DSA Report of Project Activities: January 1 st to March 31 st, 1999

Transcription

1 DSA Report of Project Activities: January 1 st to March 31 st, 1999 Project Report: Q-8 April 12, 1999 Decentralization Support Activity Project Ministry of Finance & Ministry of Economy Development and Cooperation Addis Ababa

2 I. CORE ACTIVITIES A. Accounts Reform Assistance in developing a training program for donor reporting for the Sector Development Programs The project arranged a two week consultancy for Professor Jim Yardley and his colleague, Kelly Richmond from Virginia Tech. There were four objectives of this consultancy: (1) review the Government of Ethiopia s Financial Reporting System for donor funds, (2) prepare a training manual in financial reporting of donor funds, (3) prepare training materials for classroom use, and (4) present to the accounts trainers at the Ethiopian Civil Service College and the Regional Management Institutes an overview of the donor reporting training module. The terms of reference had to be modified when the consultants arrived because the accounts department was extensively involved in rapidly developing an interim reporting system to meet the requirements of the Sector Development Programs. Only the first objective was partially accomplished. The consultants found that an emerging interim donor financial reporting system was in the process of being designed and implemented. A thorough review of the system was therefore not possible because the system was under development. Objectives two through four were dependent upon completion of the first objective. With the changed circumstances, this consultancy was redefined in terms of three objectives: (1) describe the emerging interim donor financial reporting system, (2) assess the emerging interim donor financial reporting system, and (3) make recommendations for a process to schedule and design an appropriate donor financial reporting system. The consultants presented an executive summary of their findings to the Ministry of Finance prior to their departure. A final report (A-20) was subsequently delivered to the Ministry of Finance. Assisting the regions to close their accounts One task of the accounts reform is to reduce the backlog of regions in closing their accounts. The project provides logistical assistance to the Accounts Department of the Ministry of Finance to send teams from the Ministry to both train regional accounts staff and to directly assist and supervise the closure of accounts. During this reporting period teams went to three regions (Afar, Somali, Southern Nations Nationalities and People s Regional Government) and one administrative area (Dire Dawa) to assist in closing accounts. Reports of this assistance were prepared (Report A-21 for Dire Dawa and Harai, and Report A-22 for Afar, Report A-23 for SNNPRG). 1

3 B. Budget Reform Completion of Version 2 of the Budget Reform Design Manual During the reporting period, the budget design team revised Budget Reform Design Manual Version 2 and distributed it to regions and federal public bodies for review (B-14). Version 2 presents a new chart of accounts, a financial calendar and new budget formats. Regional and Federal workshops on the budget reform During the reporting period, the budget design team organized separate workshops for regional and federal finance staff to review Versions 1 and 2 (B-4 and B-14) of the Budget Reform Design Manual. The workshop for regional finance staff was held at the Debre Zeit Management Institute between March 29 th and April 2 nd. The workshop included participants from all nine regions and from Dire Dawa and Addis Ababa. Eight participants from each region were invited and included the following staff: heads of planning and finance bureaus, heads of the budget department of regional finance bureaus, heads of the budget and planning departments of the regional education and agriculture bureaus. A total of 83 regional participants and 11 resource persons from the federal government attended. The five day workshop provided participants an opportunity to review the two documents and discuss them in detail. Regions felt that the design was appropriate to their requirements and made recommendations for improvement. A key recommendation is the revision of the proposed financial calendar to release the notification of regional subsidies early to provide region and sub-regional levels time to prepare their budgets. Another observation from the workshop is that there is considerable evolution in the process of regional budgeting. Since reviewing the budget process, two regions have gone further in devolving financial management. A four day workshop on Versions 1 and 2 of the Budget Reform Design Manuals has been scheduled for finance staff of all federal public bodies in Addis from April 13 th. C. Public Investment/Expenditure Reform PIP A second draft of the Macro Economic and Fiscal Framework for the PIP period FY was completed and circulated within MEDaC at the end of December After review by the MEDaC Management Committee, the Development Finance and Budget Department was requested to prepare the MEFF in a revised format, with options for management consideration and incorporating a forecast of Treasury, loan and assistance requirements by public body to be prepared by the MEDaC sector departments. Revised forecasts of GDP from the MEDaC 2

4 Macroeconomic Planning Department and forecasts of revenue and recurrent expenditures from the Ministry of Finance were to be incorporated. A revised draft of the MEFF was submitted on February 26, Further revisions were requested to incorporate information on the forecast of external funding requirements for the Regions to be prepared by the MEDaC Regional Economic Planning Department. A revised version of the MEFF was submitted to the MEDaC Management Committee on March 22, 1999, and MEDaC submitted a final report to the Office of the Prime Minister on March 25, 1999 (P-22). After review by the Office of the Prime Minister, further information was requested on the forecasts of revenue and recurrent expenditure and the capital expenditure requirements for As a result, by the end of March 1999, the Indicative Planning Figures for the period had still not been approved. Nevertheless, the Call Letter requiring the public bodies to prepare their submissions was sent in January. Public bodies have worked on the preparation of their PIP submissions, which will be finalized as soon as they receive their IPF s. At the end of March, a number of public bodies had submitted their Project Profiles and the data was being entered into the PIP Database Management System by staff in the MEDaC Sector Departments. Forecast of External Funding for The forecast of external funding was up-dated and after review by the MEDaC Management Committee, a final report was circulated within MEDaC on February 10, 1999 (P-23). Computer Training, Equipment and Database Management Training in Microsoft Windows and Excel for 20 persons from MEDaC that started in November through a local commercial training center was completed in early January. Training for a second group of 12 persons started January 26, 1999 and was completed in early March. Four computer workstations for MEDaC Sector Departments were procured and installed in February The changes in the PIP Database Management System were completed in early March to enable decentralized data entry in the MEDaC Sector Departments. All of the User Manuals were updated to reflect the changes made to the system. Training on the use of the PIP Database Management System was provided to 26 persons from the MEDaC Sector Departments, the Development Finance and Budget Department, and the Computer Services Department during the period March 9-19, Other PIP Training As reported during the last quarter, training materials for a PIP training program in MEDaC were prepared to build upon the lessons learned from the preparation of the PIP. However, as of the end of March the workshops had not been held 3

5 pending finalization of the Macroeconomic and Fiscal Framework and the Indicative Planning Figures for D. Training In-service training in accounting During the reporting period the second round of courses in Module 1 of Specialist Capacity in Accounts were delivered by the Regional Management Institutes in Southern Nations Nationalities and Peoples Regional Government and Tigray regions. In the second round of training 110 government staff were trained in Accounts Module 1 distributed as follows: Round 2 of In-Service Training in Accounts Module 1 Region Number of Staff Trained Tigray 37 SNNPRG 73 Total 110 Translation of the in-service training manuals During the reporting period Tigray completed the translation of the trainee and trainer manual for Module 1 of Specialist Capacity Training in Accounts. Production of the trainer copy is completed and the project is currently producing the trainee copy. The translation of the of Module 1 of accounts into Oromifa is still in process. The first firm selected was unable to prepare a satisfactory translation. The translation was rebid and the new group of firms is currently being evaluated by a committee from the region. Recruitment of an in-service training coordinator The scope of the emerging in-service training program in financial management is large and demanding. With five training institutions located around the country, the program requires coordination. The project proposed to recruit a host national to assist the institutional partners and the project in coordinating this training. The position was agreed to by USAID, the Ethiopian Civil Service College and the Ministry of Finance. Terms of reference for the position were prepared and recruitment commenced. A selection committee has been identified to review and make a recommendation. During the reporting period the candidates from the first advertisement were evaluated. Eight candidates were reviewed and two reached the minimum threshold. The committee felt that since there only were only two candidates who barely met the threshold and that the position should again be 4

6 advertised. A second advertisement was placed and seven candidates applied. These seven new applicants along with the two who previously met the threshold will be evaluated. Evaluation will be done in the next reporting period. Additional funding requirements for in-service training Because of a reduction in UNDP funding, UNDP funds are not available to support the in-service training program in financial management. The project was notified of this change in July 1998 after the budget for the second two year phase of the DSA project had been submitted to USAID. The project prepared a projection of the financial requirements of the in-service training program for the next two years. The short fall indicated in this projection was substantial ($1.25 million). The Ministry forwarded this projection to USAID and is discussing with USAID how to meet these requirements. Semi-annual meeting of the directors of the in-service training institutes To facilitate the management of the in-service training program in financial management, it was agreed to meet on a semi-annual basis with the institutional partners delivering the training (the Ethiopian Civil Service College and the four Regional Management Institutes). The first meeting was held in May of 1998 and it was agreed to hold the second meeting after the Management Institutes had completed one round of training. The second meeting was held from January in the Ministry of Finance. The two day meeting covered policy issues about content and logistics of the training as well as specific issues about the delivery of the training. The experience of the first round of training was presented by the four institutions that delivered courses and a number of recommendations were made and are documented in the minutes of the meeting (T-20). A major recommendation was the expansion of the standard module from 35 days to 50 to present the constitutional and policy framework in which financial management occurs in the regions. Invited participants included the directors and the trainers of the management institutes and the heads of the finance bureaus of the four regions that have management institutes (Amhara, Tigray, Oromia, and Southern Nations Nationalities and Peoples Regional Government) as well as administrative staff and trainers from the Ethiopian Civil Service College (ECSC). Seventeen regional staff and seven federal staff attended the meeting. E. Policy Support to the Prime Minister s Office Policy advising to Minister Gebre-ab Newai in the Prime Minister s office is one of the activities of the DSA project. This activity is implemented with short-term consultants. Consultancy by Professor Dwight Perkins 5

7 Dwight Perkins of Harvard University is the principal manager of the DSA project s policy component. His trip scheduled initially for June of 1998 was postponed to February due to the out break of border hostilities. The February trip was cancelled because of the ordered departure issued by the U.S. State Department in early February. Schedule of upcoming activities The chief of party met with Minister Newai to schedule activities for the policy initiative. The Minister made two requests. First, he would like additional studies on export commodities. Some of these studies would be of the depth of the coffee study (PA-6) and some would be shorter desk studies. The Minister will forward a list of these studies to the project. The second request was to complete the macro economic policy model started by Dr. Malcolm McPherson in February It was agreed that the Minister would send a member of staff from his office and would recommend that MEDaC send a staff member from the Macro Department to Harvard for a short course and then follow-on work with the modelers from HIID. This arrangement is in part necessitated by the ordered evacuation which prevents project consultants from coming to Ethiopia. The two government participants will attend the Macroeconomic Policy and Management course at HIID from June 28 to July 23, 1999 and then work for two weeks in Cambridge on the model. The project has procured a laptop computer for the staff to load the model and return it to Ethiopia. II. ASSISTANCE TO NON-CORE ACTIVITIES Cash management consultant The DSA project scheduled a cash management consultant for five weeks in February. This consultancy was postponed due to the ordered departure issued by the U.S. State Department. Additional personnel on short term assignments are not allowed to travel to Ethiopia under the ordered departure. The cash management consultancy was rescheduled for April 20 th. III. PROJECT MANAGEMENT Recruitment During the reporting period recruitment continued in accounts, cash and debt management. The project identified an accounts consultant to work on donor reporting which would allow the ministry and the project to assess his suitability as a resident advisor. The ordered departure cancelled this consultancy. The consultancy in cash management scheduled for February also was cancelled. One objective of the cash management consultancy was to assess the individual s suitability as a resident advisor. 6

8 Contract renewal A second two year phase of the project contract was negotiated during the reporting period. The second phase runs from January 6, 1999 to December 31, Project reporting During the reporting period the seventh quarterly report was prepared and distributed (Q-7). Administrative support The project provides a range of administrative support services including: procurement, production of documents, and support for the in-service training program. Procurement: During the reporting period the project procured four computer workstations for the PIP component to assist MEDaC s Sector Department to enter data for the FY PIP. Production of documents: To prepare for the budget and accounts workshops the project prepared several hundred copies of the following: Versions 1 and 2 of the Budget Reform Design Manual, Accounts Form, and Accounts Process. Multiple copies for the PIP were prepared. One hundred copies of the manual Introduction to the Computer were prepared for the Ministry of Finance. Financial and Administrative Support to the In-Service Training Program The project was extensively involved in assisting the training institutions to deliver the in-service training in Module 1 in accounts. Budgets with standard costs were prepared and advances provided all of the training institutions to facilitate their delivery of the training. The project provided final payments which covered the costs of these courses. IV. OUTSTANDING ISSUES Ordered Departure During the reporting period, the U.S. State Department issued an ordered departure for non-essential U.S. government employees and an ordered departure for all dependents of U.S. government employees. The status of contractors on U.S. contracts was clarified during the reporting period. Essential staff on U.S. contracts are allowed to remain in Ethiopia. The current status for staff of the DSA project is as follows. The USAID/mission accepts that the chief of party and the PIP advisor are essential personnel and are allowed to remain in the country. No additional short 7

9 term or long term project staff are allowed in the country. The ongoing activities in the areas of budget reform, PIP reform and the development of the in-service financial training have been relatively unaffected by the ordered departure. The ordered departure has significantly delayed the recruitment of advisors in cash management and accounts. The project has also identified a short term debt management consultant but this consultancy is also on hold. The ordered departure has affected the policy initiative but the effect is mitigated by the proposed training and model development in Cambridge. Delays in the PIP Delays in the finalization of the Macroeconomic and Fiscal Framework (MEFF) (P-21) and the Indicative Planning Figures for have seriously impacted preparation of the PIP and the intent to have it considered in advance of the 1992 Capital Budget. On the other hand, the information base for the MEFF has been expanded significantly, and the analysis is now presented in a format that focuses the attention on some of the key policy issues that require decisions at the highest levels of government. 8

10 ANNEX 1 PROJECT REPORTS A. Accounts Reform Code Title A-1 Report of Visits to Regions: Assessment of Training Needs in accounting, by James Yardley, August 1, A-2 Assessment of Training Needs in Accounting and Accounting Practices, by James Yardley, August 1, A-3 Accounts Reform Project Training Strategy, by James Yardley, August 12, A-4 Financial Reporting End State, by James Yardley, August 18, A-5 Accounting Specialist Training: Training for Accountants in a Self- Accounting Unit, by James Yardley, August 19, A-6 Trip Report to Region 1, January 5, A-7 Trip Report to Southern Nations, January 5, A-8 Trip Report to Amhara Regional State, January 5, A-9 Trip Report to Dire Dawa Administrative Council, Harar and Somalia Regional States, January 7, A-10 Trip Report to Afar Region Government, Jan. 12 to Feb A-11 Report of Consultancy, by James Yardley, 22 June - 22 August, A-12 Donor Accounting, by James Yardley, August 21, A-13 Description of the Ethiopian Government Accounting System: Accounting Cycles and Processes, September 28, A-14 Description of the Ethiopian Government Accounting System: Government Accounting Form, September 28, A-15 Accounts Policy Paper, December 25,

11 A-16 Accounts Issues Paper, December 28, A-17 Summary of Recommendations for the Description of the Ethiopian Government Accounting System, December 31, A-18 Report on the Accounts Design Team s Review of Regional Accounting Systems, December 9, A-19 Accounting for Donor Funds and External Assistance, December 29, A-20 Report of Consultancy, by James Yardley and Kelly Richmond, January 20, A-21 Trip Report: Dire Dawa and Harari Region, March 9, A-22 Trip Report: Afar Region, February 24, A-23 Trip Report: Southern Nations Nationalities and Peoples Regional Government, January 11, B. Budget Reform Code Title B-1 Budgeting Basics: Introduction, March 14, B-2 Draft Budget Policy Paper, December 23, B-3 Draft Budget Issues Paper, December 23, B-4 Budget Manual Version 1: Budget Processes & Preparation, January 15, B-5 Defining Public Bodies, June B-6 The Process of Parliamentary Appropriation and Approval of the Budget, June, B-7 Budget Reform Design Manual Version 2: Chart of Accounts and Financial Calendar, December 24, B-8 Issues about the PIP and Budgeting, November 17,

12 B-9 Policy issues that need to be resolved to implement Version 2 Budget Reform Design Manual, November 17, B-10 Defining Public Bodies, (Revised), November 30, B-11 The Process of Parliamentary Approval and Appropriation for the Budget, (Revised), December 12, B-12 Separate Appropriates of the Regional Subsidies, December 12, 1998 B-13 The Treatment of Pensions, December 20, B-14 Budget Reform Design Manual Version 2: Chart of Accounts, Budget Preparation, and Presentation. C. Public Investment/Expenditure Reform Code Title P-1 Organization, staffing and management of the Capital Planning Process at Federal, Sectoral and Regional Levels, May 20, P-2 Public Investment Program Design, May 26, 1997, Updated June 19, P-3 Outline: Macro Frame, August 27, P-4 Policy Paper on the Public Investment Program, September 1998 P-5 Issues Paper on the Public Investment Program, September 1998 P-6 Manual for the Preparation on the Public Investment Program, January P-7 System Requirements and Terms of Reference for a Consultant on Data Management for the Public Investment Program, February, P-8 Expenditure Programming During the PIP Period, March P-9 Developing Indicative Planning Figures for Treasury and External Funding for the PIP Period FY , March P-10 PIP Preparation: an Example Based on the Ethiopian Roads Authority, March P-11 Indicative Planning Figures, May

13 P-12 Forecast of External Funding Available to Ethiopia, May P-13 A Note on Flexibility and Relationship to the Capital Budget, June, P-14 Lessons Learned From Preparation of the , Public Investment Program, November P-15 PIP FY s , Volume I English & Amharic. P-16 PIP FY s , Volume II English. P-17 PIP FY s , Volume II Amharic. P-18 Briefing on the Status of the Public Investment Program, December, P-19 Forecast of External Funding for , December 11,1998. P-20 Assessment of the Applicability of the Federal PIP Format to the Oromia Regional State, PIP Design Team, August, P-21 Fiscal Framework for Federal Capital Expenditures , March 22, P-22 Fiscal Framework for the Public Investment Program : A Discussion Paper on the Underlying Assumptions and Issues Arising, PIP Design Team, March 25, P-23 Forecast of External Funding for , PIP Design Team, February 10, D. Policy Advice to the Prime Ministers Office Code PA-1 Title The Potential for Cereal Exports from Ethiopia, by Richard Goldman, October 16, PA-2 The Results of the Visit to Ethiopia, by Dwight Perkins, December 19, PA-3 Trip Report: My Visit to Ethiopia, by Malcolm McPherson, February 14,

14 PA-4 PA-5 PA-6 A Macroeconomic Model for Ethiopia, by Malcolm McPherson & Tzvetana Rakovski, February 7, A Note on Macroeconomic Management in Ethiopia, by Malcolm McPherson, March 3, Strategy for Development of the Coffee Sector, Dr. Mike Westlake, October 24, E. Training Strategy for Accounts, Budgets, Public Investment/Expenditure Planning Code Title T-1 The Training Strategy for Accounts, Budget and Financial Planning Under Civil Service Reform, September 10, 1997 T-2 Trip Report: Assessment of the Region 1 Management Institute, November 14, 1997 T-3 Brief on the Training strategy for Accounts, budgets, and Financial Planning. T-4 Trip Report: Assessment of the Region 3 Management Institute, December 3, 1997 T-5 Training Module 1: The FGE System of Accounting, by Frank Cajthaml, March 12, T-6 Meeting on In-Service Training in Financial Management at the Ethiopian Civil Service College, June 16, T-7 Training Manual (Trainer Version), July 24, T-8 Training Manual (Trainee Version), July 24, T-9 Workbook for Trainees, August 3, T-10 Guide for Trainers, August 3, T-11 Forms [Overheads] for Trainers, August 3, T-12 Overheads for Trainers, August 3,

15 T-13 Tests and Solutions for Trainers, August 3, T-14 Getting Started: Public Investment Program, June T-15 PIP Users Guide, June T-16 PIP Technical Guide, June T-17 LDS-Language Dictionary Systems Users Guide, June T-18 SAM-Systems Administration Module, June T-19 PIP Sample Reports, June T-20 Minutes of the Semi-Annual Meeting of the Institutions Delivering In- Service Training in Financial Management under the Civil Service Reform Program: January 29-30, February 10, F. Miscellaneous Reports Code Title M-1 Technical Proposal: Decentralization Support Activity, November 27, M-2 Performance Monitoring Plan, for USAID/Ethiopia, September 30, M-3 Regional financial Presentation, March 29, M-4 Government Financial Registration and Report, March 29, M-5 Using dbase IV with Government Accounting Package: Version 1, December 1, M-6 DSA Project Deliverables, December 3, M-7 Previous Version - Basic Job Training Accounts. May 1988 (Amharic). M-8 Schedule of DSA Project Deliverables, February 15, M-9 Proposed Extension of the Decentralization Support Activity Project, June 12,

16 M-10 Comments on the Draft Final Report on Financial Reporting System on the Use of Donor Funds by the Excellence Management and Accounting Consultants, October 2, M-11 DSA Project 1998 R-4 Actual Deliverables Compared with Planned, December 19, G. Project Quarterly Reports Code Title Q-1 Report of project Activities: February 10 th to June 30 th Q-2 Report of Project Activities: July 1 st to September 31 st Q-3 Report of Project Activities: October 1 st to December 31 st Q-4 Report of Project Activities: January 1 st to March 31 st 1998, April 27, 1998 Q-5 Report of Project Activities: April 1 st to June 30 th 1998, July 8, Q-6 Report of Project Activities: July 1 st to September 30 th 1998, October 19, Q-7 Report of Project Activities: October 1 st to December 31 st 1998, January 27, 1999 Q-8 Report of Project Activities: January 1 st to March 31 st 1999, April 12, 1999 H. Minutes of the Project Steering Committee Code Title MSC-1 Minutes of the DSA Project Steering Committee, December 4, MSC-2 Minutes of the DSA Project Steering Committee, for the Fourth Quarter (January 1, 1998 to March 31, 1998), June 4 th MMT-1 Minutes of the Management Team, April 15,

17 MMT-2 Minutes of the Management Team, June

18 Quarterly report #8 January 1, 1999 to March 31,