Tuvalu: Capacity Development for Public Financial Management

Sovereign Project | 41180-012 Status: Closed

Project Details

Project Officer
Lototele, Malie Pacific Department Request for information
  • Tuvalu
  • Technical Assistance
  • Public sector management
Project Name Capacity Development for Public Financial Management
Project Number 41180-012
Country Tuvalu
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7161-TUV: Capacity Development for Public Financial Management
Technical Assistance Special Fund US$ 800,000.00
Government of Australia US$ 57,750.00
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Public sector management - Public expenditure and fiscal management

Gender Equity and Mainstreaming No gender elements
Project Rationale and Linkage to Country/Regional Strategy

Project Outcome

Description of Outcome
Progress Toward Outcome The Public Enterprise Act drafted by the TA has been enacted and is in force. The Act gives power to the Public Enterprise Review Monitoing Unit to monitor the performance of all the PEs. Under the Act, all PEs are required to submit corporate plans to the Ministry of Finance and Economic Planning. The Act also empowered the Auditor General's Office in tuvalu to undertake the auditing of PEs acconts. The most important feature of the Act is the explicit focus on running PEs as commercial entities. Under the Act, Public Servants can no longer be appointed to the board of directors.
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)

The government and management of the PEs found the TA to be very helpful and relevant. With the exception of appointing new board of directors as specified in the PE Act (currently ongoing to be completed by end of October 2011), the TA has successfully achieved the following:

Output 1 - Effective management of PE reforms: (i) The Public Enterprise Review and Monitoring Unit (PERMU) is established and operating in MFED; (ii) Conducted on the job trainings for the PERMU on its role under the PE Act and on analysis of corporate plans and financial statements of PEs; (iii) Drafted a management policy and approach for displaced workers.

Output 2 - Strengthened and coherent oversight of fiscal performance and PE performance: (i) Approved strategic policy on PE governance reform; (ii) Approved PE (Performance and Accountability) Act; (iii) Completed scoping studies on the proposed merger of the two banks (National Development Bank of Tuvalu and the National Bank of Tuvalu (NBT), and privatization of the Philatelic Bureau, Travel Office and Post Office; (iv) Completed a tariff review of the Tuvalu Electricity Corporation (TEC) and the Tuvalu Telecommunications Corporation (TTC); (v)completed scoping studies on embedded businesses within the Public Works Department

Output 3 - Strengthened management capacity in PE: (i) Support the development of PE corporate plans; (ii) Conducted various workshops for PE management, ministers and potential directors on roles under the PE Act, and on reading and understanding financial reports; (iii) Trained PE staff on the use of the Mind Your Own Business (MYOB) accounting software; (iv) Approval of the Banking Commission Act; (v) Developed job description and performance appraisal methodology and; (vi)Establishment of a liquidity and debt collection policy for NBT

Output 4 - Strengthened capacity in MFED: (i) Completed the diagnostic analysis of the capacity within MFED; and (ii) Completed on-the job training on debt management, analysis of financial statement for MFED officials and workshop on MFED's role under the PE Act.

The TA is expected to be close on Decemeber 2011 as original planned.

Geographical Location Tuvalu

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

The TA takes both a top-down and a bottom-up approach. It will develop an MTFF and create the policy and legislative environment for improving the performance of public enterprises. It will simultaneously work with enterprises to put in place management and planning tools to help them understand and improve their performance and enable the Government and its enterprises to monitor and manage performance. The TA will provide capacity building and support through the four components.

Component 1: Management Services

The TA will be supported by augmented management services from the consultant firm, providing ongoing management, liaison, and mentoring, as well as the coordination of inputs, to ensure that inputs are directed toward the agreed objectives rather than fragmented. The expected output will be effective capacity building and management of public enterprise reforms. The main activities will be to (i) support the establishment of a mechanism through which the Government can better manage enterprise monitoring, including a steering committee and a public enterprise unit; (ii) develop an overall strategy and implementation plan for the TA; (iii) coordinate all TA inputs including coordination with other externally-funded activities; (iv) help the Government review lessons in enterprise ownership and management and facilitate their application; (vi) promote positive and productive relationships with the Government, enterprises, development partners, and ADB; and (vii) provide quarterly and annual monitoring of TA progress and associated reporting.

Component 2: Strengthening Fiscal and Enterprise Management

This component will provide stronger and more coherent oversight of fiscal and public enterprise performance. The main activities will be to (i) help MFEP develop and implement an MTFF; (ii) provide training for staff of the public enterprise unit on its role; (iii) develop and implement a strategic policy on public enterprise governance reform, outlining the Government's position on enterprise ownership and options for divestment; (iv) prepare the Public Corporations Act as overarching legislation that sets out Government monitoring requirements and management and reporting requirements for all enterprises; (v) develop a regulatory framework for monitoring enterprises and a legal framework for both establishing and divesting enterprises; (vi) coordinate with the Pacific Financial Technical Advisory Center (PFTAC) regarding assistance to develop a financial institutions bill; and (vii) assess the tariffs required for the financial sustainability of the Tuvalu Electricity Corporation (TEC) and the Tuvalu Telecommunications Corporation (TTC) and provide options for how the financial requirements of these public enterprises can be balanced with the community services required of them by the Government.

Component 3: Results-Based Planning and Management Assistance for Enterprise Performance Improvement

The output of this component will be strengthened management capacity in public enterprises. The main activities will be to (i) work with general managers and boards of directors to develop and implement a corporate plan and an action plan for each enterprise, based on the Government's overarching public enterprise strategic policy and plan, and to help them meet the requirements of the Public Corporations Act; (ii) improve accounting and management by introducing basic accounting skills and disciplines to allow standardized and timely accounts to be submitted to boards and then to the public enterprise unit; (iii) provide assistance to support specific National Bank of Tuvalu policy and practice changes to improve performance; (iv) develop job descriptions for use in all enterprises, together with a performance appraisal format; and (v) support the Government's assessment of the private sector development potential in Tuvalu as a basis for decisions on appropriate private sector involvement in public enterprises.

Component 4: Capacity Building

This component will strengthen the capacity in MFEP and public enterprises to provide sustainable fiscal management, planning and monitoring, and public enterprise monitoring and management. The main activities are (i) a diagnostic analysis of MFEP capacity, building on the results of the 2007 PEFA review, and developing a framework to measure planned interventions to remedy budgeting and financial management problems (to be financed by the Government of Australia); (ii) formal training, informal on-the-job development and learning by doing, and mentoring for MFEP, the public enterprise unit, boards, and general managers; and (iii) raising public and stakeholder awareness undertaken in regard to specific issues.

During Project Implementation

The TA will finance 25.5 person-months of intermittent international consulting and 8 person-months of national. ADB will recruit a firm based on a simplified technical proposal under the quality- and cost-based selection process, using 80:20 weighting for quality and cost. The consultant team will have a (i) team leader and advisor on institutional strengthening and public enterprise development (international, 12 person-months); (ii) specialist in developing public financial management capacity (international, 2.5 person-months); (iii) public financial management advisor (international, 8 person-months), (iv) planning and human resource development advisor (international, 3 person-months), and (v) project facilitator (national, 8 person-months). International advisors will be very senior technical specialists in their field, with extensive experience in small island states, as well as skilled trainers committed to capacity building. The outline terms of reference for consultants are in Appendix 4.

TA implementation will be supported with augmented management services from a project manager working approximately 3 person-months and provided by the firm for a lump sum. The management and administrative input of the project manager will be provided intermittently but according to an agreed plan throughout TA implementation. The project manager will be responsible for developing the detailed terms of reference for the three long-term advisors and the national consultant. The consultants will be engaged in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time).

The TA will be implemented intermittently over 38 months starting in December 2008 and ending in December 2011. TA implementation will commence with a diagnostic analysis of MFEP capacity. The implementation of remaining activities will commence with an inception report prepared for ADB and the Government by the team leader within 4 weeks of the start of field activities, which will include an overall work plan for the full period and a detailed work plan for the first year. Brief quarterly progress reports will be prepared in consultation with the public enterprise unit and provided to ADB. Semiannual progress reports will be submitted throughout the TA and a draft final report submitted by 30 October 2011. The final report will be submitted within a month of the incorporation of ADB and Government comments on the draft final report. The outcomes of the diagnostic analysis will be the subject of a separate report. ADB will help the Government share all reports with other development partners.

Business Opportunities

Consulting Services The technical assistance will finance the services of a team of five consultants comprising: (i) project manager (international, lump sum, intermittent), (ii) team leader and advisor on institutional strengthening and public enterpise development (international; 12 person-months, intermittent), (iii) specialist in developing public financial management capacity (international, 2.5 person-months, intermittent), (iv) planning and human resource development advisor (international, 3 person-months, intermittent), and (v) public financial management advisor (international, 8 person-months, intermittent). There will be a project manager, who may be the team leader or a different person. The team will be engaged through a firm based on a simplified technical proposal under the quality- and cost-based selection process using, 80:20 weighting for quality and cost. This will be in accordance with ADB's Guidelines on the Use of Consultants (February 2007 as amended from time to time).
Procurement PDP Pty Australia Limited.

Responsible Staff

Responsible ADB Officer Lototele, Malie
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Subregional Office in Suva, Fiji
Executing Agencies
Ministry of Finance and Economic Development
Mr Minute Taupo
[email protected]
Min. of Finance and Economic Planning P O Box 33 Funafuti Tuvalu


Concept Clearance -
Fact Finding -
Approval -
Last Review Mission -
PDS Creation Date 05 May 2008
Last PDS Update 14 Nov 2011

TA 7161-TUV

Approval Signing Date Effectivity Date Closing
Original Revised Actual
03 Nov 2008 03 Dec 2008 03 Dec 2008 31 Dec 2011 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 57,750.00 125,000.00 0.00 0.00 0.00 982,750.00 03 Nov 2008 850,533.94

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