Annex J7 e - Public Financial Management Risk Assessment Framework_Central MOE.pdf

December 22, Public

Financial Management

Risk Assessment

Framework

Stage 2 – Risk Assessment

Government of Senegal

Ministry of National Education

Government of Senegal, Ministry of Education PFMRAF Stage 2 Risk Assessment

Table of Contents

i. ACKNOWLEDGEMENT AND COMPOSITION OF ASSESSMENT TEAM

ii. LIST OF ACRONYMS/ABBREVIATIONS

I. EXECUTIVE SUMMARY

II. BACKGROUND/PROGRAM DESCRIPTION

III. ASSESSMENT SCOPE AND METHODOLOGY

IV. OTHER DONOR AND PARTNER RISK ASSESSMENTS PERFORMED

V. SUMMARY OF IDENTIFIED RISKS

VI. MAPPING OF IDENTIFIED RISKS AND PROPOSED FUNDS FLOW

VII. IDENTIFIED RISKS AND RECOMMENDATIONS

1. Entity Features

2. Budget

3. Procurement

4. Cash Management

5. Accounting and Reporting

6. Human Resources and Payroll

7. Internal control

8. Information Technology

9. Auditing and Compliance

VIII. CONCLUSION

The USAID/Senegal PGST hereby confirms that the Stage 2 Report of the Ministry of Education has been reviewed by and represents the view of the Mission.

LIST OF TABLES

Table 1. Activities, potential implementing mechanism and approximate budgets for USAID -

Senegal’s Education Sector’s five-year program Table 2. Number of risks identified in each functional area, rated as low, medium, high, or critical

LIST OF FIGURES

Figure 1. The identified risks, denoted as the overall risk number corresponding to the risk rating worksheet in Appendix A, are mapped above Figure 2. Diagram of the flow of funds for internal funds

Figure 3. Diagram of funds flow for external funds

LIST OF APPENDICES

Appendix A. Risk Rating Worksheet

Appendix B. List of Individuals Interviewed

LIST OF REQUIRED ATTACHMENTS

Attachment 1. Statement of Work. Public Financial Management Risk Assessment Framework

Stage 2 Risk Assessment of Senegal’s Ministry of Education. USAID-Senegal. November 5, 2015.

Attachment 2. Stage 2 Questionnaire. Evaluation of Risks in the Public Financial Management of Senegal’s Ministry of Education. 2016

i. ACKNOWLEDGEMENT AND COMPOSITION OF ASSESSMENT TEAM

Acknowledgement

The assessment team would like to express their deepest appreciation for the support provided by the Ministry of Education (MOE).

Composition of Assessment Team

The assessment team was composed of the following members:

1. Gora Niang, Financial Analyst Consultant, Office of Financial Management, USAID-

Senegal

2. Assane Sakhanokho, Public Finance Analyst, Office of Financial Management, USAID-Senegal

3. Cheikh Tall, Financial Analyst, Office of Financial Management, USAID-Senegal

4. Malick Diop, Education Specialist, General Development Office, USAID-Senegal

5. Amadou Lamine Ndiaye, Education Specialist, General Development Office, USAID-

Senegal

6. Alpha Ibrahima Bah, Education Specialist, General Development Office, USAID-

Senegal

ii. LIST OF ACRONYMS/ABBREVIATIONS

Acronym

1 Definition Definition ADS Système de Directives Automatisées USAID’s Automated Directives System ARMP Autorité de Régulation des Marchés Publics Public Procurement Regulatory Agency CAOSP Cour des Comptes Court of Auditors CC Cour des Comptes Court of Auditors CDCS Centre Academique d’Orientation Scolaire et Professionnelle Academic Center for Scholastic and Vocational

Guidance CDSMT Cadre de Dépense Sectorielle à Moyen

Terme Framework for Medium Term Sectoral

Expenditure CI Contrôle Interne Internal Control CIDA Agence Canadienne pour le Développement

International

Canadian International Development Agency

CIME Cellule Informatique du Ministère de l’Education Ministry of Education Information Unit

CPM Cellule de Passation des Marchés Procurement Unit COF Contrôleur des Opérations Financières Financial Operations Controller DAGE Direction de l’Administration Générale et de l'Équipement Department of General Administration and

Equipment DBF Division Budgétaire et Financière Division of Budget and Finance DCI Division de la Comptabilité et de l’Investissement Division of Accounting and Investment

DCMP Direction Centrale des Marchés Publics Central Department of Public Procurement DCS Direction des Constructions Scolaires Department of School Construction DEE Direction de l’Enseignement Elementaire Department of Elementary Education DEMSG Direction de l’Enseignement Moyen

Secondaire General Department of Secondary Education

DEQS Direction des Equipements Scolaires

Department of School Equipment

DEXCO Direction des Examens et Concours Department of Exams DI Direction de l’Investissement Department of Investment DOB Division Operations Budgetaires Budget Operations Division

DM Division des Marchés Procurement Division DPPD Document de Programmation Pluriannuelle des Dépenses Multi-year Expenditure Plan

DPRE Direction de la Planification et de la

Réforme de l’Éducation Department of Planning and Education Reform

DRH Direction des Ressources Humaines Department of Human Resources DRP Demande de Renseignement et de Prix Information and Price Request HR Ressources Humaines Human Resources G2G Gouvernement à Gouvernement Government to Government GOS Gouvernement du Sénégal Government of Senegal GPE Partenariat Mondial pour l’Education Global Partnership for Education IA Inspection d’Académie Academy Inspectorate

For purposes of this report, acronyms derived from French, particularly those for GOS agencies or programs, generally retain their French acronym in this report and in the appendices. The French-derived acronyms may not necessarily correspond with the acronym for the English translation.

IAAF Inspection des Affaires Administratives et

Financières Administrative and Financial Affairs

Inspectorate ICT Technologie de l'Information et de la

Communication Information and Communication Technology

IDA Association Internationale de

Développement International Development Association

IEF Inspection de l’Education et de la

Formation Education and Training Inspectorate

IGE Inspection Générale d’Etat State Inspector General IGF Inspection Générale des Finances Finances Inspector General II Inspection Interne Internal Inspectorate IME Inspection Medicale des Ecoles Schools Medical Inspectorate IT Technologie de l’Information Information Technology LFI Loi de Finances Initiale Law of Initial Finance MOF Ministère de l’Economie et des Finances Ministry of Economy and Finance MOE Ministère de l’Education Nationale Ministry of National Education

MIRADOR Management Intégré des Ressources Axées sur une Dotation Rationnelle Integrated Resource Management Focusing on

Rational Allocation OD Ordonnateur Delegue Delegated Authorizing Officer OHADA Organisation pour l'Harmonisation en

Afrique du Droit des Affaires Organization for the Harmonization of

Business Law in Africa OMD Objectifs du Millénaire pour le

Développement Millenium Development Goals

OS Ordre de Service Service Order PAQUEEB Projet d’Amélioration de la Qualité et de l’Equité dans l’Education de Base Project to Improve the Quality and Equity of

Basic Education PAQUET Programme d’amélioration de la Qualité, de l’Equité et de la Transparence Program to Improve Quality, Equity, and

Transparency PDEF Programme Décennal de l’Education et de la Formation Decennial Education and Training Program

PFMRAF Cadre d’Evaluation des Risques en Finances

Publiques Public Financial Management Risk Assessment

Framework PPM Plan de Passation des Marchés Procurement Plan PTA Plan de Travail Annuel Annual Workplan PTIP Plan Triennal d'Investissement Prioritaire Triennial Priority Investment Plan RAFP Responsable Administrative et Financier

Projet Administrative and Financial Project Manager

RSF Rapport de Suivi Financier Financial Monitoring Report SIGFIP Système d’Information et de Gestion des

Finances Publiques Information and Public Finance System

SIGMAP Système Intégré de Gestion des Marchés

Publics Integrated Procurement Management System

SOW Statement of Work

TAFIRE Tableau Financier des Ressources et des

Emplois Financial Table of Resources and Jobs

TDR Termes des References Terms of Reference TFP Partenaires techniques et financiers Technical and Financial Partner (formerly

Donor) WAEMU Union Economique et Monétaire Ouest

Africaine West African Economic and Monetary Union

WB Banque Mondiale World Bank USAID Agence des États-Unis pour le

Développement International United States Agency for International

Development VAF Vérification Administrative et Financière Administrative and Financial Audit

I. EXECUTIVE SUMMARY

Purpose

Prior to funding governmental organizations, and in compliance with ADS 220, USAID requires a risk assessment using the Public Financial Management Risk Assessment Framework

(PFMRAF). USAID-Senegal, through the Education Office, intends to provide direct funding to the Government of Senegal’s Ministry of Education (MOE) to support complementary activities involving the implementation of an MOE scholarship program, a functional reading commission, an early grade reading book procurement, and early grade reading class interventions. This report summarizes the results of a Stage 2 risk assessment conducted on the MOE to identify, analyze, and propose ways to mitigate risks.

Scope and Methodology Used to Conduct the Assessment

The PFMRAF Stage 2 – Risk Assessment procedures were used to evaluate the MOE in nine functional areas, specifically: (1) entity features, (2) budget, (3) procurement, (4) cash management and treasury, (5) accounting and reporting, (6) human resources and payroll, (7) internal control, (8) information technology, and (9) audit and compliance. The assessment followed the scope and methodology presented in the approved Statement of Work (Attachment

1). The assessment was conducted by the USAID evaluation team from December 20, 2015 to April 14, 2016 at the Ministry of Education offices. MOE staff were interviewed, and documents and policies were reviewed for compliance and adequacy. A meeting was held in

July 2016 to inform key MOE personnel of the assessment results.

Results

The identified risks and recommendations are summarized in Section VII of this report, the questionnaire (Attachment 2), and the risk rating worksheet (Appendix A). A total of 22 risks were identified and these are noted by functional group in Sections V, VII, and Appendix A.

The assessment allowed us to determine the MOE’s existing strengths and weaknesses in various areas.

The results of the assessment confirm that budgetary and accounting systems are based on sound legislative and regulatory frameworks. Furthermore, there has been significant progress in budgetary management of appropriations in part due to the establishment of systems for budget and accounting phases. These systems have helped strengthen budgetary control and facilitated timely processing of financial records. No major deficiencies were identified in the areas of cash management and audit and compliance.

Three risks relating to procurement, human resources, and information technology were rated critical. These are: delays in planning and procurement, lack of systematic adherence to open competition procedures in personnel recruitment, and funding constraints impacting the effective implementation of information technology. To address the procurement issue, the MOE is committing to the development and implementation of a procurement-focused capacity building program. As an interim measure, the MOE has successfully included a line item for next year’s budget in anticipation of the planned G2G book procurement activity. The MOE is addressing the human resource and information technology critical risks through the establishment and adherence to open competition rules for personnel recruitment, and an increase in awareness at the central government level on the need to finance the improvement of the information technology infrastructure, respectively.

Twelve high risks were identified across various functional areas, with the remaining seven risks rated as medium. Weaknesses are exacerbated by a lack of qualified personnel, a lack of formalized training system in some areas, inadequate document management systems, and a lack of an integrated information technology system. The MOE has agreed to a risk mitigation plan to address the risks mentioned above. The plan is budgetised and shared with other donors to rally further financial and technical support.

Conclusions/Recommendations

After assessing the MOE in accordance with the Statement of Work, the USAID assessment team has identified and documented relevant fiduciary and other associated risks. The team also documented the proposed response measures for the various risks identified. With the incorporation of the risk response measures, the assessment indicates the MOE has adequate systems in place to manage direct funding. The assessment team concludes that USAID-Senegal can continue with project implementation.

II. BACKGROUND/PROGRAM DESCRIPTION

A major element of the Education Strategy of USAID-Senegal aims to improve early years reading skills in elementary education in public schools and daaras . This five-year program will be implemented in seven regions, has a budget of approximately 90 million USD, and started in

October 2016. The program includes five main activities: (1) reading development activities implemented by an implementing partner, (2) reading development activities implemented by the

Government of Senegal, (3) technical capacity strengthening activities, (4) community mobilization activities, and (5) an impact evaluation assessing the various interventions. The proposed activities, potential implementing mechanisms, and estimated budgets are summarized in Table 1. These activities will be implemented in a complementary manner to maximize the impact on reading achievement.

Table 1. Activities, potential implementing mechanism and approximate budgets for USAID - Senegal’s Education Sector’s five-year program.

Activity Possible Mechanism Estimated Budget Primary Early Grade Reading Activity Contract $70-$75 million Government-led Early Grade Reading

Activities (G2G) Fixed Amount and/or Cost

Reimbursement Agreements $5-$7 million

Human & Institutional Capacity

Development Contract $5-7 million

Our Sisters Read Cooperative Agreement $2 million Impact Evaluation Contract $1.5 million Total up to $93 million

This program supports the first and third global education goals articulated in USAID’s

Education Strategy . The Education Strategy is premised on the development hypothesis that education is both foundational to human development and critically linked to broad-based economic growth and democratic governance. The applicable goals are:

● Goal One: Improved reading skills for 100 million children in primary grades by 2015.

● Goal Three: Increased equitable access to education in crisis and conflict environments for 15 million learners by 2015.

As noted in the SOW, the program is consistent with USAID-Senegal’s Country Development

Cooperative Strategy and Senegal’s sector plan for education. The program also supports the third development objective in USAID-Senegal’s CDCS for 2012-2017. This objective focuses on increasing effective citizen participation in the management of public affairs at the national and local level. The program is additionally designed to support the implementation of

A daara in Senegal is the equivalent of a madrasa. This word, which translates simply as “school” in Arabic, is defined by Cambridge Dictionaries Online as “a school where people go to learn about the religion of Islam”

(http://dictionary.cambridge.org/us/dictionary/british/madrasa). Daara students may study other subjects, in addition to the Koran.

USAID. 2011. Education Opportunity Through Learning, USAID Education Strategy, 2011-2015.

http://pdf.usaid.gov/pdf_docs/Pdacq946.pdf USAID. 2012. Senegal Country Development Cooperation Strategy, 2012-2016.

https://www.usaid.gov/sites/default/files/documents/1860/SenegalCDCS.pdf

PAQUET, the Government of Senegal’s sector plan for education, including the MOE’s plans to prioritize improved progress in early grade reading.

Of the five complementary activities identified, several activities, estimated at 5 to 7 million

USD are envisioned as G2G activities. These activities encompass the implementation of an

MOE scholarship program, establishment of a functional reading commission, early grade reading book procurement, and early grade reading class interventions. The design phase for these activities is currently underway.

G2G activities will include providing support to a soon-to-be established reading commission so that it develops into an effective platform for decision-making, strategic thinking, research, and advocacy on early grade reading. This may include workshops, research projects, outreach and drafting/review of proposed policy reforms. The scholarship program aims to increase the cadre of expertise on early grade reading in Senegal, including scholarships to key actors to attend overseas universities to update their expertise, and for Senegalese students to attend local universities and become specialized in early grade reading. The book procurement activity will facilitate the availability of teacher and student materials on time in class. The intent is to use host government procurement system. The MOE has successfully included a line item for next year’s budget in anticipation of this G2G book procurement activity.

The MOE will also lead early grade reading interventions replicating activities modeled in the

All Children Reading project which has been conducted in six other regions of the country. The instruction and service delivery activities will be expanded to a seventh region, anticipated to be the region of Saint Louis. The G2G reading activity will enable the curriculum, book development, teacher training, and testing departments of the MOE to implement evidence-based early grade reading reform in this region. Direct implementation by the MOE is essential for institutionalizing a focus on early grade reading at the Ministry level, taking into account the

MOE’s strengths and weaknesses as identified by USAID. The careful and deliberate selection of the interventions to be implemented through a direct agreement will enable the MOE to progressively take ownership of a broader range of interventions in the future, and to consider scaling up to a national level using their own resources. To that end, USAID will facilitate policy dialogue with the MOE around the need to budget and maintain financial feasibility.

The G2G reading activity will commence in year one and continue to year five. This will allow adequate time for the development of the necessary teaching/training materials, undertaking of capacity assessments, and testing of the Project’s roll-out to classrooms. The necessary materials would be printed and distributed in time for the requisite trainings to take place at the beginning of the school year. Smaller activities will be carved out for the first two years to prepare the ground for GOS extension of activities in Saint Louis, and for subsequent scale up and sustainability.

III. ASSESSMENT SCOPE AND METHODOLOGY

Scope of Application of the Risk Evaluation and Methodology

USAID has developed a Public Finance Management Risk Assessment Framework (PFMRAF) to facilitate the analysis and mitigation of risks associated with G2G assistance. A rapid appraisal or Stage 1 risk assessment was conducted on the Government of Senegal in

September 2011. The recommendation from this stage was to perform a Stage 2 risk assessment for the GOS entities to which USAID plans to provide G2G assistance. This Stage 2 risk assessment was conducted in 2012. As noted in the SOW, the Mission has chosen to update the

Stage 2 risk assessment due to alignment with project life, termination of activities, and change in implementing mechanisms.

The SOW for the Stage 2 risk assessment on the Ministry of Education (MOE) was approved in

November 2015 (Attachment 1). The phases followed in this assessment are described generally in Section IV of the SOW. This Stage 2 risk assessment was conducted using the manual of the PFMRAF for Phase 2 - Risk Assessment . The assessment focused on the nine functional areas as defined in the manual: entity features, budget, procurement, cash management and treasury, accounting and reporting, human resources and payroll, internal control, information technology, and audit and compliance. The testing procedure was as follows:

1. Review of relevant policies and legislation.

2. Interview of key personnel to gain a full understanding of processes and practices.

3. Evaluation of specific process flow by testing particular transactional data. The selection of items tested was based on the perceived risk. Source data were reviewed to verify compliance with policy and current practice

4. Assessment of identified risks. Risks could be the result of a weakness in the policies or procedures or exceptions observed in the review of operations that reflect a deviation in practice from the established policy.

5. An assessment of the risks and the recommendation on the way to mitigate the risk has been presented for each identified risk. The details of the way in which the mitigation measure must be conducted are not provided in this document but will be developed with the collaboration with MOE.

The assessment was conducted by the USAID evaluation team from December 2015 to April

2016 at MOE main office as well as the MOE’s department and division offices in Dakar (e.g.

DEQS, DCS, DCI, IAAF). The risks identified and proposed mitigation are included in this report.

Risk Rating and Analysis

Individual risks are assigned risk ratings based on the impact and the probability of the risk.

The rating is based on a risk matrix, and the risk rating is assigned a value of critical, high, medium, or low. The matrix to determine the risk rating is shown in Section VI. The rating

Public Financial Management Risk Assessment Framework (PFMRAF) Manual A Mandatory Reference for ADS

Chapter 220 New Edition Date: 07/28/2014 drives the appropriate level of mitigation. The individual ratings for impact and probability, expressed as an integer, are based on the following:

Impact rating

Negligible 1 PFM broadly reflects good international practice.

Marginal 2 PFM broadly reflects good international practice with some gaps or inefficiencies present.

Serious 3 Significant elements of the PFM system do not reflect good international practice.

Catastrophic 4 There are obvious and material divergences from good international PFM practice.

Probability rating

Remote 1 An adverse event associated with the risk is rare or would only occur in exceptional circumstances.

Occasional 2 An adverse event associated with the risk might occur because the conditions for it exist, but controls exist and are effective.

Probable 3 An adverse event associated with the risk likely will occur because the controls are inadequate or are applied inconsistently.

Frequent 4 An adverse event associated with the risk is expected to occur.

Risk Mitigation

The evaluation team of the USAID-Senegal will develop a risk mitigation plan. The team will make a decision of rating of the risk, will communicate the assessments, and propose mitigation measures to the MOE. While the mitigation plan may outline potential measures to address risk, the MOE and USAID will agree on the best method(s) to address risks and incorporate those into the MOE action plan.

IV. OTHER DONOR AND PARTNER RISK ASSESSMENTS PERFORMED

No other donor or stakeholder risk assessments were conducted on the Ministry of Education.

V. SUMMARY OF IDENTIFIED RISKS

A Stage 2 – Risk Assessment was conducted based on the nine functional areas as indicated in the SOW (Attachment 1) and the Stage 2 questionnaire (Attachment 2). All 22 identified risks are summarized in the risk rating worksheet (Appendix A) and mapped in Figure 1 of this report.

The identified risks, rated from low to critical and shown by functional areas, are summarized in

Table 1 below. No risks were identified in cash management and in audit and compliance.

Three risks were rated critical: delays in planning and procurement, lack of systematic adherence to open competition procedures in personnel recruitment, and funding constraints impacting the effective implementation of information technology. These represent a fiduciary risk and treatment measures for mitigation were identified (Appendix A). Twelve high risks were identified across the various functional areas. These also represent fiduciary risks and various treatments were identified to address these issues. The remaining seven risks were rated as medium.

Table 2. Number of risks identified in each functional area, rated as low, medium, high, or critical.

Functional Area Number of

Risks per

Area

Risk Rating number of risks

Low Medium High Critical

1. Entity Features 2 2

2. Budget 3 2 1

3. Procurement 3 1 1 1

4. Cash Management and

Treasury

5. Accounting and Reporting 2 1 1

6. Human Resources and Payroll 5 2 2 1

7. Internal Control 2 1 1

8. Information Technology 5 4 1

9. Audit and Compliance 0 Total 22 7 12 3

VI. MAPPING OF IDENTIFIED RISKS AND PROPOSED FUNDS FLOW

The identified risks are shown in Figure 1 below. More information can be found in the Risk

Rating Worksheet (Appendix A) and the discussion in Section VII.

Figure 1. The identified risks, denoted as the overall risk number corresponding to the risk rating worksheet in Appendix A, are mapped above.

Impact

.C a ta st ro p h iq u e

High Critical Critical Critical

.S e ri o u s

High High

Critical Critical

.M a rg in a l

Medium Medium High

High

.N eg li g a b le

Low

Low Medium Medium

1.Remote 2.Occasional 3.Probable 4.Frequent

Probability

The proposed funds flows are shown in Figure 2 and 3 below. Figure 2 illustrates the program execution process for goods and services procured using GOS funds. The treasury has a single account at the central bank which acts as the Government’s bank. The single treasury account

1 3 2

5 4

14 14 14 14 works as follows: (i) all public resources including collected fiscal and non-fiscal revenue, treasury correspondents’ resources including local communities and public institutions, and resources mobilized within the framework of budget support are subject to a daily centralization

(leveling) in favor of the principal account of the general treasurer; (ii) the other deposit accounts opened by technical and financial partners (TFP) at the central bank can only be centralized in the main treasury account after authorization by the TFPs; (iii) transfers to agencies and public institutions are directly executed by the general treasurer from his principal account. (iv) For payment implementation, the general treasurer supplies accounts in favor of debtors.

Figure 3 outlines the program execution process for external reimbursements. For external resources, the funds flow will be as follows. USAID/Senegal will provide funds to the MOE through a new Special Account (SA). The SA will be opened in a commercial bank to facilitate payment for eligible expenses. The SA will be managed in accordance with the disbursement procedures described in the financial management manual for administrative and accounting procedures of the GOS, and the USAID/GOS Implementation Letter which will be signed with the MOF. The SA would be administered by the Investment Directorate (ID) in coordination with the Department of General Administration and Equipment (DAGE). The ID is housed at the MOF and is in charge of the management of designated accounts in Senegal. In turn, the ID is responsible for coordinating with the DAGE MOE entities.

Figure 2. Diagram of the flow of funds for internal funds.

Préparation dossiers de marchés et sélection des fournisseurs

Emission des bons d’engagement

Réception des biens et des prestations

Vérification de conformité et de service fait

Ordre de paiement et émission du mandat MEF (Ordonnateur délégué)

Exécution des paiements Compte de Paiement

MEF (Payeur Général)

DAGE (MSAS) et COF délégué (MEF)

DAGE (MSAS)

Compte Principal du trésorier général

BCEAO

Fonds de PTFs

Ressources budgétaires (Fiscales et non fiscales)

Transferts aux Agences et EP

Comptes de Dépôt à la BCEAO

Fournisseurs et prestataires de services

F L U X

D E

O N D s

C I R C U I T

E X E C U T I O N

D E P E N S E S

Preparation of procurement files and selection of suppliers

Issuance of commitment letters

Receipt of goods and services

Verification of service completion

Payment order and issuance of mandate DAGE (MOE) (Authorizing Officer)

Processing of payments Account for Payments

MOF (General Pay Officer)

DAGE (MOE) - Controller

DAGE (MOE)

Principal Account of the General Treasury

BCEAO

TFP Funds

Budgetary resources (fiscal and non-fiscal)

Transfers IAs and IEFs

Deposit Accounts at BCEAO

Suppliers and service providers

C

A

S

H

L

O

W

E

X

P

E

N

D

I

T

U

R

E

C

H

A

N

N

E

L

Transfers

Resources of treasury correspondents including local communities

Commitment

Liquidation

Authorization

Paiement

Figure 3. Diagram of funds flow for external funds.

USAID

(Funds) DP

Principal Account

Managed by DI

Suppliers /

Consultants Accounts of Beneficiaries

Secondary Account

Managed by DAGE

IAs and IEFs

Accounts

Funds

Submission of reports and supporting documents

VII. IDENTIFIED RISKS AND RECOMMENDATIONS

The identified risks and recommendations included in this section are summarized from the

Questionnaire (Attachment 2) and the Risk Rating Worksheet (Appendix A). All identified risks discussed in this report are cross-referenced to the Questionnaire, and vice-versa.

1. Entity Features

The assessment of the Ministry of Education’s entity features covered the nature of MOE, legal status, organizational structure, and reporting relationships. Other areas covered are the internal and external factors affecting the operations, key functions, and processes related to the programs.

Discussion

MOE prepares and implements the policies defined by the Minister of Education. It manages the sector and guarantees citizens the right to education access within the principle of state secularism (Decrees No. 86-877, July 19, 1986; amended by Decree No. 2002-665, June 14, 2002). To ensure the central administration of the education sector, the MOE has an administrative and financial department to support its missions. However, there is an insufficient number of qualified personnel in these roles.

The current organization chart does not always take into account new directions and priorities in education. There are issues with delays in the implementation of standards, including the draft decree on the MOE organogram, and the establishment of a technical committee. Delays were also noted in the reorganization of structures and professionalization of Academy Inspectorate

(IA) and Education and Training Inspectorate (IEF) staff. The current changes in institutional and organizational contexts and the unfinished reforms are constraints that can introduce risk in achieving sectoral results within the desired timeframes. These include decrees on MOE organization, particularly organizational charts for planning units, which have not been completely finalized.

The MOE has IAs in regions and IEFs in departments and municipalities in Senegal. The process of decentralizing budget scheduling planned in 2017 is underway. Note also that over a three year transitional phase, it was recommended that authorization power be entrusted to regional heads at the decentralized level, with the ultimate objective being to transfer authority to the heads of the IA and IEF. Strengthening their capacity will be planned during this period.

Furthermore, MOE staff receive inadequate support and training on the various directions and new priorities, including directives that need to be addressed as part of regional reform measures.

This impacts the MOE’s ability to achieve its objectives, fulfill its mandates, in addition to negatively impacting internal management processes. More generally, there is a need to accelerate the process of familiarization with the six West African Economic and Monetary

Union (WAEMU) directives and new planning tools that the MOE is required to align with beginning January 2017, a relatively short time line. Alignment with the new planning tools and their operationalization are important challenges not only for the Department of Planning and

Education Reform (DPRE), but also for all other structures involved in the planning and budgeting process. The absence of a capacity building plan points to a serious weakness in the harmonization and effectiveness of state and donor interventions.

Identified risks and recommendations

Risk #1: The lack of alignment of MOE missions and goals relative to activities conducted could overshadow certain commitments and lead to certain projects being open to interpretation. The current staffing does not support MOE mission and priorities. [Attachment 2. Questionnaire

Section 1: 1.3-1.4]

Potential effect of risk

The discrepancy between the MOE missions and its present activities could overshadow certain commitments or lead to the certain projects being open to interpretation.

Risk rating

The impact is considered serious and the probability occasional, resulting in a high risk rating.

Recommendation(s)

A revised decree should be put in place to align activities with missions and goals of the MOE and ensure that commitments are reflected in their official mandate.

Risk #2: Inadequacy and inconsistency of interventions in the programs.

MOE staff receive insufficient support and training, both in terms of frequency and follow-up.

The situation is further aggravated by the timeline for compliance with the WAEMU directives.

This problem is not specific to MOE but is a general issue for the entities of the Government of

Senegal (GOS). [Attachment 2. Questionnaire Section 1: 1.6.1-1.6.2]

This weakness undermines the MOE’s ability to achieve its objectives and fulfill its mandates and could negatively impact its internal management processes.

Develop and implement a master training plan.

The six WAEMU directives are: Directive No. 01/2009/CM/WAEMU on the Code of Transparency in the

Management of Public Finances; Directive No. 06/2009/CM/WAEMU on Budget Laws D; Directive No.

07/2009/CM/WAEMU on the General Regulations of Public Accounting; Directive No. 08/2009/CM/WAEMU on

Government Budget Classification; Directive No. 09/2009/CM/WAEMU on the State Chart of Accounts (PCE);

Directive No. 10/2009/CM/UEMOA on Table of State Financial Operations (TOFE).

2. Budget

A review was carried out on the relevant aspects of the Finance Act of 2013, 2014 and 2015, the regulations of public finance, and the MOE budget process and standards.

In addition, key staff members were interviewed to assess their understanding of the budget process. Selected tests were conducted to understand the basis of compliance with regulations and policies.

MOE prepares its budget within the framework of the medium-term development objectives consistent with the MOF’s medium-term sectoral expenditure framework (CDSMT). Budgets are prepared for the next fiscal year and generally classified into three categories: staff costs, goods and services, and investment expenditure. The MOF addresses the MOE directives and budget ceilings. The budget guidelines provide timelines for the budget planning process. The Division of Budget and Finance (DBF) within the MOE meets and gathers all the data from the central level, districts and regions in preparation for a consolidated draft statement and a work plan for the budget committee’s consideration. The budgetary ceilings also take into account spending priorities, justifications, and estimates for each category. This is one of the major control measures adopted by the MOF to regulate MOE spending.

The procedures for developing and implementing the state budget are regulated by Decree No.

2009-85 of January 30, 2009 on the preparation of the state budget, which contains a budget timetable with specific deadlines. The provisions of this decree are set each year by a macroeconomic and fiscal framework and circular letters from the MOF. The MOE's draft budget is prepared in accordance with budget nomenclature and programming documents (i.e.

letter of sectoral policy, multi-year expenditure plan or DPPD, annual work plan, etc.).

In general, the MOE uses clear planning and programming frameworks, tools, and structures for the implementation of sectoral policies such as those defined in the strategic development plans

(2013-2025 PAQUET) and the work plan. The work plan operationalizes the DPPD and is the reference document for the various directorates/divisions within the MOE and the local and regional planning and budgeting entities. MOE has a Department of Planning and Education

Reform (DPRE) whose mission, functions, and organization has remained relatively stable despite ministerial changes (Decree No. 2012-640 of July 4, 2012). The DPRE monitors the preparation and the development of the plans, projects and programs of the sector, supports the programming and budgeting of projects and programs, coordinates the technical and financial implementation of the projects and programs, and produces technical and budget monitoring reports.

The DAGE has the primary responsibility for coordinating the development of the budget. To this end, it is subject to the principles of the budget preparation timetable of the government as defined by Decree 2009-85 of January 30, 2009. The timetable for the preparation of the budget

Decree No. 2009-85 of January 30, 2009 on the preparation of the state budget, notably Article 28, instructed the publication of the Finance Act (BIA) after its promulgation by the Head of State. Budget 2016, enshrined in the

Organic Law No. 2015-23 of December 18, 2015 and bearing initial Finance Act 2016, is implemented by the Letter

No. 0,013,656 MEFP / DGF December 31, 2015.

describes the main steps of the annual process of preparation of the budget and of the transmission of the budget documents. The process begins in March and ends in December of each year. In case of disagreement on the initial allocation of appropriations made by the DAGE, a first arbitration is made by the Minister or members of the Cabinet. It is then forwarded to the

MOF. In the course of the fiscal year, the requests for budgetary adjustments are subject to the approval of the Minister and then transmitted to the MOF.

Based on interviews and questionnaire responses, the assessment team concluded that the DAGE has complied with the various stages of budget preparation over the past three years. It was noted, however, that for the 2016 budget preparation, the MOE did not receive notification from the MOF until June 4, 2015. This is a one month delay relative to Decree No. 2009-85, which sets the date at no later than April 30. Also, the circular from the MOF specifying guidelines and the conditions that must be met was dated July 13, 2015, over a month after the initial notification. These delays resulted in almost a two and a half month delay relative to the provisions of the applicable decree. The situations noted above are examples of external factors which can disrupt and/or lead to delays in the internal budget preparation and the programming cycle at the MOE. Note, however, that these issues do not actually present a major risk for MOE in light of its organizational structure. The establishment of a steering committee and technical committee for budgetary reforms within MOE has enabled the MOE to adapt and comply with budget document transmission deadlines to the MOF.

The MOE applies a policy of results-based budgeting. Budgetary and financial reforms introduced by the MOF within MOE since 2005 has resulted in the use of CDSMT and coordinated planning with the DAGE, which is experienced in results-based budgeting. Since budgetary and financial reforms were introduced, the MOE has regularly produced annual performance reports at the end of each fiscal year. A review of performance reports of 2013, 2014 and 2015 have shown that efforts were made to account for the achievement of results and the manner in which the resources have been used, with an emphasis placed on progress and performance. Moreover, according to MOE staff, these performance reports are very useful for informing budgetary choices including revisions of budget lines and are also useful in facilitating budgetary negotiations with the MOF. There were some issues noted relating to a lack of mastery of performance analysis as well as delays in information flow to the

IA and IEF.

The MOE has criteria for the allocation of resources relating to expenditure for decentralized structures. The allocations are based on updated criteria that take into account number of classrooms, number of educational classes, number of students, number of teachers, and status of the area, among other things. A mechanism for applying criteria was introduced in 2014 and criteria have been integrated into a computerized Excel tool that assists in determining allocations. Review of documents and interviews conducted have shown that the allocation criteria related to performance have not been retained in the allocation methodology.

Additionally, "remote area" and "area of insecurity" were not taken into account due to the lack of statistical data permitting inclusion of these parameters in the analysis.

The budget is executed according to the normal procedure for the execution of expenditure specified in the general regulations on public accounting (RGCP): commitment, liquidation and authorization for the administrative phase and /or budgetary, and payment for the accounting stage. It involves three main actors at the central level: the credit administrator, the authorizing officer delegate seconded by the MOF to the MOE, and the accountant (public treasury).

The results of the assessment points to significant progress in budgetary management of the appropriations in part due to the establishment of systems such as SIGFIP used during the budgetary phase, and ASTER for the accounting stage. These systems have helped strengthen budgetary control and facilitated timely processing of financial records. The DAGE monitors the implementation of appropriations using SIGFIP. The assessment team noted, additionally, that the DAGE has clearances (access codes) that allow it to monitor and address issues in real time without using the services of the MOF.

The problem of budget cuts carried out by the MOF on MOE budgetary allocations can disrupt program implementation and result in non-compliance with deadlines for activity completion.

These situations can lead to risks, especially in the implementation of projects such as manual acquisition and classroom construction. The assessment has also identified the following issues:

(1) problems with completeness or archiving of expense records that make it difficult to find receipts in a timely manner and prevents accounting from understanding the nature of the expense and the regulations that must be applied, (2) budgetary allocation errors, (3) insufficient public finance skills due to a lack of training of staff, such as credit administrators and managers, involved in budget execution, (4) issues with processing and transmission speed of files from decentralized services to the central offices. Application of the new harmonized framework of public finances advocating decentralization points to the immediate need for capacity building for the DAGE.

Risk #3: Significant cuts in budgetary allocations. [Attachment 2. Questionnaire Section 2:

2.1.15.6]

Potential effect of Risk

The budget reduction weakens the MOE’s capacity to implement programs (e.g. acquisition of manuals, classroom construction) and jeopardizes attainment of objectives. It can also affect the

MOE’s ability to address immediate requests from certain projects.

MOE should include in its discussions with the MOF the maintenance of budget commitments to allow for the sustainability of its activities and financial coverage of its strategic plan.

Risk #4: Budget overruns in the course of the year. [Attachment 2. Questionnaire Section 2:

2.1.15.5]

Unexpected costs exceeding budgeted amounts negatively impacts planned activities and allocations for new recruits. Planned activities may not be completed as overruns could result in the diversion of funds from those activities.

The impact is considered marginal and the probability occasional, resulting in a medium risk rating.

Continue to strengthen the salary expenses rationalization policy initiated by the MOE over the past three years. Develop a comprehensive census of teachers and management plan to promote recruitment and retention.

Risk #5: Shortcomings in allocating budgetary resources, specifically the budget allocation criteria do not include important parameters (e.g. performance, remote areas, areas of insecurity). [Attachment 2. Questionnaire Section 2: 2.4.1]

Performance has not been retained as criteria in the allocation methodology. In addition, "remote area" and "area of insecurity" were not taken into account due to the lack of statistical data permitting inclusion of these parameters in the analysis. These could impact the accuracy of the result.

Statistical data for remote and insecure areas should be integrated into the MOE information system. Improve the criteria to incorporate performance.

3. Procurement

The assessment team reviewed the procurement code, the procurement website, and contracting practices and standards being used. In addition, key staff members were interviewed to understand the procurement process. Select items were tested to determine compliance with the regulations and policies.

The management of procurement and delegation of public services obeys the limitations and rules not only of budget programming but also the expenditure chain with respect to the public procurement code, supplemented by the various regulations in effect in Senegal. Procurement is supported by the existence of operational systems at the national level and at the level of the

MOE. At the national level, the functional system is demonstrated through:

● a code of public procurement and its implementing mechanisms

● a priori control bodies ( Central Department of Public Procurement or DCMP)

● a posteriori control bodies with regulatory authority (Public Procurement Regulatory

Agency or ARMP)

● a public procurement management software (Integrated Procurement Management

System or SIGMAP)

At the MOE, the system is demonstrated through the quality of the contracting authority, award and management of procurements, and delegation of services.

The MOE has an institutional framework for procurement awards. There is a procurement unit

(CPM) attached to the General Secretariat. Members are appointed by administrative order No.

00006342 / MEN / SG / PMO 12.22.2015 in accordance with the provisions of the public procurement code. The procurement unit is responsible for ensuring the quality of procurement records and the proper functioning of the procurement commission. The procurement commission and its members are designated by decision No. 00006342/MEN/SG/CPM of

December 22, 2015. This commission is responsible for opening the procurement process, evaluating tenders, and awarding contracts. It is composed of four permanent members (from

DAGE and DPRE) and twelve members representing various beneficiary services. The DAGE chairs the commission.

Establishment of the procurement unit and commission are in compliance with the institutional framework for public procurement management, including the regulatory provisions. The problems faced by the procurement commission are related to the lack of availability of members. In addition, the procurement unit faces logistical problems, a lack of equipment, and insufficiency of staff in quality and quantity. The issues faced pose a risk to the unit’s operational capabilities.

Procurement notices are published through the public procurement portal or through other media such as newspapers. Review of the contract awards for the years from 2013 to 2015 showed that plans were consistently published and available on the government’s public procurement portal.

It was noted, however, that the procurement plan for 2015 underwent 34 revisions up to

December 8, 2015. This many revisions would seem to suggest problems with the procurement planning process. It was determined that the situation was due to the delayed insertion of several procurements into the plan as well as MOF changes in the budgetary allocations that entailed revisions.

The MOE is familiar with different types of offers and did not encounter major difficulties in their use. According to information contained in the quarterly report of December 2015, of the

62 procurements included in the plan, 60 had been started and 59 had been allocated. However, extensions of deadlines for evaluating bids were also frequently authorized. This suggests a difficulty, on the part of the evaluation committees, to meet the 15-day time limit set in the procurement code for the period from bid opening and the provisional contract award date. This situation raises the issue not only of the lack of qualified or available evaluators, but also of deficiencies in planning the bid opening and evaluation sessions. These issues could potentially result in delays in the procurement process.

Deficiencies in record archiving were also observed. Procurement records are not centralized at the procurement unit, the unit identified in the procurement code as responsible for archiving all procurement award documents. Instead, each department archives its own procurement records and files are poorly classified, making them difficult to use. This issue points to the potential risk of loss of information and procurement documents.

The average time observed between the actual date of publication of the tender notice and the actual notification of the contract are: 95 days for the DRP, 125 days for opening tenders, 99 days for restricted invitations to tender, and 51 for the direct agreements. These long delays are related to the capacity of the staff involved at different points in the process and also the quality of the files submitted by the contracting authorities.