce a points (ii) System introduced Coopers and Lybrandfactor evaluation system in January 1993, first at are currently conductingbased on an Australian the senior executive a study with a view tomodel level and later at the recommending to

level of Senior Cabinet a JobManagers, Legal Evaluation andOfficers, and Program Management SystemManagers; about 30- (JEMS). All PMT need40% of PMT staff are to be covered.covered on this system.

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OUTCOME OPERATIONS(iii) Prepare and (iii) Reduce flight of (iii) PMT salary scales 17 entities will beimplement new salary talent from the public were adjusted in 1990 converted into executivescales for Professional, sector by making and 1994. Some PMT agencies whose CEO's,Managerial and compensation categories are now on under performanceTechnical staff linked to competitive with par with market rates, contracts, will haveimplementation of new parastatals and the such as legal officers, significant autonomy inpost classifications private sector and communications recruitment (including

specialist, but many are outside the civil service)not, particularly and setting salaries incomputer specialists, order to achieve agreedengineers, scientists, and performance targets.health/medical This effort is supportedspecialists. by the PSMP. Salaries

of staff in the Executive(iv) Implement the new (iv) A decision was Agencies are expectedclassifications and their taken to implement to be adjusted in linecompensation package Corporate Plans with market conditions.only in those ministries throughout government.that have initiated Therefore, newimplementation of their classification systemcorporate plan and implemented in allcompleted the ministries andorganizational reforms departments where

I required under the plan I_relevant.

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IIL Computer Component

COMPONENT ACTIVITIES EXPECTED ACHIEVEMENTS FUTUREOBJECTIVES RESULTS OPERATIONS(a) Set up a Financial (a) Carry out functional * The core accounting The design and The core systemManagement requirements analysis; system will give the development of the core modules will need to beInformation System (b) Procure/develop line agencies the expenditure extended to spending(FMIS) to support the application software and capacity for efficient management system units so that payment/budgeting, accounting procure hardware; processing of the incorporating the receipt transactions canand cash management (c) Set up FMIS at a set large number of required functionality be directly processed atprocesses in the MOF, of designated pilot sites; payment and receipt has been completed. these units. This isthe MSP and selected and transactions that proposed to be doneline ministries. (d) Replicate system they encounter as The primary modules of under the Public Sector

government wide. part of their day to the system have been Modernization Projectday operations. implemented at 17 sites (PSMP).

The system should have encompassing allthe following basic * The system will ministries. A commitment controlfunctionality: simultaneously system needs to be

record these However, at present the instituted and the(a) It should enable line transactions and system is mainly commitment moduleagencies to record related financial data operational at ministry that has been developedbudget appropriations in system data bases head quarters, other than needs to be implementedaccording to the new that will be a few exceptions, where at spending ministries toprogram budget accessible both at the modules have also enable the ministries toclassification structure; the Ministry and the been implemented at record commitments andrecord the issue of MOF level. Ready subordinate spending check for the existencewarrants and releases of availability of timely units. of a prior commitmentfunds from the MOF for and accurate before authorizing aline agency programs and financial information Spending unit payment. The Financialprojects; record from system data transactions are Secretary indicated thatcommitments; record bases will lead to an generally processed at the Commitmentpayment orders and, after improved capacity ministry headquarters. Control module wouldchecking for each of the for financial be implemented shortly.

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above limits, prepare management and Two elements of thechecks for government decision making at functionality have not The consolidationcreditors. the line agencies and been implemented these module that is currently

the MOF. This are: (a) The under development(b) It should provide includes the capacity Commitment control needs to be implementedagencies the information for prioritization of module that will enable at the center to enablerequired to reconcile resource allocations, the ministry to record the MOF and othertheir bank accounts; cash management, commitments and central agencies to have

budgetary control subsequently check for direct access to(c) It should enable and monitoring, and the existence of a prior expenditure informationMinistries and line fiscal reporting. commitment before recorded at the spendingagencies to prepare the authorizing a payment; ministries. The technicalfinancial reports required * Timely production and, (b) A consolidation hardware infrastructurefor the management of of financial and module that will enable required for this is nowtheir financial resources; accounting reports a consolidation of in place and the

required by law will information from necessary software(d) It should enable the improve spending agency required for theMinistries to produce accountability and systems to a central data consolidation ofMOF prescribed transparency of base and automatic information frommonthly and annual public expenditures. producnon of overall agency systems isfinancial statements budget execution reports nearing completion. A/reports in a timely for the MOF. At present consolidated data basemanner to enable the these reports are containing GovernmentMOF to determine the produced by the agency wide financial data isoverall government wide systems and expected to be availablestatus of budget consolidated manually within the next fewexecution; at the MOF. The months. A Web

Commitment Control interface and user(e) It should periodically module has been friendly data accesstransfer developed and is ready tools are planned for thisaggregate/transaction for installation. The data base. This will bedata from the agency Consolidation module is part of an Executivesystems to a central under testing. Information System for

61

system to enable the finance managers incentral agencies such as Several agencies operate Government.the MOF/Accountant an automated payrollGeneral (AG) to monitor system. They use this A more full functionthe overall status of system to calculate the budget preparationbudget execution on a total amounts for pay system is now beinggovernment wide basis and emoluments due to planned by the MOF.and to provide other their employees in a This will give, inagencies such as the given month. The FMIS addition to theAuditor General access then processes this as a consolidation features,to government wide payment request and spending ministries andtransaction data to enable produces a check for the the MOF enhancedthem to carry out the agency to cover its capacity to develop andauditing function. payroll. analyze the budget

proposals and carry outA budget preparation "what if " analysis basedmodule was planned on alternative scenarios,under ARP I and prior to finalizing thecompleted in the present budget.project. This systemenables the MOF to This system will need toconsolidate budget have facilities to downproposals from spending load the approvedagencies and after a budget data to the FMISseries of iterations after it has beenbetween the MOF and approved by Parliament.spending agencies,prepare the final A project data base isgovernment submissions being developed by thefor presentation to the PIOJ to capture data onParliament. capital projects. The

data on expendituresA basic debt already incurred on

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management system was these projects resides inimplemented under ARP the FMIS data base. AnI. electronic link is

planned between theseBy implementing the systems to enable thecore systems mentioned Government to monitorabove, the government both the financial andhas moved from a the physical aspects ofmanual budget these projects.execution andaccounting system to a These modules andlargely automated continuingsystem. The enhancements to theimplementation of these current FMIS aresystems has required the planned to betraining of a large implemented under thenumber of staff in the follow on PSMP project.use of automatedaccounting systems Some subsidiary specialIt has also enabled the purpose systemsgovernment to get a modules are planned:better idea of the exact Amongst these are afunctionality that is payroll system forrequired for each of the agencies who do notareas covered by the currently have ansystems modules. This automated payroll; ahas been a learning more full function debtprocess and has required management system andthe systems modules to some specific systemsbe modified periodically for the Accountantto accommodate new General such as a loanrequirements as these management system.

_____________ ___ _I_ emerge after actual use The AGs office intends

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of systems. The to implement thegovernment has reached CSDRMS package fora stage where these Debt management andrequirements have now has contracted for a loanbeen largely firmed up. accounting system.

On completion of thesesystems the Governmentwould have a suite ofsystems modules tosupport most of thebusiness processes in thefiscal management area.

It would be appropriateat this stage for thegovernment to step backand review the FMISexperience and developa long term systemsstrategy for the future.This would define thenext generation softwarerequirements includingthe degree of integrationrequired betweenvarious systemsmodules developedunder this project andrelated systems such asthe tax and customsadministration systems.It would also determine

64

the most appropriateimplementation strategyfor putting these systemsin place, including anexamination of thepossibility of using offthe shelf applicationsoftware for some of thefunctions.

(b) Set up a Human (a) Develop a prototype Give human resource A prototype system has Although ostensibly aresources Management system to determine user managers a tool for been developed to prototype, the HRMISInformation system requirements; HRM and decision capture and maintain system is already(HRMIS) in the MPS making, including the data related to the proving useful to HRand selected line (b) Implement system at facilities for maintaining following areas: Basic managers at both theministries a set of designated sites; an up to date and personal information on line agency and the

complete record of a civil servant; central levels in the(c) Validate system information on civil information related to performance of theirfunctionality against user servants over the course his/her education, functions. It hasrequirements at pilot of their careers. This training skills, payroll therefore in effectsites; will assist HR managers and pension related become a production

in their functions related information, disciplinary version of the HRMIS.(d) improve functionality to career planning, actions if any,to obtain better fit with placement, training, and separation from service, However, the system isuser requirements; in carrying out other and the complete service based on the concept of

personnel actions. record including all recording the(e) develop / procure personnel actions during information related toproduction version; the course of his/ her personnel actions after

career. they occur. HR(d) Replicate system managers at the centergovernment wide. The prototype has been and line agencies are

deployed at 33 sites now looking foracross all government enhancements that will

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and contains data on enable the system to beabout 25, 780 civil the primary tool forservants out of a total of them to carry out theabout 36,000 civil business processesservants employed by related to personnelgovernment. management and for the

production andThe prototype is being simultaneous captureused to establish further and recording of alluser requirements. related information for

these processes.It is expected that after On the technical sidethis process is complete the team responsible forthe current system will the system would like tobe replaced by a new migrate to a more robustsystem that incorporates industry standard datamore enriched base like ORACLE orfunctionality and is INFORMIX from thebased on a more robust PARADOX data ba!seindustrial strength that it currently uses.RDBMS compared tothe current paradox Future developments onbased platform the HRMIS system are

to be done during thecourse of the PSMP. Areview of the HRMIS iscurrently underway.

The current thinking isto custom develop theenhanced system on thenew technical platform.

66

The Bank teamn feelsthat in view of the factthat the prototypesystem has enabled thegovernment to get abetter idea of the realuser requirements, it isan appropriate time toinvestigate whether anoff the shelf packagecould be used to providethe enhancedfunctionality requiredfrom the new systemand to compare thecosts and time thatwould be required forcustoms developmentwith that required forthe purchase andimplementation of offthe shelf software. Thiswill enable thegovernment to make amore informed choice asto the future course ofaction in this regard.

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IV. TRAINING COMPONENT


OUTCOME OPERATIONSTrain senior and mid- (i) Seminars to Review of general Staff training andlevel managers, familiarize Cabinet, management courses familiarizationcomputer staff, and MOP, and PSs with the and establishment of workshops for Sr.financial and accounting objectives and scope of modular component for Managers essential topersonnel civil servants the reform. an Executive the reform effort wereto facilitate Development Program carried out as planned.administrative reformn in: (ii) Classes for senior

managers, computer Review of curriculum Courses were developedstaff, personnel staff, of Government training at MIND in areas suchsenior and mid-level organizations; design of as Program Budgeting,managers of selected new curriculum, Finance for Non-development ministries, including in computer financial Managers,financial managers and training; installation of Basic and Advancedstaff. computer facilities and Auditing Techniques,

initiation of computer Auditing Contracts, The(iii) Strengthening the training program for Corporate PlanningAdministrative Staff accounting staff Process, CorporateCollege (ASC) and Planning & ProgramFinancial Accounts Budgeting, CorporateCollege of Training Planning - Strategies(FACT) [which later and Performancebecame part of MIND] to Measures, Creating adeliver general Corporate Planningmanagement courses, and Workshop, Corporateclasses in program Planning - Financialbudgeting, program Modeling onmanagement, accounting, Spreadsheets

I and computer skills

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In addition, training wasoffered on site as well asat the ARP and HRMISpremises as indicated

l___ _below(i) Corporate Planning (i) Corporate Planning (i) Compietion of 3 year All ministries and

Workshops and project corporate plans departments nowrelated on-the-job prepare Corporate Planstraining carried out in and use Programdevelopment ministries Budgeting.and other ministries (ii) Development of

"how to" skills; 38 people trained in(ii) Core training in translation of corporate corporate planning incorporate planning plans into operational MIND and over 1,200methodology for 560 plans; development of have taken MIND's 1/2persons; Financial performance standards - 1 day workshops in usemodeling for 36 of corporate plans.participants; performancemeasurement for 30participants; training oftrainers/resources (iii) Manual as referencepersons (10) -- MIND document

Corporate Planning(iii) Update Corporate Manual developed andPlanning Manual disseminated.

(ii) Customer Service (i) Evaluation of past Enhanced quality of Over 4,000 publictraining training (2,700 service to customers and servants in 16

questionnaires) establishment of Governmentorganizational structures departments have been

(ii) Systems and Program to support the reform: trained by MIND todevelopment in agencies date, includingand development of (i) Increased customer sensitization of

69

training aids (local video) satisfaction managers and staff tothe need for efficiency

(iii) Consultancy to (ii) Speedier delivery of and effectiveness (turn-develop automated service around time shortened insystems for service most agencies) anddelivery (iii) Institutionalization customer needs

of continuous efficiency(iv) Training in improvement The project financed theefficiency/productivity training of 25 MINDmethodology in select (iv) Material developed trainers.agencies and to enhance quality anddevelopment of increase volume of Improved customerEfficiency and Training training perception indicated byCommittees surveys.

(iii) Program (i) Training in job (i) Improved 18 participants from 14Management evaluation and competence of MDD to ministries

classification classify all occupational participated in 12 weekgroups courses in Human

Resource Management(ii) Training of (ii) Improved including analyzingmanagement analysts competence of MDD to staffing and jobs,

undertake organizational employee development,development in agencies compensation and

benefits, job evaluation(iii) Consultancy to and classification,review human resource (iii) Human Resources employee and laborpolicy Policy updated relations and human

resource personnel and(iv) Organization (iv) Change developmentDevelopment implementation planintervention for MDD developed and team

I building and change I

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management skillsacquired

(v) TQM seminar forMDD staff

(v) Understanding ofTQM philosophy andprinciples _

(iv) Program Program budgeting and Total 5,000 personsBudgeting management workshops trained in Program

for ministry staff to be Budgetingheld by Senior Financialand Program In addition, 190 staffManagement Advisors from all ministries andwith support from departments have beenTraining Advisors during trained in programthe design and budgeting and financialimplementation phases of modelingprogram budgeting.

All finance staff in allministries anddepartments nowprepare Corporate Plansand use ProgramBudgeting

(v) Accounting and Operational training to be 830 staff in allAuditing conducted for accounts government ministries

staff by the training and departments haveadvisors, staff of FACT been trained inand local consultants in Accounting Levels 1 &order to improve skills in 2.key a,pects of

I accounting operations. 78 Auditors have been

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trained in basic andadvanced audittechniques, focusing onvalue for money ratherthan compliance andimpact and benefit ofexpenditure and betterinternal financialcontrols

(vi) Computer skills Computer training to The FMIS has been The Public Sectorrelated to Financial provide necessary skills commissioned and is up Management ProjectManagement for the government to and operating in all (PSMP) will provideInformation System implement, operate and ministries and in two continued training, as(FMIS) maintain the HRMIS departments. needed

400 staff at 16 sites in13 ministries (includingthe Auditor General and The ARP is in theAccountant General) process of providinghave been trained in MIND with additionalchart of accounts, computer equipment tobudget structure, and be in place beginning ofnew budget execution September 1998 toprocedures and the enable further training inoperation of the the FMIS.integrated financialmanagement system(200 in-house at ARPHeadquarters and 200on site).15 persons were trainedas FMIS Managers(super users)

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(vii) Computer and Computer training to A 12 week course in A prototype of the The Public Sectorother skills related to provide necessary skills Human Resource HRMIS has been Management ProjectHuman Resource for the government to Management for 18 commissioned at 33 (PSMP) will provideManagement implement, operate and participants from 14 sites continued training, asInformation System maintain the HRMIS ministries/agencies was needed(HRMIS) held at MIND in 1997 Training successfully

deliveredBetween July 1996 andMay 1997 four courses The computerin HRMIS fundamentals Consultants fromwere held at MIND for HRMIS reported39 persons and one problems with softwareHRMIS Executive in that the computerWorkshop was held for hardware in the25 persons laboratory could not

support the program.122 persons given 2 This resulted in a highweeks training in degree of down timeHRMIS training over 3- because of technical4 days period. problems. This was the

final HRMIS courseheld in the lab.

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V. REFORM ALNA GEMENT COMPONENT


OUTCOME OPERATIONS

Strengthenproject/reformimplementation andmonitoring capabilities

(i) Office of the PM (i) Provision of (i) Improved Network with 12 work(reform at all levels) consultancy services and coordination of policy stations established in

installation of a computer direction Cabinet Office tosystem to facilitate on facilitate Reformline, time management of Management. Policyreform activities Review and Monitoring

Unit on network.(ii) Closer monitoring of

(ii) Dissemination of the implementation and Corporate Planningpolicy g uidelines; review use of the Corporate Manual developed andand analysis of corporate plan in the budget disseminated. Strategicplans in conjunction with process Planning workshops forPSs and Ministries Corporate Planners and

Permanent Secretariesconducted.

(iii) A more centralized(iii) Develop and approach to the System to regularimplement an MIS for evaluation of review and evaluation ofCorporate Plans and achievements and Corporate plansevaluation of the relevant information on developed. Anreports constraints Evaluation Committee

to evaluate CorporatePlans set up.

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(iv) Management of (iv) Creation of Consultant's report onYear 2000 automated machinery to manage the effect of the Y2Ksystems review and Millennium (Year 200) problem on GOJupdate. information technology Hardware and Software

problems prepared. Secretariat todeal with problem setup.

(v) Hosting of Retreat (v) Improvement of Retreat organized infor Permanent Secretaries implementation of October 1997.and Senior Managers reform activities.

(ii) ARP Secretariat Project Manager, All units fully staffed ARP Secretariat andand Reform cells in the technical, and with international Reform cells in theMOF and MPS administrative staff to be consultants and GOJ MOF and MPS were

recruited staff. adequately staffedthroughout project witha successful mix of localand internationalconsultants and GOJstaff specializing inareas such as ProjectManagement, FinancialManagement, HumanResource Developmentand Computerization.The ARP office wasresponsible for therecruitment ofconsultants inconsultation with andapproval of IMCAR,OPM, Reform Cells and

75

the relevant PSs. Thisarrangement wassuccessfully carried outand key areas of thereform were completed.

There was good accessto decision-makers.

Good linkages betweenARP and reform cellswere established.

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APPENDIX B

CABINET OFFICES1 DEVON ROADP.O. BOX 272.KINGSTON 6. JAMAICA

1998 December 2

Mr Jit GillPublic Sector Management SpecialistPoverty Reduction & Economic ManagementLatin America & the Caribbean RegionThe World Bank - Room 1-7-1011818 H Street, N.W.Washington, D.C. 20433U.S.A.

Dear Mr Gill

FPMIP (Loan 3386A-JM)

Enclosed is revised draft (November 1998) of our Section of the Implementation CompletionReport (ICR) for the above-mentioned project along with comments on the section prepared byyour office.

It is suggested that you send us a copy of the full report for a further review before the finaldocument is produced.

Please do not hesitate to contact us if there are any further queries or clarification required.

Yours sincerelyCABINET OFFICE

Kirby L ClarkeDirector Information Systems& Special Projects

Enclcc Permanent Secretary/Cabinet Secretary

Mr Errol Graham - Local World Bank Office

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APPENDIX B

PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE

GOVERNMENT ADMINISTRATIVE REFORM PROGRAMMEProject Completion Report

on the Financial & Programme Management Improvement Project (Loan 3386A JM)September 1991 - June 1998

This report summarises the Government's contribution to the Implementation Completion Reportand includes contribution from the five (5) subprojects under the FPMIP. The format is inkeeping with the World Bank's guidance on Government's contribution to the ICR

Project design

Based on the experience of the first phase (ARP I) where the design had been all-inclusive andall- embracing, which limited to a great extent, any measurable achievement, definite attemptswere made to make ARP II more specific. Emphasis was, therefore, centred around areas of theproject that were considered urgent and would have greater positive impact on the operations ofgovernment, and the public at large. Attention was focused on improvements in financialmanagement; computerisation of the financial and human resource management informationsystems; the quality of service offered by the agencies interfacing directly with the public; andthe implementation of the corporate/strategic planning methodology.

The objectives complemented the efforts started under ARP I as activities needed to becontinued/completed, especially in the area of (i) planning; (ii) budgeting and accounting and(iii) computerisation where it was becoming increasingly difficult for the Central Governmentto produce meaningful budgets without proper planning; to process the ever-increasing volumeof transactions and prepare timely, adequate and accurate financial information using a manualsystem. So too was the urgent need for improvement in the areas of service to the public as theimage of the Public Service was less than desired.

The Project

Support for the government's effort in order to improve the efficiency of financial and humanresources management in the central organization - was effectively covered under the six sub-projects/components, namely Reform Management; Programme Management Reform;Financial Management Reform; Computerisation; Training; and the ARP Administration.Activities under these subprojects were contained in two categories, Consultancy and Training(Category 1) and Goods (Category 2).

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Reform Management - This subproject sought to provide direction and management of all thereform activities; and to strengthen project/reform implementation and monitoring capabilities.Programme Management - focused on some of the day to day human resource managementproblems such as classification and compensation, customer service improvement, andcorporate/strategic planning, and the decentralisation of some service delivery points;Financial Management Reforms - addressed the problem of improvement of the government'sbudgeting, accounting and financial management systems and operations, through theintroduction of programme budgeting; and the accounting system linked to the new budgetstructure;the Computerisation sub-project was aimed at developing computerised systems to support thefinancial management information system (FMIS), as well as the human resource managementinformation system(HRMIS); the Training subproject sought to assist in improving thecapability of the Management Institute for National Development (MIND) - the government'sumbrella training organisation - to deliver the required training not included under the other subprojects, for example, general management training, and also to effectively deliver reform-related training to adequately maintain the reform efforts. The extent of the investmentenvisaged, was deemed adequate for the activities that had been originally planned, but as theimplementation progressed, and priorities shifted, additional funds were required for theComputerisation subproject. This was as a result of no funds having been provided specificallyunder the Loan for HRMIS, although the activity was included under Computerisation.

Funds were re-allocated from the other subprojects to finance the additional requirements underComputerisation, especially from Programme Management Improvement, as the consultant forCorporate Planning was financed by the former British ODA (Overseas Development Agency)from 1995 to 1997 and in some cases a significant amount of the reform work had to beundertaken by GOJ staff and paid by GOJ.

PROJECT APPRAISAL

OBJECTIVES OF THE FMIS

To support the efforts of government to improve the efficiency of financial management andhuman resource management in Central Government through the development andimplementation of the following:

-- a budgeting system based on programme budgeting structure and programme classification;

-- adapting/linking the accounting and cash management systems to the revised budget model;

-- computerisation - aimed to develop a FMIS to support the budget, accounting, cashmanagement and financial reporting processes;

-- training;

-- adjustment of administrative structures, and job classification system;

-- measures to attract and retain a cadre of technically sound accounting and financialmanagement personnel.

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Project Planning and Management

A diagnostic study was not conducted to inform the project planning and implementationprocess, resulting in insufficient knowledge of what was existing and future dimension offinancial management concerns. As a consequence, the original scope of the project and theassumptions made were limited.

Corporate Planning and the required human resource infrastructure should have beeninextricably linked to the FMIS, but were not.

The logical first step to sensitize the Political Directorate and Executive Management about theobjectives of the project, the broad methodology and the benefits to be derived in order to getthem to accept the concept and drive it, did not take place.

The involvement of the Political Directorate and Executive Management was sporadic, mainlybecause of the inappropriate structure that was in place to provide the support for the project.

Executive Management of the Project was characterized by extended periods of inattention byboth the government Executive and the Bank, interspersed with brief periods of intense scrutiny.This inevitably led to the formulation of static targets and objectives, with a poorly understoodstrategy for reform.

The Project's programme/project managers did not have a clear framework of coordination andlinkages due in part to the lack of a single, organic and holistic project plan. The coordination ofactivities between components depended on constant efforts by these managers, rather than as anatural consequence of the project structure.

The result was a constantly moving set of requirements during implementation which inevitablyled to delays.

The situation changed in November 1993 with the establishment of the InterministerialCommittee on Administrative Reform (IMCAR) comprising the Political Directorate and theExecutive Management which provided general policy direction and the IMCAR WorkingGroup under the Chairmanship of the Cabinet Secretary as Head of the Civil Service givingspecific directions and guidance with the broad policy framnework set by the full committee.

The Corporate Planning process was more focused. There was involvement of the PoliticalDirectorate and the Executive Management.

Regular meetings of the IMCAR Working Group were held to review progress and resolve theproblems leading to improved coordination between the various components.

The deficiency in skilled personnel was considered to be a serious problem. The human resourcedeficiency was particularly critical in the area of finance and accounting due to a long period ofbrain-drain and the Government's inability to attract skilled personnel. The implementation ofthe FMIS components had to proceed despite the serious skills gap which resulted in a short-term strategy of underfilling a number of posts in the finance and accounting group. Progress

80

towards a solution has been made as posts were upgraded, job functions re-defined, and somepositions filled. Training at the operational level, has been accelerated and this should help toover-take the deficiency in time, however, some problems still exist at the management level asituation which has limited the level of benefits ministries could derive from the implementationof the system. This is being addressed by the Govemment of Jamaica through ongoinginitiatives including training of managers at MIND..

As the implementation of the project progressed it became necessary and obvious that if theFMIS was to be effective, it would have to be implemented in all ministries and majordepartments simultaneously, instead of just in the core Ministries. This was achieved.

The procurement methodology used in the Project proved to be comprehensively inadequate tosatisfy the needs of a large Information Technology implementation. The single comprehensivepurchase of equipment led to numerous problems:

Equipment became obsolete before it was installed;

Inventory became, and continues to be, a huge problem, because of insufficient space tostore equipment during it's aforementioned decline into obsolescence;

It was nearly impossible to predict exact site requirements at the time that equipment wasordered, leading to an excess of some items, and a corresponding shortage of others;Un-interruptable Power Supplies (UPS) are particularly problematic, because the delaybetween procurement and installation damaged battery packs, which constitute 75% ofthe cost of the units.

Despite the challenges however, tremendous strides have been made in the financialmanagement reform process. Substantial benefits have been gained from the improved systemsand we continue to build on the foundation already laid. Corporate planning was instituted in allministries and major departments instead of the eight (8) core ministries. The project as stateddid not stress/emphasise the importance of linking the Corporate Plan to the Budget, so althoughthe Plans are prepared the challenge is, to link the Budget to the Plan. This linkage can only beachieved through the Operational Plans which must support the Corporate Plan. This aspect iscurrently being addressed.

The Human Resource Management Information System (HRMIS) was implemented in thirty(30) agencies instead of just the scheduled core personnel entities; and the number of agencies inwhich customer service improvements were to be undertaken increased from eight (8) to twenty-five (25) by 1997 as directed by the policy makers.

ARP Secretariat

There were several administrative changes during the period of the implementation of theproject, resulting in a more direct involvement of the Cabinet Office in the management of theproject, which proved very effective. The ARP Secretariat was left with the responsibility forthe administration of the funds, including the recruitment and maintenance of consultancyservices and procurement of goods.

81

The Cabinet Office maintained firm control on the activities of the project through frequentmeetings of the IMCAR Working Group which consisted of government officers and consultantswith responsibilities for the various areas of the reform efforts. At these meetings, progress wasassessed and problems, real or perceived, were dealt with and solutions for resolving the issuesmade thus providing the device for quick problem-solving and adjustments of programmeswhere and when necessary and more timely implementation of the various activities.

PROJECT IMPLEMENTATION

As indicated, initially the project was faced with several difficulties, but under the positivedirection of the Cabinet Office, ministries, departments and agencies showed improvementresulting in sub-projects being implemented and institutionalised. This has had a tremendousimpact on the government institutions and their operations, particularly in the financial andhuman resource management areas, where it was now possible that the time to produce financialstatements was considerably reduced and human resource data already captured on the system,now being accessible within minutes. The quality of customer service improved in many areasresulting in a number of entities launching citizens' charter while others were in the process ofpreparing charters.

The supervision carried out by the World Bank's team has shown a tremendous improvementover the last four (4) years of the project with better collaboration and cooperation with teammembers all with a view to overcoming the difficulties thus ensuring the success of the project.

November 1998

82Project Results - Financial & Programme Management Improvement Project

Subproject Objective Achievements Benefits Other Comments

Reform Management Unit established and functioning to Closer monitoring of the preparationmonitor the implementation of reform and use of the corporate plans in the

To provide consultancy support efforts budgeting process; a moreto the OPM to manage and Year 2000 Unit established to monitor centralised approach to themonitor the reforms and to Y2K compliance programmes and evaluation of achievements andprepare necessary policy provide technical advice to agencies. constraints in all areas of themeasures reforms service-wide. This

Awareness of Permanent Secretaries provided a more informed base forand other senior officials heightened effective decision-making and morein respect of the capabilities of FMIS, timely implementation of reformHRMIS, the Y2K problem, and the activities. Also, the enabling ofimportance of performance appraisal prompt and direct response to

problems affecting the Year 2000.

Programme Management Corporate planning methodologyinstituted in all ministries and major

To establish the corporate departments and concerted efforts Improvement in the planning andplanning methodology in eight being made to cement the link to the budgeting process; easier(8) ministries and initiate the budgeting process. Approximately identification and correct placementconcept in others 1,200 persons have been trained in the of programmes/activities; and

methodology. improvement in the assessment ofperformance.

To adopt the Australian modelof Post Classification and The post classification model wasrelevant persons trained in its adopted. The methodology was used toimplementation classify all the positions in

government, although there are

83To strengthen control to ensure areas that still needed refinement

chievement of programmes and Approximately 43 statutory bodies oraintenance of financial viability of 70% falling under the umbrella of the Improvement in the financialublic enterprises and other statutory Ministries have operated in a manner viability of public sector enterprisesodies to address the areas. and other statutory bodies.

Project Results - Financial & Programme Management Improvement Project


Programme Management cont.d Programme developed and Higher levels of personnelimplemented; some personnel recruited, making the process of

To prepare and implement a procedures decentralised; improved change relating to the reformsprogramme for attracting and compensation packages implemented smoother and more effective; lowerretaining qualified professional, for 399 persons in the professional, attrition rate of qualified personnelmanagerial and technical staff 788 managerial and 162 technical

areasTo design and implementmeasures to improve the Reduction in waiting time for publicefficiency and effectiveness of Customer service improvement services. For example driver'sover-the-counter services in instituted in twenty-five (25) agencies license obtainable within 2 hourseight (8) selected agencies with approx. 4,400 persons given instead of 6 months; birth

relevant training certificates in I hour to 4 weeksinstead of 6 weeks to 1 year.

Increase in revenue intake bygovernment as service becomesmore accessible

Financial Management Reforms

To develop and implement

84programme budgetingmethodology in ministries and Programme budgeting methodology Budgets prepared on a more timelydepartments established in all ministries and basis, and attempts being made to

departments link with the corporate plan andassist in identifying priorities whichwill result in more efficientallocation of scarce resources, andenabling better forward planning.Greater accountability andtransparency for public expenditure.Ministries/departments can identifyinput costs for achieving specificobjectivesMinistries/departments able todetermine purpose of expenditureand what it gets for monies spentinstead ofjust the nature of theexpenditure as defined underobjects.

Project Results - Financial & Programme Management Improvement Project


Computerisation FMIS implemeitted and operating in Financial statements produced on a17 sites. , more accurate and timely basis

To implement computer- based Persons trained were as follows:systems in MOFP and selected 300 in a training environment Standardisation of the accountingagencies to support the 700 on-the-job systembudgeting, accounting, cash 30 senior managers sensitisedmanagement and financialreporting processes designedunder the financial managementcomponent; and _ _

85HRMIS implemented in 34 sites and Personnel information more easilynumber of persons trained were as available.

the HRMIS to assist the follows: 136 senior managers; 74 Establishment Order produced usinggovernment in the management application managers; over 100 HRMISof the civil service sensitised to the system's capabilities

and effectiveness; and approx. 300 atfield/user sites provided withoperational/training support.

Training Improved financial management atOver 7,000 persons were trained in all both middle and senior management

To train at least 3,000 civil areas levelsservants for the implementation Formal financial management:of FMIS, HRMIS, and middle and senior managers 34financial management reforms, programme budgeting - over 5,000and programme management exposed to the conceptimprovements other areas 247

corporate/strategic planning: 1,200

Enhancement of the ability of the9 members of the teaching staff were teaching staff to deliver training

To strengthen MIND to deliver sent on short courses; 4 members oftraining in general the teaching staff were trained inmanagement, programme FMIS and HRMIS, and trainingbudgeting, programme equipment providedmanagement, accounting andcomputer skills

Project Administration A total of forty-eight (48) long-term The timely procurement ofconsultants (local and foreign) were consultants' services and effective

ARP Secretariat recruited for financial management, management of their contractscomputerisation (FMIS & HRMIS), enabled the smooth discharge of

To recruit consultants and programme management their services in the related reformmanage their contracts (corporate/strategic planning, efforts.

86organisational/procedural reviews,and customer services improvement),training and the Year 2000 problemon a timely basis over the period ofthe loan and contracts satisfactorilyadministered. There was also anumber of short-term contractsexecuted over time for the conduct oftraining under the programmemanagement: corporate planning andcustomer services subproject withnumbers trained as follows: TQM forthe Revenue Services - 1,361;training of trainers (MIND/MDD) -73; team building (MDD) - 102;management analysis - " 57;

To prepare quarterly and annual customer service improvement -reports on progress of project 412; corporate planning - 100implementation Provision of continuous update on

Quarterly and annual reports were the progress of the projectprepared and submitted which also

To maintain separate accounts facilitated the PIOJ's quarterlyand records of all project reviews Proceeds of the Loan disbursed on aexpenditure timely basis and accounted for in

Separate accounts were maintained accordance with World Bank andand accounts and statements of GOJ guidelinesexpenditure audited and submitted ona timely basis

November 1998

Documents

World Bank Documentdocuments.worldbank.org/curated/en/100101468263079015/pdf/multi-page.pdf · introduction of a Financial Management Information System (FMIS) to support the budgeting,