Appraisal Project Information Document (PID) (English)

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Table of Contents

• The World Bank 1
• The World Bank 2
• BASIC INFORMATION 2
• A. Basic Project Data 2
• Components 2
• PROJECT FINANCING DATA US Millions 2
• Maximizing Finance for Development 2
• Is this an MFD-Enabling Project MFD-EP 2
• Is this project Private Capital Enabling PCE 2
• SUMMARY 2
• Total Operation Cost 13.00 2
• Total Financing 13.00 2
• Financing Gap 0.00 2
• The World Bank 3
• DETAILS 3
• World Bank Group Financing 3
• B. Introduction and Context 3
• 1. The Federated States of Micronesia FSM is a small and geographically dispersed Pacific Island country PIC 3
• 2. The FSM faces anemic economic growth and poverty reduction due to structural challenges. 3
• The World Bank 4
• 3. Negative net migration has driven a decline in the population in the past decade resulting in an acute shortage 4
• 4. Fragility also constrains FSMs development potential with limited progress in systematically addressing its 4
• 5. In FSM each state government has its own executive and legislative bodies and exercises considerable 4
• 6. The Department of Finance and Administration DOFA is the key Department in the FSM responsible for policy 4
• 7. The capacity constraints arising from acute skilled labor shortages and elevated levels of outbound migration 4
• The World Bank 5
• 8. Historically assessments of public financial management performance have indicated weaker performance in 5
• Quality of Budgetary and Financial Management Equity of Public Resource Use 5
• The World Bank 6
• FSM Pacific Income Group and Global 6
• 9. PFM reform in FSM is guided by the PFM Roadmap 2023-2026 which sets out the vision for achieving better 6
• PFM outcomes at both National and State level and has strong political support. 10. In recent years GoFSM has taken a number of steps to strengthen institutional capacity to carry out core public 6
• Project for Strengthening Public Financial Management P161969 PFM I hereafter 6
• The World Bank 7
• 11. Despite recent improvements gaps continue to exist in fiscal management practices and controls related to 7
• 12. Implementation of the new FMIS is ongoing and further expansion of core financial management information 7
• 13. Publicized budget hearings and the recent publication of the Citizens Budget provide a degree of transparency 7
• 14. DOFA has the further objective to become a Green Climate Fund GCF accredited entity which would require 7
• C. Proposed Development Objectives 7
• The World Bank 8
• 15. PDO Statement 8
• 17. PDO Level Indicators 8
• D. Project Description 8
• 18. Project description. 8
• 19. Project Components. 8
• 20. Component 1 Improve Fiscal Management Practices and Controls 4625000. 8
• 21. Sub-component 1.1 Strengthen budgeting and reporting practices 3195000. 8
• The World Bank 9
• 22. Sub-component 1.2 Strengthen procurement practices 1430000. 9
• 23. Component 2 Expand Core Financial Management Information Systems 4325000. 9
• 24 Sub-component 2.1 Continue rollout of core public finance system 3225405. 9
• 25 Sub-component 2.2 Expand public finance systems 1099595. 9
• The World Bank 10
• 26. Component 3 Enhance Human Resource Capacity Communications and Change Management 2300000. 10
• 27. Sub-component 3.1 Enhance Human Resource Capacity for Public Finance 1630000. 10
• 28. Sub-component 3.2 Change Management Communications and Citizen Engagement 670000. 10
• 29. Component 4 Project Management 1750000. 10
• The World Bank 11
• Triggered 11
• 30. E. Implementation 11
• 31. The project implementing agency DOFA has broad experience implementing donor-funded projects and 11
• 32. To address the implementing agency capacity gap DOFA will continue to be supported by a PIU and the project 11
• The World Bank 12
• 33. A Project Steering Committee PSC will be maintained to enhance project coordination and oversee project 12
• CONTACT POINT 12
• World Bank 12
• BorrowerClientRecipient 12
• The Federated States of Micronesia 12
• Implementing Agencies 12
• Department of Finance and Administration 12
• FOR MORE INFORMATION CONTACT 12
• The World Bank 13
• APPROVAL 13
• Approved By 13