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NEPAL PORTFOLIOPERFORMANCE REVIEW
NPPR 2009
RESULT-BASED MANAGEMENT FORPORTFOLIO PERFORMANCE AND
DEVELOPMENT EFFECTIVENESS
December 3-4, 2009
Ministry of FinanceGovernment of Nepal
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CCOONNTTEENNTTSS
MESSAGE FROM THEFINANCESECRETARY
MAIN REPORT
GGOOVVEERRNNMMEENNTTOOFFNNEEPPAALL
BBAACCKKGGRROOUUNNDDPPAAPPEERR
ATTACHMENT 1
ADBBACKGROUNDPAPER
ATTACHMENT 2
DFID BACKGROUNDPAPER
ATTACHMENT 3
WORLDBANKBACKGROUNDPAPER
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MAIN REPORT
GGOOVVEERRNNMMEENNTTOOFFNNEEPPAALL
BBAACCKKGGRROOUUNNDDPPAAPPEERR
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Nepal Portfolio Performance Review 2009
Result-based Management for PortfolioPerformance and Development Effectiveness
A Vision Paper of the Government of Nepal
Ministry of FinanceSingh Durbar, Kathmandu
December 3-4, 2009
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Table of Contents
1. Conceptual Outlook2. Result-based Practice in Nepal3. Nepals Result-based Initiatives in Key Areas
3.1. Reforms in Budgeting System
3.2. Reforms in Public Financial Management (PFM)
3.3. Reforms in Procurement System
3.4. Reforms in Monitoring & Evaluation System
3.5. Reforms in Human Resources Management
3.6. Quality -at -Projects Entry
4. Nepal on the Path of Aid Harmonization: Enhancing Commitments
5. Future NPPR Mechanism making more Result focused
6. Major Challenges in Key Areas
7. A Way Forward
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Nepal Portfolio Performance Review - 2009
Result-based Management for Portfolio Performance and
Development Effectiveness
Part - I
1. Conceptual OutlookThe Result based management (RBM) approach has emerged as a
centerpiece of global efforts to improve the effectiveness of public
management and is widely seen as representing best practice in this field. It is
increasingly applied in developing countries. It is also known as Managing for
Development Result (MfDR) in many countries.
RBM centres on gearing all human, financial, technological, and natural
resources domestic and external - to achieve desired development results. It
shifts the focus from inputs (how much money will I get, how much money can I
spend?) to measurable outputs (what can I achieve with the money?) at all
phases of the development process. At the same time, RBM focuses on
providing sound information to improve dec ision-making. This entails tracking
progress and managing business on the basis of solid evidence and in a way
that will maximize the achievement of results.
It implies that goals are specific, measurable, achievable, and concrete,with time bound targets. At the same time, they must be expressed in human
terms (i.e., as development outcomes). For this reason, RBM is more than a
methodology: it is a way of thinking and acting, built on a prac tical toolbox for
improved public management.
The RBM cycle involves five core components or stages:
setting goals and agreeing on targets and strategies; allocating the available resources to activities that will contribute to
the achievement ofthe desired results;
monitoring and evaluating whether the resources allocated aremaking the intended
difference;
reporting on performance to the public; feeding back information into dec ision-making.
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The development of a performance culture and the full implementation
of RBM are not easy. A lot of effort is required to create the internal
preconditions for results management through targeted organizational and
human resource development. However, capacity development is not enough.
Firm leadership and political will - over a prolonged period of time - are alsoessential if these capacities are to be developed and used in the pursuit of RBM.
Though, the role of leadership in setting the course and constantly clarifying the
core functions and objec tives of an organization is fundamental, but more
important, it is vital in providing the model for the behavior and attitude that are
needed to support the results orientation.
The push for results in International Initiatives
In the international arena, numerous initiatives have underpinned this push
for results. The Millennium Development Goals (MDGs) are probably the best
known and most ambitious global commitment to results-based povertyreduction. The agreed MDG goals, targets, and indicators provide the basis for
measuring progress and the effectiveness of aid.
The Monterrey Consensus, adopted in 2002, encompasses a commitment
by developed countries to increase levels of aid in conjunction with better
governance, policy reform, and a greater focus on development effectiveness
on the part of the developing countries.
A growing number of national poverty reduction strategies (PRSPs) alsotestify to a strong international commitment to provide more and better aid in
parallel with improvements in policymaking in developing countries. Within this
framework, all development partners are bound to mutual accountability,
transparency, and achievement of measurable results.
The Paris Declaration on Aid Effectiveness, adopted in 2005, reflects a
broad consensus on how best to reform aid to contribute to these commitments.
The most distinguishing feature of the Declaration is the shared nature of the
commitments, including an emphasis on the way in which improvements in
donor practices go hand-in-hand with the strengthening of country systems andinstitutions.
Several important elements emerge from the lessons to the success of
RBM efforts in various parts of the world:
Strong support from both the top and lower levels is needed; RBM reforms must be prioritized by the state and must complement
existing initiatives, strategies and national development plans;
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It is crucial to build the capacity of RBM practitioners by providingtraining and access to sufficient operational capacity and suitable
business systems, and by empowering organization leaders to test out
new approaches that may enhance RBM in their organization;
The availability of reliable data and Monitoring and Evaluation (M&E)systems has proved to be a very important and consistently
challenging aspect for many of the countries, agencies and
individuals.
RBM in the context of Aid Effectiveness
The focus on results makes RBM central to the entire aid effectiveness
agenda. It means that stakeholders push partner country governments and
donor agencies to demonstrate results. It means that development partnersand recipients oblige each other to demonstrate that they are meeting their
commitments and promises. The accountability of partner country governments
and donor agencies to their respective publics is complemented by mutual
accountability between donors and rec ipients and it is RBM that serves as the
crucial basis to make this mutual relationship rea l. With relation to the aid
management and effec tiveness principles that form the basis for the Paris
Declaration, MfDR is closely linked to ownership, alignment, and harmonization.
But RBM reaches far beyond aid management. It addresses the entire
development process in partner countries and guides the allocation of all
development resources in the most effective way. Independent of aid
relationships, RBM comes to bear direc tly on domestic issues of leadership,governance, and accountability, making it a fundamental political axis instead
of a simple planning and management tool.
There is growing agreement that RBM should form the basis for country-
owned systems that donors and partners are jointly committed to support.
Country-based monitoring and evaluation, and the underlying statistical
capacity, are essential to make these systems strong. Reliable performance
monitoring frameworks not only permit greater accountability and more
credible feedback on the effectiveness of aid; they also encourage donors to
refrain from imposing their own monitoring and reporting requirements, relyinginstead on sound country defined criteria.
The establishment of a stronger performance culture remains a
challenge not only for developing country governments, but also for donor
organizations. In responding to this challenge, donor agencies are increasingly
pushed to establish consistent sets of internal proc edures and incentives that will
reward their employees for achieving sustainable and long-term return oninvestments, and not simply for accounting for the use of donor resources.
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2. Result- based Management Practice in NepalNepal is slowly but steadily moving towards result-based management in
a number of areas. Following the reform attempts made in various areas in
Nepal in its bid to fulfill the commitment towards achieving MillenniumDevelopment Goals (MDGs), Nepal introduced a Poverty Reduction Strategy
Paper (PRSP) as a backbone of Tenth Five Year Plan supported by introduction
of MTEF, Immediate Action Plan (IAP), introduction of separate Poverty
Monitoring and Analysis System (PMAS) and later District Poverty Monitoring andAnalysis System (DPMAS). The National Planning Commission (NPC) and other
key ministries (finance, education, physical planning and works, local
development, Energy, Agriculture) have taken lead role in adopting a results
based approach in public sector management. Support from development
partners for key components of RBM include assistance by the World Bank, DFID
and others in preparing the Medium Term Expenditure Framework, UNDPssupport for the Poverty Monitoring and Analysis System, ADBs assistance for the
Governance Reform Program, and DANIDAs support for results-based
education management.
The government is committed to implement this approach in budgeting,
monitoring & evaluation and human resources management. Following the
establishment of a poverty monitoring and analysis (PMAS) system at the central
level, the government has prepared a district poverty monitoring and analysis
(DPMAS) for assessing development interventions and their local impact, which
is a sound basis for result based M&E. The Three Year Interim Plan (TYIP) has
adopted a results-framework for its sector and thematic areas and hasemphasized the importance of adopting results approached in the line ministries
and of disseminating it down to the district level. The government has taken
some encouraging steps to develop core elements of results-based
management for planning, budgeting, implementation and monitoring in
scattered way. The government has started poverty based resource allocation
to local bodies, strengthening M&E units in key ministries.
National Planning Commission, with the support of ADB, is implementing a
projec t Strengthening Capacity for MfDR (2008)" to internalize the approach
in key agencies such as National Planning Commission(NPC), Ministry of PhysicalPlanning and Works (MOPPW), Ministry of Loc al Development(MOLD), Ministry of
Education(MOE), Ministry of Energy and Ministry of Agriculture and
Cooperatives. These agencies have developed MfDR tools and techniques such
as, results frameworks and indicators, business plans, guidelines on projec t
prioritization, and a manual on MfDR operationalization. The projec t will help
create a result based management culture in these agencies and the country.
Steering C ommittee formed under the chairmanship of the Vice Chairman,
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National Planning Commission oversights the implementation of the result-based
management in Nepal.
Recognizing the importance of results-based management (RBM) for
improving portfolio performance and development effectiveness, theGovernment and participating development partners (DPs) agreed to make it
as a main theme for Nepal Portfolio Performance Review (NPPR) 2009. Under
this theme, four key areas are identified: (i) reforms in budgeting system; (ii)
improving human resource management; (iii) improving projec ts' quality-at-
entry; and (iv) strengthening monitoring and evaluation system.
RBM aims to shift the focus of budgeting from internal control and inputs
to outcomes and efficiency. Public expenditure management is an integral part
of the RBM and performance based budgeting system. In this context,recommendations made under Public Expenditure and Financial Accountability
(PEFA) report and recently approved Public Financial Management Strategy
could provide a good guidance for selecting immediate budgetary reform
measures. It is also anticipated that a few sectoral agencies will agree on to
implement the RBM with a clear linkage to improved portfolio performance and
development effectiveness indicators. The mechanism will be discussed during
the 2009 NPPR and an action plan will be prepared for adopting RBM
approach.
The annual NPPRs led by the Government with joint participation of
development partners such as ADB, DFID, J ICA and the World Bank have been
monitoring progress towards results-based management at the sec tor levels
through a bottom-up monitoring process. In this context, Sector Results Profiles
have been prepared for the priority sec tors under ADB portfolio, which include
(i) agriculture and rural development; (ii) energy; (iii) education; (iv) finance (v)
governance; (vi) transport and communication; and (vii) water supply,
sanitation and urban development. Further, the assessment of cross-cutting
issues, including (i) gender and soc ial inclusion; (ii) proc urement; and (iii)
environment and social safeguard has been carried out. As a part of
preparation for 2009 NPPR, ADB has conducted a workshop to discuss sectoral
issues, based on its portfolio, and develop action plan with deliverable results for
monitoring throughout the year. It is anticipated that such exercise will help
facilitate in the overall discussion at NPPR.
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3. Nepals Result based Reform Initiatives in some Key Areas3.1. Reforms in Budgeting System
Concept of Result-based Budgeting (RBB)
Results-based Budgeting (RBB) is a strategic management tool
designed to improve resource management and public sector
accountability. The core of the RBB system is the performance
management framework, and it focuses primarily on performance
measurement and linkages with policy-making and resource
management. It targets the results of programs and activities undertaken
by government agencies using public monies. The RBB results are c lassified
under various performance components: inputs, processes, outputs,
outcomes, and impact. Though traditionally there is overwhelmingemphasis on outputs and outcomes measurement, RBB also focuses on
purposive input application and activity completion, recognizing the
close relationship between input use and output performance. Various
dimensions of output performance also affect the desired outcome of the
program or activity. Therefore, the RBB measures results achieved atalmost every stage of the project from input application, activity
completion, outputs delivery and impact achievement. Ongoing
performance measurement and periodic evaluation are key tools through
which progress is determined. Performance measurement and evaluation
present valuable opportunities to learn and adjust so that the desiredresults may be achieved.
Challenges of Budgeting System
The Government of Nepal has engaged in planning and budgeting
exercise for half a century, a period during which foreign assistance and
budgetary outlays have increased significantly. Overall performance hasbeen mixed, however, with major improvements in some areas but
disappointing outcomes in others. Some of the causes may be
summarized as: dominance of political agenda, over centralization
bureaucratic structures with limited implementation capacities,dominance of top-down planning, underdeveloped private sector,inadequate harmonization and coordination among development
partners and the government.
Further, there are various issues across the budgeting cycle, which pose
further challenge in budget administration, as follows:
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In budget planning exercise, sectoral ceiling is, normally,prepared on incremental basis.
Normally, projec ts are included in budget without prior detailedstudy and with performance indicators
Although MOF issues expenditure authorization invariably on thefirst day of fiscal year, most ministries takes months to send
authorization to their spending units. Expenditure tracking is poor.
Allocation may not be consistent with national plan goals,targets and priorities.
As of present provisions, the virement up to 25% within mainheads of recurrent expenditure of a project is authorized to the
concerned ministry. In many cases, the appropriated amount in
certain sub-heads remains idle being other sub-heads running
out of fund. More flexibility and authority at the project level may
be needed on the basis of result indicators (to be developed in
advance) except a few line items such as salary, rent, utility
charges which can be assessed realistically in budget planning.
In case of donor funded projec ts, reimbursement is not soughton time by the project management, which puts pressure on
government budget resulting distortion in budget execution.
Similarly, re-imbursement is not authorized timely on the part of
donors.
Reform Initiatives in RBB
As part of its result-based management initiatives, the Ministry of
Finance (MOF) has implemented fully developed performance based
incentive scheme in its tax and customs offices which is entirely tied to
results they achieve. The government is now planning to introduce results-
based incentive scheme in public sector agencies that are directly
responsible for delivery of public goods and services. Based on the
learning and experiences of the pilots of these incentive schemes and the
sec toral budgeting reforms, MOF intends to implement results-basedbudgeting on a wider scale. The current year budget presents critical
results of some sectors and the budget appropriation is tied to those
results. Long term institutional and human capacity development as well
as concrete management support will be essential to institutionalize results
based budgeting in public sector management.
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Without having a full scale integrated and comprehensive RBB plan,
which needs a rigorous efforts and resources, several steps have been
taken to improve the project performance in Nepal, amongst them some
are:
Performance based incentive system planned for some selectedbig development projects.
Medium-term budget framework has been presented toParliament with a promise that future financing for projects will
be ensured and multi-year contracting promoted for all
government projects.
The bidding of multi-year projects can be done in a singlepackage,
The virement up to 25% within the main heads of recurrentexpenditure of a project is authorized to its relevant ministry,
Additional funding has been committed, if required, for megaprojec ts like Kathmandu- Nijgadh fast track, Upper Seti Hydro-
power Project.
A Government Budget Management and Expenditure ReviewCommission is to be formed under the chairmanship of member
of the Public Accounts Committee of the Legislative- Parliament
to examine and recommend measures to improve budget
management and expenditure system.
Piloting of Result based Budgeting
As a component of the MfDR project, supported by ADB, there will
be a technical support to pilot RBB in two government agencies that are
directly engaged in public service delivery. Potential agencies include the
Transport Management Office and the Traffic Management Office (of
Nepal Police). In addition, as an outcome of the NPPR 2009, there may be
other agencies, which could show their eagerness, to launch the RBB
mechanism. The projec t will assist the government to develop criteria toassess the readiness of agencies and/or selection of the projects for the
implementation of RBB (using MfDR readiness assessment tool) and also
facilitate the selection of the pilot agencies, either the two mentioned
above or other viable ones. The project, in close collaboration with MOF
and pilot agencies, will develop implementation modalities, which will
include key results areas and monitor able performance indicators on
service delivery that are organization- spec ific. The projec t will support the
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implementation of the two pilots, as well as monitor and publicize the
results of the pilots.
Medium Term Budget Framework (MTBF)
Nepal's MTBF, supposed to be revised annually, contains priorities,
programs and projects, and sets annual targets at national and sector
levels for a three-year period. For each sec tor and subsec tor, the MTBF
shows expenditures of the previous year, estimates for current year
budget allocations for the forthcoming year, and forecasts for two
additional years. Implementing agencies prepare detailed work
plan/programs with performance indicators. Release of budgeted
allocations is contingent on demonstrated performance. For few years,
MTBF proc ess has not been followed properly. Current year budget (FY2009/10) has revived MTBF process again with added values by
incorporating resources estimate for three year as a significant departure
in this process. The government is now working on to institutionalize the
MTBF, enhance the quality of the process, including developing
comprehensive manuals and guidelines.
3.2. Reforms in Public Financial Management (PFM)Various studies by the development partners and the Nepal Public
Expenditure and Financial Accountability (PEFA) assessment show that
despite the satisfactory fiscal discipline, the overall risk related to public
financial management in Nepal is high. The assessment further concludes
that the system is generally designed but unevenly implemented and
despite advanced set of laws and regulations and processes in place,
there are gaps in the control framework and implementation. In 2005, the
Government and the World Bank with participation of a number of other
development partners carried out a Public Expenditure and Financial
Accountability (PEFA) assessment based on the PEFA framework. This
assessment covers 31 indicators that were assessed and benchmarked
covering six core dimensions. A significant output of the PEFA assessment
was a detailed list of approximately 150 actions to be undertaken over
the short and medium term to improve PFM performance (the
Development Action Plan - DAP). Since the PEFA Report was published in
February 2008, there are some delays in the implementation of the
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(PFMRP) which requires strong political will and commitment which will
contribute to reducing fiduciary risks and improve transparency and
accountability of public financial management (PFM). Public financial
management strategy has been finalized for next three years for Nepals
Public Financial Reform Program. This strategy comprises six program
outcomes, eighteen outputs, thirty eight activities and performance
indicatorsand targets.
Nep a l Pub l ic Sec tor Ac c ou nt ing Stand a rd (NEPSAS)
In the rec ent pa st, Nep al ha s in it ia ted a num be r of me asures to imp rove/ streng then the
f inanc ia l ma nag em ent system . Ce rta in area s c ove r ing som e of the func t ions of FCGO
have, however, got l i t t le or no attent ion in these in i t ia t ives. Fund Management,
Reimbursement/ Investment and Appropr iat ion funct ions of FCGO did not get any
p riori ty in these reform ini t iatives. In the c onte xt of estab l ishm ent o f TSA reg ime a nd
imp leme ntat ion of new f inanc ia l m ana ge m ent system s, streng thening of Inform at ion is
also c rucia l . This c arr ies signi fica nc e in view of GO Ns c om m itm ent to m ove to IPSAS
c ash based ac c ount ing system a nd to imp leme nt Nepa l Pub l ic Sec tor Ac c ount ing
Stand ard (NEPSAS). The go vernm ent ha s tak en a de c ision to imp lem ent p ubl ic sec tor
c ash b asis of ac c ount ing system in l ine wi th internat ional a c c ount ing stand ards (IPSAS).
The government has committed in the PFM agenda with a separate
Sec retariat for PEFA which is govern by the steering committee chaired by
the Finance Secretary. This is a gesture of commitment to implement thePFM reforms. This Secretariat plays a coordinating and facilitating role to
monitor the implementation of PEFA actions and to establish a central
monitoring system to track the progress against each PEFA indicator.
3.3. Reforms in Procurement SystemIn recent times, wide spread perception amongst the stakeholders
and the reports in the media have indicated that malpractices in public
procurement, including intimidation and collusion/cartelling amongst thebidders are on the steep rise, both at the central level and in the districts.
Cases have not only been reported in the media but also seen when the
bidders were prevented from bidding through intimidation and use of
physical force by individuals and groups hired by a few unscrupulous
bidders. This malfunctioning of the public procurement is of national
concern. Given these problems of fraud, cartelling and intimidation, a
joint GON/DfID/ADB/WB Procurement Review Team (JRT) was constituted
under the convenorship of the Ministry of Finance (MoF) to review the
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current procurement issues, including laws, regulations and procedures in
public procurement that are impeding economic and transparent project
implementation and recommend the measures to address them. It was
expected that the review exercise would provide a common forum where
procurement-related issues and problems could be openly discussedbetween GON line agencies and the development partners and to
identify issues and remedial measures that would help enhance
transparency and competitiveness in the GON public procurement. The
Team submitted its report to the Steering Committee (SC) recently, and
also suggested various measures to improve the situation.
Struc tural Refo rms in Proc urem en t System & its Cha lleng es in Nep a l
The proc ureme nt regulatory fram ew ork c onsists of the Publ ic Procurem ent A c t, Publ ic
Procurement Regulat ions, and General Contract Law and Construct ion
Entrepren eurship A c t. The Pub l ic Proc urem ent A c t, 2007, the suprem e law on
proc ureme nt, broa dly b ased o n the UNCITRAL m od el law , was enac ted in Janua ry 2007
and Reg ulat ions issued in August of the sam e y ea r. The p rocurem ent law is ap pl ica ble
to a l l ent it ies inc luding the pa rastata ls. The Law c ove rs al l area s of proc ureme nt
including works, goods, consul t ing and other services and appl icable to al l
go vernment p roc urem ent i rrespec t ive of c ont rac t va lue . These are g enera l ly ad eq uate
instrum ents but for a few m inor shortcom ings. New law has imp ortant provisions suc h
as: review of proc ureme nt de c isions, crea t ion o f reg ulatory bo dy , PPMO though also
invo lved in de c ision m ak ing on va ria t ions re fe rred to the Ca b ine t , c od e o f co nduc t fo r
bidders and publ ic off ic ia ls handl ing procurement and blackl is t ing of defaul t ing
c ontrac tors. These instrum ents are b eing fo l low ed as they are m and atory b ut the
effec t ive imp lem entat ion, in pa rticu lar of the ab ove m ent ioned p rovisions, lac ks and
m ay som ew hat imp rove only after the doc um ents, including Publ ic Works Direct ives
and Standa rd Bidd ing Docum ents are rev ised and deve lop ed to be in conform i ty w ith
the Ac t and the Reg u la t ions and PPMO be c om es act i ve as mand ated by the Law . As of
now , the c ap ac i ty o f the PPMO nee ds to b e strengthene d. Tec hnica l assistanc e
prog ram s provide d b y A DB and World Ban k a re c urrent ly in plac e to suppo rt PPMO for
imp lem ent ing the Proc urem ent Law which inc ludes ca pa c ity bu i ld ing on p roc urem ent
in the c ount ry . The jo in t rep or t s rec om m enda t ions are e xpec ted to be imp lem ented to
reduce col lusion, coercion and int imidat ion in bidding process. Another issue, a
prod uc t of the new Proc ureme nt Law is "Var iat ion" to co ntrac t . The ne w law requi res
var ia t ion exc eed ing 15% of the c ont rac t pr ic e a pp rova l o f the Ca b ine t wh ich is be ing
c r it ic ized b y var ious de velop m ent pa rtners as a problem in imp leme ntat ion of large
works contracts as no amount of deta i led invest igat ions would stop var iat ions
pa rt ic u la r ly a ga inst the ba c kdrop of the c om plex g eo logy of the c ount ry . Var ia t ions,
c aused for co ntrac tors prof itab i li ty involvem ent and his ineff ic ienc y in ma nag ing in
terms f inanc e, equip m ent do involve p rospe c ts for c orrupt ion.
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Some of the major recommendations of J RT are as follows:
a. Procurement capacity enhancement plan of PPMO and otherexecuting agencies will be introduced.
b. Implementation of e-bidding should be explored as an option toavoid the physical obstruction in submitting tenders and thus
reduce the chance of collusion
c. Multi-plac ed bid submission could be tried in governmentfunded projec ts with amendment in the Ac t.
d. User groups should be allowed to bid contract only in the locallevel works where they are the users. Also, capacity is enhanced
of the local bodies to monitor the work of user groups.
e. Constructive engagement with local construction industries.f. Detailed criteria for blacklisting the Contractor/supplier/user
groups/NGOs should be developed and enforced.g. NGO should not be awarded any work without properqualification and screening.
h. GON to ensure security and get cooperation from all politicalparties to prevent alleged involvement of their sister
organizations in hooliganism and collusion and also persuade
district contractors associations to refrain from promoting
collusion among its members.
The Steering Committee, established to oversight the implementation of
the report, has accepted the report and has sent to PPMO for further
implementation. PPMO circulated to all related public entities focusing onthe issues like development of Contract Agreement Monitoring systems,
allocation of budget for procurement training and penalize to the person
or groups involved in bidding related criminal activities. Ministries and
departments are positive to develop Contract Agreement Monitoring
System software and proposing budget for the training.
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Introd uc tion of E- Proc urem ent
The G ove rnm ent of Nep al ha s announc ed throug h i ts Annua l Budg et of FY2009/ 10 for
a rran ge m ents for e- tend ering in big infrastruc ture projec ts. The revision in Proc urem en tAc t wi ll inc orporate the m ul tip le plac e b id subm ission unt il the fu l l f led ge d e -tend er ing
system in plac e. As a p rogress, prepa rat ion of e- b idd ing strateg y repo rt has bee n
c om pleted and c onsultat ion is unde rgoing for its imp lem entat ion. The World Bank
c arr ied out a d eta i led rea diness assessm ent for im plem ent ing e-p rocu rem ent in 2007
and a number o f rec om me nda t ions have b een m ad e to imp lem en t e -p roc u rem en t . As
a m ed ium to long term so lu tion , rev iew o f the reco mm enda t ions and im p lem enta t ion of
such recommendat ions should be a pr ior i ty which provides technical solut ion to
p ossible c ol lusion.
Support from the development partners is instrumental toinstitutional strengthening of the PPMO in the areas where new ideas,
technologies and system development is required, such as e-procurement
system, contract management system improvement and contract
administration. The World Bank and ADB are helping the Office in
identifying the capacity gaps and help in implementing the reforms in this
area to attract qualified and competent staff. Transitional Standard
Bidding Document are issued and are put in the PPMO website and
finalization of this Document, which covers SBD draft for civil works, goods
and consulting services, is underway. Preparation of e-procurement
proposal and software development is planned during this year.
3.4. Reforms in Monitoring & EvaluationNepals Monitoring and Evaluation( M&E) is relatively weak and low
priority area in terms of reform initiatives resulting slow progress in reforms
despite some important milestones have been laid. There is a wide
recognition that institutional capacity for monitoring and evaluation is
limited across monitoring units. Although, there are M&E units established
in most ministries, these are often under-funded and under-staffed and
low incentives to work in these units. There is also growing c oncern to have
more localized system of monitoring and evaluation to minimize thegeneral overlook from the centre in these areas.
The importance of soc ial accountability tools such as periodic
Citizen Performance Score Cards for different service delivery units and
Citizen Report Cards enhance community participation is felt. They
provide a more realistic assessment of institutional and regulatory
weaknesses in monitoring and evaluation that affect implementation.
These tools are now being increasingly popular in many governments.
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Nepal is also in line with this reform in medium term as the overall
information system is improved.
Result b a sed Mo nitoring & Eva luation
The Results-Based Monitoring a nd Eva luation (M&E) System is used for system atic an d
focused program p lann ing , per fo rmance mon i to r ing , per fo rmance eva lua t ion ,
pe rforma nc e rep orting and inform at ion ut il izat ion for prog ram imp rovem ents and p ol ic y
de c ision-m ak ing. This fac tor helps to e nsure system at ic and struc tured pe rform anc e
p lann ing , m ana ge m ent , and m ea surem ent under the RBM a nd he lps to fo rge t igh te r
l inkag es between resource use and po l i cy imp leme nta t ion .
Nepals monitoring and analysis system has historically treated as
input monitoring. Also, there is a lack in required expertise with the
implementing agencies to verify the report submitted by the consultants.Timely and appropriate assessment of the projects contribution toward
attainment of outputs and outcomes is not accomplished. The necessity
of establishing result based M&E system, with spec ific indicators, in each
projec t before start up is vital. Effectiveness of aid and local resources
pose a serious challenge in Nepal. Sec tor programs like Health and
Education have relatively good monitoring and evaluation frameworks in
place. The rollover of such frameworks to other ministries could be helpful.
However, further progress could be made in this area with the use of the
poverty monitoring assessment systems (PMAS).
At the foremost, separate M&E policy is lacking in Nepal. The use of
IT in M& E is certainly important to have better efficiency. Network
establishment among executing agencies and National Planning
Commission is vital. There is some progress made in this front as Optical
fiber link between the ministries within Singh Durbar have been
established. Setting up of a Projec t Performance Information System at
National Planning Commission is another area where progress now is
picking up. Additional resources are required to operationalization the
PMAS/DPMA including disaggregation of data in medium term.
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Result b a sed Mon itoring & Eva luatio n- A Suc c ess Story in Nige r
In order to revise the Ac c elerated Develop m ent a nd Pove rty Red uc t ion Strateg y (SDRP)
in Niger, the go vernm ent forme d a n Inform a t ion a nd M oni toring and Evaluat ion
Them atic Group whic h is c om po sed pr ima r ily of M&E spe c ia l ists wo rking wi th the
c entra l gov ernme nt, pro jec ts, and c oo pe rat ion insti tu t ions. For effic ienc y, the g roup
wa s orga nized into three sub g roup s: Statist ic s, Too ls a nd M etho d olog ies, a nd Sup p ort
and Ad visory Services to Them atic G roups. The them atic g roups ma nda te wa s to help
the other 14 thematic groups to develop sector strategies, including ident i fy ing
ob jec t ives and o utco m es. The g roup wa s also exp ec ted to b e respo nsib le for the
ove ral l c oherenc e of the strateg y and for ensuring that the intervent ion ap proa c h
ad hered to RBM pr incip les. To c arry o ut i ts ma nd ate, the Inform at ion a nd Mo ni tor ing
and Evalua t ion ha d to p romo te the co nc ep ts, pr incip les, and tools of RBM a nd m ak e
RBM a real i ty und er the ne w SDRP. The M&E grou p wo rked for six m onths, inc luding two
to th ree m onths on the d eve lopm ent o f me thodo log ica l too ls such as the d esign of aresul ts-b ased logica l fram ew ork, indic ator d ata c ards, and the resul ts c hain. The
group s m ain ac hievem ents we re p rovid ing supp ort , ad visory servic es, a nd tra in ing to
sector groups. Development of the SDRP results chain, which was entrusted to a
subg roup, After ap proxim ately on e ye ar s wo rk, the new SDRP do c um ent wa s val ida ted
b y the Go ve rnment in Sep tem b er 2007. Its intervention ra tionale is set o ut, fi rst, throug h
a h ie ra rc hy of ob jec t i ves co m pr ising a ge nera l ob jec t i ve , a spe c i fi c ob jec t i ve , and
seve n a reas of intervent ion; and , sec ond , through the resul ts hierarchy , which inc ludes
44 outputs, 7 spe c i fic o utco m es, 3 gene ral outc om es, and one imp ac t. For the di fferent
l inks of the resul ts chain, the methodological approach helped ident i fy 8
assum ptions/ r isks, including 5 for outputs and spe c i fic o utco m es and 2 for spe c i fic
outcomes and general outcomes; and 126 indicators, including 10346 for theoutco m e leve l , 15 for the spe c i fic outc om es level , 7 for the ge neral outco m e
level , and one for the im pa c t level .
In 2007, the w ork of the M &E Them atic G roup w as rew arde d w hen the fo llowing
signif ic an t results we re a ttained : 1) Training in stra teg ic RBM for 60 staff involve d in the
revision of the PRS. 2) De ve lop m en t of the SDRP results c ha in, de fined a s a set of results
a t ta ined wi th in a t ime per iod and l inked to each other in a cause-and-e f fec t
relationship (o utpu ts, outc om es, and imp ac t). The spe c ifici ty o f this results c ha in
l ies in the breakd own of outcom es in to spe c i fi c o u tcom es and g enera l ou tcom es. 3)
Develop m ent of the logic al fram ew ork of the SDRP ba sed on a m atr ix integrat ing the
RBM a pp roac h, which is ac hieved by taking into a c c ount four di fferent levels of results:
ou tpu ts, spe c i f ic ou tco m es (sec to r) , genera l ou tco m es, and long- te rm impa c t .4 )Deve lop m ent o f per fo rma nce ind ica to r da ta c ards in the form of proo f ind ica t ing tha t
the d esired results we re atta ined at a l l levels of the c hain. The d ata c ard for ea c h
indica tor presents the resul ts in q uestion, the indica t ive g oa ls targeted , the t ime l im i t
envisag ed for atta in ing the resul t, the source of the d ata , and the en t ity respo nsib le. 5)
A prop osed repo rting fram ew ork for the reg ional and na t iona l levels, whic h would
re f lec t an RBM ap proac h .
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Further, the government, recently, has announced to create a
mechanism under the chairmanship of National Planning Commission to
monitor the budget ac tion plan. This mec hanism will carry out the site visit
of selec ted big infrastructure projects in every two months and prepare
reports. These reports will be submitted in a regular ministerial review
meeting and the special committee meeting in every three months under
the chairmanship of the Prime Minister. The government has also
announced to introduce the Independent evaluation of the programs as
prioritize by National Planning Commission.
3.5. Reforms in Human Resources ManagementSome of the generic issues in human resources management,
particularly for the effec tive portfolio performance, are outlined as timely
non-fulfilling of vacant positions, inadequate staffing, frequent transfer of
project staff, absence of institutional memory due to the absence of
compliance of handover/takeover mechanisms, lacking capacity and
incentives mechanism. These are hampering project implementation and
portfolio performance and need to be addressed urgently. In regards to
the issue of transfer of projec t staff at the center and district level without
the proper hand over of responsibilities is a major conc ern that has been
repeatedly raised in past NPPRs. Although the Ministry of General
Administration confirms that the staff transfer has been carried out in
accordance with the Civil Service Act, frequent changes of key
implementing staff have occurred resulting in further implementation
delays, disruption in the project implementation momentum and loss of
institutional memory. Likewise, the frequent changes of the local
development officers of the districts, chief executive officers at the
municipalities, sec toral district chief and district technical officers and
assoc iated staff have significantly hampered the implementation of many
projec ts. The situation is equally challenging in accounting human
resource management front as well.
Hiring
Timely fulfillment of vacant positions and deployment of projec t
staff has been raised as a critical issue since long time. The government
has time and again expressed its commitment to unbridle the issues
particularly for the projec ts financed by development partners. In order to
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expedite the proc ess (i.e. hiring the personnel for the projec ts), the
government has been developing a procedural guidelines for creating
temporary job post. These posts can be filled through transfer from other
permanent government agencies, hiring only for the project duration, and
contracting out the job or services through agreement. The project that
needs the staff, may ask for it with clear statement of the intended supply
modalities. The Ministry of General Administration has finalized the
guidelines for creating the temporary position and recruitment. In the
meantime, the governed has also formed a Task Force, comprised of J oint
Sec retaries from Public Service Commission, Ministry of General
Administration and Ministry of Finance, to develop common selection
guidelines.
Transfer and Retention
At present, there are various authorities at various levels for
transferring the staff. The untimely and frequent transfer of the project
personnel hampered the projec ts implementation negatively resulting
time and cost overrun. As the issue has been raised in various fora by
different stakeholders, the Ministry of General Administration (MOGA) has
paid great attention to it. As the organizational reform of MOGA itself is in
the process with added duties and authorities as a Central Personnel
Agency of the government, the Ministry has developed a proposal to
authorize the task of personnel transfer to the concerned ministries with
clear common guidelines. With this provision, when implemented, it will
improve the situation better. The government has clear rules and
regulation for the handover/takeover process to maintain the institutional
memories in offices. The compliance is very weak and needs to be
improved with strong commitments.
Performance-based Incentives
As the government is concerned about the performance andincentive of the employees, the government has announced through the
current year budget speech that performance based incentive system
will be put in plac e in selected big infrastructure projec ts. Some of the
Ministries have already been implementing it satisfactorily, such as Ministry
of Finance. Some ministries are preparing for introducing this scheme to
enhance the performance of the projects.
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During this NPPR 2009, there will be a discussion as how to address
the human resource management issues and develop a concrete actions
such as (i) adherence to two years tenure of all project staff of donor
financed projec ts and possibility of retention of good staff for project
period (ii) fulfillment/deputation of required number of project
implementation staff at the district level for donor supported projec t; (iii)
review the performance based incentive scheme implemented in
Department of Revenue and consider replication to other major line
ministries such as the Ministry of Physical Planning and Works and Ministry
of Local Development where donor funded projects are high and (iv)
capacity enhancement particularly in specialized areas such as
procurement, safeguards, M&E and explore the possibility of outsourcing.
3.6. Quality at EntryThe assessment done by some of the development partners and
other observations show that projec t start-up period is too long in Nepal
partly because of a lack of sufficient implementation readiness at the
time of loan approval. Average time taken to achieve 20% disbursement
in 2008 is 49 months. This has further carried over into broader
implementation delays and ultimately in the extension of projec ts. As a
result, the average age of portfolio in Nepal is 52 months, higher than the
ADB wide averages of 41 months (Ref. ADB supported projects). These
data indicate that Nepal portfolio suffer from poor quality of entry of
projec ts. A focus on projec t readiness is critical for quick start-up.
To reduce common start up delays and ensure quality at entry,
there was a discussion on project readiness filter during the 2005 NPPR with
an aim of completing prerequisite actions for a quick start-up after the
loan approval. The filter was streamlined to indicate the actions required
in the areas of land acquisition; environmental assessment; procurement
of goods, works and services; and preparation of detailed design and
bidding documents at various stages of projec t cycle. Despite the use of
readiness filter, its effec t is very limited. Now, it has bec ome necessary to
refocus on this issue during this NPPR 2009, revisited the filters and agreed
upon with strong commitments from both government and DPs. While
discussing on the readiness filters, it is expected to concentrate the
discussion on the following major activities:
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Projec t implementation units established and projec t staffassigned/deputed
Provision of budget for the first year of implementation Establish financial management system, auditing arrangement,
fund flow arrangement, and oversight system Bid invitation for works and goods issued for the first 12 months of
projec t implementation and request for proposals issued for
consultants
Process/administrative clearance for temporary use of land, e.g,right of the way for the first two years of projec t implementation
completed
Compensation determination committees established and atleast 20% land acquisition completed
All statutory clearances like environment/forest clearances forthe first two years of project implementation completed
4. Nepal on path of Aid Harmonization: Enhancing CommitmentsMore than ever, citizens and taxpayers of all countries expect to see
tangible results of development efforts. Both development partners and the
government wish that their actions translate into positive impacts on peoples
lives. Reaffirming the commitments for better aid and its utilization, various
international commitments have been reflec ted through many forums such as
Paris Declaration, Accra Agenda for Action. Nepal participatedin the 2nd
High-
Level Forum on Aid effectiveness held in Paris in March 2005 and became
signatory to the Paris Declaration. Since then Nepal has moved forward with a
number of milestones as its commitment for aid effec tiveness.
Ministry of Finance conducted a survey on Monitoring theImplementation of Paris Dec laration in 2007, which revealed interesting
findings. Table -1 summarizes the status of implementation of the Paris
Declaration in Nepal.
Ta b le- 1: Nep a l Survey on M on ito ring the Pa ris De c la ra t ion : Summa ry of
f indings
Indicators Results
Aid on Budget 74 %
Technical assistance 34 %
Coordinated Technical Assistance 14 %
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Using Procurement system 59 %
Using country Public Financial Management system 68 %
Parallel Project Implementation Units- PIUs (number) 106
Predictability 47 %Program-based Approach: Budgetary support and
others
32 %
J oint Country Analytic Work (CAW) 37 %
Ministry of Finance disseminated the above findings in various national,regional and international forums, including the 3rd
In line with the Paris Principles, Nepal is revising Foreign Aid Policy.Currently, it is being floated among the stakeholders.
High-Level Forum in
Accra itself. In Accra, Nepal was the first presenter in "Marketplace of
Ideas" session that showcased the success story in area of aid
harmonization - particularly in education and health SWAP, and peace
proc ess.
With a view to localizing Paris principles, Nepal has developed a draftNational Action Plan on Aid Effectiveness (NAP) and shared with
development partners as well as government agencies. The NAP will
continue to identify Nepal-specific, doable actions that help to
implement Paris principles on ground, which revolve around 5
overarching themes of aid harmonization- ownership, alignment,
harmonization, managing for development results (MfDR), and mutual
accountability.
After Accra, Nepal has been actively participating in various jointventures, task forces, and initiatives, for example on 'Cluster-B: Public
Financial Management', 'Cluster-C: Conditionality, Accountability, and
Transparency', 'International Aid Transparency Initiative (IATI)' etc.
Finance secretary level participation in the first annual conference ofIATI held in the Netherlands in Oc tober 2009 further reaffirmed Nepal's
commitment towards better and transparent aid. The IATI intends to
publish all aid-related information in a consistent format so that the
traceability of aid transaction is improved resulting in visible and
effec tive results.
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In line with commitment made in the Paris Dec laration, the secondround of evaluation of Paris Declaration is being conducted at country
level in 2010. Recently, Nepal volunteered to participate in the
second round of Paris Declaration Evaluation (PDE-II).
To materialize all the above mentioned initiatives, Nepal realizes theemergent need of local capacity. Capacity existent at individual level
needs to be retained in organizations and institutionalized through
various incentive systems. Capacity so developed needs strong back
up of information and policy. For this, Ministry of Finance is
implementing a project, with the support of UNDP, to develop
capacity of Ministry of Finance along with five key developmentMinistries. The project has three major components- developing and
operationalizing Aid Information Management System (AIMS),
developing and sustaining individual, organizational and institutional
capacity for aid management, and supporting implementation of aid
effectiveness principles in Nepal through revised policy instruments and
action plans. Need assessment exercises for the former two
components have just been completed.
We hope this
engagement will be another milestone on the way to identify baseline
information on effectiveness of Paris Declaration in Nepal.
5. Future NPPR mechanism making more Result FocusedMovement to a transparent result based performance framework for the
NPPR is felt necessary. A mutually accountable results framework could be
developed which focuses on key indicators and be formulated around an
annual cycle which is linked to the preparation and execution of the budget.
The framework could be based around a manageable number of annual
performance indicators which would measure progress towards agreed sec toral
level targets and monitor key macro-economic, PFM and governance basedindicators. In order to keep the implementation focus of the NPPR, each
indicator and annual target will have direc tly linked actions which are
supportive policy or implementation changes that are required to make
progress towards annual targets. A good target would be around 20 indicators
(covering more than 70% of the budget). This framework would be the focus of
all dialogue on government performance.
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Development partners progress towards their Paris and Accra
commitments also needs to be measured annually to establish a truly mutually
accountable framework. Indicators can be derived from internationally agreed
targets and adjusted to the Nepali context. Selec tion of 10-15 indicators should
be sufficient to adequately measure progress. The possibility of merging NAP
indicators with the NPPR also needs to be explored. Currently, there are two big
challenges in this area, which are- aid information database and agreeing on
achievable annual targets. This new approach could be developed by a joint
team of development partners and government.
Similarly, the progress follow ups of NPPR periodic progress also needs to
adopt more participatory approach. Conducting reviews at the concerned
lead agencies premises will generate more ownership than asking for the
progress and inviting at a plac e in a formal fashion. This can be discussed whilefinalizing the implementation and follow up modalities after the NPPR meeting.
6. Major Challenges in Key AreasThere have been various challenges in enhancing project portfolio
performances and achieving the development effec tiveness. For the purpose of
steadily addressing some of the major challenges through this NPPR mechanism,
the followings are outlined as summary:
I. The sectoral ceiling is normally prepared on incremental basis.Budgeting Reforms
II. Projects are included in the budget without detailed study.III. Sectoral target/indicators have not been prepared in advanceIV. Budget allocation is not linked with the sectoral targets and priorities.V. Lack of enough flexibility for the projec t manager to mobilize the fund
within allocated budget head (virement).
VI. Conc entration of capital expenditure at the last trimester of thebudget year.
VII. Consistently guarantee of fund for a projec t without hindrances in anybudget year.
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I. Inadequate staff for the projects against the required number.Human Resources Management
II.
Frequent transfer, not fully complied with 2 years tenure, and transferdone at the middle of the projec ts life.
III. Lack of incentive resulted slow progress of the projects which over runthe costs and also undermined the national capacity building.
IV. Capacity gaps in various areas, particularly in proc urement, monitoringand evaluation, safeguards, etc.
V. Lack of institutional memory in the projec ts after the movement of thestaff due to inadequate technical support (IT systems, data) and non-
compliance of handover/takeover mechanism.
I. Generally, weak commitment on the monitoring and evaluationaspect of the project.
Monitoring and Evaluation
II. Absence of separate monitoring and evaluation policy.III. Non-provisioning of budget for M&E activities in each project.IV. Lack of integrated information systems established at the c entre andlinking it to the line agencies and the districts.V. Insufficient capacity building efforts.
I. Outdated Projects readiness filterProjects Quality at Entry
II. Preparation delays for a quick start-up of the projec ts resulteddemands for projec t extension. Delays oc curred in PIUs establishment
and staffing, land compensation committees formation, environmental
clearances, preparation of detailed design and bidding documents,
etc.
III. Lack of enough budget, in some projec ts, for the first year ofimplementation
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IV. Weak compliance of the Project readiness filter from both side GONand DPs.
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7. A Way ForwardThe Government of Nepal is committed to overcome these challenges
through the continuation of the reform, initiated in different times and through
the new measures in various areas in order to improve the performance of the
projec ts and achieve the development results. Spec ifically, to address the
above mentioned challenges, following key ac tions are identified:
I. Implementing the result based budgeting (RBM) to further improve thebudgeting system, by selec ting pilot sec tors/projec ts, where following
possibilities will be explored:
Budgeting Reforms
a. Provide flexible ceilings in selected pilot sec tor/projec tsb. Projects are included in the budget with detailed study with
measurable sectoral performance indicators
c. Provide enough flexibility in mobilizing the fund within the budgethead
d.Timely approve the annual work plan and ensure the fundauthorization on time
II. Advance the budget approval process to allow more time for earlyimplementation of the projects.
III. Budget allocation is aligned with the sec toral targets and priorities.IV. Continuation of multi-year budgeting initiated in FY 2009/10
I. Full compliance of Civil Service Acts 2 years tenure provision for allprojects staff.
Human Resources Management
II. Explore the possibility of deployment through the projec t period forgood performing staff.
III. Launching the performance based incentive system in majorspending ministries like Ministry of Physical Planning and Works,
Ministry of Local Development, etc.
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IV. Explore the possibility of outsourcing in some of the areas likeprocurement, M&E, safeguards.
V. Provision of creation of temporary posts to fill up the vacancy ontime.
VI. Exercise the possibility of transferring the personnel transfer authorityfrom Ministry of General Administration to the line ministries with
certain guidelines.
I. Develop a separate monitoring and evaluation policyMonitoring and Evaluation
II. Rollover the sector wide M &E framework in other ministriesIII. Establish the integrated information system for M&E at the NPC and link
them with other ministries
IV. Make mandatorily the provision of M&E budget in each projec t.
I. GON is committed to update and implement Project Readiness Filteralong with the development partners.
Quality at Projects Entry
II. GON is committed to ensure enough budgets at the first year of theprojec ts.
III. GON is committed to minimize the project start up delays.IV. GON is committed to expedite the process for provisions like
environment/forest.
V. GON is committed to set up PIUs and assigned the projec t staff timely.
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Part II
Implementation Status of NPPR 2008 Action Plan
The Government of Nepal has organized its annual Nepal PortfolioPerformance Review Meeting (NPPR) in November, 2008 after it took full
ownership of the meeting since 2006. The theme of the meeting was selected as
Use of Country Systems for Improved Portfolio Performance. Five sub-themes
were selected on which several short term and longer term ac tions identified
with measurable indicators. The sub-themes were: (1) result-based
management, (2) public financial management (3) public procurement (4)
monitoring and evaluation and (5) donor harmonization, coordination and
project management.
Various actions were developed with role defined to the responsible
agencies and timeline as an outcome of the discussion in the review meeting
attended by project managers, development partners, government agencies.
As an improved implementation strategy, five champions were identified and
given job for follow up of implementation for each sub-theme. Trimester progress
review meetings were held in February, May and November. Due to the
countrys situation at transition, the reforms implementation through this
mechanism was affected caused slow progress in many areas. However, the
overall progress of NPPR 2008 was mixed. Out of the identified 31 short term
indicators, 10 were c omplied, 18 were work in progress and 3 were due.
Ministry of Finance has followed up the implementation progress as stipulated
schedule and shared with all Development Partners. Details of the
implementation status of the action plans are presented in the attached matrix.
National Planning Commission led this sub-theme supporting by other
government agencies and development partners. Seven actions were identified
and followed up for its implementation. As the MfDR Technical Assistance wasdelayed, the progress of this theme was slowed. However, some progress was
seen. High level committee has been formed under the chairmanship of Vice
Chairman, National Planning Commission to guide and implement the results
frameworks such as capacity building framework, revision of reporting formats,
program and budgeting framework. The concrete progress is yet to be made.
Result based management
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Public Financial Management
Financial Comptroller Generals Office was given led role for this sub-theme. Ten key actions were identified and implemented during a year. Some
of the progress made is as follows: the Education and Health sec tors are
connected with FCGO database; PFM strategy document has been approved
by PEFA steering c ommittee; the preparation of implementation plan is
underway; PEFA implementation unit has been established in 15 ministries for the
implementation of the strategy; the PEFA action plan has been sequenced and
prioritized and Phase I of the PFM Strategy has been prepared by the
government with the overall government development objectives.
Public Procurement Management
Public Procurement Monitoring Office (PPMO) was given a lead role on
this Sub-theme. There were five key ac tions were identified. As a progress, GON
and Development partners J oint Review Panel prepared a report on collusion,
coercion and intimidation practices in bidding process and submitted to the
steering committee. The c ommittee has approved the report and sent to PPMO
for its implementation. Relevant recommendations of the report will be
incorporated in the proposed revision of the Proc urement Act. Likewise, some
capacity building activities in PPMO has been done. Restructuring and furthercapacity enhancement of PPMO is felt necessary. Similarly, transitional Standard
Bidding Doc ument has been issued and is posted in the website. Final SBD draft
is being consulted with Development Partners.
Monitoring and Evaluation System
Three short term actions were developed and given the implementation
role to National Planning Commission. Regarding the progress, in order to
incorporate the M& E budget while approving the projec t/annual work plan,
NPC issued the guidelines to all ministries as TYIP focus to allocate 0.5 percent oftotal budget for M&E. Preparation of M&E action plan is underway.
Donor Harmonization, Aid Coordination and Project/Program Management
Six actions were identified and implemented. Some of the key actions
were related to the holding of National Development Forum (NDF) whereby the
plan was to formalize the new Foreign Aid Policy and Aid Effectiveness National
Action plan (NAAP). As the NDF postponed, these two major activities were
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delayed. Aid mapping exercise was completed. However, further updating and
revision is necessary. To establish Aid Information Management system, need
assessment has been completed by Gateway Foundation. Service provider for
software has been selected. The issues of staff transfer were discussed in almost
all progress review meeting. For the adoption of Standard Operating Procedure
in each agency for incorporation of proper mechanism of handover and
takeover, MOF has requested to all line agencies.
Regarding Longer term action plan matrix, it was not feasible to focus on
implementation and follow up as the nature of the issues has longer timeframe.
It is also felt that NPPR should focus only on shorter term doable actions to be
implemented within a year.
Attachment: Ac tion Plan Matrices with updated progress as of November, 2009
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Updated:November2009
22000088NNEEPPAALLPPOORRTTFFOOLLIIOOPPEERRFFOORRMMAANNCCEERREEVVIIEEWW((
NNPPPPRR))
AACCTTIIOONNPPLLAANNFFOORRIIMMPPRROOVVIINNGGPPOORRTTFFOOLLIIOOPPEERRFFOORRMMAANNCCEE
((SShhoorrtt--tteerrmm
AAccttiioonnPPllaann))
PPrrooggrreessssaassoo
ffNNoovveemmbbeerr22000099
FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
1.Results-
Based
Management
(RBM)
Expected
Outcome:
Efficiencyand
Effectivenessof
theGovernment
ofNepalin
achievingdesired
results
Champion:
DivisionChief,
Poverty
Monitoring
Division,NPC
Internalizationof
RBMbygovernment
agencies
Developacapacitybuilding
framework(conceptualization,
procedures,resources,
logistics)
NPC,
MOF,
sectoralline
ministries
Capacitybuilding
frameworkdeveloped
March
2009
June09
Due.
AstheMfDRTAdelayed,
thisactionhas
alsobeendelayed.
Capacitybuildingframeworkis
plannedtobedoneundertheproject.Theproject
hasbeenoperationalizedfromJuly22,
2009.
NPCiscommittedtopreparethisframework.
Reviewandrevisereporting
formatforresult-based
reporting
Prepareresultbasedannual
/programandbudget
framework.
NPCandsectoral
lineministries
NPCandsectoral
lineministries.
Revisedformatprepared
RBM-informedprogram
andbudget.
May
2009
July
2009
Complied.
Existingreportingformatsare
re
viewedandrevisedbythecommittee.
Itis
approvedbyNPCandcirculated.
Printingisbeing
donefordistribution.
Itwillbeuploadedinthe
website.
Complied:
GuidelinesarealreadyissuedbyNPC
to
thelineMinistriesforresultbasedAWPforFY
2066/67.
NeedforGON-
Donorharmonization
inplanning,
programmingand
monitoringresults
Formahigh-levelsteering
committeechairedbyNPC
ViceChairmanand
representedbyMOF,relevant
lineministriesand
developmentpartners.
Developaframeworkand
implementationplanforRBM
NPC
NPC/MOF/line
ministries/DPs
Regularminutesof
meeting
Frameworkand
implementationplan
finalized
January
2009
June
2009
April,
09
Complied.
Thecommitteehasbeenformedon
24June09underthechairmanshipofVC,
NPC
re
presentedbysomesecretariesoflineministries
includingMOFsecretaryasJointSecretaryof
NPCmembersecretary.
Due.
ThisactionisrelatedtotheNo.1action.
As
th
eMfDRTAhasbeendelayed,
thisactionisalso
affected.
Ineffective
development
impacts/results
tracking
Reviewthesystemof
PMAS/DPMASatcentral,
districtandsectorallevelfor
furtherstrengthening
RolloutMfDRprocesstoother
lineagencies
NPCandMOLD
NPC/concernedline
agencies/ADB
Reviewreports
(trimester,MDAC,
NDACreports)
Shareprogressand
lessonslearntofthe
currentMFDRprocess
July
2009
June
2009
W
orkinprogress.
SteeringCommitteeis
fo
rmedundertheChairmanshipofSecretary,
NPCandCoordinationCommitteeisformed
un
derthechairmanshipofJointSecretary,
NPC
to
reviewthesystem.
W
orkinProgress:Processhasbeenstarted
underADBTA.
Consultantsselected.
Consultationshavebeendonewithlineministries.
In
ceptionworkshophasbeendoneasplanned.
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FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
2.
Public
Financial
Management
(PFM)
Expected
Outcome:
Transparent,
Accountableand
RobustFinancial
Management
System
Champion:
Mr.DevRaj
Pathak,Joint
FCG,FCGO
Delayinfundrelease
duetodelayin
programapproval
MOFtoincreasetheadvance
releasefrom1/3rdtoan
appropriatelevelforP1
projectsbasedonperformance
orfundingneeds,andpriority
ofthegovernment
MOF,
NPC,
Line
Ministries
Timelyfundreleaseto
P1projects
Decisiononincreasing
theproportionfor
advancefrom1/3rdto
appropriatelevelforP1
projects
July
2009
C
omplied:Currentadvancereleasesystemis
enoughand
P1projectsgetthefundsasthey
need.
Prepareaconceptnotefor
advancingthetimeforwork
programandbudget
discussionandensurethat
theyareapprovedpriorto
budgetingofnewfiscalyear
MOF,
NPC,
Line
Ministries
ConceptNoteprepared,
disseminatedand
discussedwiththeCA
members
March
2009
N
otcomplied:GONhasprincipallyagreedto
advancethebudgetspeech.
Lastyear,MOFwas
preparedtoannouncebudgetspeechinJune,
09.
H
owever,duetothesuddenchangesinthe
government,thiswasnotpossible.
Lackofsubmission
ofProcurementPlan
withBudget
Submission
Forensuringbetterfinancial
discipline,
GONtoissue
directivesfor"budget
surrender"inmid-yearreview
ofthebudgetifthereisno
progressinimplementationof
programasperprocurement
plan
MOF/NPC/line
ministries
Budgetmanagement
basedonperformance
April
2009
Aug,
09
W
orkinProgress:
TheNPChasmadeaprovisiontosubmitthe
workplanatthetimeofapprovalofprograms.
Provisionhasbeenproposedforreviewingthe
clauserelatedtothebudgetsurrenderinFinancial
ProceduralAct.
TheActisunderdiscussionin
parliamentarycommittee.
InadequateAccounts
Staffandissueof
AccountsStaff
transfer
GONtomakedecisiontofill
thevacantpositionsof500
stafftoaddresstheissueof
inadequateaccountspool
MOF,
FCGO
500staffrecruited
Transferpolicy
reinforced
Implementationnot
affectedbytransferof
staff
March
2009
June09
W
orkinprogress
Transferpolicyhasbeenfollowed.
.Therearestillvarious
positionsneedtobefulfilled.
Outof85officers,
31
officersandmorethan200accountantshave
alreadyjoinedtheservice.
Nonofficersandrestof
th
etotalpersonnelwillbefulfilledwithin2009.
R
equesthasbeenplacedtoPublicService
C
ommissionforfulfilling50temporarystaff.
FCGOtoensurethepolicyof
adheringtoCivilServiceAct
regardingstafftransfer
includingthattheaccountstaff
willnotbetransferredinthe
lasttrimesteroffiscalyearand
iftheproject/programisinthe
finalyear,duetoaccountability
ofclosingfinalaccounts
FCGO
Governmentaccounts
smoothlyreconciled
ProjectAccounts
preparedontime
Ongoing
C
omplied.
FCGOhasfollowedthecriteriaofCivil
ServiceAct.
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FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
Weakcapacityof
accountsstaffand
capacitybuilding
Revisethetrainingcurriculum
basedoncurrentneedsand
prepareatraining
implementationplanand
trainingpackagetoimplement
firstroundoftrainingwithin
FY2008/09,
tocoverthe
followingschemes:(1)
GeneralAdministrationand
FinancialManagementfornew
entriesfor3monthsand(2)
RefresherTrainingfor2weeks
beforestaffaredeputedto
project/program.
MOF,
FCGO
PreparationofTraining
ImplementationPlan.
Implementationof
trainingprogram.
Capacityofaccounts
staffenhanced.
Timelypreparationof
financialstatements.
Implementat
ionPlanby
Jan2009
Implement
firstroundo
trainingby
mid-July
Continue
thisevery
year
June09
Sept
09
W
orkinProgress:Curriculumofinduction
traininghasbeenfinalized.
TrainingonFinancial
M
anagementfornewentriesofficershasbeen
doneinSeptember.
In
ductiontrainingfornonofficers(Accountants)
hasalsobeenstartedinNovember2009.
OutdatedCash
BasisAccounting
System
GONtomakedecisionto
adoptcashbasisaccounting
standardsasperinternational
standards(IPSASbased),and
implementroadmapsubmitted
bytheASB.
MOF,
FCGO,
OAG
AdoptionofIPSAS-
basedaccounting
standards
Harmonizationofcash
basedaccounting
systemwithinternational
standardswhichis
transparentandmeet
IMFbenchmarks
July
2009
W
orkinProgress.
AsacommitmenttomovethePFMAgenda
fo
rward,
theBudgetSpeechofFY2009/10has
givenprioritytoImplementpublicsectorcash
basisofaccountingsysteminlinewith
in
ternationalaccountingstandards(IPSAS).
G
oNapprovedtoimplementtheNepalPublic
SectorAccountingStandardBoardundercash
basisaccountingsysteminlinewithinternational
accountingstandards(IPSAS)onSeptember15,
2009.
Lackofinfrastructure
andconnectivityfor
promptreporting
Atleastforsectorsoperating
onSWApbasis,
GONtomake
decisiontoimmediately
provideconnectivitytoFCGO
databasetoenabletheline
agenciestopromptlyaccess
theinformationsystem.
Also,ensurecapacitybuilding
actionintegratedinthe
decision.
MOF,
FCGO
Decisiontoprovideon-
lineconnectivityto
sectorsoperatingon
SWApbasis
Timelyconsolidationof
financialstatements.
April
2009
C
omplied.
Thecurrentsectors(educationand
health)implementingSWApareconnectedwith
FCGO
database.
Asthesectorsoperatingin
SWApapproachincreases,
FCGO
willprovide
connectivity.
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FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
Slowimplementation
ofPEFAActionPlan
GONtoprepareanapproach
paperforJointWB/DFID/ADB
andGONmissiontoprepare
PFMStrategyDocumentto
sequenceandprioritizethe
PEFAActionPlanlinkingwith
overallgovernment
developmentobjectives.
MOF,
FCGO,
World
Bank,
DFID,
ADB
Jointmissionlaunched
andagreementon
prioritizedPFMprogram.
Agreementon
implementationplanand
developmentpartner
supportinSWAp
approach.
Approach
Paperby
Mid-Jan.
2008
Complied.
WorkshoponExperiencesharingof
Single
Treasury
Account
and
International
AccountingStandardsinPublicSectorhasbeen
co
nductedinFebruarybyPEFAsecretariatwith
su
pport
from
the
WB.
The
PFM
Strategy
DocumentPhaseIhasbeenprepared.
A
budgetprovision
has
been
made
in
the
governments
budgetforFY2009/10
undera
se
paratebudgetheadof35-3
/4-2
00forPublic
FinancialManagementReformandatotalbudget
ofRs.17.5millionhasbeenallocatedmainlyfor
re
currentexpenses.
PEFA
Implementation
Unit(PIU)
has
been
establishedin15ministriesfortheimplementation
ofthestrategy.
BasedonPFMStrategy
Document,preparea
Project/ProgramConceptNote
followingSWApapproach
throughwiderdonor
consultation.
PFMStrategyDocument
PreparationofPFM
SWApprogramto
implementPFMStrategy
Document
Joint
Mission
byMarch
2009
PFM
Strategy
Document
byMay
2009
W
orkinProgress:PFMStrategyDocumenthas
beenapprovedbyPEFAsteeringcommitteeon
Ju
ly6,
2009.
Preparationofimplementationplan
is
ontheschedule.
Supporthasbeensoughtfrom
W
B/DFIDforitsimplementation.
3.
Public
Procurement
Management
(PPM)
Expected
Outcome:
Efficientand
EffectiveUseof
PublicMoneyfor
BetterService
Delivery
Champion:
Director,PPMO
Collusion,
Coercion
andIntimidationin
thebiddingprocess
Studythecausesandeffects
oftheissueanddefinethe
collusionandcoercion
practice,suggestforthe
necessaryamendmentinthe
PPAandPPRthroughaGON-
DevelopmentPartnersJoint
ReviewPanel
MOF,
PPMO,
DPs
ReportbytheStudy
Team
Enhancecompetition
(Numberofcompetitors)
Complaintsreduced
July
2009
Complied.
GON-
DevelopmentPartnersJoint
ReviewPanelpreparedthereportandsubmitted
to
thesteeringcommittee.
SChasapprovedthe
re
port,preparedanactionplanandsenttoPPMO
fo
rimplementation.
Relevantrecommendations
willbeincorporatedintheproposedrevisionof
procurementact.Preparationofe-procurement
proposal,arrangementoffunding,manpowerand
so
ftwaredevelopmentisplannedinthisyear.
WeakCapacityof
PPMOand
Stakeholdersin
implementingPublic
Fulloperationalization
(includingstaffing)ofthe
PublicProcurementMonitoring
Office(PPMO)
OPMCM/MOGA
PPMOfullystaffedand
operationalized
March
2009
W
orkinProgress:RestructuringofPPMOisfelt
andprocessofstrengtheningisundergoing.
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FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
ProcurementLaw
Carryoutmassivetrainingand
awarenesscampaigntothe
vigilanceagencies,
procurementunits,highlevel
govt.officials,
bidders
communityandcivilsociety
PPMO/MOGA
Numberofworkshops,
trainingandawareness
campaignandtraining
materials
Familiaritywith
procurementlaw,
effectiveprocurement
procedure
First
program
byMarch
2009
Continue
eachyear
inPPMO
program
W
orkinProgress:Awarenessworkshopfor
SeniorTrainerheld,
includingparticipantsfrom
co
rporations.
TAcoverscostofdeveloping
trainingmaterialsandmodules.
Trainingfor
DTCOchiefshasbeencompleted.
Massive
trainingswillbeconductedunderWBTA.
AgreedactionsaretobecompletedunderIDF
grantwithintheprojectperiod.
IssuanceofStandardBidding
Documentsforworks,goods
andconsultantservices
(TransitionalandFinal)
PPMO
IssueofStandardBid
Documents(Transitional
andFinal)
Transitio
nalby
Decemb
er2008
Finalby
July
2009
Complied:TransitionalSBDsissuedandarein
th
ewebsitewww.ppmo.gov.np.
W
orkinProgress:FinalSBDsdraftofcivil
works,goodsandconsultingserviceshavebeen
se
nttoDevelopmentPartnersfortheircomments/
su
ggestions.
http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/http://www.ppmo.gov.np/7/27/2019 NPPR 2009 Report
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FocusSub-
Theme
Challenges
AgreedActions
Responsible
Agencies
PerformanceIndicators
Target
Dates
Revised
Target
date
Progress
VariationOrder
Studytheproblemsof
Variationorderofexecuting
agenciesandrecommend
necessaryactionfor
amendmentinPublic
ProcurementLaw
PPMO,
Procuring
Entities
ReportofPPMO
Smoothcontract
Administration,savingin
costandtimeofproject
July
2009
W
orkinprogress.
Consultationswithline
m
inistriesareunderwayinordertoincorporate
th
isissueintheproposedamendmentof
ProcurementAct/regulation.
4.
Monitoring
andEvaluation
System
(M&E)
Expected
Outcome:
EfficientM&E
Systemin
Operation