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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 68781-TP

PROJECT APPRAISAL DOCUMENT

ON A

GLOBAL PARTNERSHIP FOR EDUCATION FUND GRANT

IN THE AMOUNT OF

US$2.8 MILLION

TO

THE DEMOCRATIC REPUBLIC OF TIMOR-LESTE

FOR A

MANAGEMENT STRENGTHENING PROJECT

June 8, 2012

Human Development Sector Unit

East Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective June 8, 2012)

Currency Unit = Timor-Leste US$

US$1 = Timor-Leste US$1

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AAP Annual Action Plan IBRD International Bank for

Reconstruction and Development

AJR Annual Joint Review IDA International Development

Association

AusAID Australian Agency for International

Development

INFORDEPE National Institute for Professional

Educators Training

CDP Capacity Development Plan LEG Local Education Group

CPS Country Partnership Strategy MDG Millennium Development Goals

DG-CS Director General for Corporate

Services

MoE Ministry of Education

EGRA Early Grade Reading Assessment MSAF Management Strengthening Action

Framework

EFA Education For All MSP Management Strengthening Project

ESSP Education Sector Support Project NESP National Education Strategic Plan

EMIS Education Management Information

System

NSDP National Strategic Development Plan

FTI/GPE Fast Track Initiative PFM Public Financial Management

FM Financial Management PIU Project Implementation Unit

GAEM Office of Strategic Advice and

Modernization

SOP Standard Operating Procedure

GoTL Government of Timor-Leste TOR Terms of Reference

GPE Global Partnership for Education UNICEF United Nations Children‘s Fund

Regional Vice President: Pamela Cox

Country Director: Ferid Belhaj

Sector Director: Xiaoqing Yu

Sector Manager: Luis Benveniste

Task Team Leader: Dandan Chen

TIMOR-LESTE

Management Strengthening Project

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT .................................................................................................1

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

B. Sectoral and Institutional Context ................................................................................. 1

C. Higher Level Objectives to which the Project Contributes .......................................... 3

II. PROJECT DEVELOPMENT OBJECTIVES (PDO) ....................................................4

A. PDO............................................................................................................................... 4

B. Project Beneficiaries ..................................................................................................... 4

C. PDO Level Results Indicator ........................................................................................ 5

III. PROJECT DESCRIPTION ..............................................................................................5

A. Project Components ...................................................................................................... 5

B. Project Financing .......................................................................................................... 7

Lending Instrument ............................................................................................................. 7

Project Cost and Financing ................................................................................................. 7

IV. IMPLEMENTATION .......................................................................................................7

A. Institutional and Implementation Arrangements .......................................................... 7

B. Results Monitoring and Evaluation .............................................................................. 7

C. Sustainability................................................................................................................. 8

V. KEY RISKS AND MITIGATION MEASURES ............................................................8

A. Risk Ratings Summary ................................................................................................. 8

B. Overall Risk Rating Explanation .................................................................................. 9

VI. APPRAISAL SUMMARY ................................................................................................9

A. Economic and Financial Analyses ................................................................................ 9

B. Technical ..................................................................................................................... 10

C. Financial Management (FM) ...................................................................................... 11

D. Procurement ................................................................................................................ 11

E. Social (including Safeguards) ..................................................................................... 12

F. Environment ................................................................................................................ 13

Annex 1: Results Framework and Monitoring .........................................................................14

Annex 2: Detailed Project Description .......................................................................................15

Annex 3: Implementation Arrangements ..................................................................................27

Annex 4: Operational Risk Assessment Framework (ORAF) .................................................40

Annex 5: Summary of Management Strengthening Action Framework (MSAF) .................44

Annex 6: Implementation Support Plan ....................................................................................47

Annex 7: National Education Strategic Plan Financing Gap Analysis ...................................50

Annex 8: Gender Analysis ...........................................................................................................52

Annex 9: Coordination with AusAid Management and Leadership Program ......................55

i

TIMOR-LESTE

MANAGEMENT STRENGTHENING PROJECT

PROJECT APPRAISAL DOCUMENT

East Asia Pacific

Human Development

Date: June 8, 2012

Country Director: Ferid Belhaj

Sector Manager: Luis Benveniste

Sector Director: Xiaoqing Yu

Project ID: P125443

Lending Instrument: Specific

Investment Grant

Team Leader(s): Dandan Chen

Sectors: General Education Sector

Themes: Education for All (100%)

EA Category: C

Project Financing Data:

Proposed terms:

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

Source Total Amount (US$m)

Total Project Cost:

Cofinancing:

Recipient:

Total GPE Fund:

IBRD

IDA

New

Recommitted

2.80

2.80

Recipient: Democratic Republic of Timor-Leste

Responsible Agency: Ministry of Education

Contact Person: Sr. Apolinario Magno, Director-General Corporate Services

Telephone No.: (670) 723 4862

Fax No.:(670) 332 2033

Email: [email protected]

mailto:[email protected]

ii

Estimated Disbursements (Bank FY/US$m)

FY 2013 2014 2015 2016

Annual 1.05 1.10 0.60 0.05

Cumulative 1.05 2.15 2.75 2.80

Project Implementation Period: August 1, 2012 – July 31, 2015

Expected effectiveness date: August 1, 2012

Expected closing date: July 31, 2015

Does the project depart from the CAS in content or other

significant respects?

○ Yes X No

If yes, please explain:

Does the project require any exceptions from Bank policies?

Have these been approved/endorsed (as appropriate by Bank

management?

Is approval for any policy exception sought from the Board?

○ Yes X No

○ Yes ○ No X N.A

○ Yes X No

If yes, please explain:

Does the project meet the Regional criteria for readiness for

implementation?

X Yes ○ No

If no, please explain:

Project Development Objective: To support the implementation of the National Education

Strategic Plan (NESP) through strengthening the capacity and systems of the Ministry of

Education (MoE).

iii

Project description:

Component 1. Strengthening Targeted Management Directorates. A program of prioritized

support to the management functions of the MoE will target senior management, management

of school-based management reform, and training capacity.

Component 2. Strengthening Public Financial Management (PFM) and Evidence-based

Planning Capacity, including Management Information Systems (MIS). Technical support will

focus on strengthened policy formulation processes and planning systems and capacity; high

quality and transparent financial management systems; strengthened procurement and contract

management functions; and monitoring and evaluation including the Education Management

Information System (EMIS) and related systems.

Safeguard policies triggered?

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waters (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

○ Yes X No

Conditions and Legal Covenants:

Loan

Agreement

Reference

Description of Condition/Covenant Date Due

1

I. STRATEGIC CONTEXT

A. Country Context

1. Timor-Leste is a country in transition from post-conflict stabilization to development, and

from low-income to a medium-income status, graduation supported chiefly by oil and gas

revenues. Although there has been significant progress in the creation of the architecture of

governance and the associated legal and institutional frameworks, Timor-Leste still exhibits the

characteristics of a fragile state. The country has made solid progress in establishing institutions

to safeguard public sector accountability, but their effectiveness is constrained by limited

capacity and evolving legal mandates. The functioning of both the private and the public sectors

has improved markedly during a period of development of government systems, with remaining

constraints in staff qualifications and experience.

B. Sectoral and Institutional Context

2. Human development outcomes for Timorese in both health and education remain among

the weakest in the East Asia Pacific region, and population growth is still high (net total fertility

rate of 5.7 in 2009/10). Nevertheless, change and growth in the education sector have been

significant since independence in 2002. Net enrolment rate in primary education has increased

from 68 percent to more than 90 percent from 2004/05 to 2011. There were rapid reductions in

grade-to-grade dropout from 11-12 percent in 2008-09 to 3-4 percent in 2010. As identified in

key sector diagnostics such as the Early Grade Reading Assessment (EGRA) and the National

Education Strategic Plan (NESP) itself, the sector continues to face major challenges in the

quality of education, and the efficiency of education, including continued high levels of

repetition particularly at early grades.

3. After launching the draft NESP 2011-2030 in November 2010, Timor-Leste‘s Ministry of

Education (MoE) established in 2011 a new Ministry organizational structure aligned with NESP

and recruited a new management team to oversee its implementation. NESP is organized into

seven education reform Priority Programs, five management strengthening Priority Programs,

and one Priority Program aimed at improving donor coordination. Recognizing key human

resource and management challenges in implementing NESP, the Ministry has prioritized: the

recruitment of qualified staff; the development of a Management Strengthening Action

Framework (MSAF); the development of a Public Financial Management (PFM) Strengthening

Plan; the alignment of partner support; and the introduction of a management by results system.

4. At the country level, the National Strategic Development Plan (NSDP) 2011-2030

emphasizes an infrastructure-led development strategy, but with an important role for human

capital development. A Human Capital Fund has been established to help meet the human

capital needs of NSDP achievement. Priorities are set out for the education sector, to which the

NESP is fully aligned. The Minister of Finance has indicated that additional domestic resources

can be available for the education sector, provided that progress is made on the competent

management of government budget for education outcome and improved delivery on key

initiatives supported by government, such as the Teacher Career Regime, School Feeding, and

2

School Building and Furnishing programs. The MoE has identified the need to strengthen its

management to deliver the results of these initiatives within the NESP framework.

5. On the overall public financing of education, education spending has remained constant

at 2 percent of Gross Domestic Product (GDP). However, the total amount of education

spending is increasing given the fast pace of GDP growth. The growing national resource

envelope continues to support the expansion of the education sector in recent years. With the

average year-to-year enrollment growth at basic and secondary education is around 9-10 percent

per annum during the same period, the increase of public expenditure in education has been at

the faster pace than the enrollment expansion. It is estimated per student public spending is

about US$120 1 in 2006/07, and rising to around US$190 in 2010.

Case for FTI/GPE Support2

6. At the Education Annual Joint Review (AJR) meeting in November 2010, the MoE of

Timor-Leste stated its interest in pursuing Fast Track Initiative (FTI) catalytic funding to support

NESP implementation. The MoE confirmed his support during the Quarterly Development

Partners meeting of May 10, 2011. Furthermore, the NESP was appraised in 2011 according to

the FTI Appraisal Guidelines. The costing of NESP was subsequently revised. Initiatives to

strengthen donor coordination have also taken place including the commitment of the Ministry

and partners to the ―Dili Education Declaration‖ in 2011 and the Ministry‘s launching of Priority

Program of ―Achieving Donor Coordination‖ (Priority Program 13). The MoE has also played

an active role to lead the development partners‘ support to the NESP, through the Local

Education Group (LEG) with United Nations Children‘s Fund (UNICEF) as the coordinating

agency.

7. Based on the FTI appraisal results of the NESP, the LEG has endorsed the NESP and

identified gaps for external funding support. In light of this appraisal, the development partners

confirmed their November 2010 assessment of the Strategic Plan as being a serious,

comprehensive, and appropriate framework for the development of the education sector in

Timor-Leste. They commended the Government of Timor-Leste (GoTL) and its MoE for their

achievements and the strength of their strategic framework, and commit to working as partners

within the LEG and the structure of NESP in addressing the challenges identified. The appraisal

identified some concerns, especially about management reform and capacity development and

NESP costing and financing that call for more attention. With wide financing gaps estimated for

NESP execution, especially in 2012 and 2013, the Partners committed to providing continued

financial and technical support to the Ministry and to supporting its efforts to gain an increased

share of the national budget and to leverage new external support. In this context, they formally

recommended the re-endorsement of Timor-Leste and its NESP by the FTI Secretariat, and

pledged to support the government in its preparation of a new request for funding from the FTI

fund.

1 Including tertiary students.

2 In September 2011, the ―Education For All – Fast Track Initiative‖ (EFA-FTI) was renamed the ―Global

Partnership for Education‖ (GPE). The acronyms FTI and GPE are used in reference to events and support prior to

and after this change, respectively.

3

8. Timor-Leste has a record of success on results and on-time implementation using FTI

funding. The FTI partnership has supported Timor-Leste since 2006. The Implementation

Completion Report for the 2009 FTI Bridging project found that the project achieved its

development objectives of expanding access to education by marginalized groups; and

improving the quality of the learning experience and retention rates for the same groups. An

EGRA was conducted, and early grade literacy and numeracy training and materials provided.

The repeat of EGRA undertaken in 2011 is expected to show a slight improvement in learning

outcomes in early grades. The project worked through Ministry systems, collaborated with

UNICEF and civil society partners, and developed innovations which were integrated and are

now being rolled out within Ministry Priority Programs in NESP (e.g. Escola Básica, Learning

Materials). The FTI support was also highly catalytic in nature, as the FTI phase one activities

were eventually scaled up with joint International Development Association (IDA)/AusAID

funding, and the bridge funding activities extended with Ministry budget and IDA support. Since

initial FTI endorsement, Official Development Aid (ODA) to education increased from US$16.6

million in 2006 to US$29.5 million in 2010.

9. The MSAF has been developed in early 2012. The proposed support from GPE is

expected to be catalytic in terms of strengthening the management of all resources for which the

MoE is responsible for. It will further leverage increased government and external funding and

enable the sector to benefit from the multi-partner nature of GPE support and process.

Continued management strengthening of core Ministry systems will enable the Ministry to

continue to manage and expand its programs in line with the NESP. The project focus on

management strengthening recognizes the ambitious goals of the NESP, and the need for

strengthening of targeted directorates and senior management to fulfill their functions in the

NESP as a prerequisite for achievement of Education Priority Program goals. It is hoped that

with the active engagement of the development partners through newly formed structures such as

the LEG, the project will better position the Ministry to manage and coordinate support from

external partners. The project implementation will be highly collaborative with other

development partners‘ support in related areas, such as the AusAID support to management and

leadership training in 2012 (Annex 8 discusses the coordination arrangements for the two

approaches agreed by AusAID and the World Bank).

10. GPE funding will be closely coordinated with simultaneous investments in management

training financed by the domestic budget of the MoE over the duration of the project. GPE funds

will be put to technical assistance and operational costs. Government resources for training costs

has also been leveraged by GPE funding particularly to support school-based management and

teacher and non-teaching staff training, the Ministry‘s NESP implementation focus areas for

2012-2015.

C. Higher Level Objectives to which the Project Contributes

11. The higher level objectives are aligned with the core goals of the NESP and NSDP for

education, and the education Millennium Development Goals (MDG‘s) as follows:

4

a. Achieve gender parity in education access and management by 2015;

b. Achieve universal basic completion by 2015; and

c. Eliminate illiteracy in the 15-24 age group by 2015.

12. The project actively contributes to the achievement of these goals by supporting the

implementation of NESP Priority Programs aimed at improving the Ministry‘s implementation

and management capacity.

Link to Country Partnership Strategy (CPS) and rationale for Bank involvement

13. The GPE support is consistent with World Bank strategic objectives as included in the

Interim Strategy Note 2009-2010, and current draft CPS organized by key themes of

―Productivity‖ and ―Jobs‖. The project‘s alignment to the strategic objectives include

developing the capacity to implement a coherent national development strategy, and

strengthening the human development outcomes and service delivery results in Timor-Leste to

more widely share the benefits of Timor-Leste‘s oil and gas wealth.

14. The World Bank was proposed by the MoE and the Local Development Partners Group

as the Supervising Entity for GPE Funding support. Bank‘s experience in preparing and

supervising GPE operations and its strong implementation support and oversight capacity were

deemed to be of high comparative advantage to carry out the function.

II. PROJECT DEVELOPMENT OBJECTIVES (PDO)

A. PDO

15. The Development Objective of this project is to support the implementation of the NESP

through strengthening the capacity and systems of the MoE.

B. Project Beneficiaries

16. The direct project beneficiaries of the project will be the staff of the MoE, through

organizational change management processes, systems development, mentoring and training,

increased value of their work, and improvement of the work environment. In particular, the

following Directorates and Units responsible for management, corporate services and some

management of key service delivery priorities for NESP implementation will be targeted

(referred to in this document as Targeted Management Directorates):

a. Offices of the Minister and the Vice Minister

b. Office of Strategic Advice and Modernization (GAEM)

c. Office of the Director-General of Corporate Services (DG-CS)

d. Office of the Director-General of School Management, Innovation and Curricular

Development

e. Legal Advisory Office

f. National Directorate of Finance and Logistics

5

g. National Directorate of Procurement

h. National Directorate of Planning, Statistics, and Information Technology

i. National Directorate of Human Resources

j. National Directorate of Basic Education

k. National Institute for Professional Educators Training (INFORDEPE)

l. District Directorates (13 Directorates)

m. Basic Education Cluster Schools management teams (202 teams)

17. In addition, by allowing the MoE and the school directors to effectively implement the

NESP at the national, regional, district, and school level and to leverage additional resources

from national and international sources for increased access to and quality of education, this

project will reach, as end beneficiaries, all the users of the education system, including more than

300,000 students in Basic Education, as well as approximately 10,000 teachers.

C. PDO Level Results Indicator

18. The PDO- level Results Indicator is: ―Improved rating of sector management capacity

assessment‖.

19. The Intermediate-Level Project Indicators are:

a. ―Improvement in Performance by Targeted Management Directorates and key staff

against Annual Action Plans (AAPs) and Budget Plans and relevant NESP

Priority Programs‖; and

b. ― Strength of PFM systems in the Ministry‖; as measured by:

(i) Composition of expenditure out-turn compared to original approved

budget;

(ii) Aggregate revenue out-turn compared to original approved budget; and

(iii) Presence of transparency, competition, and complaints mechanisms in

procurement.

III. PROJECT DESCRIPTION

A. Project Components

Component 1: Strengthening Targeted Management Directorates (Estimated cost

US$1,812,000)

20. Component 1 will first aim at strengthening senior management capacity in terms of

sector leadership, coordination, and oversight functions. These functions are aligned with NESP

Priority Program for ―General Management Systems‖ (Priority Program 8). It will provide: (i)

Management support in the offices of the Minister, Vice-Minister, and Director-Generals (DGs)

to ensure strategic and effective senior management and successful implementation of

comprehensive capacity development actions, including partnership with an international

6

institution in the areas of education management and organizational development; (ii) Technical

support to Ministry coordination and oversight of management strengthening tasks, including

advice towards a learning partnership with an international institution; and strengthen national,

regional, and district level sector management and coordination; (iii) Support to Ministry in

coordination and management of Management Strengthening Project (MSP); and (iv) Technical

support to the development and implementation of an adequate legal framework to implement

and adapt the NESP.

21. Second, this component will strengthen the policy and planning capacity of Targeted

Management Directorates. Aligned with NESP Priority Program for ―Basic Education‖

(Priority Program 2), this component will also support the Basic Education Directorate in

developing: (i) the four School Standards Pillars of Quality School Governance, Positive School

Environment, Effective School Management, and Quality Learning Outcomes; (ii) the Escola

Básica Implementation Plan, including school management policy and procedures manual; and

(iii) the Escola Básica management training modules and materials, including development of

systems for management by results.

22. Third, this component will strengthen the development of training capacity of the

Ministry, including management training to improve service delivery. Support will be provided

to INFORDEPE, the Ministry‘s training arm, to: (i) undertake a functional analysis and needs

assessment reflecting its specific responsibilities to provide training to achieve NESP goals; (ii)

produce a Capacity Development Plan (CDP) based on the functional analysis and needs

assessment; and (iii) provide technical assistance to support the implementation of the Capacity

Development Plan.

Component 2: Strengthening Public Financial Management and Evidence-based Planning

Capacity, including Management Information Systems (Estimated cost US$988,000)

23. Component 2 will support Priority Program 12, ―Achieving Planning and Budget

Excellence‖, and 11, ―Introducing Information Technologies and management information

systems‖. Support will aim to fully achieve NESP Result 12.33 and partially achieve Result

12.44 by providing: (i) Technical support to strengthened policy formulation processes and

planning systems and capacity; (ii) Technical support to high quality and transparent financial

management systems, with support to the implementation of the PFM Reform Matrix, including

contribution to the establishment of a pooled fund for joint provision of external support in

education through government systems; (iii) Technical support to strengthen procurement and

contract management functions in the MoE; and (iv) Technical support to monitoring and

evaluation of the NESP, including to further update, maintain and upgrade the Education

Management Information System (EMIS) and related systems.

3 R12.3: A quality, transparent Financial Management system is fully achieved by 2012 4 R12.4 The process of Monitoring and Evaluation of the Implementation of the Strategic Plan is fully supported

7

B. Project Financing

Lending Instrument

24. The Lending Instrument for the MSP will be a Sector Specific Investment Grant.

Project Cost and Financing

25. The total project cost is US$2.8 million as shown in the table below.

Project Components Project

cost (US$)

1. Strengthening targeted management directorates

2. Strengthening Public Financial Management and

Evidence-based Planning Capacity, including

Management Information Systems

Total Project Costs and financing required

1,812,000

988,000

2,800,000

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

26. The MoE will provide overall vision of the management strengthening goals and policies

that steer the broad direction of the project. The executive management of project activities will

be the responsibility of the Director-General for Corporate Services (DG-CS) and overall

coordination and management the responsibility of his office. On a day-to-day basis, the

management of project activities will rest with the DGs and Directors in whose Directorates

MSP activities fall.

27. A Project Implementation Unit (PIU) will be established to perform support functions

including: coordination, procurement, disbursement, financial management, monitoring and

evaluation, and reporting of project implementation. The PIU will directly report to DG-CS.

PIU is responsible for compiling quarterly progress report synthesizing information from

relevant Directorates. Consistent with the NESP, the DG-CS should report to the Minister.

Further details of reporting arrangements are specified in the Project Operations Manual.

B. Results Monitoring and Evaluation

28. The PIU will coordinate with the DG-CS‘s office and relevant Directorates to monitor the

project. The proposed monitoring indicators are provided in Annex 1. The data related to output

indicators will be provided by PIU semiannually. Outcome indicators are reported annually.

29. The project monitoring will be an integral part of the overall NESP monitoring and

evaluation. Routine monitoring will be carried out by PIU. The GAEM, as part of its strategic

8

role, will be responsible for monitoring and reporting on the overall NESP implementation

progress. End-of-year AJRs led by the Ministry with participation of development partners will

provide feedback for further refinement of the NESP implementation and monitoring

arrangement. Developing the NESP monitoring toolkit is also supported by the MSP.

C. Sustainability

30. Sustainability of the results of this project lies in its close linkage with the sector‘s and

the country‘s long-term development plans, NESP and NDSP (2011-2030). The MSP is

designed to specifically support the achievement of NESP results and the successful

implementation of the activities under NESP. The experience and lessons learned during NESP

implementation will help identify future capacity building needs.

31. The MSP aligns with NESP Technical Cooperation Management Protocol and Guidance

on Capacity Development in the Ministry, and will work collaboratively with initiatives that

promote donor co-ordination. This includes transparent, accountable and participatory technical

assistance management systems for capacity development, which are practical and realistic for

implementation and monitoring.

32. Managing the capacity strengthening activities under MSP will develop valuable

experience in the Ministry for broader management strengthening initiatives and project

management. As committed to in the NESP, technical assistance personnel will work and be

housed in the Ministry, and will work with stronger terms of reference, clearly defined

counterparts and common codes of conduct, principles and regulations, contracts, salary, and

leave systems. To ensure value for money is received from technical assistance, the Ministry

will maintain and further strengthen harmonized systems for the selection, procurement and

general management of all technical assistance. Specific obligations and standard procedures

will extend to Ministry Directors receiving international and national consultants. The MSP will

align to the NESP Concept of Transition to high-impact capacity support. This includes a focus

on organizational objectives rather than inputs, a defined capacity strategy and results

framework, mainstreaming of PIU‘s through a focus on Ministry management, and pooling

technical assistance.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary

Risk Rating

Stakeholder Risk High

Implementation Agency Risk

Capacity High

Governance Moderate

Project Risk

Design Moderate

Social and environment Low

9

Program and donor Moderate

Implementation and sustainability High

Overall Implementation Risk Substantial

B. Overall Risk Rating Explanation

33. The Ministry has been identified as having low overall capacity with heavy reliance on

international advisors. Skills transfer to national staff has been mixed, with the absence of a

consultative and comprehensive capacity development approach. However, some key systems

capacity has improved recently. The presence of implementation capacity has been reflected in

its high disbursements of World Bank/FTI/GPE-funded operations and up to 98 percent

execution rate of its own budget. Funding under this project will continue to support efforts to

reinforce the Ministry‘s implementation capacity and to mainstream responsibility for this into

the Ministry‘s directorates. Project funding will continue the effort to transition from

international consultant support to use of national consultants.

34. Experience from strengthened Education Sector Support Project (ESSP) management

will be applied to the new project delivery approach. To support skills transfer and

sustainability, strengthened skills transfer and improved sustainability, the new project will align

to the Capacity Development Assistance Framework developed consultatively in the MoE.

35. The project builds on existing structures for project management and implementation in

the MoE, which have demonstrated relatively strong capacity to deliver according to agreed

implementation plans. Ministry management capacity has been strengthening during 2011.

During 2010/11, the Ministry has also strengthened results reporting and management of ESSP

which provides a strong basis for the achievement of MSP objectives. The EMIS now regularly

produces good quality information - it is continually improving and will improve further with

project support. To support skills transfer and sustainability, the new project will align to the

MSAF developed consultatively in the MoE.

36. The MSP will build on past good practices and project implementation experience, which

reduces the risk rating from high, but the imminent change of government and capacity building

challenges in the Ministry makes the overall risk rating substantial.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

37. As a management strengthening/capacity development grant, the economic and financial

impacts of the project are difficult to quantify. However, benefits are expected to include:

improved planning and budgeting, with closer links between plans and budgets, and with budgets

based on better informed costing and AAPs; improved budget execution; more accurate and

timely procurement; more effective expenditure and cash planning to reduce the size and

incidence of idle cash balances; and more effective management of the GoTL‘s financial

resources. Other benefits include improved governance; more effective leadership and

10

management; improved integrity and transparency of the PFM system; improved skills base

(language, accounting/bookkeeping, IT); and improved service delivery. Economic and financial

sustainability is built into the design of the program, as described in Annex 6. The project will

build institutional and human resource capacity and systems and processes that are meant to

serve the government over the long-term, with a broad view to improve economic, financial, and

implementation management of the sector. Previous experience in transitioning towards more

national technical assistance has proven successful in ensuring longer term transfer of skills and

greater sustainability.

B. Technical

38. Project preparation has drawn on relevant analytic work up to 2011 including Education

Efficiency Analysis and the multi-partner analysis of the FTI process including FTI appraisal of

the NESP and External Quality Review according to FTI process. Considering the PDO of the

MSP, the question of how best to sustainably strengthen the capacity and systems of the MoE

has been the subject of considerable analytic work during supervision of the previous ESSP and

during preparation of the MSP. The multi-donor mid-term review of the ESSP and New Zealand

Ministry of Education Capacity Building Project in 2010 focused on review of capacity building

and of financial management systems. Considerable lessons learnt on effective capacity building

were included in the technical approach to MSP. Further relevant analytic work also integrated

into project design included Bank-contracted advice to the finalization of the NESP and a

Technical Cooperation Management protocol for the Ministry.

39. Project preparation included support to the development of a consultative MSAF based

on a capacity assessment of the Ministry, identification of a priority Management Strengthening

Agenda, and provision of Policy Notes on key management strengthening approaches. The key

features of the agenda include (i) Results-based management; (ii) Leadership; (iii) Change

management; (iv) Process management (v) Competence management; and (vi) Monitoring

results and processes. The emerging priority actions in the MSAF proposed to the Ministry

included:

a. Management and Leadership Course coordination;

b. A Communication Strategy to ensure management ―buy-in‖ on management

reform;

c. Functional Analysis as the starting point to clarify functions, tasks and required

competencies of Ministry units as a basis for development;

d. Participatory definition of organizational processes and procedures and key

management processes; and Ministry implementation of these based on agreed

standard operating procedures (SOPs);

e. Recruitment or reappointment of key staff;

f. Undertaking targeted capacity strengthening based on steps above;

g. Setting up Performance Assessment, Accountability Processes and Incentives;

and

h. Ministry implementation of identified and new processes based on agreed SOPs.

11

40. A list of six-month priorities for management strengthening from project effectiveness in

June 2012 has been agreed with the MoE. These priorities are supported in the activities

described in the Project Description detailed in Annex 2. Further details on the MSAF and

approach are included in the Project Operations Manual. Measurement of achievement of the

project development will be achieved through the PDO-level indicator of a capacity assessment

of the Ministry, and intermediate outcome indicator achievement of improved performance by

Targeted Management Directorates and key staff against AAPs and Budget Plans and relevant

NESP Priority Programs.

C. Financial Management (FM)

41. The FM approach is detailed in Annex 3, Implementation Arrangements.

42. Project funding will be managed by the Directorate of Finance, Administration and

Logistics. FM specialist support will be funded under the project. Experience under the ongoing

ESSP and the series of operations funded over previous years by the FTI Catalytic fund has

demonstrated that the MoE in Timor-Leste has a satisfactory capacity for FM, however, this has

occurred through relative isolation of the projects from the Ministry, with reliance on a project

accountant employed on a contractual basis and use of project spreadsheets separated from the

Ministry. It is envisaged that funds will be integrated onto Freebalance (the GoTL Accounting

Software) when this is rolled out to the MoE. A greater degree of integration, as proposed by

this project, while desirable does entail some fiduciary risk as FM capacity within the Ministry is

quite low, and is the subject of project support.

43. Engagement of development partners with the Government in the formulation and

execution of annual budgets and annual actions plans is important.

44. This project is designed to finance and disburse 100 percent of all eligible project

expenditures as identified in the project documents and Trust Fund Grant Agreement. Ministry

unaudited interim financial reporting requirements and disbursement arrangements through the

Designated Account (DA), are detailed in Annex 3. The project will have one expenditure

category of Consultants and Operational Costs.

45. The GoTL has well documented processes and procedures with adequate segregation of

duties and these are generally followed in World Bank projects. While internal audit within

Timor-Leste is very weak, FM supervisions of World Bank Education Projects have not revealed

any material internal control issues.

D. Procurement

46. Procurement of consultant services will be carried out in accordance with IDA‘s

―Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and

Grants by World Bank Borrowers‖ dated January 2011, and the provisions stipulated in the legal

agreements. The procurement plan would be updated at least annually or as required to reflect

the actual project implementation needs and improvements in institutional capacity. Consultant

Services is the main category for project support. Details of methods and thresholds are

12

provided at Annex 3. In addition, GPE financing will support incremental operating costs.

Overall responsibility for project implementation rests with the Directorate of Procurement.

Procurement activities will be carried out by the Department of Procurement of the Directorate

of Procurement, supported on an intermittent basis by an international procurement advisor

contracted under the project. This position has been previously supporting capacity development

of the procurement responsibilities of the on-going education projects in the portfolio. The

Department is also supported by two national procurement officers.

47. An update of the assessment of the capacity of the MoE to implement procurement

actions for Bank-supported projects was carried out in May 2010, and a Situational Analysis was

undertaken in July 2011 by the international procurement advisor supported under ESSP. The

overall project risk for procurement is ―high‖, consistent with the previous Country Procurement

Assessment Report. Issues and risks concern identified include the implementing agencies‘ lack

of available procurement expertise and the overall administration for the numerous consultants‘

contracts, and grants as well as planning and programming of the various training initiatives.

The project will itself support a number of activities with the objective of carrying out the

priority procurement strengthening agenda of the Ministry.

E. Social (including Safeguards)

48. The population of Timor-Leste is considered indigenous, and significantly poor and rural.

The poverty rate in 2007 was 49 percent. Human Development outcomes are weak but

improving. There are 32 language groups in Timor-Leste, indicating a significant diversity of

social groupings. Divisions along ethno-political lines marked unrest in 2006 which affected

service delivery. Service delivery concerns raised with government, civil society and donor

partners commonly include teacher absenteeism, school feeding programs, and access to tertiary

scholarships, with a perception of systemic bias to Dili-based elites regarding the awarding of

tertiary scholarships. Due to low levels of Portuguese fluency which vary across the country,

language of instruction is a source of frustration, with teachers poorly trained in the skills needed

to teach languages including the most common language of Tetum.

49. Social and safeguards policies are not triggered as the project is focused on management

strengthening at the central Ministry level.

50. Gender parity in access and management by 2015 is one of the three core goals of the

NESP. The gender balance is quite even for primary education, but becomes progressively less

so at higher levels of education and in the professional world, with only 38 percent of the

students at the National University being female. In the education workforce, women are

increasingly outnumbered as the levels increases, and are underrepresented in management

positions. The low number of women in senior management means that women‘s voices are not

always represented in policies and decision making. Terms and conditions are not favorable to

female employment. Analysis of gender issues, and recommended approaches and policy and

procedure changes for the project to support, are included in the Gender Analysis at Annex 8.

Annex 8 also identifies priorities for data collection related to EMIS strengthening and for

particular activity priorities emerging for the project to support are further listed.

13

F. Environment

51. Environment safeguards are not triggered as the project is focused on management

strengthening at the central Ministry level. The focus on management strengthening includes

inputs of technical assistance and training. No safeguards are expected to be triggered and no

physical investments are planned in the proposed project.

14

Annex 1: Results Framework and Monitoring

TIMOR-LESTE: Management Strengthening Project

Indicator Baseline

Target Values

(Proposed changes in bold)

Data Collection and Reporting

YR1

(2013)

YR2

(2014)

YR3

(2015)

Frequency

and

Reports

Data Collection

Instruments

Responsibility

for Data

Collection

PDO level result indicators:

Improved rating of sector management capacity assessment To be

carried out

Improved

assessment

result

Improved

assessment

result

Annual Independent

assessment

of Ministry

management

capacity

DG-

CS/GAEM

Intermediate result indicators:

1. Performance by Targeted Management Directorates and

key staff against AAPs and Budget Plans and relevant

NESP Priority Programs, including:

1) Priority Program 2: Basic Education Reform

2) Priority Program 7: Improving Teacher Quality

3) Priority Program 8: General Management Reform

4) Priority Program 10: De-concentration and

Organizational Improvement

5) Priority Program 11: Introducing Information and

Communication Technology and Management Information

Systems

5/13 (AJR

2013)

50%

Satisfactory

80%

satisfactory

100%

satisfactory

Annual

NESP

Performance

Assessment

Framework

(PAF); AJR

reporting;

Annual

project

progress

report

GAEM/ DG-

CS

2 Strength of PFM systems in the Ministry; as measured

by:

a) The average deviation (in percentage) of budget

execution from original budget across all National

Directorates;

b) Budget Execution measured in cash basis; and

c) Presence of transparency, competition and complaints

mechanisms in procurement.

a)Budget

Variation :

6%

a) ≤5%

a) ≤4%

a) ≤3%

a) and b) Dir.

of Finance

and Logistics

c) DG-CS,

Dir. of

Procurement

b) Budget

94%

b) 97%

b) 97%

b) 97%

15

Annex 2: Detailed Project Description

TIMOR-LESTE: GPE Management Strengthening Project

1. The MSP will support the MoE to achieve the NESP by strengthening the capacity and

systems of identified Ministry Directorates and Senior Executive Officers responsible for NESP

Management Reform Priority Programs. By so doing, it will provide vital support to these

directorates in their management oversight and corporate services support to the Ministry‘s

implementation of the Education Reform Priority Programs of the NESP. By supporting the

Ministry to implement key reform agendas, project support will contribute both to: (i) developing

long term capacity to manage the education sector; and (ii) providing the MoE with

supplementary short term implementation and technical advisory capacity to manage its ongoing

programs funded by GoTL and its donor partners. The support will aim to increase quality of

budget expenditure and plan implementation, as well as leverage more GoTL and donor funding

to support the service delivery goals of NESP.

2. The project will build on achievements and lessons learnt from previous activities in the

area of management support. The project‘s approach will strengthen the Ministry‘s

management, planning and monitoring of external support based on evidence, with a clearer

focus of supported activities prioritized through sector discussion, and planned and monitored

through a participatory governance framework including medium-term and evidence-based

planning. A PFM Reform Matrix and a MSAF, consultatively developed and prioritized by the

Ministry, will be key tools for focusing external support to NESP implementation. Two major

NESP Management Reform Priority Programs will be targeted by this project – Priority Program

8: General Management Systems, and Priority Program 12: Planning and Budgeting Excellence.

PROJECT DESCRIPTION

Project Components

Component 1: Strengthening Targeted Management Directorates (Estimated cost

US$1,812,000)

3. Component 1 will strengthen senior and general management systems in Targeted

Management Directorates to ensure the implementation of the NESP. The component supports

NESP Priority Program 8, ‗General Management Systems‘ ensuring the implementation of the

Strategic Plan.

4. The intermediate outcome indicator of Component 1 will be ―Improved performance by

Targeted Management Directorates and key staff against AAPs and Budget Plans and relevant

NESP Priority Programs, including:

a. Priority Program 2: Basic Education Reform;

b. Priority Program 7: Improving Teacher Quality;

c. Priority Program 8: General Management Reform;

d. Priority Program 10: De-concentration and Organizational Improvement; and

16

e. Priority Program 11: Introducing Information and Communication Technology and

Management Information Systems.‖

5. This component includes a program of prioritized support to the management functions

of the MoE, essential to manage NESP implementation. The component includes the Ministry‘s

management and coordination of overall capacity development based on an overarching Ministry

CDP, strengthened senior management of strategic and administrative processes, and continued

support to the legal framework to implement and adapt the NESP in coordination with

stakeholders.

6. The program of management support includes technical assistance coordinated with

Government-funded training costs. Management support will include on-the-job training and

applied skills enhancement activities, technical assistance, and mentoring activities and an

institutional twinning and advice to develop a Government-funded international training

partnership. Partner support will be coordinated through a Management Strengthening

Reference Group to be led by the Ministry.

7. First, this component will aim at strengthening senior management capacity in terms

of sector leadership, coordination, and oversight functions. These functions are aligned with

NESP Priority Program for ―General Management Systems‖ (Priority Program 8). It will include

the following activities:

a. Providing management support in the offices of the Minister, Vice-Minister, and

Director-Generals. This support will ensure strategic and effective senior

management and successful implementation of comprehensive capacity development

actions. The project proposes support from an international institution in the areas of

education management and organizational development as proposed below. This will

support NESP activity 8.2.1 and 8.3.1. NESP activity 8.2.1. ―Design and implement a

CDP for the Office of the Minister and Vice Minister‖. NESP activity 8.3.1. ―Design

and implement a CDP for the Offices of the Director-Generals and Inspector-

Generals of Education, and for the INFORDEPE President‖. Activities include

technical support to the refinement and implementation of comprehensive

management support and capacity development actions in the offices of the Minister,

Vice-Minister, and Director-Generals, Inspector Generals, and INFORDEPE

leadership to ensure effective senior management of strategic and administrative

processes based on SOPs, management protocols, and functional analysis. This

includes the establishment and implementation of effective administrative procedures

and regulations. Priority examples of these include anti-corruption governance

mechanisms and procedures to make the MoE a women-friendly work place.

b. Providing technical support to Ministry coordination and oversight of

management strengthening tasks, including advice towards a learning partnership

with an international institution, and strengthening national, regional, and district

level sector management and coordination. This includes support to NESP activities

8.2.2 and 8.2.3 to develop management by results tools, and 8.4 aimed to design and

implement a program of management support based on a capacity building plan for

17

management directorates. This component will provide technical support to Ministry

coordination and oversight of management strengthening tasks including the

implementation and monitoring of the MSAF and associated tools such as Training

Needs Analysis and staff performance review. Advice will be provided on

management of training and support for staff to address identified gaps in achieving

AAPs of Directorates. Key features of the management strengthening approach of

the project include results- based management, change management, leadership,

SOPs and process identification, participatory development and management,

management of required competences, and monitoring of results and processes. Key

management strengthening actions include communication strategy functional

analysis, identification of competencies in both organizational and management

processes, and development of SOPs, and participatory process design. Advisory

support will target the Director-General of Corporate Services, the Director-General

of School Management, Innovation and Curricular Development and also the

Directorate of Human Resources to lead development of the strengthening of

directorate capacity. This activity will include coordination of essential technical

support to strengthening of national, regional, and district Directorates, as per NESP

8.4. The detailed management technical approach contained in the Project Operations

Manual provides further discussion of management strengthening approaches to be

considered.

c. Provision of support to the Ministry in coordination and management of MSP. This includes management of the MSP and of additional external support to

management strengthening in coordination with development partners and

stakeholders. Management arrangements are detailed in Annex 3. Inputs include

national consultant expertise as well as contributions by international technical

assistance funded under other project activities.

d. Provision of technical support to the development and implementation of an

adequate legal framework to implement and adapt the NESP. Technical support

to complete already identified legislation and other legal instruments required under

the legal framework and support implementation that ensure there is compliance with

the law of Timor-Leste. Additionally, support in development of legal instruments

that are identified as necessary during the planning processes of NESP. Support to

legal strengthening will help ensure the adequate coordination of the Ministry‘s legal,

budget and policy frameworks. A training and support program will be provided for

development of new legislation and to raise awareness of Ministry staff of existing

legislation and competencies relevant to their functions. Support to the establishment

and adequate staffing of an entirely Timorese-staffed Legal and Cooperation Office

will prepare national staff to undertake three key areas of activity:

i. Deliver legal advice in sectoral areas of the Education System;

ii. Help finalize legislation for the legal framework; and

iii. Contribute to effective training and support programs.

8. Second, this component will strengthen the policy and planning capacity of Targeted

Management Directorates for improved service delivery. Aligned with NESP Priority

Program for ―Basic Education‖ (Priority Program 2), the project will support the capacity of the

18

Directorate of Basic Education to support the 202 Basic Education Cluster Schools (Escolas

Básicas) management teams to develop, from the school level, the four School Standards Pillars:

Quality School Governance, Positive School Environment, Effective School Management and

Quality Learning Outcomes that are articulated in the draft Schools National Quality Standards

Framework.

9. This area of activities will be implemented under the leadership of the National

Directorate of Basic Education and INFORDEPE through technical assistance, and training and

support activities. Additional partner support will be coordinated through the Basic Education

Implementation Team as required under the NESP led by the Ministry. Activities will include:

a. Technical support for NESP Priority Program 2 for the Directorate of Ensino

Basico, and other directorates and Ministry bodies, to effectively coordinate the

development of planning, implementation, monitoring and evaluation of activities

that promote effective school based management. Support will be given to

developing the Escola Básica Implementation Plan, including school management

policy and procedures manual. Priority is to be given to strengthening systems,

targets, deadlines, and accountability mechanisms. This includes ensuring that

representatives from Ministry district structures and Escola Básica are able to

participate effectively in these processes. This area of support recognizes that

effective Escola Básica implementation is a Ministry priority and will be integrated

into MSP and NESP implementation processes so that the capacity of multiple

directorates is improved to meet their NESP responsibilities. Areas of activity are

outlined in sub-program 2.3 of the NESP, specifically:

i. Result Area 2.3.1 ‗Plan for the new cluster-based management system

designed and implemented‘;

ii. Result Area 2.3.2 ‗School management policy and procedures manual

developed and implemented‘.

b. Technical support will be provided to the development of the Escola Básica

management training modules and materials, including development of systems

for management by results, and provision of training and support to Escola Básica

leaders and Ministry staff who work with Escola Básica. Modules of training will

include the four Escola Básica pillars of: Quality School Governance, Educational

Leadership, Positive School Environment, Physical Resource Management, Human

Resource Management, Financial Management, Information Management, and

Quality Learning Outcomes. Methods of training and support required to improve

Escola Básica management will be identified and appropriate delivery mechanisms

developed and implemented. Systems will be developed and implemented to

monitor and evaluate the impact of training and support on results at the school

level. Areas of activity are outlined in sub-program 2.3 of the NESP, specifically:

i. Result 2.3.3 ―A capacity development program for school managers and

technical staff based on a management-by-results approach is developed and

implemented‖.

ii. Result 2.3.4 ―Systems are developed and implemented for school managers

and others to promote management by results‖.

19

10. Third, this component will strengthen the training capacity of the Ministry, including

for management training for improved service delivery. The project will support the

management strengthening of the Instituto Nacional de Formação de Docentes e Profissionais

da Educação –INFORDEPE to support the achievement of NESP Priority Program 7: Improving

Teaching Quality, specifically Results 7.2 and 7.3, and other training required for non-teaching

staff that are identified in the NESP and during NESP implementation. This component

recognises that additional support is required due to the vital role INFORDEPE has in improving

the overall performance of the Ministry and schools and the urgency of INFORDEPE providing

the services that are required of it under its Decree Law, including its management training

responsibilities. It is recognised that the MSP does not have the resources to fully support

strengthening the management and service delivery of INFORDEPE. Therefore, this activity can

be seen as a platform upon which more effective support from the Ministry and donors can be

targeted in the future. Current coordination with significant support from other parties to

INFORDEPE management and teacher database development (including the Universities of

Minho and Aveiro in Portugal) is also essential.

11. The project aims to provide support that ensures INFORDEPE is informed of the extent

of resources, facilities, equipment, and capacity available and required to fulfil its training

mandate. The final output will cost CDP as is required under NESP 8.3.1 and 8.4.1.

12. A key approach is the use of technical support to enhance INFORDEPE‘s own capacity

to identify its needs reflecting its training mandate, plan how to address those needs and to

develop the advocacy skills so that it can clearly articulate to the Ministry and donors the support

that it requires and how this support should be delivered. The Research Unit of INFORDEPE

will be the counterpart of technical support provided by the MSP in the production of the

INFORDEPE CDP. In parallel, support will be provided to the President and Vice Presidents of

INFORDEPE so they are able to strengthen their ability to participate in project activities.

13. Partnerships in this sub-sector will be important. The project proposal recognizes the

significant ongoing work of key partners supporting INFORDEPE, including Portugal, Brazil,

and UNICEF, and the likelihood of significant new donor support. Alignment of donor support

to the NESP and planning generated as a result of NESP activities. The fragmented support for

INFORDEPE to date will transition to better coordination by partners as a key feature of future

support. This is based on recognition that INFORDEPE and the Ministry manages and leads the

new agenda for strengthening of INFORDEPE.

20

14. Specific activities within the this area of the component include:

a. A Functional Analysis and Needs Assessment of INFORDEPE, with a lead role of

the INFORDEPE Research Unit in the process, and which uses the INFORDEPE,

Decree Law, the NESP and NESP planning documents to determine the full extent of

INFORDEPE functions. Of particular importance is to distinguish what constitutes

training, which is the responsibility of INFORDEPE and other forms of teacher,

school manager, and non-teacher support such as mentoring and on-the-job

assistance, which are the responsibilities of Ministry directorates. The needs

assessment of INFORDEPE would link the functional analysis to the existing

institutional arrangements, management and administration systems, staff capabilities

and resources currently available to INFORDEPE.

b. Production of a CDP based on the functional analysis and needs assessment of

capacity development requirements, timeframes for achievement, sources of support

and likely costs. This plan should involve participation and input from INFORDEPE

and have evidence that inputs from Ministry directorates, school managers, and

teachers has been given proper consideration in the planning process.

c. Technical Support to Implementation of the CDP so that INFORDEPE is able to

clearly articulate what future support it requires from the Ministry and donors, plays a

leadership role in design of that support and ensures that support is consistent with the

CDP. The project will assist INFORDEPE managers to ensure that their Officers have

the ability to manage this process and plan implementation.

15. Implementation of the overall component will recognize and provide support to some key

priorities for management strengthening:

a. A Communication Strategy on Management Support is an urgent priority, to:

i. Achieve ‗Buy-in‘ on management reform;

ii. Explain the focus of the MSAF and specifically the MSP and its link to the NESP;

iii. Gain input from key Ministry staff at the design stage and requires workshops

once the operation manual is developed;

iv. Develop baselines (especially regarding attitudes and organizational culture) and

reaffirm these through the life of the project;

v. Inform all teams about NESP, annual plans accountability system and starting of

process definition workshops; and

vi. Meet other communication priorities as identified / emerging during

implementation.

b. Physical environment is a key constraint to effective management. This has

been identified through consultation with Ministry staff. A suggested approach is a

committee based in the National Directorate for Finance and Logistics to consider

proposals from Directorates for physical environment funding priorities, for support

from identified Ministry budget.

21

c. Although the Ministry has experience and capacity in selecting and managing

technical advisors, this requires improvement, further standardization,

formalization, and empowerment of lower level managers. The Ministry‘s

ESSP technical advice selection processes have been Ministry-managed. The

Ministry is willing to improve its capacity to recruit and manage its technical

advisors transparently, to hold them accountable, and these processes can be further

strengthened including for transparency and accountability.

d. The project will provide advice to develop a learning partnership with an

international institution. The learning partnership is proposed with a Lusophone

institution with a range of successful experience and training offerings in the

education, public administrative reform, and organizational development spheres in

a context similar to that of Timor-Leste. The objectives of the partnership will

include: strengthening the institutional systems and capacity of the Ministry through

access to multiple areas of expertise and modular programs, beyond the traditional

approach of individual technical specialists; sine qua non criteria selection of a

partners with Portuguese-speaking capacity and experience working with education

management and administration, and similar governance and capacity contexts

(potentially a South-South collaboration).

Component 2: Strengthening Public Financial Management and Evidence-based Planning

Capacity, including Management Information System (Estimated cost US$988,000)

16. Component 2 will support NESP Priority Program 12, ―Achieving planning and budget

excellence‖. Support will aim to fully achieve Result 12.35 and partially achieve Result 12.4

6.

This component will also support NESP activities 8.2.2 and 8.2.3 to design and implement

management by results tools and coordinate and monitor the performance of the NESP.

17. The intermediate outcome indicator of Component 2 will be the ―Strength of PFM

systems in the Ministry‖, as measured by:

a. The average deviation (in percentage) of budget execution from original budget

across all National Directorates;

b. Budget Execution measured in cash basis; and

c. Presence of transparency, competition, and complaints mechanisms in procurement.

18. The component will be implemented through technical assistance, and training and

support activities. Partner support will be coordinated through a Management Strengthening

Reference Group to be led by the Ministry, as well as through a PFM working group.

Component 2 will include the following activities:

a. Technical support to strengthened policy and planning systems and capacity in

the GAEM and the Directorate of Planning, Statistics, and Information Technology

5 R12.3: A quality, transparent financial management system is fully achieved. 6 R12.4: The process of Monitoring and Evaluation of the Implementation of the NESP is fully supported

22

including the continued development and use of NESP implementation tools, AAPs,

and School Development Plans, as per NESP Priority Program 12.

b. Technical support to quality, transparent FM systems, with support to and

implementation of the PFM Reform Matrix with active Ministry of Finance and

partner participation. This includes priority areas such as financial management

capacity at all levels, strengthened budget development process, more accurate

financial management reporting and information flows, strengthened financial

systems and strengthened ability to cost programs and operate and update cost and

expenditure forecasting and modeling tools (See PFM Reform Matrix, Figure 3).

This activity will be of critical importance in supporting the Ministry‘s efforts to

improve the efficiency of expenditure of Education finance from both government

and development partner sources. Significant analysis is available to support these

efforts, including the refined costing of the NESP in 2011, and sector expenditure and

efficiency analysis undertaken in 2011. It is also expected that this component will

contribute to the establishment of a pooled fund for joint provision of external support

in education through government systems. This area of support reflects NESP

Priority Program Result 12.3, ―Creating a quality, transparent financial management

system‖.

c. Technical support and support to training to strengthen Procurement and

Contract Management functions in the MoE. This includes refinement,

implementation, and monitoring of a Procurement and Contract Management

Training Plan and Manual, and legal support to the Directorate of Procurement. The

Ministry will support strengthened Procurement and Contract Management through

adequate and sustained staffing and resourcing of the Directorate of Procurement, and

commitment of responsible staff for training in procurement and contract

management responsibilities within Directorate AAPs and Training Plans.

Strengthening of this function will be closely linked to the support to Priority

Program 12, ―Creating a quality, transparent financial management system‖.

Technical support will also contribute to Priority Program 13, ―Ministry Management

of Technical Assistance‖, particularly in the Ministry performance monitoring and

evaluation of consultants, suppliers and contractors‘ performance, including those

provided through external support.

d. Technical support to Monitoring and Evaluation of the NESP and MIS including

regular participatory monitoring of NESP achievement and development of

monitoring, analytic and evaluative capacity in the MoE; and updating, maintenance,

and upgrading of the EMIS and related systems. Initial monitoring tools and

performance evaluation frameworks have been developed by previous support under

the ESSP and Just In Time Policy Notes Trust Fund in 2011. Continued support will

include intermittent specialist visits to support the GAEM, Ministry Senior

Management and the Department of Planning, Statistics, and Information Technology

to maintain, analyze, and review Strategic Plan performance. This support will align

to Priority Program 12 to monitor the implementation of the NESP.

23

The activities will be implemented through technical assistance and training

activities, under the leadership of the National Directorate of Planning, Statistics, and

Information Technology. Partner support will be coordinated through the existing

EMIS Working Group, led by the Ministry.

24

Ministry of Education Public Financial Management Reform Matrix (September 2011)

Category Activities Responsibility Primary Performance

Indicator

Comprehensiveness

and Transparency

1. Revise the structure of the budget and ledger system as a

minimum to three broad cycles of school education DG-CS Classification of the budget

2. Define the combined sources AAP for the MoE all DGs

Extent of unreported

government operations

3. Multi-donor fund for Management programs of the strategic

plan DG-CS Classification of the budget

4. Integrate the donor-funded projects in the Freebalance DG-CS Classification of the budget

5. Donors aligning their support to national strategic objectives

and increasingly use of the Government‘s systems DG-CS Classification of the budget

Policy-based

Budgeting

6. Cost of the Strategic plan and prioritization all DGs

Multi-year perspective in fiscal

planning, expenditure policy

and budgeting

7. Continue to improve the budget system process, policy-based,

transparent, and participatory, and start to introduce

performance management measures DG-CS Classification of the budget

Predictability and

Control in Budget

Execution

8. Prepare the details of the annual procurement plan in the

beginning of the year all DGs

Competition, value for money

and controls in procurement

9. Complete the school census, update EMIS, and reconcile with

payroll all DGs

Effectiveness of payroll

controls

10. Detail staffing profile based on the new Escola Básica and new

organic law (teachers separate from administrative functions ) all DGs

Effectiveness of payroll

controls

11. Procurement reform that includes new recruitment of staff and

simplification of procedures and documentation in more

languages DG-CS

Competition, value for money

and controls in procurement

12. Implement in the Ministry the decentralization functions from

Ministry of Finance DG-CS

Effectiveness of internal

controls for non-salary

expenditure

Predictability and

Control in Budget

Execution

13. Produce operational manuals and detail business process in the

4 languages for the Priority Programs (school feeding,

distribution of materials, etc.) all DGs



expenditure

14. Implement new financial procedures for the Escola Básica

clusters DG-CS



expenditure

25

15. Implement new financial procedures for the Districts operations DG-CS



expenditure

16. Imprest tranches transferred directly to the new official bank

accounts in each Escola Básica (reduce fiduciary risks) to avoid

delay payments DG-CS



expenditure

17. Create a small unit of quality assurance for commitments,

contracts and payment requests all DGs



expenditure

18. Submit at the beginning of the year the annual audit plan

based on the risk assessment by the Inspector-General all DGs Effectiveness of internal audit

Accounting,

Recording, and

Reporting

19. Coordinate unit report on quarterly basis on the consolidated

annual actions plans (government and donors) DG-CS

Quality and timeliness of in-

year budget reports

20. Study on how the EMIS can be the main instrument to serve the

Ministry managers (budget/planning/policy

/monitoring/reporting) and be the evidence of service delivery DG-CS

Quality and timeliness of in-

year budget reports

21. Implement new financial procedures for the Imprest system in

the Regions and reflect the financial operations in the

Freebalance DG-CS

Timeliness and regularity of

accounts reconciliation

22. Reconcile and consolidate all the information related with the

cash balance available in all official bank accounts of the MoE DG-CS

Timeliness and regularity of

accounts reconciliation

Cross-cutting

23. Give training to the managers on management procedures,

communication, and administrative procedures DG-CS Cross-cutting

24. Provide adequate recruitment of staff in the key areas like

finance, procurement and human resources all DGs Cross-cutting

25. Complete the recruitment of the staff to the MoE - Escola

Básica all DGs Cross-cutting

26

Figure 1: Ministry of Education Organizational Chart

Director Geral Serviços

Corporativos

(DGSC)

Director Geral

Administração Escolar,

Inovação e

Desenvolvimento

Curricular

(DGAEIDC)

Director Geral Cultura

(DGC)

DN Finanças e

Logística

DN Recursos

Humanos

DN Plano,

Estatística e

Tecnologias de

Informação

DN Acção Social

Escolar

DN Ensino Básico

DN Ensino

Secundário Geral

DN Educação Pre-

Escolar

DN Ensino

Secundário

Técnico-Vocacional

DN Museus e

Bibliotecas

DN Artes, Cultura

e Indústrias

Criativas Culturais

DN Património

Cultural

Ministro de Educação

Vice Ministro Secretário de Estado da

Cultura

DN Ensino

Recorrente

Inspector Geral de

Educação

(IG)

Sub-Inspector

Geral para

Administração e

Finanças

Sub-Inspector

Geral para

Administração

Escolar

DN

Aprovisionamento

DN Currículo e

Avaliação Escolar

Direcções Regionais

Instituto Nacional de

Formação de

Docentes e

Profissionais da

Educação

(INFORDEPE)

Agência Nacional

para a Avaliação e

Acreditação

Académica

(ANAAA)

Biblioteca

Nacional

Museu

Nacional

Dept Serviços

Corporativos

Dept Ensino

Secundário Geral e

Secundário Técnico-

Vocacional

Dept. Recursos

Humanos

Direcções Distritais

Secção Educação

Pré-Escolar e

Ensino Básico*

Secção Cultura

Superintendentes

Distritais

Inspectores

Escolares

Directores Regionais:

a) Direcção Regional de Educação I (Distritos de Baucau, Viqueque, Lautém e Manatuto);

b) Direcção Regional de Educação II (Distritos de Díli, Liquiçá e Aileu);

c) Direcção Regional de Educação III (Distritos de Ainaro e Manufahi e Covalima);

d) Direcção Regional de Educação IV (Distritos de Ermera e Bobonaro);

e) Região Especial: Direcção Regional de Educação de Oe-Cusse.

Unidade de Infra-

Estruturas e

Manutenção dos

Equipamentos da

Educação

Unidade de Media

Educativa

Secção Serviços

Corporativos

Secção Acção

Social Escolar Ensino Recorrente

Gabinete de Análise

Estratégica e

Modernização

Gabinete de Protocolo e

Assessoria de Imprensa

Gabinete Jurídico e de

Cooperação

Universidade

Nacional Timor

Lorosa’e

(UNTL)

Director Geral Ensino

Superior

(DGES)

DN Ensino

Superior Técnico

DN Ensino

Superior

Universitário

DN

Desenvolvimento

das Ciências e

Tecnologias

Chefe de

Gabinete

Ensino Secundário Geral e Secundário

Técnico-Vocacional

Educação Pré-Escolar e Ensino Básico

*Os Distritos de Dili, Liquiçá,

Covalima e Bobonaro terão

uma Secção de Educação

Pré-Escolar separada.

27

Annex 3: Implementation Arrangements


Project Institutional and Implementation Arrangements

1. The Ministry will have overall responsibility for coordination and implementation of the

MSP including procurement, disbursement, and financial management.

2. Key tools for strengthening the Ministry‘s management of the project include:

a. the existence of a national project coordinator and national finance and

procurement consultant staff responsible for supporting Ministry management of

previous Bank-supervised projects in the Ministry;

b. the development of a Project Management Structure including roles, reporting

arrangements, and ways of working among partners for previous Bank-supervised

projects in the Ministry;

c. the dedicated focus on Ministry project management within Component 1; and

d. the use and strengthening of existing Ministry experience and capacity in

selecting and managing technical advisors, which requires further standardization,

formalization, and lower level management empowerment. As further discussed

in the Management Strengthening approach detailed in the Project Operations

Manual, the Ministry is demonstrating its capacity to recruit and manage its

technical advisors transparently. The NESP identifies the priority for developing

technical assistance management protocols, standards and processes. National

and Education sector-based policies on technical assistance management provide

opportunities for further strengthening.

3. The MoE will provide overall vision of the management strengthening goals and policies

that steer the broad direction of the project. The executive management of project activities will

be the responsibility of the DG-CS and overall coordination and management the responsibility

of his office. Management of the MSP will be executed with Component 1 activities to support

supplementary capacity for management of additional external support to the Ministry. On a

day-to-day basis, the management of project activities will rest with the Director-Generals and

Directors in whose Directorates MSP activities fall. Project coordination, reporting, and

monitoring will be the responsibility of a national consultant project coordinator who would

report to the office of the Director-General. A monthly financial and technical report to the

Minister and Vice Ministers by the Director-Generals and Directors will be introduced as a

standard procedure and is detailed in the Project Operations Manual.

4. A PIU will be established to perform support functions including procurement,

disbursement, financial management, and monitoring and evaluation of project implementation.

The PIU will directly report to DG-CS. PIU is responsible for compiling quarterly progress

report synthesizing information from relevant Directorates. Consistent with the NESP, the DG-

CS should report to the Minister. Further details of reporting arrangements are specified in the

Project Operations Manual.

28

5. This process will be supported and informed by the NESP PAF and MSAF.

6. Each Directorate‘s AAPs and other tools for NESP implementation, and the AJR and

quarterly sector development partner meetings, will link the project‘s activities to the

implementation of the NESP and to a strengthened donor coordination structure.

7. The MSP will be managed and integrated in the Ministry‘s NESP implementation and

coordination frameworks. Project management of MSP will apply principles of Ministry

leadership, active management level engagement, and development partner participation. These

structures include:

a. Directorates implementing AAPs for Priority Program Implementation;

b. NESP implementation coordination working groups;

c. A Capacity Development reference group to form as part of the Ministry‘s

development of its MSAF; and

d. Regular ―Quinzenal‖ Ministry meetings

Considering the need for coordination of management strengthening, the Ministry will develop a

Ministry-led calendar of training within the MSAF for the NESP. A Management Strengthening

Reference group, as a specific group for Ministry managers to discuss the human resource

constraints to achieving the NESP, will be supported by the project as a priority. The need to

integrate within existing Ministry structures, and to avoid added burden of additional projects

structures, is a reasonable concern. However, such a group is required for the Ministry to

prioritize and lead its management strengthening agenda, including reducing the burden of the

current fragmented approaches to management strengthening in the Ministry.

Project Administration Mechanisms

8. As part of support provided under Component 1, the national consultant project

coordinator responsible for project coordination, reporting, and monitoring will ensure regular

project reporting to the Ministry executive and to the broader LEG including the World Bank as

supervising entity. A Ministry-led Management Strengthening Reference group will act as

project coordination committee for MSP and for other external support to management

strengthening.

Financial Management, Disbursements, and Procurement

Financial Management and Disbursements

9. Under the Bank‘s OP/BP 10.02 with respect to projects financed by the Bank, the

borrower and the project implementing agencies are required to maintain financial management

systems — including accounting, financial reporting, and auditing systems — adequate to ensure

accurate and timely information regarding project resources and expenditures. These

arrangements are deemed acceptable if they are capable of correctly and completely recording all

transactions and balances relating to the project. In addition, such arrangements are acceptable if

29

they can facilitate the preparation of regular, timely and reliable financial statements and

safeguard the projects assets; and are subject to auditing arrangements acceptable to the World

Bank.

10. Overall, the financial management system will meet the financial management

requirement as stipulated in OP/BP 10.02 subject to implementation of the agreed actions and

mitigating measures. The project risk was rated as substantial due to the high country risk, low

capacity of the MoE over reliance on one current staff member. However, this can be reduced to

Moderate with the mitigating measures proposed in this annex.

Risk Analysis

11. Timor-Leste continues to be a post-conflict country subject to political instability and

macroeconomic fragility. Petroleum savings provide a strong buffer against near term shocks,

but the rapid increase in government spending can pose problems for fiscal and external

sustainability given large non-oil deficits. Timor-Leste has established many of the formal

institutions of governance; however in practice the institutions are fragile. The separation of

powers has been challenged; the judiciary is fragile; findings of the oversight institutions are

ignored by the Executive; Parliament often struggles to perform an effective accountability role.

Timor-Leste‘s position on the Transparency International‘s perceptions index ranking is 146 out

of 180 for 2009, which is consistent with the 145 for 2008. Experience has revealed some

concerns about the Country Public Financial Management System, however there is also

evidence that the situation is improving with the increased revenues and accountability demand

brought on by donors and the incoming oil revenues. While capacity remains low and there is

potential for instability within the country the country environment risk remains high. The table

below summarizes the risk analysis. With the appropriate risk mitigation measures as outlined

the overall risk assessment is moderate.

Type of Risk Risks

Rating

Summary Comments

and Risk Mitigation

Residual

Risk

Rating

Condition of

Negotiations/

of

Effectiveness A. INHERENT RISKS (risk

that arises from environment in

which Project is situated)

Country Level

High High

Timor-Leste continues to be a

post-conflict country subject to

political instability and

macroeconomic fragility.

Petroleum savings provide a

strong buffer against near term

shocks, but the rapid increase

in government spending can

pose problems for fiscal and

external sustainability given

large non-oil deficits. Timor-

Leste has established many of

the formal institutions of

governance; however in

30

Type of Risk Risks

Rating

Summary Comments

and Risk Mitigation

Residual

Risk

Rating

Condition of

Negotiations/

of

Effectiveness practice the institutions are

fragile. The separation of

powers has been challenged;

the judiciary is fragile; findings

of the oversight institutions are

ignored by the Executive;

Parliament often struggles to

perform an effective

accountability role. Timor-

Leste‘s position on the

Transparency International‘s

perceptions index ranking is

146 out of 180 for 2009, which

is consistent with 145 of 2008.

Experience has revealed some

concerns about the Country

Public Financial Management

System, however there is also

evidence that the situation is

improving with the increased

revenues and accountability

demand brought on by donors

and the incoming oil revenues.

While capacity remains low

and there is potential for

instability within the country

the Country Environment Risk

remains High

Entity Level High High

The MoE has been identified as

having low overall capacity and

is sometimes vulnerable to

political forces on policy

formulation, occasional

restructuring, FM staff

retention problems and

consultant turnover. The

higher risk rating reflects the

lack of FM capacity within the

MoE and the reliance advisers

and consultants.

(1) Sufficient resources have been

assigned to ensure adequate FM

coverage within other MoE projects

and there have been minimal FM issues

in these projects.

(2) Additional Staff within the project

unit are being trained to reduce the

reliance on the current FM advisor.

(3) Repeated reassurances of the

priority of the initiative from the

highest level of the MoE during

preparation.

Project Level Moderate Moderate

Project Size:

US$2.8 million of GPE

funding.

Project Duration:

3 years.

Project Complexity:

The project has one

implementing agency, one

disbursement categories

including only consulting

services and operating costs

31

Type of Risk Risks

Rating

Summary Comments

and Risk Mitigation

Residual

Risk

Rating

Condition of

Negotiations/

of

Effectiveness and 2 components.

OVERALL INHERENT RISK Substantial Substantial

B CONTROL RISKS (risk that

the Project’s financial

management system is

inadequate to ensure funds used

economically and efficiently for

intended purpose)

1. Budgeting There are no activities intended

to be funded by government so

no government budgeting

issues for funding of the

project.

However, the project will need

a budget and monitor actual

against, even more important

for report based disbursements.

Substantial

The MoE have adequately budgeted for

the existing World Bank projects. Also

as this project is management

strengthening through capacity building,

including PFM then this aspect of the

project would also assist develop and

improve project budgeting processes.

Moderate

2. Funds Flow

Fund flows under existing

World Bank projects have been

well established and there have

been no issues previously.

Low

Low

3. Accounting

(1) Currently project accounts

are maintained on

spreadsheets and these

generally do not provide the

same level of robustness as an

accounting software package.

(2) The planned roll out of

Freebalance, the government

accounting system from the

start of the project will require

user training.

(3) There is limited experience

and capacity of staff both

within MoE and in the current

MoE Bank projects and an

over reliance on the project

accountant.

Substantial

(1) Training will be provided to staff

before Freebalance is implemented.

(2) Until the project accountant is

confident the Freebalance is meeting the

project‘s accounting needs, transactions

will be maintained concurrently on

spreadsheets in the same format as other

MoE bank projects.

(3) Additional training (this has already

started) is provided to other staff

working on the project accounts to

reduce the over reliance on the current

project accountant.

Moderate

.

32

Type of Risk Risks

Rating

Summary Comments

and Risk Mitigation

Residual

Risk

Rating

Condition of

Negotiations/

of

Effectiveness

4. Internal Controls

While the current Bank projects

have maintained adequate

internal controls and generally

followed country internal

control procedures there is still

a strong perception of a lack of

transparency and hence there

risk that controls will not

always be complied with.

Moderate

The MoE has a functioning internal

control system that will be used to

support this project. These controls have

been reviewed in previous projects and

have been found to be in full

compliance with Bank guidelines. FM

supervision missions will review both

the controls systems and compliance to

the systems.

Moderate

5. Financial Reporting The project team have had

previous experience with

World Bank reporting and

reporting has been timely and

generally of a high standard.

However, given the low

capacity within the country and

the reliance on the project

accountant there is some risk if

this person leaves.

Moderate

(1) Quarterly IFRs will be required.

(2) Ongoing FM capacity building

within the Ministry and project staff

through Financial Advisors employed

within the MoE.

Moderate

6. External Audit

Audits may not be completed

by due date. In recent years

Timor-Leste projects have a

poor record in issuing audits to

the Bank within the agreed

time frame. This is not only a

potential breach of the Grant

Agreement but also delays the

opportunity of the project to

obtain independent verification

of the accounts and to address

any issues identified.

Moderate

MoE to ensure that accounts are ready

when the auditor arrives and to liaise

with government over the timing of the

completion of timely audits.

Moderate

CONTROL RISK Moderate Moderate

OVERALL FM PROJECT

RISK

Substantial Substantial

Implementing Agency

12. Project funding will be managed by the Directorate of Finance, Administration and

Logistics. The Bank and the MoE recognize that the Directorate of Finance, Administration and

Logistics will require support from external finance management consultant or Technical

Assistance (TA) during the project‘s implementation period. The MoE will provide for this

technical support in its annual financial plans and budget, and funded under this project.

13. Experience gained from the ongoing ESSP and the Second Chance Education Project,

and a series of operations funded over the past three years by the FTI Catalytic fund has

demonstrated that the MoE in Timor-Leste has a satisfactory capacity for financial management.

However, this has occurred through relative isolation (ring fencing) of the projects from the

33

Ministry. A project accountant is employed on a contractual basis and hence is not an employee

of the MoE. The FM success of the recently completed and on-going Bank projects has

depended largely on the expertise of this accountant. The accounts for the project are maintained

on spreadsheet and there is no integration of the FM requirements, such as either by reporting or

staffing, other than through authorizations of purchases orders and cheque signatories. A greater

degree of integration, as proposed by this project, while desirable, does entail some fiduciary risk

as FM capacity within the MoE is quite low.

Funding Sources

14. The MSP will be funded from a GPE grant of US$2.8 million with a project

implementation period of 3 years.

Budget

15. A total budget for the project will need to be prepared by the MoE and broken down into

annual budgets. Procurement plans will be prepared to support the budget. Detailed budgets for

operating costs will need to be prepared annually for approval by the Bank.

Funds Flow and Disbursement Arrangements

16. This project is designed to finance and disburse 100 pecent of all eligible project

expenditures as identified in the project documents and GPE Grant Agreement.

17. Disbursements methods of Advance, Replenishment and Direct Payments will be used.

There is no goods procurement under the project, therefore there is no need for Special

commitments.

18. Project funding will be deposited into a DA through the Ministry of Finance in a

commercial bank held by the GoTL on behalf of the project. The account will be in US Dollars.

Withdrawal Applications to replenish the DA will be report-based disbursements on a quarterly

basis, ensuring sufficient funds to cover 6 months expenditure requirements.

19. The project will have one expenditure category as listed below:

Category Description GPE Grant US$ Percentage of

expenditures to be

financed (inclusive of

taxes)

Consultants‘ services, Operating Costs for the

Project

2,800,000 100

Total 2,800,000

Accounting Systems

20. The project will initially continue to use spreadsheets to record its accounting

transactions until such time as the Ministry of Finance approves the roll out of the Government

of Timor-Leste‘s Accounting Software (Freebalance) to World Bank funded projects (now

approved in principle and scheduled for 2012). While the accounting transactions for other

34

World Bank funded projects at the MoE have been well maintained on Spreadsheets there are

some risks over the corruption of files, failure to maintain adequate back up files and lack of

capacity within spreadsheets to operate as an effective accounting recording system.

21. While Freebalance will enable great reporting options - a more robust system and the

integration into the MoE consolidated reports - and address systems security issues, there is some

initial risk as the current project staff and MoE finance staff has limited skills in Freebalance.

Therefore it is crucial that adequate training is provided.

22. In May 2012, Ministry of Finance has indicated that it has approved and planning for the

rollout of Freebalance to the World Bank funded projects, with priority for new projects.

Freebalance system can be implemented as early as September 2012 if not earlier.

Internal Controls

23. The GoTL has well documented processes and procedures with adequate segregation of

duties and these are generally followed in World Bank projects. However, internal audit within

Timor-Leste is very weak and therefore little reporting on the effectiveness of internal controls

apart from annual external audits. There is no framework within Timor-Leste for internal audit

and two ministries are partly covering this. Reviews of the framework for internal audit are

currently underway through other donor initiatives.

Reporting Systems

24. IFRs will be prepared quarterly by the project staff within the MoE. The financial reports

will include an analysis of budgeted versus actual expenditure for the current period, year to date

and for the cumulative to date by each component and sub-component and will also identify the

project commitments. While only one Disbursement Category is proposed, it is recommended

that the reports should still include a breakdown of consultants services and operating costs. As

report-based disbursements are proposed for the project and the reporting formats have been

agreed to for disbursement purposed and included in the disbursement letter. The IFRs will be

forwarded to the Bank within 45 days of the end of each calendar quarter

25. As mentioned in the Funds Flow Section the IFRs will also contain a column for the

projected project expenditure and cash forecast for the next 6 months to enable funds to be drawn

down.

26. The move of the accounting system from Spreadsheet to Freebalance may see changes to

the formats of the reports depending on system capabilities, but any changes will be agreed upon

by both parties in order to comply with the requirements of reports in form and substance

acceptable to the World Bank.

External Audit

27. The constitution of Timor-Leste allots the function of external audit to the High

Administrative, Tax and Audit Court. As this institution remains to be created, the function of

external audit is assigned to the MoF which discharges its responsibilities through the

35

contracting of external audit services. The Government will fund the costs of the audit through

their existing contractual arrangements.

28. The Recipient will be required to submit annual audited project financial statements for

each fiscal year within 6 months of the end of the each fiscal year.

Financial Management Action Plan

29. A summary of the FM Action Plan is shown below.

No. Action Date by which action

required

Responsible

1 Approval of the draft formats of unaudited IFRs that will

be used for the Project financial reporting and

disbursements. This will be fundamentally the same as

those provided for ongoing projects, but ensuring they

meet all requirements.

Completed MoE & World

Bank FM Specialist

Supervision Plan

30. The overall FM risk assessment for this project is substantial before mitigating measures.

Therefore 2 on-site implementation support visits a year is recommended initially. The intensity

could be varied subsequently depending on the risk rating.

31. Below is the implementation support plan proposed, based on the outcome of the

financial management risk assessment.

FM activity Frequency

Desk reviews

IFRs Quarterly

Project audit audited financial statements report Annually

On site visits Review of overall operation of the project FM arrangements Semiannually, based on the

substantial risk rating

Monitoring of actions taken on issues highlighted in review of the IFRs

and audit reports, auditors‘ management letters, systems audit report,

and other reviews

As needed

Transaction reviews as part of semiannual implementation support site

visits

Semiannually, based on the

substantial risk rating

36

Procurement

32. Procurement of consultant services will be carried out in accordance with IDA‘s

―Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and

Grants by World Bank Borrowers‖ dated January 2011, and the provisions stipulated in the

Legal Agreements.

33. The general description of items under the expenditure category is presented below. For

each contract to be financed by the Grant, different procurement methods or consultant selection

methods, need for prequalification, estimated costs, prior review requirements, and time frame

would be agreed between the Borrower and IDA project team in the procurement plan. The

procurement plan would be updated at least annually or as required to reflect the actual project

implementation needs and improvements in an institutional capacity.

34. Selection of Consultants (US$2,700,000): Consulting services will involve mainly

assignments for individual consultants. Expertise required will consist of: (i) strategic plan

implementation and monitoring advice; (ii) management capacity building coordination; (iii)

budget and finance advice; (iv) legal advice; (v) procurement advice; (vi) process design

expertise; (vii) FM support; and (viii) MIS database as well as a series of studies (baseline, tracer

of leavers).

a. Quality- and Cost-Based Selection (QCBS): With regard to the assignments

where the scope of work of the assignment can be precisely defined and the

Terms of Reference (TOR) are clear and well specified;

b. Selection Based on Consultants‘ Qualifications (CQS): Regarding small

assignments (below US$200,000) of a routine nature, such as training and/or

facilitation, a qualified consultant firm may be selected through CQS method;

c. Individual Consultants: International consultants, as well as local ones, may be

appointed/hired by the Directorate to assist in project implementation and to

provide technical assistance. They should be selected competitively based on

experience and qualifications of at least three qualified consultants among those

who have expressed interest in the assignment. In addition, with appropriate

justifications and after concurrence by IDA, individual consultants may be

selected on a sole-source basis in exceptional cases, such as: tasks that are

continuation of previous work that the consultants have carried out and for which

the consultants were selected competitively; assignments lasting less than 6

months; and when the individual consultant is the only consultant qualified for the

assignment.

35. The ceiling for short-lists of consultants composed entirely of national consultants would

be US$200,000. In the event that sufficient numbers of qualified national firms are not available

for effective competition, then the short-list would consist of both national and international

consultants.

36. The prior review threshold is shown in the following table.

37

Selection Method Prior Review (No

Objection Letter

Required)

Yes/No

Threshold Remarks

Consultants-Individual

Competitive

Selection (IC -

CS)

Only TORs on

Selective basis

All

Sole-Source Basis

(IC-SS)

TORs All Only used in

exceptional

circumstances with

proper justifications.

Consultancy

- Firm

Quality and Cost-

Based Selection

(QCBS)

Yes Above US$100,000 up to

no limit

Quality-Based

Selection (QBS)


no limit

Least Cost

Selection (LCS)


no limit

Only for routine

assignments

Consultant's

Qualification

Selection (CQS)


no limit

Fixed Budget

Selection (FBS)

Yes TOR, Fixed Budget Ceiling

as specified in the Request

For Proposal subject to

bank's Prior Approval

Fixed Budget Ceiling

will be indicated in

Request for Proposal

Document

Single-Source

Selection (SSS)

Yes All In exceptional cases

only with proper

justification.

37. Incremental Operating Costs (US$100,000): From GPE financing, the project will

finance costs associated with field visits, transport, per diem, as well as maintenance of vehicles

and equipment used by the project. While the operating cost can cover office supplies and

consumables, it will not finance procurement of goods, such as computers.

38. Assessment of the agency‘s capacity to implement procurement: Overall responsibility

for project implementation rests with the Directorate of Procurement.

39. Procurement activities will be carried out by the Department of Procurement of the

Directorate of Procurement, staffed on an intermittent basis with an International Procurement

Advisor contracted under the project. This position has been supporting capacity development of

the procurement responsibilities of the on-going education projects in the portfolio. The

Department is also supported by two national procurement consultants.

40. A Situational Analysis was undertaken in July 2011 by the International Procurement

Advisor supported under ESSP. The situational analysis provides a comprehensive assessment

of procurement capacities, issues, and strengthening priorities including training, and a

procurement strengthening agenda for the Ministry. The assessment reviewed the organizational

38

structure for implementing projects and the interaction between the staff responsible for

procurement and other national agencies.

41. An updated Procurement Risk Assessment has been completed during appraisal, and filed

on project file. While the country‘s public procurement system is still weak in terms of internal

manuals, clarity of procurement process, and documentation, the designated procurement staff

for projects has generally good knowledge and skills in managing procurement activities

following Bank guidelines, and thus overall procurement risk is rated Moderate.

42. In the meantime, the project itself will support a number of activities with the objective of

carrying out the priority procurement strengthening agenda of the Ministry, with focus on

developing clear guidelines and procedures for record-keeping, procurement planning, bid

evaluation and contract awarding, contract management and administration, strengthening

procurement oversight through regular internal, and external audits. The priorities include:

a. Technical assistance in developing a training program in procurement for both

Procurement staff and Line Directorate staff with procurement responsibilities;

b. Technical assistance in developing a project procurement and contract

management manual;

c. Technical assistance in developing manuals for increased transparency and

internal control following the Integrity and Transparency agenda;

d. Develop guidelines and training programs for contractor performance evaluation;

and

e. Legal support aiming at institutionalizing procurement procedures.

Environmental and Social (including safeguards)

43. Social, Environment, and Other Safeguards are not triggered as the project is focused on

management strengthening at the central Ministry level. The focus on management

strengthening includes inputs of technical assistance and training. No safeguards are expected to

be triggered and no physical investments are planned in the proposed project.

Monitoring & Evaluation

44. Data for the project‘s outcome and results indicators will be drawn from the information

sources for the Ministry‘s PAF. Given the limited, complex, and challenging nature of the

monitoring and evaluation tasks envisioned for this MSP and the Ministry‘s limited experience

with and capacity for such tasks, the project will support capacity for project monitoring through

Components 1.3 (management strengthening project management) and 2.4 (technical support to

monitoring and evaluation of the NESP). The credibility of the Ministry‘s budget planning and

expenditure, and strength and transparency of key PFM systems, will be measured and collected

through NESP monitoring and through regular budget reports.

39

Role of Partners (if applicable)

45. The MoE is chair and UNICEF is Coordinating Agency of the LEG. A consultative

process involving the development partners has been adopted as part of project preparation and is

proposed for project implementation and monitoring. This is particularly relevant given the

catalytic nature of the funding support, and the expectation of relevance to external support

including management strengthening and NESP education reform Priority Program activities.

40

Annex 4: Operational Risk Assessment Framework (ORAF)


Project Stakeholder Risks Rating High

Description:

Elections in mid-2012 may result in a change of government and change of priorities.

However, project activities that are part of the NESP, are integrated in the NSDP and directly

aligned to the MDG‘s, and are both essential and not controversial.

Risk Management :

Project design is flexible to allow for small changes in activities

within initial project objectives.

Resp:

Client,

Bank Stage: Preparation

Due Date :

completed

Status:

completed

Task team will work with LEG and potential new government to

ensure understanding of project activities and adequate handling of

change requests.

Resp:

Client,

Bank

Stage:

Preparation,

implementation

Due Date :

underway,

ongoing

Status: underway,

ongoing

Implementing Agency Risks (including fiduciary)

Capacity Rating: High

Description:

The MoE has been identified as having low overall capacity, and is sometimes vulnerable to

political forces on policy formulation, occasional restructuring, staff retention problems, and

consultant turnover. The high risk rating reflects these issues and the heavy reliance on

international advisors. Skills transfer to national staff has been mixed, with the absence of a

consultative and comprehensive capacity development approach. However, some key systems

capacity has improved recently. The presence of implementation capacity has been reflected in

its high disbursements of World Bank/FTI/GPE-funded operations and up to 98 percent

execution rate of its own development budget.

Risk Management :

Funding under this project will continue to support efforts to

reinforce the Ministry‘s implementation capacity and to mainstream

implementation responsibility into the Ministry‘s departments.

Project funding will continue the effort to transition from

international consultant support to use of national consultants.

Experience from strengthened ESSP management will be applied to

the new project delivery approach. To support skills transfer and

sustainability, strengthened skills transfer and improved

sustainability, the new project will align to the Capacity

Development Assistance Framework developed consultatively in

the MoE.

Resp:

Client,

Bank

Stage:

Preparation,

implementation

Due Date :

underway,

ongoing

Status: underway,

ongoing

41

Governance Rating Moderate

Description:

The project will be coordinated under PIU, working collaboratively with relevant Directorates.

The PIU has been working well in past projects.

While implementation capacity remains a challenge for MoE, the FM supervision ratings for

past and on-going projects have been satisfactory. The quality of the accounting information

and documentation represents a high standard. Bank reconciliations are routinely completed

correctly, petty cash records are accurate and a cash account reconciles the cash to the petty

cash book balance. Transactions have adequate documentation information that can be quickly

and easily accessed and spreadsheets are comprehensive in their information but relatively

simple in their design. All contracts for consultants are found to be well monitored and

internal controls are robust.

There are limited specific FM issues for the MSP given the focus on technical assistance.

One central concern is sustainable FM capacity. FM capacity in the Ministry is concentrated in

two key people, on which effective FM management heavily relies. As part of Component 2

activities, focus will be given to appropriate capacity building and transfer of competencies in

FM. The Ministry is committed to maintaining qualified national consultants for FM during

the remaining project period. Consultants in the Ministry with FM responsibilities have agreed

to take on the extra work associated with the activities included in Additional Financing. A

focus on preparation for project implementation readiness during appraisal stage has included

the intention to minimize risks, delays and additional work during the implementation phase.

Risk management:

Transparency and accountability will be improved through well-

established procedures that are included in the project operations

manual.

Resp: Client,

Bank

Stage:

Preparation,

implementation

Due

Date :

underway,

ongoing

Status:

underway,

ongoing

The MSP will be regularly monitored from World Bank Dili and

Jakarta Country Offices, formally supervised semi-annually. Annual

audited financial reports are subject to reviews from the Bank‘s FM

team.

Project Risks

Design Rating Moderate

Description:

The MSP will build on the positive results and midterm-review-guided implementation lessons

learnt from ESSP, which are incorporated in design. Design will be kept straightforward and

closely aligned to the NESP Management Reform Priority Programs and the overall MSP

supported by multiple donors.

Risk Management:

Design to be kept straightforward and in line with MoE‘s own plan;

transition will continue to reliance on national contractors for highly

technical roles, including education expertise, and implementation

support.

Resp:

Client,

Bank

Stage:

Preparation

Due Date :

completed

Status: completed

42

Social & Environmental Rating Low

Description:

No identified social safeguards or environmental safeguards risks due to project focus

on management strengthening.

Risk Management :

Program & Donor Rating: Moderate

Description:

MSP will build on the successful implementation of the ESSP and FTI/GPE, through

which donor coordination has improved in the Education sector.

A weakness of donor support to capacity development in the MoE has been that support

has been fragmented and has been provided on an inputs-basis, with little joint planning

by partners with the Ministry for the timing of training and study visits for a small and

busy number of Ministry staff. Major Ministry policy, program development, and

training events have been undermined when partners have funded competing

opportunities overseas at the cost of Ministry program commitments at home.

Risk Management:

The AJR of donors on NESP progress will provide a continuous platform

for donor coordination.

Considering the need for coordination of management strengthening, the

Ministry will develop a Ministry-led calendar of training within the MSAF

for the NESP. A Management Strengthening Reference group, as a

specific group for Ministry managers to discuss the human resource

constraints to achieving the NESP, will be supported by the project as a

priority

Resp:

Client,

Bank

Stage: implementation Due Date :

underway, ongoing -

annual

Status:

underway,

ongoing

Implementation and Sustainability Rating High

Description:

The project builds on existing structures for project management and implementation in

the MoE, which have demonstrated relatively strong capacity to deliver according to

agreed implementation plans. Ministry management capacity has been strengthening

during 2011. During 2010/11, the Ministry has also strengthened results reporting and

management of ESSP which provides a stronger basis for the MSP. The EMIS system

is in place regularly producing good quality information - it is continually improving

and will improve further with project support.

Risk Management:

Experience from strengthened ESSP management will be applied to the

new project delivery approach. To support skills transfer and

sustainability, the new project will align to the MSAF developed

consultatively in the MoE.

Resp:

Client,

Bank

Stage: Preparation,

Implementation

Due Date :

underway, ongoing

Status:

underway,

ongoing

43

Project Team Proposed Rating

Preparation Risk Rating: Moderate Implementation Risk

Rating: Substantial

Comments:

While demonstrated project implementation performance at MoE suggests that risk is reduced, overall implementation risk is rated at Substantial given the continued

challenges of low implementation capacity.

44

Annex 5: Summary of Management Strengthening Action Framework (MSAF)


Action Item General Management Strengthening Management for Sub-sector Results

1. Management and Leadership

Course coordination (Change

Management)

Generic management skills

2. Set a Communication strategy Commence Communication Strategy for ‗buy-in‘ on

management reform. Explanation of the focus of the MSP and

its link to the NESP. Seeks input from key Ministry staff at the

design stage and requires workshops once the operation

manual is developed. Establishes some baselines (especially

regarding attitudes and organizational culture) and continues

through the life of the project.

Inform all teams about NESP, annual plans accountability

system and starting of process definition workshops.

Other components as identified in the communications strategy

over time.

Inform all existing priority program teams about NESP, annual plans

accountability system and starting of process definition workshops

3. Functional Analysis This is the starting point as part to clarify Ministry functions

and tasks. This requires analysis of the Organic Law, NESP,

other laws and review of existing practice. This should focus

on identification of the services required by schools and the

links from national to district to school levels to meet NESP

education access and quality objectives. An example for a

useful functional analysis would be identifying the range of

tasks necessary for Cycle One students completing at the right

age.

This requires coordination of management activities by District

Directorates, National Directorate of Ensino Basico, National

Directorate of Curriculum, INFORDEPE (lead units) and also

National Directorate for Planning, Statistics and Information

Technology, National Directorate for Human Resources,

National Directorate for Procurement, National Directorate for

Finance and Logistics, Unit for Infrastructure and Education,

and the General Education Inspectorate.

Which units of the Ministry do what tasks? This clarifies some gaps,

overlaps and uncertainties that currently exist.

For example, INFORDEPE provides training and the District Directorates

and Directorate of Ensino Basico also provide support for schools. What

does this distinction mean in practice? What are the priorities for the areas

of internal Ministry operation need that should be addressed. e.g.

decision making, internal communication.

Which are the target areas where the focus is on improving education

outcomes? This requires identifying some key NESP education goals

where the various units of the Ministry can work together so that

improved management can produce improvement in schools.

45


4. Define Organisational Processes

and Procedures

What processes (operational policies and procedures) are

necessary for the Ministry to operate effectively? This links to

the Ministry-wide priority areas and the education outcomes

focus. From a ‗bottom-up approach‘ the educational outcome

focus would assist defining the Ministry-wide processes and

processes specific to directorates.

Start the process of developing a Manual of SOPs based on an agreed

format and commencing with priority areas. E,g. document management,

decision making processes/accountabilities and teacher attendance. The

SOPs must be clear about what procedures must be followed, who is

accountable, consistent across the Ministry and explain how monitoring

and reporting occurs.

5. Define Management Processes Implement process definition for general MoE management

functions through facilitated participatory workshops.

Implement process definition of the activities required for producing

desired sub-sector results, using facilitated participatory workshops

approach. Identify what staff are required to implement the procedures

both in terms of competences and numbers of staff, and the resources

necessary to do their job effectively.

6. Identify Needed Competences Based on process definition, identify the competences that are

required for effective general management (use 10-point

Competence Matrix as a starting point). Codify need

competences in (a) procedures manual(s).

Identification of potential ongoing support (change

management processes, training, mentoring) for managers such

as the Institutional twinning arrangement and specific

Technical Advisor support.

Based on process definition, identify -- for each Priority Program -- the

competences needed for implementing the processes required for NESP

goal attainment. Write staff terms of reference (TOR) to reflect the jobs

to be performed and competences (qualifications) needed. TOR,

recruitment, training and support of staff to do their jobs and evaluation of

individual, group and Ministry performance.

7. Recruit or Reappoint Staff Use the adapted Competence Matrix as the basis for recruiting

new staff where units are not staffed to cover the

processes/competences needed.

Training Needs Analysis, Training Plans, Training programs

targeted at technical and administrative staff at all levels

Once TOR have been written (or rewritten) reorient staff members to their

tasks or, ask position holders to reapply for their positions. Recruit

externally for position that cannot be filled by existing staff members.

8. Undertake “targeted” Capacity

Strengthening

Use procedures manual(s) covering the 10 functional areas as

the basis for management training design. Deliver the courses

through INFORDEPE (initially using local and/or expat

trainers from other agencies).

Based on an assessment of staff qualifications and experience in relation

to TOR requirements create individual capacity development programs to

be provided through training courses or other means (mentoring, on-the-

job training, etc.), developed with the help of a capacity strengthening

advisor.

9. Set up Performance Assessment,

Accountability Processes, and

Incentives

Assess competence (performance)

Regularly monitor staff performance through Civil Service

systems and in relation to staff TOR and annual plans (annual

review). Units and their leaders to give face to face

accountability reports (covering desired outcomes) including

reasons for shortfalls, and any new capacity development

needs. Rewards are to be given to units/individuals reaching or

Regularly monitor staff performance through Civil Service systems and in

relation to staff TOR and annual plan (annual review). Units and their

leaders to give face to face accountability reports (covering desired

outcomes) including reasons for shortfalls, and any new capacity

development needs. Rewards are to be given to units/individuals reaching

or exceeding goals.

Specific indicators and methods relevant to individual directorates and

46


exceeding goals.

Develop an ongoing Monitoring and Evaluation system that

allows the Ministry to know that procedures are being

followed.

other Ministry bodies are developed as a part of the Ministry wide

Monitoring and Evaluation system. This allows directorates to know that

there is a change of practice and behavior.

10. Implement new processes based

on SOPs.

Implementation of procedures with priority focus on improving

educational outcomes.

Institutionalize management training at INFORDEPE

Implement the monitoring and evaluation system so that the

Ministry knows that procedures are being followed and as a

consequence results are being achieved that improve

educational outcomes.

Institutionalize process Human Resources functions at the Directorate of

Human Resources (process definition, mapping staffing needs, creating or

advising on creation of TORs, determining staff training needs,

organizing or advising on staff training programs, and undertaking staff

performance assessment).

Accountability reporting could be routinized under the leadership of the

Planning Directorate, and setting standards for and coordinating technical

assistance by the Sector Coordination Advisor in the Strategic Analysis

and Modernization Cabinet of the MoE.

Implement the monitoring and evaluation system so that directorates

know that procedures are being followed and as a consequence there is a

change of practice and behavior.

47

Annex 6: Implementation Support Plan


Strategy and Approach for Implementation Support

1. Implementation support provided by the World Bank will build on experience built up

from previous and ongoing operations, chiefly the ESSP (2007-2013). Implementation

support is provided in a ―proactive supervision‖ mode, reflecting the capacity challenges

faced by the GoTL in meeting pressing and ambitious human development goals. Trust

Funding from AusAID, complementing the co-funding of the ESSP, has been important in

strengthening the supervision approach.

2. The Ministry has overall responsibility for coordination and implementation of the

MSP including procurement, disbursement, and financial management. Key themes of

project implementation support by the World Bank to sector engagements including ESSP

since the mid-term review of ESSP in late 2010 include:

a. Ministry management. Supporting strengthened Ministry management

including understanding of management responsibilities using key tools such as

a ―Project Management Structure‖ document and practices (Project

Coordination Committee, regular reporting, and Project Executive structure for

project-related decision-making).

b. Technical advice. Expanding the scope and increasing the level of experience

applied to analytic work provided to inform development and achievement of

strategic goals of the sector, in a responsive and ‗Just in Time‘ mode; and

c. Decentralized supervision. Task Team Leadership based in the region, and the

expansion of World Bank technical and operations staff in the Dili office

supporting sector interventions.

3. During project preparation and initial implementation in January 2013, MSP project

implementation will benefit from particular relevant technical advice:

a. MSAF development between September 2011 and February 2012, funded by

FTI/GPE project supervision trust funding;

b. Strategic plan implementation & monitoring advice as part of the ESSP

project, which will provide senior advice to NESP implementation and

coordination from September 2011, developing a framework for monitoring

including strengthening key data sources;

c. NESP PAF policy advice supported by the AusAID-supported Just In Time

Policy Trust Fund during late 2011, to develop an outcomes monitoring

framework and evaluation capacity, and intermittent further review to January

2013; and

d. Economic sector update and efficiency analysis and NESP costing advice and dissemination supported by the Just In Time Policy Trust Fund, which will

develop multi-year budgeting frameworks and transfer skills in use of key

costing and efficiency tools to support implementation of Component 1.

4. Joint sector engagement and review of NESP implementation and monitoring will

contribute through fora including LEG meetings and AJR. Ministry-led agendas including

48

the MSAF and PFM reform agenda will be reviewed, updated, and informed through these

mechanisms.

5. In addition to the use of existing and demonstrated project management structures,

particular aspects of project design intended to support implementation include:

a. Flexibility in design to respond to implementation priorities of the NESP.

Priorities and inputs for the implementation of the NESP will further evolve.

Changes and adjustments can take place under the direction of the MoE and in

discussion with sector stakeholders.

b. Component alignment to responsibility of Ministry Directorates as defined

in NESP Annual Action Planning process, linked with budget. By increasingly

engaging through appropriate NESP coordination mechanisms, with middle-

management representations of the MoE, project supervision will continue to

support the Ministry‘s increased delegation of responsibilities to its middle-

management. This will help strengthen the NESP management for results

approach and NESP implementation results through the pre- and post-election

period in 2012.

c. Procurement and financial management support contracted as part of

Component 2, supplementing Ministry capacity to implement and update the

Ministry‘s Procurement and Contract Management plan.

6. FM and Procurement Management technical specialist support will continue to be

provided to the MSP by Dili- and regionally-based World Bank specialist staff, as discussed

in ―Annex 3: Implementation Arrangements‖.

Implementation Support Plan

Time Focus Skills Needed Resource Estimate Partner Role

First 12 months Project effectiveness

and mobilization

priorities and new

Minister inception

engagement

MSAF, PAF, PFM

specialist expertise

US$100,000

FTI/GPE Supervision

budget (total

including Task Team

preparation)

AusAID Trust Fund

for Supervision

Supervision budget;

includes engagement

and discussion

12-48 months Routine project

supervision support

including project

progress and policy

engagement, financial,

disbursement, and

procurement specialist

support.

Management

Strengthening

technical, PFM and

PAF monitoring and

update advice

World Bank

education sector

operations

experience and

fiduciary specialist

expertise

Task Team

Leadership and Dili-

based Education

Operations Officer.

Support from

US$100,000 per

annum GPE project

supervision budget

and US$70,000 per

annum Timor-Leste

Second Chance

Education project

budget

GPE Secretariat

engagement related

to project

supervision support;

regular discussion

with LEG

49

Skills Mix Required during Implementation

Skills Needed Number of Staff Weeks Number of Trips Comments

Proactive supervision

strategy

30 15 Proactive supervision

strategy in Timor-Leste

context. Regionally-

based Task Team Leader

(TTL)

Economic analysis and

PFM advice

4 4

Institutional

development

6 6

PAF advice 3 3 Annually as part of AJR

preparation

Partners

Name Institution/Country Role

Ms. Norkham Souphanouvong,

Education Specialist

UNICEF Coordinating Agency for

FTI/GPE

50

Annex 7: National Education Strategic Plan Financing Gap Analysis


1. The NESP presents an ambitious financing agenda. An updated plan costing effort

based on 2010 census data, and updated data on key subsectors including a teacher survey,

has produced more realistic figures, with 2011 implementation requiring about US$111.8

million, followed by a steep escalation in 2012 and model increases after that. This remains

above what the government has allocated for 2011 (US$95 million) plus Development

Partners (DP)‘ financial contributions (around US$11.4 million). Some of this shortfall

(about US$5 million) could be covered by DP pledges that so far have not been counted as

direct contributions to NESP. However, the sharp costing increases in 2013 and beyond put

the needed funding far beyond the expected revenue stream (both government funds and DP

contributions). To examine these issues the FTI/GPE appraisal of the NESP conducted a gap

analysis. The very nature of the Timorese budget, directly depend on the size of the funds

drawn from contained oil revenues, which is decided upon each year by the government, ,

makes such projections more difficult than in other countries (where budgets are more

directly linked to the economic growth). To estimate government contributions, the appraisal

used two scenarios, as shown in the Table below. The first one is based on a steady increase

of the education budget by 10 percent per year. The second scenario assumes a similar steady

increase, but by 13 percent per year. Table 5 summarizes the projections for 2011 to 2015

using these hypotheses. The US$5 million gap mentioned above can be seen for 2011. With

such increases in education‘s share of the budget in 2012, the gap (even after adding DP

contributions) rises to around US$45 million in 2013. Depending on the actual increase of

the government budget for education, this gap might either remain in the vicinity of US$45

million per year, or slowly decrease to about US$5 million 2015 (although this figure doesn‘t

account for much external support, most of it being still undetermined for that year).

Projected Total Education Budget 2011-2015 (NESP, March 2012)

2011 2012 2013 2014 2015

EducationalProgrammes

01PreschoolEducation $1,740,486 $2,249,006 $11,391,646 $12,570,042 $13,836,553

02BasicEducation $52,431,948 $64,649,208 $78,989,568 $80,072,540 $79,547,200

03aSecondaryEducation-General $3,771,533 $7,906,194 $9,018,637 $9,850,767 $11,431,956

03bSecondaryEducation-Technical $2,255,788 $7,506,243 $10,072,670 $10,658,156 $11,683,569

04HigherEducationincl.Polytechnics $13,246,317 $29,449,000 $35,804,327 $39,636,775 $39,471,757

05RecurrentEducation $1,500,000 $2,939,000 $4,067,200 $3,803,400 $3,739,000

06SocialInclusion $0 $0 $617,312 $620,649 $621,931

07TeachingQuality $4,852,000 $4,808,000 $7,623,868 $7,821,875 $8,433,502

Sub-TotalEducationalProgrammes $79,798,071 $119,506,651 $157,585,229 $165,034,205 $168,765,467

ManagementProgrammes

08GeneralManagement $0 $0 $2,500,000 $2,700,000 $3,000,000

09HRManagement $264,000 $284,000 $312,000 $297,000 $292,000

10De-concentration $2,384,000 $3,568,000 $3,568,000 $2,722,000 $2,722,000

11ITandMIS $465,000 $501,000 $285,000 $315,000 $345,000

12PlanningandBudgeting $241,000 $279,000 $132,000 $122,000 $132,000

13DonorCoordination $0 $154,000 $122,000 $122,000 $5,632,000

Sub-TotalManagementProgrammes $3,354,000 $4,786,000 $6,919,000 $6,278,000 $12,123,000

MoEnonteachersalaries $7,600,000 $8,278,076 $8,534,480 $8,961,204 $9,409,264

TotalEstimatedBudget $90,752,071 $132,570,727 $173,038,708 $180,273,408 $190,297,731

51

Projected NESP Costs and Funding Sources (NESP, March 2012)

aExternal funding for 2015 mostly not yet determined

bDoes not include international cooperation funding (ODA and non-ODA, estimated at above US$12 million

per year) that do not come in support of explicit NESP targets. cDoes not include new support sought from FTI/GPE in support of NESP.

2. In a case similar to the second scenario, a modest increase in external funding

(complementing the assumed increase in government funding levels) would succeed in

closing the expected financing gap. These levels of government support will probably remain

below the FTI/GPE benchmark level of 20 percent of the national budget allocated to

education, but may be as much as the government can manage in the short-term, given that:

a) overall government revenues are expected to increase sharply, and b) capacity for effective

management and implementation of the NESP will still be being built over the period. Also,

an important caveat is needed. This gap analysis only covers the next five years. The long-

term sector plan so far presents costing (still being revised) that will increase rapidly to a

level in 2030 that would require a 20 percent share of the government budget for education

plus continued DP support.

3. If the government is not in a position to increase the proportion of its spending going

to education to these extents, the other alternative would be for the Ministry to scale back or

re-phase education development plans, especially in the middle years (2012 and 2013), when

a large increase in spending is required by the NESP. Such scaling back is, in fact, an option

already provided by the NESP itself, in case funding or capacity are found to be insufficient.

The AAPs constitute the key tools for the re-adjustments of implementations programs, as the

different directorates adjust their annual goals and budgets to the resources available that year

(both human and financial).

4. The Ministry has requested that development partners prioritize support for the NESP

capacity building agenda, whatever the financing gaps might be. This seems reasonable since

successful implementation of the Plan depends in early strengthening of management

expertise, an agenda which is estimated to require about 7-12 percent of the NESP overall

budget. Given that much of this funding would be for technical assistance (difficult to

finance with domestic funds), it is particularly appropriate that this be supported by external

agencies.

52

Annex 8: Gender Analysis


1. Gender parity is a critical MDG and gender ―mainstreaming‖ is an important policy

goal in Timor-Leste. Gender parity in access and management by 2015 is one of the three

core goals of the NESP. In 2009, the Ministry undertook a gender assessment making

significant recommendations as included below. The development of the NESP provided the

opportunity for creating a gender working group, which produced a detailed problem tree

analysis and proposed a series of solutions that were discussed with all the education

stakeholders and finally incorporated it in the NESP. The educational aspects of the gender

plan are included in Priority Program 6: Social Inclusion and the key management aspects in

Priority Program 7: Improving Teaching Quality and Priority Program 9: Human Resource

Management.

2. The gender balance is quite even for primary education, but becomes progressively

less so at higher levels of education and in the professional world. For example, recent EMIS

data reveal that girls‘ primary school enrollments are commensurate with their proportion in

the population (48 percent of total enrollees are girls) and that they outperform boys slightly

in both grade repetition and retention (e.g., their repetition rate in primary is 18 percent

compared to 21 percent for boys). At the pre-secondary level, they have a higher net

enrolment rate than boys, but more boys (31 percent) complete that level than girls (24

percent). Similarly, at the secondary level, a higher proportion of females attend (18 percent)

school, but a higher proportion of boys graduate (12 percent). In higher education, the

gender divide becomes even deeper, with only 38 percent of the students at the National

University being female. In the education workforce, women are increasingly outnumbered

as the level increases: they are 39 percent of primary school teachers; 27 percent of those at

the secondary school level, and 18 percent of university lecturers. Moreover, they are

underrepresented in management positions: 10 percent of school directors (principals) are

women, as are 28 percent of Ministry Heads of Department.

3. Women‘s participation in management in the MoE is constrained. There are very few

women at the senior management level. The Minister, Vice Minister, Director-Generals,

Assistant Director-Generals, and the Secretary of State are men. Two of nine national

directors are women. All 5 regional directors are men, 28 percent of regional and national

head of departments are women, and 5 percent of the school inspectors are women. The low

number of women in senior management means that women‘s voices are not always

represented in policies and decision making.

4. Upward mobility is limited. For example, 17 percent of Level 5 staff are women, and

8 percent of Level 6. There are systematic constraints for women wishing to develop their

career within the education sector, such as negative attitudes towards women‘s ability to

manage and lead, lack of female role models, long hours and commitments that are difficult

to reconcile with family and child care responsibilities. Temporary staff are 62 percent

female. Their position doesn‘t entitle them to maternity leave and civil servants benefits.

Opportunities to attend international conferences and workshops are in majority offered to

men, and some of the selection and promotion practices are not women-friendly.

53

5. Recommendations towards programs, institutional, procedural, and policy changes to

enable the Ministry to achieve its gender goals for 2015, and for integration in approaches

employed by the MSP, include:

a. A creative usage of deployment and career regime to ensure that women enter

and stay in the MoE;

b. Develop an innovative system to support women staff and promote upward

mobility. For example, set up a women staff association providing support and

mentoring to teaching and administrative staff;

c. Create a gender unit to address gender related issues and a gender executive

group with civil society;

d. Design a generic module on gender mainstreaming training for public servants

as well as well as specific modules for each sector to increase gender sensitivity

in development and implementation of programs;

e. Ensure the selection of more women in senior level and local level posts in the

public service, including skills building and training to support women to attain

middle and senior level managerial posts;

f. Establish a minimum quote for women in the workforce and particularly in

decision-making positions, including 30 percent in senior management and 40

percent of permanent staff;

g. Ensure that training in gender equality is included in the teacher-education

program, both in pre-service and in-service training;

h. Provide leadership training to increase the number of women in senior

management including women in working groups to ensure full-participation in

decision and policy making;

i. Provide skills and leadership training to encourage women staff to access middle

and senior management positions; and

j. Provide language training for equal access to international training and

workshops.

6. Recommendations for devising women-friendly procedures and non-discriminatory

policies include:

a. Revise recruitment and interview procedures to be more gender-sensitive,

including women in interview panels;

b. Offer child care access for female staff;

c. Promote education, eliminating all barriers to schooling of married, pregnant

girls and young mothers, including child-care facilities as appropriate; and

d. Ensure a zero-tolerance attitude towards sexual violence and develop an anti-

harassment policy

7. The 2009 assessment also recommended the further improvement of the quality of

Ministry MIS with adequate staff training to maintain and update these systems and conduct

data collection and analysis. The assessment made further recommendations relating to

communications programs on gender related issues, access to schools for girls, curriculum

development, and engagement with parents and communities considering gender issues.

8. Particular priorities emerging from the above assessment and to be integrated in the

MSP‘s support to all the core managerial functions, including those related with gender,

therefore include:

54

a. Integrate training on gender equality and gender-responsive programming in

both management strengthening and teacher education support;

b. Increase the number of women in the teacher workforce;

c. Leadership, skills, and language training approaches to increase the number of

women in senior and middle management positions;

d. Revise recruitment and interview procedures to be more gender-sensitive and

make the MoE a women-friendly work place through an anti-harassment policy

development and implementation;

e. Develop a zero-tolerance policy for sexual violence in Ministry institutions and

schools; establish code of conducts for teachers and staff and sanction

misconduct;

f. Ensure gender related issues are acknowledged in the new teacher career

regime;

g. Support capacity to maintain and update key Ministry MIS; and

h. Support gender-responsive program development and implementation as part of

planning capacity support.

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Annex 9: Coordination with AusAid Management and Leadership Program


Points developed in discussion by AusAID East Timor Section and World Bank Timor-Leste

Education Task Team, October 24, 2011

1. These points are provided as part of the information response to the External Quality

Review for the FTI proposal for Management Strengthening 2012-2015.

2. The partners have confidence the support to the Ministry will be complementary:

a. The Management and Leadership (M&L) program is a political commitment

focusing on short term core management and leadership skills urgently needed

by the MoE;

b. The M&L program is focused on the leadership/executive cadre, rather than

the general ministry staff;

c. The M&L program is based on a rapid assessment and response approach with

a focus of activities by June 2012 before AusAID‘s new sector program later

in 2012;

d. The FTI/GPE project will be based on the deeper capacity assessment

undertaken through the MSAF process now underway.

e. Based on this deeper assessment, the FTI/GPE project will support more

specific/ technical management capacity development requirements directly

tied to Directorate's responsibilities in implementing NESP Priority Programs

as set out and updated in AAPs, and linked to individual staff work plans.

f. The AusAID program will both inform and fit into the broader MSAF

approach, which AusAID supports as a partner. AusAID will provide input

during its development.

g. At the technical level, AusAID, and Bank consultants have worked closely

together to integrate the M&L, MSAF and FTI/GPE project approaches - the

earlier M&L general capacity assessment has been used as a base for the

deeper MSAF assessment, and proposed training under M&L will be delivered

more rapidly while MSAF activities are being further defined in close

consultation with the Ministry.

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