Independent Evaluation Group (IEG) : Project Data

Public Disclosure Authorized
Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review

SV Local Government Strengthening (P118026)
Report Number : ICRR0020848
1. Project Data
Project ID Project Name

P118026 SV Local Government Strengthening
Country Practice Area(Lead)

El Salvador Social, Urban, Rural and Resilience Global Practice
L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD)

IBRD-79160 30-Nov-2015 85,000,000.00
Bank Approval Date Closing Date (Actual)

01-Jun-2010 31-Dec-2016
IBRD/IDA (USD) Grants (USD)

Original Commitment 80,000,000.00 0.00
Revised Commitment 80,000,000.00 0.00
Actual 79,874,672.25 0.00
Prepared by Reviewed by ICR Review Coordinator Group

Cynthia Nunez-Ollero George T. K. Pitman Christopher David Nelson IEGSD (Unit 4)
2. Project Objectives and Components
a. Objectives
According to the Financing Agreement (FA, p.6), the amended FA (p.5), and the Project Appraisal Document
(PAD, p.4), the Project Development Objective is:
• "to improve the administrative, financial, and technical processes, systems and capacity of local
government to deliver basic services, as prioritized by local communities, in the medium and long-term."
Page 1 of 18
b. Were the project objectives/key associated outcome targets revised during implementation?
No
PHEVALUNDERTAKENLBL
c. Will a split evaluation be undertaken?

No
d. Components
1. Promotion of Decentralized Service Delivery (US$ 52.75 million at appraisal, US$ 56.94 million
actual). This component financed subproject grants to municipal governments. These grants were used by
municipalities to finance locally determined priorities such as rural and access roads, potable water
systems, sanitation and waste services, and access to electricity.
2. Strengthening of Municipal Governments (US$ 19.72 million at appraisal, US$ 24.95 million actual).
This component financed training and technical assistance directed at municipal governments to prepare,
implement, and supervise municipal subprojects, including the preparation of strategic participatory and
municipal development plans; municipal disaster risk management policy, practices, and activities;
equipment (both hardware and software) to strengthen the municipalities' procurement and financial
management capacity; implement the Municipal Administrative Career Law; support for the Undersecretary
of Territorial Development and Decentralization (Subsecretaria de Desarrollo Territoria y Descentralization
or SDTD) as well as the Salvadoran Institute for Municipal Development (El Instituto Salvadoreno de
Desarollo Municipal or ISDEM) and its Municipal Training Center, including the establishment of its
regional offices in selected sites; and create a national registry for municipal administrative careers.
3. Decentralization Strategy Support (US$ 1.63 million at appraisal, US$ 0.68 million actual). This
component financed the evaluation of current rules, processes, and procedures for decentralized services
rendered by local governments, and develop a national decentralization strategy and its implementation
plan.
4. Project Management (US$ 5.10 million at appraisal, US$ 5.02 million actual). This component
financed training and technical assistance to the Fondo de Inversions Social para el Desarrollo Local
(FISDL) and ISDEM to manage the project, design and implement a project communications strategy, a
project monitoring and evaluation system, and technical studies for training modules in public sector
management, and conduct required audits.
e. Comments on Project Cost, Financing, Borrower Contribution, and Dates

Project Costs: The project was appraised at US$ 80.0 million. Total costs at project close reached US$
79.89 million. There was a front end fee (US$ 0.2 million at appraisal, and actual) and an unallocated
amount (US$ 0.60 million at appraisal, US$ 0.0 actual). The unallocated amount was distributed to eligible
expenditure categories in the 2015 restructuring to match disbursements.
Financing: The International Bank for Reconstruction and Development financed this project as a
Specific Investment Loan for US$80 million, with US$79.06 disbursed, and the remainder cancelled.
Page 2 of 18
Borrower Contribution: ISDEM committed US$ 3.00 million at appraisal and disbursed US$ 3.76 million
at project close. Local governments committed US$ 2 .00 million in cash and in-kind and disbursed US$
5.04 million.
Dates: The project became effective in 2010 and was scheduled for closing in November 30, 2015. A Mid
Term Review (MTR) was conducted in May 2013, as scheduled. A final project evaluation was carried out
in August - December 2016 to assess project impact. The project was restructured five times, two before
the project became effective and an additional three during implementation:
• In July 2010, at the government's request, to increase resources allocated to municipalities.

• In November 2010, following the legislature's ratification of the loan, for municipalities to execute the
subprojects, revise the implementation arrangements, add Technical Assistance subproject grants as a
new disbursement category, and increase the ceiling for the Designated Account following the transfer
of additional resources from the Ministry of Finance to municipalities.
• In January 2013, to amend the implementation arrangements in response to limited ISDEM
managerial capacity, revise the results framework, and reallocate resources among disbursement
categories.
• In July 2014, to modify the results framework once again.
• August 2015, to extend the closing date to December 2016 and reallocate resources among
disbursement categories.
3. Relevance of Objectives & Design
a. Relevance of Objectives
The project objectives remain relevant to El Salvador's Five Year Development Plan (2014-2019),
which includes a strategic outlook to 2024 where “the priorities are poverty, equality, and all other social
issues," and focus on stimulating economic development by bringing government closer to its citizen. The
project objectives also support the government's citizen and results oriented strategy by promoting inter-
municipal cooperation and developing a system of cities as engine of development. This project was the first
in the country that engaged all 262 municipalities demonstrating relevance to the national decentralization
agenda.
The project objectives are also relevant to the World Bank Group's (WBG) Country Partnership Framework
(CPF) FY16- FY19, which promotes inclusive growth and fosters resilience. The CPF, aligned with the
Government's priorities and informed by the WBG's 2015 Systematic Country Diagnostic, support objectives
which seek to: (i) build capacity to create safer communities for economic development; (ii) improve
secondary-school attainment; (iii) enhance youth employability and skills; and (iv) increase access to finance.
To foster sustainability and resilience, the CPF: (v) promotes the efficiency of public spending; and (vi) builds
capacity to manage disasters and environmental challenges. The project objectives are particularly relevant
in meeting the CPF objectives (i) building capacity to create safer communities for economic development;
Page 3 of 18
(v) promoting the efficiency of public spending; and (vi) building capacity to manage disasters and
environmental challenges. The project is cited in the CPF as directly contributing to Pillar 1: Building
Reinforcing Foundations to Promote Inclusive Growth. In addition, the project is noted to directly support
Pillar 2: Fostering Sustainability and Resilience through Objective 5: Promote the Efficiency of Public
Spending and Objective 6: Build Capacity to Manage Disasters and Environmental Challenges. The CPF
noted that the objective of this project would strengthen the overall impact of the CPF.
Rating
Substantial
b. Relevance of Design
The overall project design was broadly aligned to the project's objectives. The project development objectives
were clear and the results framework followed a logical causal chain that linked the investment and technical
assistance activities to outputs, and final outcomes (ICR, paragraph 46).
Design was informed by a municipal diagnostic using a sample of 10 representative municipalities,

which assessed (i) the country's legal framework to support local governments, (ii) financial mechanisms
available to local governments to implement local mandates, and (iii) existing local government capacity. The
diagnostics identified investment priorities that were in line with the government's plan to increase access to
roads, electricity, water, and sanitation and waste services (PAD, paragraph 26 and ICR, paragraph
27). Design benefited from wide consultation and engagement with multiple stakeholders (ICR, paragraph
22). Lessons from similar projects in the country financed by the German International Development Agency
(GTZ), the Spanish International Development and Cooperation Agency (AECID), and the United States
Agency for International Development (USAID) also contributed to the project's design (PAD, paragraph 43
and ICR, footnote 8).
Design generated project activities to positively contribute to the CPF indicators under Objective 1 of Pillar 1,
building capacity tor safer communities including:
• 1.1 Reduced average perception of insecurity in the municipalities where the "Safer Communities" Project
is implemented;
• 1.2 Enhanced and increased access to secondary prevention strategies (e.g., education, employability
skills) for special target groups;
• 1.3 Improved community cohesion through employability and community infrastructure;
• 1.4 Reduced capture/recruitment of vulnerable youth by gang structures.
In addition, activities were designed to improve public financial systems of selected local governments by
implementing consolidation plans and applying Ministry of Finance directives (SAFIM) and implement a
financial protection strategy to respond quickly and sufficiently to disasters. The activities also capture the
CPF indicator for Objective 6.2, Pillar 2, regarding the Government's contingent funding of at least one risk
transfer instrument. Project design is relevant to the CPF approach in mitigating the risks from low institutional
Page 4 of 18
capacity, weak coordination among and within public institutions, inefficient budget management, and
fiduciary challenges. Bank efforts would focus on procurement procedures, safeguards, financial
management, and other technical operational matters even though risks remain high (CPF, paragraphs 120-
121).
Rating
Substantial
4. Achievement of Objectives (Efficacy)
PHEFFICACYTBL
Objective 1
Objective
To improve the administrative, financial, and technical processes and systems of local governments
This IEG review deconstructed the compound project development objectives into two objectives: the first, to
improve the administrative, financial, and technical processes and systems of local governments; and the
second to improve the capacity of local governments to deliver basic services as prioritized by communities
in the medium and long-term.
Rationale
The key outcome indicators (ICR, paragraph 7, and Project Appraisal Document or PAD, paragraph 16) are:
• All 262 municipalities implement locally prioritized investments according to fiduciary and safeguards
policies and national standards.
• Recipient municipalities improve in at least one capacity category, measured originally in terms of
number of recipient municipalities and revised in the 2013 restructuring as the percentage of local
governments that improve in at least one capacity category.
• Local governments regularly request municipal administration and planning support from El Instituto
Salvadoreno de Desarollo Municipal (ISDEM or the Salvadoran Institute for Municipal Development). This
indicator was also revised in the 2013 restructuring to be expressed as the percentage of technical
assistance requests that ISDEM received and satisfactorily addressed in a timely manner.
OUTPUTS: The project has achieved or exceeded targets in the following:
• Trained 722 (target 150) local government officials at the ISDEM's vocational training and municipal
strengthening program
• ISDEM received 2,893 technical assistance requests, of which 2,560 were satisfied in a timely manner.
This represents 90% (target achieved) of technical assistance local governments requested from ISDEM.
• A decentralization proposal was completed, achieving target. An evaluation of current rules, processes,
and procedures for paid service provision was completed as well as sector diagnostics in Health,
Education, and Water and financial and legal issues. Workshops were carried out to disseminate results of
Page 5 of 18
the diagnostics to national and local government officials, civil society, cooperatives and other key
stakeholders. However, after the 2014 national elections, the new administration did not show strong
interest in this agenda.
• Operational and financial audits of 221 municipalities showed that 91% (target 80%) of completed
investments satisfied contract provisions.
• 93 (target 47) local governments implemented and use the Ministry of Finance's Financial Management
System (SAFIM). The Project equipped and improved the operational capacity of the Ministry of Finance’s
Directorate General of Government Accounting by providing state-of-the-art computer equipment and
servers to develop training modules on municipal financial management using open-source systems for
the deployment of SAFIM . By project close, 100 of the 120 municipalities regularly used the Municipal
Management Information System.
• 149 (target 112) local governments completed and implemented fiscal consolidation. 84% of these
municipalities were satisfied that the lessons and results from these plans helped them update their
municipal cadasters, improve their tax registries, trained their staff and acquired specialized software and
equipment,
• A lack of qualified consultants and limited local capacity hampered the initial implementation. Many local
governments could not find enough qualified consultants to prepare technical designs of works, which
resulted in much back-and-forth with FISDL. Both ISDEM and FISDL did not provide sufficient training or
adequate supervision of municipalities at project start.
OUTCOMES:
• The outcome - improved administrative, financial, and technical capacity to deliver basic services - is
evidenced by all 262 municipalities successfully implementing locally determined investment priorities
according to national standards using participatory planning processes; substantially achieving targets and
delivering investments according to fiduciary policies (target 100%, 87% actual) and safeguards policies
(target 100%, 98% actual) and in compliance with contract provisions; and the successful adoption by
municipal governments of the national government sponsored financial management system - the
integrated Municipal Financial Administration System (SAFIM), and the Municipal Management
Information System (SIGMUNI). SAFIM was deployed using open-source systems and built long-lasting
capacity at the Ministry of Finance's Directorate General of Government Accounting. As a follow-up from
this work, the Ministry of Finance is currently developing a technical assistance help desk with video calls
and self-paced online training courses to support municipalities.
• Operational audits of 221 municipalities showed that 91% (target 80%) of completed investments
satisfactorily complied with contract provisions.
• 92% (target 80%) of built or rehabilitated investments are effectively used.
• 98% (target 80%) of local governments have subproject maintenance plans
• ISDEM's Training Center strategy and new curriculum are in place and ISDEM maintains a database to
monitor its technical assistance to local governments achieving targets.
• 87% (original target 100%, revised to 85%, achieved) of local governments progressed by at least one
municipal governance capacity category after receiving technical assistance. The project created a
Page 6 of 18
Municipal Governance Index using 33 variables and 62 indicators and scored municipalities from 0-100
against the four main capacity categories. These four categories include (i) organizational level and
municipal management capacity, (ii) quality of technical procedures and municipal services, (iii) financial
management, and (iv) participation, environmental and gender. The ICR noted that this index was widely
recognized in the country and by independent evaluators as well and could be adopted as a metric in
future efforts of the government (ICR, paragraph 33).
Rating
Substantial
PHREVDELTBL
PHEFFICACYTBL
Objective 2
Objective
To improve the capacity of local governments to deliver basic services as prioritized by local communities in
the medium and long-term.
Rationale
OUTPUTS:
• The outputs under Objective 1 were also relevant to meeting this objective.
• 89% (target 80%) of Citizen Control Committees supervised the construction and monitored the
operations of the project investments. There were 294 community consultations with more than 29,000
participating to prioritize investments.
OUTCOMES:
• The second and third outcomes supporting the second objective - improved capacity of local
governments to deliver basic services - are evident in improvements in the capacity of recipient
municipality in at least one category and by regular request for municipal administration and planning
support from El Instituto Salvadoreno de Desarollo Municipal (ISDEM or the Salvadoran Institute for
Municipal Development).
• 174 (original target 209, revised target 131, exceeded) municipalities prepared disaster risk
management plans and 70 (original target 114, revised target 54, exceeded) municipalities completed and
implemented strategic participatory plans.
• 525 subprojects across all 262 municipalities improved citizen access to roads, water, and electricity
services, benefiting 3.6 million people and created over 13,000 temporary jobs (no targets provided).
• 87% of local governments improved in at least one municipal governance capacity category after
receiving technical assistance.
• 2,893 requests were received from municipal governments and 2,560 of those were dealt with
satisfactorily and in a timely manner
Page 7 of 18
• 221 or 91% (target 80%) of municipalities satisfactorily completed projects according to contracts and
technical specifications
• 92% (target 80%) of investments are in use based on representative sampling during the Final
Evaluation Report, and 98% (target 80%) of local governments have budgeted for subproject maintenance
plans.
• The fiscal consolidation activities implemented by the 149 (original target 128, revised to 112)
municipalities improved municipal finances by strengthening fiscal and administrative management,
easing financial burden of highly indebted municipalities and improved local fiscal sustainability.
• ISDEM has set up and maintains a database to monitor its technical assistance to local governments.
ISDEM completed and implemented a strategy and new curriculum for its Training Center and
institutionalized all planning processes through special guidelines and manuals to support further
planning. ISDEM has two training centers and an annual training curriculum with 33 courses. ISDEM's
vocational training and municipal strengthening program have trained 722 local government employees
(target 150). 481 staff from 167 municipalities completed a technical and/or diploma training course (of
which 201 were women). Over 84% of municipalities considered ISDEM's training and technical
assistance timely, sufficient and of good quality.
• FISDL has an environmental safeguards unit, which looks at all investments, not just those financed by
the Bank.
• The application of environmental and procurement norms were effective in ensuring greater efficiency in
the use of public resources and mitigating risks. Over 85% of municipalities considered their capacities to
identify and prevent social and environmental risks has improved and 87% expressed interest in
continuing to apply safeguards instruments in the future. Nearly 96% of municipalities considered that the
project helped them improve the technical quality of sub-projects and over 85% expressed willingness to
continue promoting citizen engagement.
Rating
Substantial
PHREVDELTBL
PHREVISEDTBL
5. Efficiency
Economic and Financial Efficiency: The PAD identified tangible targets (savings on household
expenditures) and intangible benefits (improved quality of life) to justify investments compared to what
households spent before the investments based on current Consumer Price Index data. (PAD, paragraph 76).
Investments in the following sectors were justified based on savings generated, including:
• 82 cents per household/day on roads and streets (27% of average expenditures on operation of private
Page 8 of 18
transport facilities);
• at least 51 cents per household/day on electricity provision (or 35% of average expenditures on electricity
and illumination);
• 14 cents per household/day on solid waste disposal (8% of average expenditures on household cleaning;
and
• 45 cents per household/day on water provision (68% of average expenditures on water and sanitation)
The ICR did not carry out an ex-post cost benefit analysis for the project as a whole (ICR, Annex 3, paragraph
2). Instead, ex post economic analysis replicated the methodology used during appraisal for each subproject
investment category. Since 90% of the investments consisted of roads, electrification, and sold waste
management, these subprojects were assessed using per capita benefits generated by these investments
against incurred and recurrent costs (ICR, paragraphs 57-58, and Annex 3). At completion, the benefits
exceeded costs as expressed in the following:
• for roads, a minimum benefit of US$12 to US$ 13 per capita annually offset the investment costs. With a
densely populated country like El Salvador, a high return per capita (no figure provided) were assumed to
be greater than costs.
• for electricity, benefits reached US$ 25 - US$27 a month for a 99 kwh consumption, which matched
actual household energy bills at 2016 prices.
• for garbage collection, benefits of US $160 - US$ 237 a day justified investments in garbage trucks.
Average market price for hiring a truck ranged between US$ 185 and US$ 414 a day but greater benefits
were assumed because actual project costs were below comparable market prices.
• a simple model estimated that a minimum benefit of at least 23 players using the sports and recreational
facilities at one hour each (ignoring positive externalities from playing sports and having community level
recreational spaces) justified the investments in these facilities. (ICR, footnote 25).
Financial analysis assessed the capacity of local governments to allocate incremental resources for operation
and maintenance (O&M) needs of project funded investments instead of an increase in own local revenues.
Financial O&M capacity was expressed in terms of increases in direct transfers from central government
(US$ 100 million) to annual maintenance costs needs of the project investments (US$ 8 million), and
assumed that adequate portion of the transfers would be allocated to O&M even though municipalities
currently do not adequately budget for infrastructure O&M. Private suppliers, in the case of electrification
subprojects, and reduced O&M costs from new trucks in the case of garbage collection, were assumed to
cover any O&M shortfall.
Administrative and Operational Efficiency: There were early operational inefficiencies that caused delays.
For example, decentralized procurement issues delayed initial implementation. 262 municipalities generated
an unanticipated over 3,300 procurement transactions to an understaffed FISDL. There was a dearth of
qualified consultants to meet technical design work generated by these municipalities. Both ISDEM and
FISDL did not provide adequate training nor supervision during the initial implementation. FISDL staff was
later increased and provided additional training to meet the demand for services. Implementation was also
hampered by the election cycles - two at the municipal level and one at the national level, which negatively
affected staff rotation, and required re-training of new staff.
Page 9 of 18
Efficiency Rating
Modest
a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal
and the re-estimated value at evaluation:
Rate Available? Point value (%) *Coverage/Scope (%)
0
Appraisal 0
Not Applicable
0
ICR Estimate 0
Not Applicable
* Refers to percent of total project cost for which ERR/FRR was calculated.
6. Outcome
Relevance of objectives and of design are both substantial. Efficacy of both sub-objectives is also substantial.
Efficiency is rated modest. There were minor shortcomings in the operation's administrative and operational
efficiency mostly around financial and procurement compliance, particularly during the early stages of project
implementation.
a. Outcome Rating
Moderately Satisfactory
7. Rationale for Risk to Development Outcome Rating
The risks to development outcome remains substantial. At project end, risks arise from the following:
• Government commitment. The ICR noted that after the 2014 national elections, the new administration
did not show strong interest in the national decentralization agenda (ICR, paragraph 53). In addition, short
electoral cycles limit incentives for local authorities to continue to support this agenda. Municipalities also
expressed concerns regarding the required financial and qualified human resources to update plans
completed under the project. There are no clear indications on how these plans will be monitored in the long
term. Municipalities do not adequately budget for infrastructure O&M. The risk remains substantial although
mitigated by the incentives, technical assistance, and training that continue to be offered by ISDEM and
FISDL.
• Other stakeholder ownership: A participatory planning methodology was successfully mainstreamed in
the Citizen Control Committees (CCCs) who were engaged in the prioritizing municipal investments and in
Page 10 of 18
supervising the design, preparation, and execution of these priority investments. Some CCCs were also
trained on environmental and social safeguard policies. Their continued engagement in future municipal
investment planning and implementation is threatened by those municipalities that admitted engaging CCCs
only as a means to access project funds (ICR, paragraph 40). The Task Team Leader clarified in an email
dated December 5, 2017 that this was only an anecdotal reference, not measured by any means, but useful
for future design of similar projects.
• Institutional capacity: Sustaining the policies and procedures introduced by the project requires updates
to be implemented across all municipalities. Appropriate institutions may not have sufficient mandates to
follow up. The ICR noted that future project operations could benefit from integrating outcomes from this
project in future design (ICR, paragraph 43). There are also ongoing discussions and institutional
arrangements between ISDEM, the Secretaria Tecnica y de Planificacion de la Presdiencia (STTP or the
Technical and Planning Secretariat of the Presidency), and the Ministerio de Gobernacion y Desarrollo
Territorial (MIGOBDT or the Ministry of the Interior and Territorial Development) to address continued support
to municipalities. There is also the capacity of FISDL and ISDEM to continue to comply with safeguards and
fiduciary requirements. In addition, ISDEM does not have the institutional mandate to support disaster risk
management issues and will require coordination with the Directorate General for Civil Protection, MIGOBDT,
and the Ministerio de Media Ambiente y Recursos Naturales (MARN or the Ministry of the Environment and
Natural Resources) (ICR, Annex 11)
• Technical and Financial Resource Needs: The two systems mainstreamed during the project to improve
municipal governance, SAFIM and SIGMUNI are not yet in used in all 262 municipalities. SAFIM is used in 88
of the 104 municipalities that were trained. SIGMUNI is in 120 municipalities that were trained. Municipalities
expressed their commitment to continue to use SAFIM and SIGMUNI. The Ministry of Finance maintains
these systems and have developed additional modules to train municipal staff beginning in 2017. There is
need for resources to ensure that the systems remain responsive to the needs of all municipalities. In
addition, municipal investments financed by the project will continue to require adequate O&M resources.
• For example, there is no clear indication that proposed institutional arrangements will be carried forward
even though subsequent Bank operations would build on the installed municipal capacity from this
project. There is no clear commitment to installing the Municipal Management Index, which proved useful in
accurately measuring the outcome of improvements in management capacity of municipal governments.
a. Risk to Development Outcome Rating

Substantial
8. Assessment of Bank Performance
a. Quality-at-Entry
The Bank learned from similar prior operations and incorporated lessons in the design of this project. The
project was strategically relevant to the country's five year development plan as well as the Bank's country
partnership framework. Municipal diagnostics helped inform and prioritize key areas to strengthen local
Page 11 of 18
government institutions. For example, sector diagnostics were completed for the decentralization of the
health, education, and water sectors, workshops held to disseminate results but after the 2014 national
elections, officials did not show interest in pursuing these efforts. Mitigating actions proved
inadequate. Significant shortcomings derived from a weak results framework, weak M&E design, and
appraisal of the management capacity of the implementing entities to oversee decentralization procurement
and fiduciary compliance. The results framework included inadequate indicators brought by a lack of
information on specific investments, which were to be identified during implementation. Tools to measure
outcome indicators were only developed during implementation. The M&E design lacked appropriate
indicators, which were modified after the MTR. This resulted in two restructurings to address the
shortcomings in the choice of indicators in the results framework (see Sections 8(a) and 10 for more
discussions). Fiduciary and safeguards adequately supported compliance. However, the Bank overestimated
ISDEM's management capacity to carry out fiduciary and overall coordination of the project. Appraisal also
overestimated FISDL's capacity to manage the deluge of contract needs arising from the decentralized
procurement (ICR, paragraphs 28 and 73). Limited local capacity and the dearth of qualified consultants to
prepare technical designs of works simultaneously generated by all the municipalities hampered the initial
implementation.
Quality-at-Entry Rating
Moderately Unsatisfactory
b. Quality of supervision
The Bank team effectively supervised implementation by twice a year supervisory mission and three missions
a year toward the last three years of implementation. The Bank team worked with the implementing entities to
focus on the development outcome by developing clear guidelines to evaluate outcomes (ICR, paragraph 74
and footnote 27). The Bank worked closely with the implementing agencies to ensure safeguards compliance
and minimize adverse project impacts. The Bank team trained the implementing agency staff even as high
turnover required periodic re-training. The team reported candidly on performance as reflected in downgrades
in 2014 and 2015 arising from continuing issues with financial management and safeguards compliance (ICR,
paragraph 74).
The MTR was conducted in two parts, one in May, the other in October 2013 to cover all aspects of the
project. The first part covered technical supervision of the first component (decentralized municipal
investments) The second part covered the rest of the project. Weaknesses were outlined in the implementing
entity's M&E and implementation of safeguards. After the MTR, the Bank focused on M&E and revised the
M&E through a restructuring. In addition, the team worked with the government to strengthen the M&E
framework albeit toward project end (in 2015).
Quality of Supervision Rating

Overall Bank Performance Rating

Page 12 of 18
9. Assessment of Borrower Performance
a. Government Performance
The project was reflected in the Government's priorities. The Government's National Assembly ratified the
loan and restructured the project to direct more resources for municipalities to execute locally determined
investment priorities in line with the Government's priority to channel resources directly to municipalities.
The loan was the first project in the country to engage all 262 municipalities in support of the national
decentralization agenda (ICR, paragraph 20). The government established an inter-institutional committee
to meet regularly, discuss implementation progress, and better coordinate local investments carried out by
municipalities. The government worked closely with the Bank team to ensure coordination across all
implementing units. A Mesa de Gobernanza (Governance Committee) was created recently (ICR,
paragraph 42) chaired by the Ministry of Interior and the Technical and Planning Secretariat of the
Presidency, with the participation of the Institute for Municipal Development, the Fund for Municipal
Development, and the Ministry of Finance. The Ministry of Finance supported the roll out of Integrated
Municipal Financial Administration System (SAFIM) with its own resources.
Moderate shortcomings were evident in the transition arrangements for regular operation of supported
activities after project close.
Government Performance Rating

b. Implementing Agency Performance

There were four implementing agencies - the Unidad Executura del Proyecto (UEP or Project Management
Unit) in the Ministerio de Hacienda (MH or the Ministry of Finance), the FISDL, the ISDEM, and the
municipalities.
UEP-MH coordinated efforts at both the national and municipal level satisfactorily. Progress reports were
timely. There were delays in hiring key specialists (M&E and Communications) but these were eventually
resolved. During implementation, there was no social specialist to monitor social issues.
ISDEM's political structure, limited managerial capacity, insufficient financial and human resources, lack of
prior experience with Bank requirements leading to delays in contract management, slowed initial
implementation and triggered a Level 2 restructuring in 2013. Most of these activities were transferred to
UEP under the Ministry of Finance to oversee fiduciary functions and the Secretaria de Asuntos
Estrategicos (SAE or Secretariat of the Presidency for Strategic Affairs) for overall project coordination and
management. ISDEM became responsible for technical assistance to municipal governments on basic
procurement and financial management, environmental and social policies and procedures, participatory
planning, and disaster risk management. ISDEM delivered training and capacity building to professionalize
municipal civil service. These modifications and changes in ISDEM's senior leadership team improved
performance (ICR, paragraph 23). ISDEM was not mandated to undertake disaster risk management
issues and did not have sufficient capacity in this field. This shortcoming was addressed during
implementation with technical support and further training, which strengthened ISDEM and disaster risk
management capacity at the municipal level.
Page 13 of 18
FISDL capacity to manage decentralized procurement activities was overestimated. There was also a lack
of local consultants who could prepare technical designs of works. There was also a limited local capacity
to implement subproject investments. During the early implementation there was insufficient supervision by
FISDL and ISDEM. Subsequently, FISDL increased its local advisors in the field, and created an
environmental and social safeguards unit that remain operational.
There was much back-and-forth with FISDL during initial implementation and both ISDEM and FISDL did
not provide sufficient training or adequate supervision of municipalities at project start. Subsequent
response from the Bank team and reception by the implementing agencies of the training and technical
advice resulted in satisfactory compliance by project close.
Municipalities were unfamiliar with Bank fiduciary and safeguards requirements, reflected in the slow
implementation during the initial 18 months of implementation. Implementation was also hampered by the
election cycles - two at the municipal level and one at the national level, which negatively affected staff
rotation, and required re-training of new staff. Close coordination by the Bank team and UEP supervision
effectively addressed this slowdown.
Implementing Agency Performance Rating

Overall Borrower Performance Rating

10. M&E Design, Implementation, & Utilization
a. M&E Design
As the original implementing agency, ISDEM would manage M&E (PAD, paragraph 60-65) by contracting two
specialist who will have overall responsibility for M&E and manage data inputs from FISDL. FISDL will compile
financial statements and send these to ISDEM. M&E process was a daily management tool and would
periodically assess outputs and outcomes with a baseline established at project start. Baseline would be
sourced from approved municipal subproject investment proposals, municipal diagnostics, ISDEM's capacity
assessment, and the report on decentralization in El Salvador (funded by the project). ISDEM would analyze
and disseminate data per communications strategy as well as hold semi-annual workshops on best practices
and lessons learned. A Mid Term Review (MTR) was to be conducted 2 1/2 years after the first disbursement. A
final evaluation will be conducted.
The objectives were clearly stated. The indicators, however, required revision during implementation and were
covered by two restructurings. These revisions reflected an overambitious target, for example, in the case of
the number of municipalities who would improve in one capacity category based on the Municipal Management
Index. Indicator measurement tools were only developed during implementation.
Page 14 of 18
b. M&E Implementation
M&E had a slow start. There was an initial delay in hiring an M&E specialist. Over the course of the project,
M&E staffing went through three rotations. ISDEM's M&E function was transferred to UEP-MH in the 2013
restructuring. M&E design and implementation were revised after the 2013 MTR based on its findings.
Revised indicators were added after the MTR to monitor Strategic Participatory Plans or PEPs. A final
evaluation was held in August - December 2016 and served as the basis for the outcomes reported in the
ICR.
According to the communications strategy, there were supposed to have been semi-annual workshops as
part of M&E implementation. The ICR reported instead that a communications campaign was carried out to
inform the public of the project's achievements at project close. A website with up-to-date information on the
project was up and running. A magazine article reported on the project's achievements. An event was held,
which invited officials from all municipalities, public and private institutions, civil society and international
organizations. A workshop was held to disseminate lessons learned from the project attended by various
stakeholders, including the Ministry of Finance, the Fund for Local Development, the Institute for Municipal
Development, the Corporation of Municipalities, the Undersecretary for Territorial Development and
Decentralization as well as the Project Implementing Unit.
c. M&E Utilization
The project developed M&E tools such as the Municipal Management Index, which was recognized
nationwide and by independent evaluators. This index was used to accurately measure
outcomes for indicator 2 (percent of local governments that improve in at least one capacity category).
There were significant shortcomings in the M&E system's design (indicators introduced during
implementation and after MTR) and weakness in implementation as evident by the delay in hiring and
then turnover in M&E specialist position. There was no discussion on the use and impact of the M&E system
in achieving outcomes although there was a discussion in Annex 2 on the use of the communications
strategy to overcome this shortcoming.
M&E Quality Rating

Modest
11. Other Issues
a. Safeguards
This was an Environment Category B project under Environmental Assessment (OP/BP 4.01) and triggered
three other safeguards:
• Natural Habitats (OP/BP 4.04)

• Pest Management (OP/BP 4.09)
• Physical Cultural Resources (OP/BP 4.11)
Page 15 of 18
Despite issues during project implementation, the Bank rated overall compliance with environmental
safeguards as moderately satisfactory. FISDL carried out over 500 environmental supervision missions,
identified over 100 subprojects that required remediation and the ICR reports 99% resolution (ICR,
paragraph 35). An environmental and social remediation analysis and plan were required for the Canton
Olomega Bridge in the municipality of El Carmen to address the impacts from occasional flooding due to the
poor design of the bridge. A follow-on project will monitor compliance with this finding.
The Bank's social safeguards policies on Indigenous Peoples (OP/BP 4.10) and Involuntary Resettlement
(OP/BP 4.12) were triggered during preparation. Two low-impact subprojects required involuntary
resettlement and two Abbreviated Resettlement Plans were prepared. The final Implementation Status
Report (ISR) reported no pending issues on involuntary resettlement, which affected 126 people. An
Indigenous Peoples Plan was prepared in one municipality (Izalco) as part of its Strategic Participatory
Plan.
b. Fiduciary Compliance
Financial Management: Funds were disbursed as advances to municipalities as early as December 2010.
Municipalities accessed the funds only in early 2012. At the 2013 MTR, performance was downgraded to
Moderately Satisfactory and then in late 2014 to Moderately Unsatisfactory because there were significant
delays in documenting municipal transfers, projects profiles were not being submitted for approval, and
continuing weakness in monitoring municipal project funds (ICR, paragraph 36). An action plan was
implemented, improvements undertaken and the final Moderately Satisfactory rating for financial management
was maintained until project close. Annual external operational audits were carried out. Audit opinions were
unqualified throughout the project even though Operational Audit reports found some internal control issues,
which were resolved by project close. All municipalities were audited by project close. However, the final
project audit has yet to be received and evaluated by the Bank's fiduciary and technical teams (ICR, Annex 2,
p. 36).
Procurement: The municipal governments implemented subproject investments. However, they were
unfamiliar with the procurement requirements of the World Bank. FISDL approved procurement made by
municipal entities. UEP-MH was responsible for centralized procurement. A procurement plan was regularly
updated and satisfactorily implemented. A final procurement policy review confirmed satisfactory
project procurement compliance even though there were initial delays due to the large number of requests from
municipalities and limited availability of local contractors and limited procurement capacity of FISDL (ICR,
paragraph 38). The Bank team addressed this with timely advice and training.
The Task Team Leader clarified in an email dated November 22, 2017 that the municipality of Cojuatepeque
reported to the Project Implementing Unit that a local firm awarded a contract in Cojuatepeque had falsified
advance payment and a performance guarantee. The Project Implementing Unit reported this to the Bank and
the Procurement Specialist submitted the case to INT in April 2016. The firm was debarred, the contract
rescinded, and work completed by the municipality using its own resources (ICR, paragraph 39).
Page 16 of 18
c. Unintended impacts (Positive or Negative)

---
d. Other
---
12. Ratings
Reason for
Ratings ICR IEG
Disagreements/Comment
While relevance and effficacy
Moderately of the two objectives was
Outcome Satisfactory
Satisfactory substantial, efficiency is rated
modest
Sustaining outcomes will
Risk to Development require commitment of
Modest Substantial
Outcome resources not evident in the
ICR.
Moderately Moderately
Bank Performance ---
Satisfactory Satisfactory
Moderately Moderately
Borrower Performance ---
Satisfactory Satisfactory
Quality of ICR Substantial ---
Note
When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the
relevant ratings as warranted beginning July 1, 2006.
The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as
appropriate.
13. Lessons
The ICR presents six key lessons (ICR, Section 6, paragraph 81), slightly modified below:
• Community participation enhances the prioritization of local investments. Continued engagement

during implementation fosters ownership and strengthens support for allocating resources to adequately
operate and maintain local investments. For example,
• Building capacity of institutions while implementing locally determined investments strengthens
the institutions ability to deliver local services. At the same time, a better assessment of how best to
distribute functions between central and local agencies help to better meet implementation hurdles. For
example,
• Recognizing influential actors at the local level and enjoining their participation strengthen local
Page 17 of 18
institutions. For example, the Corporacion de Municipalidades de la Republica de El Salvador (or the
Corporation of Municipalities of the Republic of El Salvador or COMURES) is an important influence among
municipalities that could help promote strategic planning, a voice to support better municipal management by
adopting tools and systems such as SAFIM and SIGMUNI and promote municipal planning that increase
transparency and facilitates administration efficiencies.
• The ICR noted that a lesson learned in social safeguard compliance was to expand the role and train staff
and environmental teams to lay the groundwork to establish a Department of Social and Environmental
Management (ICR, paragraph 34).
14. Assessment Recommended?
No
15. Comments on Quality of ICR
The ICR is concise, evidence based and internally consistent following OPCS guidelines. The ICR is thorough
and candidly discusses the various actions undertaken to strengthen the weak M&E framework, the
assessment of the readiness of the implementing agencies to undertake implementation, and the reasons
behind the five restructurings. There is an extensive discussion of the economic efficiency of the subprojects in
Annex 3. The quality of evidence and analysis support the lessons drawn from implementation. Annexes
supported arguments provided in the main body of the ICR.
a. Quality of ICR Rating

Substantial
Page 18 of 18

Independent Evaluation Group (IEG) : Project Data

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Independent Evaluation Group (IEG) : Project Data

Încărcat de

Drepturi de autor:

Formate disponibile

Public Disclosure Authorized

Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review

Report Number : ICRR0020848

Project ID Project Name

Country Practice Area(Lead)

L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD)

Bank Approval Date Closing Date (Actual)

IBRD/IDA (USD) Grants (USD)

Original Commitment 80,000,000.00 0.00

Revised Commitment 80,000,000.00 0.00

Actual 79,874,672.25 0.00

Prepared by Reviewed by ICR Review Coordinator Group

2. Project Objectives and Components

c. Will a split evaluation be undertaken?

e. Comments on Project Cost, Financing, Borrower Contribution, and Dates

• In July 2010, at the government's request, to increase resources allocated to municipalities.

3. Relevance of Objectives & Design

Design was informed by a municipal diagnostic using a sample of 10 representative municipalities,

4. Achievement of Objectives (Efficacy)

OUTPUTS: The project has achieved or exceeded targets in the following:

7. Rationale for Risk to Development Outcome Rating

a. Risk to Development Outcome Rating

8. Assessment of Bank Performance

Quality of Supervision Rating

Overall Bank Performance Rating

9. Assessment of Borrower Performance

Government Performance Rating

b. Implementing Agency Performance

Implementing Agency Performance Rating

Overall Borrower Performance Rating

10. M&E Design, Implementation, & Utilization

M&E Quality Rating

11. Other Issues

• Natural Habitats (OP/BP 4.04)

c. Unintended impacts (Positive or Negative)

• Community participation enhances the prioritization of local investments. Continued engagement

14. Assessment Recommended?

15. Comments on Quality of ICR

a. Quality of ICR Rating

S-ar putea să vă placă și