Attachment 5_DCN_2021_KOS_004_RCE_Municipal Integrity Activity.pdf

SBU Sensitive But Unclassified

DCN: 2021-KOS-004

REQUEST FOR CATEGORICAL

EXCLUSION1

PROCUREMENT SENSITIVE

PROJECT/ACTIVITY DATA

Project/Activity Name: Municipal Integrity Activity Geographic Location(s) (Country/Region): Kosovo/ Europe and Eurasia Amendment (Yes/No), if Yes indicate # (1, 2...): No Implementation Start/End Dates (FY or M/D/Y):

January 2022- January 2027

If Amended, specify New End Date:

Solicitation/Contract/Award Number(s): N/A Implementing Partner(s): N/A Bureau Tracking ID: DCN: 2021-KOS-004 Tracking ID of Related RCE/IEE (if any): N/A Tracking ID of Other, Related Analyses:

ORGANIZATIONAL/ADMINISTRATIVE DATA

Implementing Operating Unit(s):

(e.g. Mission or Bureau or Office)

USAID/Kosovo

Other Affected Operating Unit(s):

Lead BEO Bureau: E&E

Funding Operating Unit(s):

(e.g. Mission or Bureau or Office)

USAID/Kosovo

Funding Account(s) (if available): N/A Original Funding Amount: $13.5 million

If Amended, specify funding amount: n/a If Amended, specify new funding total: n/a

Prepared by: Jeton Cana Date Prepared: February 03, 2021

ENVIRONMENTAL COMPLIANCE REVIEW DATA

Analysis Type: X Request for Categorical Exclusion ☐Deferral

Environmental Determination(s): X Categorical Exclusion(s) ☐Deferred (per 22 CFR 216.3(a)(7)(iv))

RCE Expiration Date (if applicable): January 2027 Additional Analyses/Reporting Required:

Climate Risks Identified (#): Low ___0___ Moderate ___#___ High ___#___ Climate Risks Addressed (#): Low ___0___ Moderate ___#___ High ___#___

1 USAID/Kosovo/ Municipal Integrity Activity

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 1

RCE TEMPLATE VERSION 3.1

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 2

THRESHOLD DETERMINATION AND SUMMARY OF FINDINGS

PROJECT/ACTIVITY SUMMARY

In Kosovo, poor municipal budget and project planning, procurement irregularities, weak contract management and lack of implementation of external and internal audit findings at the municipal and national level create significant opportunities for corruption. This, in turn, threatens public trust in government, hinders the efficient delivery of critical public services and infrastructure, and further perpetuates and sanctions lawless behavior. The weakness of national oversight bodies engaging on local government finances compounds the problem. Public procurement has been a major source of waste, fraud, and abuse, with public funds used to reward political cronies and politically connected businesses at the local and central levels. Corruption in procurement is particularly salient as government procurement accounts for almost 40% of total public expenditures in Kosovo, compared with 24% regionally.

The Municipal Integrity Activity will address long-standing challenges related to corruption and poor-quality service delivery by the Government of Kosovo, with a focus on municipal procurement, by enhancing public financial management (PFM) and reinforcing accountability mechanisms both within government and outside of government through civil society, the private sector, and media.

ENVIRONMENTAL DETERMINATIONS

Upon approval of this document, the determinations become affirmed, per Agency regulations (22

CFR 216).

TABLE 1: ENVIRONMENTAL DETERMINATIONS

Projects/Activities Categorical Exclusion Citation (if applicable) Deferral2

Activity Name: Municipal Integrity Activity

Categorical Exclusion ☐

(1): National accountability agencies provide more effective and coordinated financial oversight;

Categorical Exclusion ☐

(2): Governments increase use of good practices in budget planning, public procurement, and contract management;

Categorical Exclusion ☐

(3): Government advances norms and practices that support internal audit and accountability;

Categorical Exclusion ☐

2 Deferrals must be cleared through an Amendment to this RCE prior to implementation of any deferred activities.

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(4) Civil society, media, & the private sector improve the integrity of public and private sector actors in public procurement

Categorical Exclusion ☐

CLIMATE RISK MANAGEMENT

The climate change screening analysis for the entire Mission’s activities was updated in January 2020. The climate risk screening under 2.2 of this RCE has been completed and rated low. No climate change considerations are identified. If during the implementation any climate change considerations are identified, they will be taken into consideration on how the activity will affect or be affected by medium, long-term climate change impacts (changes in rainfall, temperature, length of growing season, land conversion, etc.) and how the activity should be adjusted in consideration of climate change vulnerabilities.

BEO SPECIFIED CONDITIONS OF APPROVAL

IMPLEMENTATION

In accordance with 22 CFR 216 and Agency policy, the conditions and requirements of this document become mandatory upon approval. This includes the relevant limitations, conditions and requirements in this document as stated in Section 3 of this RCE and any BEO Specified Conditions of Approval.

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 4

USAID APPROVAL OF INITIAL ENVIRONMENTAL EXAMINATION

PROJECT/ACTIVITY NAME: Municipal Integrity Activity

Bureau Tracking ID: 2021-KOS-004

DISTRIBUTION: Activity Manager, MEO, IEE file

PROJECT AND ACTIVITY DESCRIPTION

1.1 PURPOSE OF THE RCE

The purpose of this document is to establish that all proposed projects/activities belong to classes of actions eligible for Categorical Exclusions as set out in Agency regulations (22 CFR 216.2(c)) and that there are no foreseeable significant direct or indirect impacts that would preclude them from receiving a Categorical Exclusion. Upon approval of this document, the Categorical Exclusions are affirmed for the project/activity. This analysis also documents the results of the project/activity level Climate Risk Management process in accordance with USAID policy (specifically, ADS 201 mandatory reference 201mal).

This RCE is a critical element of USAID’s mandatory environmental review and compliance process meant to achieve environmentally sound activity design and implementation.

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 5

1.2 PROJECT/ACTIVITY OVERVIEW

The Activity, in partnership with a broad spectrum of local stakeholders, such as municipalities, central government, independent agencies, civil society and private sector, as well as other donors, will be focused on implementation of the public procurement legislation and further advancing reforms that will prevent corruption in the area of public procurement and public finance management, as well as strengthening the accountability mechanisms in the public procurement by improving national accountability agencies oversight, internal control and contract management.

1.3 PROJECT/ACTIVITY DESCRIPTION

The Municipal Integrity Activity will address long-standing challenges related to corruption and poor-quality service delivery by the Government of Kosovo, with a focus on municipal procurement, by enhancing public financial management (PFM) and reinforcing accountability mechanisms both within government and outside of government through civil society, the private sector, and media.

Expected results under Objective 1: National accountability agencies provide more effective and coordinated financial oversight, are:

● Regulation, Oversight and Complaints Resolution of Procurement Strengthened

● National Support for Internal and External Audit of Municipal Finances Improved

Expected results under Objective 2: Governments increase use of good practices in budget planning, public procurement and contract management, are:

● Planning of municipal budgets (especially in capital investments) improved

● Integrity and Efficiency of Municipal Procurement Enhanced

● Management of Public Contracts and Expenses Strengthened

Expected results under Objective 3: Government advances norms and practices that support internal audit and accountability, are:

● Government adopt improved internal audit and control measures.

● Leadership and elected officials promote integrity and efficiency in municipal finance.

Expected results under Objective 4: Civil society, media, & the private sector improve the integrity of public and private sector actors in public procurement, are:

● Civil society organizations engage and generate support for improved municipal finance and help build a culture of accountability in public procurement.

● Media provides greater understanding and oversight of municipal finance to the public.

● Public-private dialogue on procurement challenges reinforced and private sector integrity in procurement improved.

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 6

TABLE 2: DEFINED OR ILLUSTRATIVE PROJECTS/ACTIVITIES AND SUB-ACTIVITIES

Project/Activity 1 — Municipal Integrity Activity (1): National accountability agencies provide more effective and coordinated financial oversight;

(2): Governments increase use of good practices in budget planning, public procurement and contract management;

(3): Government advances norms and practices that support internal audit and accountability;

(4): Civil society, media, & the private sector improve the integrity of public and private sector actors in public procurement

2.0 ENVIRONMENTAL ANALYSIS

2.1 JUSTIFICATION FOR CATEGORICAL EXCLUSION

The activities under the Municipal Integrity Activity are among the classes of actions listed in 22 CFR 216.2(c)(2) and have no foreseeable significant direct adverse effect on the environment.

Therefore, under 22 CFR 216.2(c)(2), neither an IEE nor an EA will be required for these activities.

Instead, a Categorical Exclusion is recommended for the projects/activities described above in Section 1.3 as follows:

TABLE 3: RECOMMENDED DETERMINATION FOR CATEGORICAL EXCLUSION

Municipal Integrity Activity

Recommended Determination for Categorical Exclusion

216.2(c)(2)(i) Education, technical assistance, or training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.).

216.2(c)(2)(iii) Analyses, studies, academic or research workshops and meetings

2.2 CLIMATE RISK MANAGEMENT

Kosovo’s climate is expected to become warmer and drier over time (see the USAID Climate Change Risk Profile, Kosovo3). To minimize the negative impacts of climate change, USAID is required by ADS 201mal4 to incorporate climate change risk screening for all new projects as of October 1, 2016, to better adapt to climate change and maximize results.

The climate risk screening in Annex 1 has been done by the Mission’s Climate Integration Lead (CIL) in collaboration with the technical team and is rated as Low. No climate change considerations are identified. If during the implementation any climate change considerations are identified, they will be taken into consideration on how the activity will affect or be affected by medium, long-term climate change (CC) impacts (changes in rainfall, temperature, length of

4 https://www.usaid.gov/sites/default/files/documents/1868/201mal_042817.pdf https://www.climatelinks.org/sites/default/files/asset/document/2017_USAID_Climate%20Change%20Risk% 20Profile%20-%20Kosovo.pdf

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 7

RCE TEMPLATE VERSION 3.1

https://www.climatelinks.org/sites/default/files/asset/document/2017_USAID_Climate%20Change%20Risk%20Profile%20-%20Kosovo.pdf https://www.climatelinks.org/sites/default/files/asset/document/2017_USAID_Climate%20Change%20Risk%20Profile%20-%20Kosovo.pdf growing season, land conversion, etc.) and how the activity should be adjusted in consideration of climate change vulnerabilities.

3.0 LIMITATIONS OF THE CATEGORICAL EXCLUSION

The categorical exclusions recommended in this document apply only to projects/activities and sub-activities described herein.

Other projects/activities that may arise must be subject to an environmental analysis and the appropriate documentation prepared and approved, whether it be a new Request for Categorical Exclusion, an amendment, or other type of 22 CFR 216 document.

It is confirmed that the projects/activities described herein do not involve actions normally having a significant effect on the environment, including those described in 22 CFR 216.2(d).

3.1 MANDATORY INCLUSION OF ENVIRONMENTAL COMPLIANCE REQUIREMENTS IN

SOLICITATIONS, AWARDS, BUDGETS, AND WORK PLANS

USAID will ensure the environmental compliance requirements are incorporated into solicitations, awards, budgets, and work plans, including relevant limitations of Section 3 above. In addition, climate risk management requirements will also be incorporated.

3.2 GENERAL IMPLEMENTATION & MONITORING REQUIREMENTS (IF APPLICABLE)

USAID will ensure that the following requirements are met:

● Provide briefings for Implementing Partner (IP) on environmental compliance responsibilities

● Ensure integration of compliance responsibilities in prime and sub-awards and grant agreements.

● Ensure compliance with applicable partner country requirements

● Annual review of project activities to ensure that scope is still covered by Categorical

Exclusion

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 8

ANNEX 1. ACTIVITY CLIMATE RISK MANAGEMENT SUMMARY TABLE

Tasks/Defined or Illustrative Interventions

Climate Risks5 Risk Rating6

How Risks are Addressed7 Opportunities to Strengthen Climate Resilience8

(1): National accountability agencies provide more effective and coordinated financial oversight;

No risks identified

Low

The implementer will track any information related to climate risk, if applicable.

N/a

(2): Governments increase use of good practices in budget planning, public procurement and contract management

No risks identified

Low The implementer will track any information related to climate risk, if applicable.

N/a

(3): Government advances norms and practices that support internal audit and accountability;

No risks identified

Low The implementer will track any information related to climate risk, if applicable.

N/a

(4): Civil society, media, & the private sector improve the integrity of public and private sector actors in public procurement

No risks identified

Low The implementer will track any information related to climate risk, if applicable.

N/a

8 Describe opportunities to achieve multiple development objectives by integrating climate resilience or mitigation measures

7 Describe how risks have been addressed in activity design and/or additional steps that will be taken in implementation.

If you choose to accept the risk, briefly explain why.

6 Low/Moderate/ High 5 List key risks related to the defined/illustrative interventions identified in the screening and additional assessment.

EUROPE AND EURASIA/ USAID/KOSOVO/ MUNICIPAL INTEGRITY ACTIVITY 9