Sri Lanka: Fiscal Management Efficiency Project (formerly Fiscal Management Reform Program II)

Sovereign Project | 38356-013

Summary

The project aims to ensure greater sustainability of public investments in Sri Lanka, particularly in the less developed regions, through more effective public resource management. It seeks to do so by enhancing the fiscal space (i.e., availability of greater resources) as a result of bringing about improved tax administration and compliance as well as more efficient public financial management. This will be largely attained through establishment of two management information system- one related to revenue and the other to expenditure management.

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Fiscal Management Efficiency Project (formerly Fiscal Management Reform Program II)
Project Number 38356-013
Country Sri Lanka
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2624-SRI: Fiscal Management Efficiency Project (formerly Fiscal Management Reform Program II)
Ordinary capital resources US$ 30.80 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Public sector management - Public expenditure and fiscal management
Gender Equity and Mainstreaming Some gender elements
Description The project aims to ensure greater sustainability of public investments in Sri Lanka, particularly in the less developed regions, through more effective public resource management. It seeks to do so by enhancing the fiscal space (i.e., availability of greater resources) as a result of bringing about improved tax administration and compliance as well as more efficient public financial management. This will be largely attained through establishment of two management information system- one related to revenue and the other to expenditure management.
Project Rationale and Linkage to Country/Regional Strategy The rationale for the project is to help the government in its efforts, particularly in a post-conflict environment, to bring about sustainable and equitable development, including providing greater scope for increasing investments in reconstruction and infrastructure development. The success of the Fiscal Management Reform Program (FMRP), and the impetus for fiscal management reforms that it helped create, sets the proper scene for a project that now focuses on systems and on human resource capacity development in this area.
Impact Greater sustainability of public investments, particularly in the less-developed regions, achieved through more effective public resource management
Project Outcome
Description of Outcome

Enhanced fiscal space for social and economic development resulting from improved tax administration and

compliance as well as efficient public financial management system

Progress Toward Outcome

The National University of Singapore was recruited by the EA in January 2013 on a QCBS basis to conduct training programs on E-Governance and Change Management for the senior staff of the Inland Revenue Department (IRD) and MOFP. In January 2013, Lee Kuan Yew School of Public Policy was also recruited by the EA on a QCBS basis to conduct executive training for staff of MOFP in Public Finance and Strategic Management. As for the recruitment of a firm to provide training onUnder the Strategic Project Development, the The TOR and budget is are being revised by the EA for the recruitment of a firm to provide training on Strategic Project Development for a cost of $1.4 million and this is to be submitted for ADB review before reposting in CMS.

An Executive Training Program on "Effective Performance Management Systems Best Practices" was concluded on a SSS basis for senior government officials by Lee Kuan Yew School of Public Policy in September 2013.

6 training programs on areas related to public financial management were conducted by the National University of Singapore and Lee Kuan Yew School of Public Policy for relevant government officials from 2011 onwards to-date. Two other training programs on e-governance and public finance are planned to take place in quarter four of 2014 at the Academy of Financial Studies, Sri Lanka.

Implementation Progress
Description of Project Outputs

1. More accountable revenue management

2. More efficient expenditure management

3. More capable public resource managers

Status of Implementation Progress (Outputs, Activities, and Issues)

From the original loan amounting to $50.0 million, the RAMIS portion amounting to $19.2 million was cancelled, effective 11 February 2013. The FMEP loan amount is now $30.8 million. Subsequent to ADB's cancellation of this portion, it was replaced by Government financing. EA, however, committed that RAMIS will be implemented using government funds. The Government of Sri Lanka is committed to restructure the project to ensure timely implementation of deliverables. The RAMIS procurement has been structured in a manner consistent with the technical specifications prepared under FMEP. The RAMIS contract was awarded to Infocomm Development Authority of Singapore (the IT arm of the Government of Singapore) in June 2014. The time frame leading to roll-out is over the next 28 months from the time of implementation.

On June 28 2013, ITMIS contract was awarded to Samsung SDS Co. Ltd at a total negotiated price of US$ 17,755,092 + LKR 30,000,000 as provided and installed costs (ADB financing) plus US$5,023,181 + LKR9,575,280 as recurrent costs during warranty period to be financed by the Government. The contract was signed as planned on 14 August 2013 and project implementation started in September 2013. As of today, ITMIS disbursement was 15% of contract value and ITMIS implementation progress is quite slow and is 5 months behind the original time schedule. The As-Is and To-Be Study Phases were completed in 2014 but the PMU highlighted that there were certain gaps in As-Is and To-Be study phases, which the System Implementation Partner (SIP), Samsung had committed for addressing such gaps during the system requirement stage (SRS) stage. Accordingly, only a conditional sign-off was provided for completion of these two phases. ITMIS is currently at requirement specification stage. Ministry of Finance is expecting to finalize this stage by April 2015. Samsung and the Ministry of Finance have not still finalized the Go-Live web portal of the Ministry, which was originally part of the first payment milestone of SIP contract. In order to minimize ITMIS implementation delays, the SIP has undertaken milestones from the successive stages, i.e the SRS and system configuration phases are now simultaneously carried out. The new Finance Minister appointed in January 2015 has advised the SIP to expedite the ITMIS implementation and to have the system ready for use by end September 2015. The Minister is keen to make use of ITMIS when preparing the government Budget 2016.

So far, 5 training and capacity building components have been completed in the areas of public finance and strategic management, e-Governance, change management, performance management systems, business English and various knowledge sharing sessions internationally. A training program on Advanced Management Development was conducted by the Lee Kuan Yew School of Public Policy at the Academy of Financial Studies in Sri Lanka in March 2014 to benefit a larger number of government officials.

Geographical Location Sri Lanka
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Not applicable
Involuntary Resettlement Not applicable
Indigenous Peoples Not applicable
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholder groups engaged in project formulation include government agencies, think tanks, and business associations. The decisions made through consultation and participation processes included (i) computerization and simplification of processes, including those in revenue and expenditure management information system, and (ii) related capacity development and training.
During Project Implementation A consultation & participation (C&P) plan was not prepared as the scope of the loan is designing and implementing management information system projects in the public sector, C&P with other stakeholder groups is not deemed mandatory.
Business Opportunities
Consulting Services All consultants to be financed from the proceeds of the loan shall be selected in accordance with ADB Guidelines on the Use of Consultants (2007, as amended from time to time). The project will require 90 person-months of international consultant and 120 personmonths of national consultant services. International and national firms and individual consultants will be engaged to provide advanced IT training, and knowledge enhancement training in various areas including national budget execution and implementation, public expenditure management, centralized accounting system management, tax and customs administration, revenue enhancement, treasury operation management, and procurement management. Training institutions or individual consultants will be engaged to provide capacity development and relevant knowledge enhancement in various areas as mentioned above. Training institutions or firms will be engaged following the quality- and cost-based selection method and the weighting will follow the standard quality-cost ratio of 80:20.
Procurement The procurement of goods and services under the loan will be in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). Procurement of goods and services estimated at $500,000 and above will be awarded on the basis of international competitive bidding. National competitive bidding will be followed for goods and services less than $500,000, and procurement will be carried out in accordance with the government procurement guidelines acceptable to ADB with clarifications and modifications described in Section E of the procurement plan in Appendix 7. Shopping method will be followed for procurement of goods below $100,000.
Responsible ADB Officer Ahsan Tayyab
Responsible ADB Department South Asia Department
Responsible ADB Division Sri Lanka Resident Mission
Executing Agencies
Ministry of Finance and PlanningUPALI@ERD.GOV.LKP.O. Box 277
The Secretariat Building, Colombo 1
Sri Lanka
Timetable
Concept Clearance 17 Jul 2009
Fact Finding 03 Dec 2009 to 11 Dec 2009
MRM 02 Feb 2010
Approval 15 Apr 2010
Last Review Mission -
PDS Creation Date 06 Apr 2010
Last PDS Update 25 Mar 2015

Loan 2624-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Apr 2010 07 Jun 2010 05 Jul 2010 30 Apr 2014 30 Apr 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 40.80 Cumulative Contract Awards
ADB 30.80 15 Apr 2010 20.98 0.00 68%
Counterpart 10.00 Cumulative Disbursements
Cofinancing 0.00 15 Apr 2010 7.33 0.00 24%

Safeguard Documents

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Evaluation Documents

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