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

Sovereign Project | 38356-013 Status: Active

Summary

ADB is supporting Sri Lanka’s public finance management reforms that will enable increased investments in less developed regions. The project will introduce new tax revenue and treasury management systems, which will strengthen public resource management, giving the government the fiscal space to step up spending in lagging and conflict-affected regions.

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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 Active
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

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 RAMIS and ITMIS are still not operational.
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)

With the cancellation of ADB financing for output 1 (more accountable revenue management), it is now fully funded by government. The output includes the establishment of a revenue administration management information system (RAMIS) within the Department of Inland Revenue. RAMIS will include automating all the business processes of the Department of Inland Revenue relating to tax administration. RAMIS will be implemented in two phases and the first release of Phase 1 - Tax payer registration was launched for the Department of Inland Revenue in January 2016. The system is expected to be fully operational by end 2016 and electronic filing of tax returns is expected to be initiated in 2017.

Output 2 (more efficient expenditure management) supports the establishment of an Integrated Treasury Management Information System (ITMIS) which will cater to the requirements of all the departments under the Ministry of Finance. ITMIS will (i) lead to more efficient treasury operations, (ii) enable more informed decision making on allocation and use of public resources by reducing time lags in raising the accuracy of budget preparation, execution and evaluation, and (iii) aid in better planning and targeting of operations and maintenance expenditures for new assets created through public investments.

The contract to develop ITMIS was awarded to Samsung SDS Co. Ltd, referred to as the system implementation partner (SIP), in August 2013. So far, the As-Is, To-Be and Requirement Specification phases pertaining to ITMIS have been completed. Samsung SDS has customized the budget module and two rounds of functional testing has been completed by third party testing team. Infrastructure required at Data Center and Disaster Recovery Site have also been installed. New MoF portal is also set for public go-live in March 2016 and daily updating of news and information in parallel to the existing portal is underway.

Under output 3 (more capable public resource managers), a number of both foreign and local training programs have been completed. Foreign training have been provided to 321 officials and local training have been provided to 655 officials. The training was provided in foreign institutions including Lee Kuan Yew School of Public Policy (NUS), eGovernment Leadership Centre(NUS), Harvard Kennedy School in US and the British Council locally.

Accordingly, officials from Ministry of Finance , Inland Revenue Department, Auditor General's Department , Customs Department , Census & Statistics Department, Import & Export Control Board, Valuation Department, Public Services Commission and Ministry of Health have attended these training programs. Training has been provided in the areas of strategic management, public financial management, economics and public policy, E-governance, project management, business process reengineering, public enterprise performance.

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 Staff

Responsible ADB Officer Nishanthi Amerasinghe
Responsible ADB Department South Asia Department
Responsible ADB Division Sri Lanka Resident Mission
Executing Agencies
Ministry of Finance and Planning
UPALI@ERD.GOV.LK
P.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 23 Mar 2016

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 31 Oct 2017 -
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 21.60 0.00 70%
Counterpart 10.00 Cumulative Disbursements
Cofinancing 0.00 15 Apr 2010 9.58 0.00 31%

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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