Argentina - Decentralization and Improvement of Secondary Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 23814 IMPLEMENTATION COMPLETION REPORT (CPL-37940; SCL-3794A; SCPD-3794S; TF-23028; TF-25276; TF-29190) ONA LOAN IN THE AMOUNT OF US$190 MILLION TO THE REPUBLIC OF ARGENTrINA FOR A AR-SECONDARY ED 1 03/29/2002 Human Development Sector Argentina, Chile, Paraguay and Uruguay Country Management Unit Latin America and Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective ) Currency Unit = Argentinean Peso AR$1 = US$ 0.5089 (February 2002) US$ 1 = AR$1.965 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS AG Argentinean Government AGN National Auditing Agency CAS Country Assistance Strategy ECSE Education Sector Cost Studies IDECE Institute for the Assessment of Quality of Education IIEP UNESCO's International Institute of Educational Planning (Buenos Aires office) NMCE National Ministry of Culture and Education NME National Ministry of Education NPCU National Project Coordination Unit PBA Province of Buenos Aires PMEs Provincial Ministries of Education PPCU Provincial Project Coordination Unit PREGASE Provincial Institutional Strengthening Program of the PMEs PRODYMES Proyecto de Descentralizaci6n y Mejoramiento de la Secundaria y Desarrollo de la Educaci6n Polimodal PROFOR Program for the Training of Managers of the Education Sector REDFIED National Education Information System SAF Administrative Financial System SINEC National Student Assessment System Vice President: David de Ferranti Country Manager/Director: Myra L. Alexander Sector Manager/Director: Ana-Maria Arriagada Task Team Leader/Task Manager: Juan Prawda  FOR OFFICIAL USE ONLY ARGENTINA AR-SECONDARY ED 1 CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 16 6. Sustainability 21 7. Bank and Borrower Performance 23 8. Lessons Leamed 28 9. Partner Comments 30 10. Additional Information 31 Annex 1. Key Performance Indicators/Log Frame Matrix 32 Annex 2. Project Costs and Financing 34 Annex 3. Economic Costs and Benefits 36 Annex 4. BankInputs 37 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 40 Annex 6. Ratings of Bank and Borrower Performance 41 Annex 7. List of Supporting Documents 42 Annex 8. Beneficiary Survey Results 43 Annex 9. Stakeholder Workshop Results 45 Annex 10. Borrower's Contribution 47 This document has a restricted distribution and may be used by recipients only in the perforrnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   Project ID: P005992 Project Name: AR-SECONDARY ED 1 Team Leader: Juan Prawda TL Unit: LCSHE ICR Type: Intensive Learning Model (ILM) of ICR | Report Date: March 29, 2002 1. Project Data Name: AR-SECONDARY ED 1 LIC/TFNumber: CPL-37940; SCL-3794A; SCPD-3794S; TF-23028; TF-25276; TF-29190 Country/Department: ARGENTINA Region: Latin America and Caribbean Region Sector/subsector: ES - Secondary Education KEY DATES Original Revised/Actual PCD: 07/28/1992 Effective: 01/01/1995 08/18/1995 Appraisal: 02/22/1994 MTR: 07/01/1997 04/20/1998 Approval: 09/15/1994 Closing: 06/30/2000 06/30/2001 Borrower/Implementing Agency: ARGENTINE REPUBLIC/NATIONAL MINISTRY OF CULTURE AND EDUCATION AND THE MINISTRIES OF EDUCATION OF THE PROVINCES OF: BUENOS AIRES; ARGENTINE REPUBLIC/MENDOZA; ARGENTINE REPUBLIC/MISIONES; ARGENTINE REPUBLIC/NEUQUEN; ARGENTINE REPUBLIC/RIO NEGRO AND SANTA FE. Other Partners: STAFF Current At Appraisal Vice President: David De Ferranti Shahid Javed Burki Country Manager: Myrna L. Alexander Ping-Cheung Loh Sector Manager: Ana-Maria Arriagada Julian F. Schweitzer Team Leader at ICR: Juan Prawda Luis Pisani ICR Primary Author: Juan Prawda 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL--Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objective of this project, known in Argentina as PRODYMES I (Primer Proyecto de Descentralizaci6n y Mejoramiento de la Secundaria y Desarrollo de la Educaci6n Polimodal), was to increase student learning in participating provinces through strengthening their and the Borrower's institutional capacity in the secondary education subsector, under a decentralized framework. It also aimed to: (a) improve the overall quality and efficiency of secondary education; and (b) increase and enhance the participating provinces' school facilities to serve better the secondary school-aged population. The original seven PRODYMES I participating provinces were: C6rdoba, La Pampa, Mendoza, Misiones, Neuquen, Rio Negro and Santa Fe. These provinces were selected based on evidence of their willingness to: (i) embrace the secondary education reform; and (ii) co-finance the project with provincial counterpart funds. In addition, the AG manifested their intention to use PRODYMES I as a learning experience to include in subsequent sector investments (PRODYMES II) in other provinces under a poverty alleviation targeting criteria. Accordingly, PRODYMES II was targeted to 630 high-risk secondary schools in the entire country. 3.2 Revised Objective: The original objectives remained unchanged throughout project implementation. 3.3 Original Components: The following three components, to be implemented at the national and provincial levels, were included in the original Loan Agreement: (i) Institutional Strengthening; (b) Quality Improvement; and (c) Infrastructure: Construction, expansion and rehabilitation. Institutional Strengthening included the following five-subcomponents: 1. Establishment and operation of a national management information system (REDFIED) to provide information on: (a) education statistics; (b) educational infrastructure; (c) socio-demographic trends; (d) number and profile of the National Ministry of Culture and Education's (NMCE) human resources by level and location; (e) budgeting and accounting; (f) educational facilities; and (g) educational documentation and research. 2. Establishment and operation of a national student's assessment system (SINEC) to: (a) provide information and monitor student academic achievement nationwide; (b) define policies and strategies to improve education quality; (c) process, create, and disseminate information on student achievement; (d) assist the provinces in establishing their own student academic achievement tests; and (e) compile academic achievement information by the provinces. 3. Strengthening of NMCE's management, financiaL and administrative capacity (SAF) by improving: (a) the administrative and financial accounting system; (b) procurement procedures for the provision and distribution of didactic and administrative materials; (c) the management and maintenance of physical facilities; and (d) the management of personnel. 4. Establishment of a postgraduate training program (PROFOR) within Argentina, as well as an abroad training program for about 200 high-level professionals in the following areas: (a) education policy and - 2 -  management; (b) economics of education and financing; (c) educational learning assessment; and (d) curriculum improvement and innovation. 5. Institutional strengthening programs for the NMCE and provincial Ministries of Education (PMEs), provided assistance in creating: (i) action plans to overcome inefficiencies in the use of human and physical resources by the NMCE and PMEs, including, among these, a review of the quality and timeliness of existing personnel databases and their corresponding payroll databases; and (ii) the assessment of procedures and practices in the personnel department of the NMCE and PME's, through a sample survey of staffing requirements and salary schedules by function, and an analysis of the NMCE and PME's policies and practices with regard to personnel compensation, incentives and attendance. Institutional strengthening programs also targeted the development of: (iii) administrative organizations with efficient resources and procedures; (iv) educational and financing planning capacity; (v) a human resources policy; (vi) a management information system; and (vii) student assessment systems. Given the limited capacity of the participating provinces to carry out the studies and subsequent action plans for the institutional strengthening subcomponents of this project (from (i) to (vii) above), NMCE decided in 1996 to establish the Programa de la Reforma de la Gesti6n Administrativa de los Sistemas Educativos Provinciales (PREGASE) aimed at providing direct technical support as well as implementing a cost model to estimate the cost of the key factors of the educational reform (ECSE). Appraisal estimate total cost and Rating Components financing (US$ million) Total IBRD Nation & Provinces Institutional Strengthening 81.59 55.45 29.53 National education information system HS (REDFIED) National student assessment system HS (SINEC) Strengthening of financing, budgeting U and administrative capacity (SAF) Education costs and productivity U program (ECSE) Training and upgrading of educational S administrators and technical staff (PROFOR) Institutional reform of Provincial S Ministries of Education (PREGASE) Quality Improvement 85.43 55.05 38.47 Curriculum development S Teacher training S Textbooks, didactic material and S equipment Infrastructure 74.38 57.33 9.93 HS National and Provincial Project 27.28 22.18 0.74 S Coordination Units Total 268.67 190.00 78.67 S - 3-  Quality Improvement of secondary education included the following activities: (i) curriculum development; (ii) the provision of in-service teacher training; (iii) the provision of textbooks and other learning materials; (iv) the development of information workshops; and (v) the development of school-based grant program. Infrastructure (construction, expansion and rehabilitation) included the following two sub-components: (i) the carrying out of an inventory of NMCE's facilities and preparation and implementation of a rehabilitation and maintenance plan for such facilities; and (ii) the construction, expansion and rehabilitation of secondary educational schools, and PMEs' regional and local administrative facilities. 3.4 Revised Components: The project experienced four amendments, none of which substantially affected the original objectives. The first amendment made to the Loan Agreement on December 21, 1995 (countersigned by the Minister of Economy and Public Works and Services on February 12, 1996) aimed at addressing slow project start-up. This slow start was mainly caused by: (i) a lack of provincial counterpart funding; (ii) considerable delays in the approval and signing of the provincial subsidiary agreements requiring in each case a specific Law of Indebtedness; (iii) delays in establishing and putting in motion in the provinces qualified implementation units; (iv) the lack of specific first-year provincial action-plans, especially procurement plans; (v) different interpretations by NMCE and the PMEs with respect to the decentralization model envisaged by the education reform; and (vi) an abrupt transfer of secondary schools to the provinces in 1993 which did not allow for sufficient time to ensure appropriate enabling conditions for a speedy and effective implementation of this decentralization process at the provincial level. This amendment: (a) defined the participating provinces more precisely; (b) offered the opportunity to include new provinces during project implementation; (c) set rules for the continuation of participating provinces in the project; (d) confirmed the provinces' obligation to make available counterpart funding required for project implementation; and (e) established project performance indicators and targets and the need to update them. Subsequently, during the implementation cycle, and based on the flexibility provided by this amendment, the provinces of C6rdoba and La Pampa, participants under the original Loan Agreement, decided in 1996 not to continue in PRODYMES I, due to lack of provincial counterpart funds, while the Province of Buenos Aires joined the project in December 1997. The second amendment to the Loan Agreement was made on November 19, 1998. This amendment was requested by the Borrower to reflect mainly an increase in the civil works component and a decrease in the acquisition of goods under the project. The amendment included: (i) changes to Annex I with respect to the distribution of the loan proceeds by expenditure category; (ii) changes in Category V for expenditures of the National and Provincial Coordination Units; and (iii) increases in amounts reimbursable through Statements of Expenditure for certain purchasing categories relating to bids in Annex IV. In 1999, the Borrower decided to request a cancellation of part of the Loan based on the following considerations: (i) the start of an economic recession causing the AG to identify possible savings; (ii) unforeseen economies of scale achieved in the infrastructure component as compared to the unit costs estimated at appraisal; and (iii) availability of other sources of funding, especially the Plan Social financed by the AG, to finance textbooks and learning materials. Consequently, a third amendment to the Loan Agreement took place on April 12, 1999 (countersigned on August 6, 1999 by the National Minister of Economy) which included: (a) the reduction of US$20 million of the loan principal and the redistribution of expenditure categories in Annex I; (b) the change in some pari-passus in Annex 1; and (c) the increase of the special account to US$15 million in Annex V. - 4 -  The severity of the financial crisis made the Borrower request a fourth amendment, communicated to the Argentine Government (AG) by telex on August 10, 1999. This amendment extended the closing date from June 30, 2000 to June 30, 2001, to allow more time to complete project activities. Finally, the Bank authorized on April 16, 2001, an extension to October 31, 2001 of expenditures required to complete 59 works in progress, maintaining the revised closure date of the remaining expenditure categories to June 30, 2001 (the list of the 59 construction sites is attached to the Bank's amendment letter and has been electronically filed). 3.5 Quality at Entry: Even though no formal Quality at Entry Criteria was available at the time this project was prepared and appraised in the period 1992-1994, this report follows Bank Quality Assurance Group standards. Firstly, the project was consistent with the Argentina's Country Assistance Strategy (CAS) available at that time (Report No. 14278-AR of April 10, 1995). Secondly, the preparation process had the political support of the AG and was prepared by technical teams of the NMCE and the participating provinces, thus ensuring design appropriation by the Borrower. Thirdly, relevant lessons leamed from the Bank's secondary education experience in other countries at the time of project preparation were included in the project design. Fourthly, although Bank lending preparation-appraisal guidelines in 1994 did not require the inclusion of a formal economic analysis in the Staff Appraisal Report for education-type investments, an economic analysis of the benefits arising from the project was nevertheless carried out. This economic analysis based the project benefits on a comparison between the investment and incremental operational costs against the potential saving resulting from it, such as: (i) reduced repetition; (ii) incremental completion of the secondary cycle; (iii) improved students/teachers ratios; and (iv) improved efficiency of administrative operations. The social and implementation capacity (at the national and provincial levels) assessments made during preparation were not conducted with the same rigor and depth required currently by the Bank in new education sector investments. No project implementation capacity at the national and provincial levels in the context of the secondary education decentralization process taking place at the start of the project was conducted. Finally, no baseline data of project performance indicators were available at the start of project implementation (they were only made available after the first amendment to the Loan Agreement, and only for some provinces). 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: General assessment by the ICR mission. Based on documentation review, field visits to secondary schools in the project provinces of Buenos Aires, Mendoza, Misiones, Neuquen, Rio Negro and Santa Fe, discussions held with the national and provincial educational authorities, the beneficiary survey carried out by an independent and qualified NGO (see Annex 8) and the stakeholders workshop (see Annex 9), the ICR mission concluded that the overall implementation of this project was satisfactory. The ICR notes that PRODYMES I provided fertile grounds to experiment with diverse interventions to effectively address similar institutional strengthening and school infrastructure issues in the distinct project provinces. PRODYMES I, as a first Bank-financed investment in education in Argentina, also served as an important laboratory for both the Borrower and the Bank to change the orientation of subsequent Bank-financed education sector projects in Argentina (PRODYMES II, III and HI-A). In effect, once the Federal Education Law was sufficiently internalized by almost all the provinces in the country, these subsequent investments placed particular importance on improving the quality of education. PRODYMES - 5-  II financed quality improvement interventions in the classrooms of 630 targeted (high-risk) EGB3 schools throughout the entire country; PRODYMES III concentrated on the EGB3 and polimodal schools of the Province of Buenos Aires (PBA); and PRODYMES III-A worked in about 200 EGB3 full-time schools in PBA. Although the original overall objective of the project was to increase student learning in the participating provinces, specifically through the quality improvement component, the Borrower did not invest sufficiently in either the design nor the implementation of the project to clearly achieve this objective. Instead, the real project thrust was focused from the very beginning of project implementation on institutional strengthening and infrastructure. It became obvious to NMCE at the early stages of project implementation that before addressing the secondary education quality improvement issues it was important to first address: (a) the limited administrative, financial, planning, and management capacity at both the national and provincial levels; and (b) the inadequate infrastructure. In addition, at the time the Loan became effective in January 1995, the NMCE considered that the Federal Education Law approved in 1993 needed additional time to be internalized by each province to adequately conduct their secondary education curricular transformation, and thus, the design and implementation of appropriate quality improvement interventions under this project (which were carried out at the latter stages of project implementation in a limited fashion). Accordingly, it is not surprising to find (as attested in the first table of Annex 2) that, compared to the project cost estimates at appraisal (without price and physical contingencies), the actual expenditure shows overspending of almost 130% in the institutional strengthening component and of 154% in the infrastructure component and an underspending of about 61.5% in the quality improvement component. Furthermore, almost the total amount allocated to physical and price contingencies (US$45.37 million) was reallocated to the infrastructure component during the implementation cycle. In what follows, ratings are provided to the achievements of each one of the original project objectives. Strengthening the institutional capacity in the secondary education sectors of NMCE and PMEs. Overall, this project outcome was rated satisfactory, with some mixed outcomes. Two project sub-components produced highly satisfactory results: the establishment of a national statistical information system and a student learning assessment system (REDFIED and SINEC respectively). In other sub-components, such as the SAF and ECSE, the ICR mission did not find evidence of sufficient significant contribution and/or impact in terms of their originally stated objectives compared with their significant implementation costs. Nor did the ICR mission encounter a firm guarantee on the part of the current National Ministry of Education (NME), formerly the NMCE, and/or the PMEs, concerning their sustainability. For these reasons, the ICR mission rated these two sub-components as unsatisfactory. Other sub-components related to this project objective, such as the strengthening of institutional management (subsequently reconverted and enhanced in PREGASE) and PROFOR, were implemented satisfactorily with varying degrees of progress in the different provinces (explained below in Section 4.2 Component 2). Improve secondary education efficiency. Based on available information comparing baseline data on indicators from 1994 for the EGB3 and polimodal levels with 2000 data and averaged for the six provinces (table 4.1), the ICR mission rated the improvement of secondary education efficiency as satisfactory. - 6 -  TABLE 4.1 PROVINCIAL IMPACT PERFORMANCE INDICATORS Buenos Aires Mendoza Misiones Neuquen Rio Negro Santa Fe Average (simple) 94 00 94 00 94 00 94 00 94 00 94 00 94 00 INTERNAL EFFICIENCY 1. Secondary education net enrollment rates (%) 61.6 74.4 NA 71.3 NA 49.8 70.9 74.5 57.8 63.2 50.1 51.3 60.1 64.1 2. Gross transition rate from 7th to 8th grade (%) 91.7 95.0 90.6 98.9 86.1 97.0 89.3 100 91.5 96.0 90.8 107 90.8 98.9 3. Repetition rates (%) I___I_ First grade (8th) 11.8 5.0 16.4 13.7 11.4 9.0 19.0 21.2 24.7 22.4 10.2 12.8 15.6 14.0 Second grade (9th) 14.8 7.5 19.4 15.5 16.7 10.6 20.7 22.3 23.0 18.6 12.3 13.4 17.8 14.7 Third grade (lOth) 11.0 5.0 13.3 11.1 12.3 10.5 16.9 18.0 15.0 10.5 9.3 9.2 13.0 10.7 Fourth grade (I Ith) 6.2 5.0 8.4 5.3 6.8 5.1 10.9 10.8 11.2 8.1 5.0 4.6 8.1 6.5 Fifih grade (12th) 2.1 4.0 2.2 1.3 1.7 1.1 2.4 1.8 1.6 0.5 0.9 0.8 1.8 1.6 INSTITUTIONAL STRENGTHENING INDICATORS 4. Number of student places per school shift in PRODYMES I secondary schools (thousands) 15.9 17.4 8.1 10.9 11.4 13.4 24.5 28.7 6.2 10.1 108. 111 174 191 FINANCIAL INDICATORS _ __._ 5. Expenditure ratio of substitute teachers as percentage oftotal expenditure 10.2 6.7 30.0 31.2 17.8 13.8 16.8 15.1 23.4 25.7 15.0 11.4 18.9 17.4 on teaching staff in EGB3 and polimodal cycle (%/o) 6. Expenditure ratio of teaching and non-teaching personnel out of total 90.1 92.2 96.8 93.4 92.1 90.3 86.9 91.2 98.2 81.0 97.3 96.9 93.6 90.8 provincial education budget (%) 7. Expenditure ratio of teaching and non-teaching personnel out of total 98.3 87.9 97.8 89.5 99.9 94.6 89.7 93.2 98.2 79.8 98.5 97.2 97.1 90.3 provincial education budget in EGB3 and polimodal (%/o) _ 8. Ratio of non-personnel expenditure out oftotal 9.9 7.8 3.2 6.6 7.9 9.7 13.1 8.8 12.2 12.4 2.7 3.1 6.4 8.1 provincial education budget (%) _ 9. Ratio of administrative and technical personnel expenditure out of total 16.1 12.4 9.0 8.4 9.1 9.6 3.7 4.6 16.1 8.2 1.7 2.0 9.3 7.5 provincial personnel expenditure in the education sector (%/6) Source: IDECE, 2001 ECSE. Costs studies based on provincial executed budgets for 1994 and 2000. In effect, the impact performance indicators show that: (i) the net enrollment rate of the relevant age population increased from 60.1 to almost 64.1% (the Province of Buenos Aires shows a strong performance with an increase of 20.8%); (ii) the gross transition rate from seventh grade (last year of primary education) to eight grade (first year of secondary education) increased from 90.8 to 98.9%; (iii) the repetition rate declined for each grade; (iv) the installed capacity in terms of number of student places per shift in PRODYMES I secondary schools increased from 174,100 to 191,500 (strong performances are shown in Rio Negro with an increase of 62.9% and Mendoza with 34.6%); (v) the expenditure ratio of substitute teachers as a percentage of total expenditure on teaching staff declined from 18.9 to 17.4% (strong performances are shown in the Province of Buenos Aires with a decline of 34.3%, Santa Fe with 24% and Misiones with 22.5%); (vi) the expenditure ratio on teaching and non-teaching personnel as a - 7 -  percentage of the total expenditure on education declined from 93.6 to 90.8%; (vii) the expenditure ratio on teaching and non-teaching personnel as a percentage of the total expenditure on education in EGB3 and polimodal declined from 97.1 to 90.3%; (viii) the expenditure ratio of goods, services and capital investments in relation to the expenditure on education increased from 6.4 to 8.1% (Mendoza shows a strong performance with an increase of 106.2%); and (ix) the expenditure ratio of administrative and technical staff as a percentage of the expenditure on personnel in the education sector declined from 9.3 to 7.5% (Rio Negro displays a strong performance with a decrease of 49%). In addition, table 4.2 indicates the following project performance indicators averaged for the six project provinces: (a) the inter-grade promotion rate increased, except for the last (5th) polimodal grade; (b) the dropout rates during the school year declined in EGB3 but increased in the polimodal cycle; and (c) the students per section increased except in the last two polimodal grades. Given the overall results in the comparison of the performance indicators despite some mixed outcomes (as shown in tables 4.1 and 4.2). TABLE 4.2 ADDITIONAL IMPACT PERFORMANCE INDICATORS (Average in the project provinces) INTERNAL EFFICIENCY 1994 2000 1. Inter.-grade promotion rates in secondary education (%) First grade (8th) 65.0 69.4 Second grade (9th) 62.9 66.5 Third grade (1Oth) 73.8 77.8 Fourth grade (1 Ith) 85.0 85.7 Fifth grade (12th) 87.2 73.3 2. Dropout rates during the school year (%) First grade (8th) 18.0 15.5 Second grade (9th) 15.6 15.5 Third grade (10th) 6.8 10.4 Fourth grade (I Ith) 7.9 6.9 Fifth grade (12th) 23.4 24.5 3. Students per section in each grade of the EGB3 and polimodal cycles First grade (8th) 25.6 26.9 Second grade (9th) 23.4 25.7 Third grade (10th) 21.9 23.9 Fourth grade (I 1th) 24.9 21.4 Fifth grade (12th) 22.8 19.2 Increase secondary education student learning in the participating provinces. According to information made available by the Instituto de Evaluaci6n de la Calidad Educativa (IDECE) at the time of the ICR mission, achievement in language declined in the 1995-2000 period in every PRODYMES I province, while achievement in math improved in every province except the Province of Buenos Aires (table 4.3). It is difficult to assess the degree to which the project contributed to these failures and accomplishments, and/or explain the relevant reasons for these changes, as no experimental design, including a control group, was set at the outset of project implementation (PRODYMES III-A, for example, includes an experimental design to measure changes in project and non-project schools of similar socio-economic conditions). In addition, and as mentioned before, notwithstanding that one of the formal PRODYMES I objectives was to improve learning outcomes, increased access and institutional strengthening at the provincial and national levels became in practice the essence of the project's design and implementation. -8 -  TABLE 4.3 PROVINCIAL LEARNING PERFORMANCE INDICATORS Buenos Mendoza Misiones Neuquen Rio Negro Santa Fe Average PROVINCE Aires (simple) YEARS 95 00 95 00 95 00 95 00 95 00 95 00 95 00 SPANISH IN 91h GRADE (2"'d of EGB3) 60.7 50.4 58.7 53.1 45.3 43.5 56.9 56.6 57.0 54.8 54.7 55.6 55.5 52.3 MATH IN 9"' GRADE (2n of EGB3) 56.0 52.7 52.1 57.7 32.6 44.1 51.7 59.8 49.4 59.6 49.2 62.2 48.5 56.0 * The latest data for Neuqu6n is for the year 1999. Source: IDECE, Ministerio de Educaci6n de la Naci6n, 2001. IDECE integrated in 2001 in one parastate institution the former SINEC and REDFIED in the post-project period. On the qualitative dimension, the application of the new EGB3 and polimodal curricular frameworks were implemented satisfactorily with different degrees of progress in the provinces. All the project provinces, except Neuquen, completed the curricular transformation of EGB3. Mendoza, Misiones and Santa Fe were applying the new curricular framework in the first polimodal grade, and the province of Buenos Aires had completed the design of the new curricular framework in all the grades of the polimodal education at the time of the ICR mission. The project also supported, in a very limited and non-systemic fashion, the design and start-up in some provinces with training programs for management, supervisory and teaching staff in institutional and curricular management techniques under the new curricular framework. In addition, some provinces like Mendoza, Misiones and Neuquen, carried out limited purchases of textbooks under the project, and others like Mendoza, Misiones and Santa Fe, supported the preparation and dissemination of teachers' workbooks consistent with the new curricular designs. As mentioned before, the relevant contribution of PRODYMES I in the quality improvement dimension is that it served as laboratory for the design and implementation of more focused and holistic quality improvement programs in subsequent Bank-financed interventions (PRODYMES II, III and III-A). Infrastructure (construction, expansion and rehabilitation). Based on available information (detailed in Section 4.2), the implementation of the infrastructure sub-component including the provision of school furniture was rated as highly successful. This rating is based on the fact that: (i) original construction targets at the time of appraisal were exceeded; (ii) the construction unit costs estimated at appraisal decreased during the implementation; (iii) access to EGB3 and the polimodal cycle was increased, (iv) innovative construction designs attuned to the provinces' climate conditions were implemented; and (v) rental costs of school facilities decreased. 4.2 Outputs by components: Component 1. Institutional strengthening. (a) REDFIED. This sub-component aimed at strengthening the statistical information-gathering mechanisms, including: (i) developing a means of linking all the uncoupled provincial educational information systems with the REDFIED that existed up to the mid-nineties; (ii) increasing the relevancy, opportunity and reliability of the education statistical information; and (iii) improving the diagnostic capacity of the education sector at the school, provincial and national levels. To carry out these objectives, REDFIED: (a) conducted annual surveys as of 1996 and systematized the information; (b) included provincial socio-educational information in the system; (c) conducted a National Census of School Infrastructure in 1998; (c) provided training; (d) acquired computer equipment and appropriate software for the national and provincial teams; (e) established procedures and instruments to gather, process and -9-  analyze information; (f) standardized information at the national level; (g) conducted periodically quality-control supervisions; (h) disseminated results (44 documents were published); (i) provided technical assistance in information technology to all provinces; and (j) conducted relevant research. The ICR mission noted that notwithstanding the above-mentioned achievements, there are still issues pending that need to be further addressed, such as: (i) the provincial statistical units are still weak and dependent on the national level; (ii) it is necessary to continue strengthening the provinces' commitment to ensure timely, reliable and valid information; (iii) the information-gathering processes at the school level are neither fully computerized nor updated in real time; (iv) the dissemination mechanisms do not cover the universe of users that require the information to make decisions on education; and (v) REDFIED activities are not appropriately linked with those of SINEC. In addition, the ICR mission observed that: (a) the links of REDF1ED with the budget planning and programming activities of NME and the PMEs as well as with other national and international information networks are insufficient; (b) the Teacher Census that was scheduled for 1998 was never carried out; and (c) the School Census of 2001 was not carried out due to lack of budget. In 2000, the NMCE decided to integrate SINEC and REDFIED in one institution: Instituto para el Desarrollo de la Calidad Educativa (IDECE - Institute for the Development of Education Quality). At the time of the ICR mission, IDECE was just beginning to try to integrate these two information systems. (b) SINEC. This sub-component aimed at improving the still incipient learning assessment system, which was established in 1993 in order to: (i) provide timely information on student learning outcomes throughout the country; and (ii) assist in the definition of policies and strategies to improve the quality of education. The learning assessment system started receiving financial support from PRODYMES I in 1995. To achieve its project objectives, SINEC: (a) provided training to national and provincial technical teams including the development of relevant training materials; (b) prepared a bank of learning-measurement items for different curricular disciplines and grades, and validated the prototype instruments on a sample of 37,500 students; (c) applied annual sampling operations in several grades (3rd, 6th, 7th and 9th) as of 1993 and census-based interventions in others (6th and 12th) since 1997; (d) acquired computer equipment, software, optical readers and printers; (e) conducted related education research; (f) prepared 125 learning performance reports; (g) provided teaching instruments to all schools (Recomendaciones Metodologicas para el Aprendizaje) in 1997 and 1998; and (h) implemented a performance feedback program in 6,300 secondary schools that had been evaluated, including follow-up manuals for school directors and supervisors of the PRODYMES II schools. The ICR mission concluded that PRODYMES I contributed to: (i) the establishment of a reliable, relevant and timely student learning assessment scheme; (ii) the build up of institutional capacity with respect to qualified technical teams at the national and provincial levels to prepare and implement census-based and sampling-based learning assessment measurement operations; (iii) the establishment of the capacity for analyzing and synthesizing information; (iv) providing learning assessment feedback of the results to teachers, school principals, supervisors and authorities; (v) developing a pedagogic interpretation (or diagnosis) of the students' main learning deficiencies in the context of the new curricular framework for corrective and preventive purposes; and (vi) instituting a culture of evaluating the quality of education. Several provinces, such as Buenos Aires and Mendoza, have strengthened and expanded their own Provincial Quality Evaluation Systems and subsequently complemented their measuring efforts with SINEC. Based on the above-mentioned achievements and experience gained, there is a need for further development to continue improving the degree to which the feedback of learning assessment findings are being internalized by the school actors and translated into better pedagogical practices. Finally, the ICR mission noted with concern the lack of appropriate financial resources in CYOI and CY02 to allow SINEC - 10-  to fully carry out its envisaged learning assessment measuring activities (as further explained in Annex 3). (c) SAF. The NMCE's Administration Undersecretariat implemented this sub-component in order to improve the Ministry's institutional efficiency and quality of administrative services, as well as to build capacity in planning, programming, implementing and monitoring resources with a view to streamline the Ministry. Except for one concrete application of a management system to expedite transactions and procedures (Tramix) still in operation in NME, the remaining resources of this sub-component financed under PRODYMES I were used to contract management studies that failed to materialize into substantive actions to make the Ministry more efficient and effective. The ICR mission confirmed that the original, non-accomplished, objectives sought by SAF in the mid-nineties are currently on the agenda set by the State Modernization Project headed by the Jefatura de Gabinete de Ministros (Office of the Chief of Cabinet) for the modernization of NME. (d) ECSE. This sub-component aimed at establishing a cost-model per school as a tool to estimate the costs of the education reform. A total of 29 cost studies were conducted over the life of the project. These studies generated valuable information, some of which was discussed in the Council of Provincial Education Ministries (Consejo Federal de Educaci6n). The information produced by these studies included: (i) teachers' salaries; (ii) cost of the Teaching Statute; (iii) national and provincial education budgets and expenditures; (iv) schools' current and operational costs; (v) the cost of applying the Reform prescribed by the Federal Education Law; (vi) the cost of the National Teacher Incentive Fund; and (vii) simulation models of education expenditure. Notwithstanding the fact that the results of these studies increased awareness among the national, and to certain extent, provincial, authorities as to the benefits in designing more pertinent education policies (like, for example, in the case of the teachers' incentive), the ICR mission found limited evidence of the incorporation of this valuable infornation into policy decision-making aimed at improving and rationalizing the cost of the education systems at a national and provincial level. The ICR mission also found a lack of: (viii) a strategy to disseminate more effectively the results, especially in the larger provinces, to ensure their impact in significantly larger portions of the education system; and (ix) a lack of systematization of the cost base data. (e) PROFOR. This sub-component sought to promote and develop the training of national and provincial officials to improve the quality and effectiveness of the organization, implementation and evaluation of education management, programs and projects. Its strategy included training (short courses and workshops, both in the country and abroad), additional education (one- and two-year graduate scholarships at national and foreign universities) and action-training (workshops reinforced with internships and work visits). During the life of the project, around 1,265 technicians and officials from each of the participating provinces and the NMCE, attended 62 local courses, and another 410 persons went to 95 international courses. Approximately 25 professionals obtained scholarships to local universities and 126 went to universities abroad. In addition, 196 officials participated in 10 action-training activities. The total cost of this sub-component was approximately US$8.6 million, representing a unit cost of US$2,800 for local courses, US$3,400 for short courses abroad, US$30,000 for graduate scholarships abroad and US$16,700 for local graduate scholarships lasting one to two years. A PROFOR evaluation conducted by a qualified independent consultant prior to the ICR mission concluded that this sub-component: (i) was cost-effective; (ii) had foreseeable impact on education management; (iii) benefited the beneficiaries' professional development; (iv) contributed to a better implementation of projects and programs in the education sector through the application of simple management instruments; (v) improved communications between national and provincial education authorities; (vi) managed to have about 70% of the foreign scholarship holders return to their work in the education sector and none abandon their study programs; and (vii) awarded scholarships through transparent and competitive evaluation and - 1 1 -  selection mechanisms. The study also indicated that from the totality of scholarship holders, 23% remained abroad while completing professional internships, 50% returned to their same activity receiving the same salary as they did prior to the scholarship, 20% ended up working at a higher level of responsibility and remuneration, and the remaining 7% finished by working part-time in the system. The methodology and procedures developed by PROFOR have served as a basis to institutionalize the further training and updating of professionals within the NME's National Scholarship Program, as well as to implement innovative skills improvement schemes in administration and school management, such as the Programa de Intercambio y Pasantias de Directores de Escuela (School Directors' Exchange and Internship Program). At the time of the ICR mission, and as a consequence of the financial crisis affecting the country, the scholarships abroad and the action-training modules were discontinued by NME. The ICR mission concluded that it would be useful and desirable to compare the options used by PROFOR with others, such as sub-contracted capability-building alternatives offered by a local university and/or the Buenos Aires branch of UNESCO's International Institute of Educational Planning (IEP) to analyze the costs and benefits of each. The ICR mission also noted that the success of interventions like PROFOR are highly dependent on the political support of the national and provincial authorities. (f) PREGASE. This sub-component had a very slow start during the first two years of the implementation cycle. Most of the studies contracted during these two first years were mainly aimed to support the incorporation of additional provinces in PRODYMES II (originally designed as an extension of PRODYMES I to incorporate additional provinces). The findings of these studies were considered, by and large, not applicable when PRODYMES II was restructured (before its implementation) to focus more in addressing quality improvements in 630 high-risk secondary schools in the country. As a result of these failed initiatives, the NMCE, in agreement with the Bank, decided at the end of 1996 to: (i) discontinue these studies; (ii) establish the PREGASE, as a NMCE-sponsored program with resources from the loan and the national budget; and (iii) provide technical support in a more systematic way, to all the provinces in the area of educational management. PREGASE was initially conceived as a supply-driven intervention targeted to the provinces. Many provinces did not embrace this centrally-driven top-down approach, thus limiting PREGASE's impact during the 1997-1999 period. In 2000, PREGASE's strategy underwent a drastic change from being supply- to demand-driven. This change was immediately rewarded by increased provincial demand to strengthen their educational institutional arrangements and activities. Under this demand-driven approach, PREGASE aimed its efforts on: (i) reengineering processes and creating regulations to improve the organizational structure and administrative activities in the areas of financial, human and physical resources, budget preparation and monitoring, and students statistics. For these purposes, PREGASE, with the financial support of PRODYMES I, supplied computer equipment to 16 provinces, and provided training to about 10,000 provincial staff involved in the management of their educational system. At the time of the ICR mission, PREGASE had been extended to 23 (of the 24) provinces in the country. As a result of these efforts, management modules have been designed and are being implemented in several project and non-project provinces to different extents, as follows: (i) processing of documents; (ii) functional organizational units; (iii) single personnel roster; (iv) medical leave authorization, payroll and compensation; (v) inventory and administration of buildings and premises under the jurisdiction of the provincial education authorities; (vi) school mapping; and (vii) legal digests. The single personnel roster has been concluded in Catamarca, Rio Negro, Salta, San Juan, San Luis and Tucuman. Currently, the payroll and personnel compensation is based on the single roster in Rio Negro and Salta, and soon to be implemented in Catamarca, La Pampa, San Luis and Tucuman. Making information compatible in the provinces has already generated savings of about 6% of the monthly payroll in the province of Salta. At - 12 -  the time of the ICR mission, the jurisdictions of the City of Buenos Aires, La Rioja, Mendoza, Misiones, Neuquen, Santa Cruz and Tierra del Fuego were initiating the implementation of this effort. Despite the significant achievements mentioned above and the efforts to make information compatible, the ICR mission perceived that, with very few exceptions, the resource administration modules had not yet been fully integrated into the following systems: (i) the provincial financial and accounting management; (ii) the budget management; and (iii) the school infrastructure information system. Also, a significant number of schools still lack the necessary computer equipment and connectivity with the internet to implement an on-line real time system for updating school information. Moreover, changes to existing regulations of the legal digest, and the incorporation of new ones, is required in order to make the decentralization of school education a reality. The ICR mission noted that PREGASE financed by the project has had more impact in non-project provinces than in project provinces. One explanation is that the Bank-financed Provincial Sector Loans (structural adjustment loans) that have taken place in several non-project provinces, like Catamarca, Rio Negro, Salta and Tucuman, serve as a leverage to improve the effectiveness of PREGASE by improving the provincial financial enabling conditions for reducing provincial deficit. Component 2. Quality improvement. (a) Curriculum development. Except for the province of Neuqu6n, where there was significant political resistance to reformulating the curriculum of the EGB3 and the polimodal cycles, the other project provinces made significant, albeit uneven, progress in this area. All the project provinces (except Neuquen) completed the curricular transformation of EGB3. At the time of the ICR mission, Mendoza, Misiones and Santa Fe were applying the new curricular framework in the first polimodal grade, while the province of Buenos Aires had completed the design and application of the new structure in the entire polimodal cycle including the professional segments and modules based on competences. The province of Buenos Aires provides a good example at the polimodal level of alignment between curriculum and other learning inputs, in terms of: (i) pedagogic viability; (ii) development of training modules for supervisors; (iii) the adoption of new forms of teaching practices; (iv) pedagogical links between the EGB3 and polimodal levels; and (v) development of teaching approaches for socially disadvantaged young people. The curricular transformation required the preparation of: (i) Institutional Education Projects; (ii) Institutional Curricular Projects; (iii) Supervisory Projects; (iv) Provincial Education Projects; and (v) Innovative Projects. All these projects sought to translate and adjust the national curricular frameworks prepared by NMCE to the provincial educational context and then, adjust the provincial new curriculum to the requirements of the EGB3 and polimodal schools. Teacher networks were also stablished during this process, stimulating innovation through an exchange of ideas within and among participating schools. Some provinces, such as Mendoza, managed to establish through the curricular transformation process compensatory programs, such as the Programa Compensatorio de Educaci6n Media de Adultos for adult education, and the Programa de Mejoramiento del Rendimiento en la Educaci6n Media for improving secondary education performance, aimed especially at those in urban areas with unsatisfied basic needs and in rural zones with difficult access. These compensatory provincial initiatives provided appropriate pedagogical assistance to students at risk. The combined efforts of the curricular transformation, the provision of pedagogic support and inputs, and the infrastructure works backed by PRODYMES I as well as other programs, like the Inter-American Development Bank-financed PRISE, managed to extend de facto compulsory education in the country to ten years (one preschool level plus the nine comprising the EGB1, EGB2 and EGB3 cycles). As a result, - 13 -  the transition rates from 7th. to 8th. grade, the successful completion of EGB3 and the transition rates from 9th. grade to the 1st. polimodal grade (10th. grade) significantly increased nationwide (as shown in table 4.1 above). The ICR mission noted that in addition to continuing to support the improvement of the quality of education in the EGB3 and polimodal levels, another pending issue on the agenda of curricular transformation and secondary education quality enhancement is work with supervisors. It is necessary to continue simplifying the supervisor's administrative load through the PREGASE efforts, modifying management processes, and simultaneously, strengthening the supervisor's pedagogical role and ensuring their presence in the classroom more frequently. (b) Teacher training. As mentioned before in this report, except for curriculum development in EGB3 and polimodal, PRODYMES I financed a limited number of quality improvement interventions, such as teacher training and provision of textbooks and learning materials and equipment. These interventions were carried out in few project provinces and their implementation was highly unholistic, when compared with the subsequent quality improvement interventions financed by PRODYMES II, III and III-A. Among some of these limited interventions, PRODYMES I supported the design and start-up in some provinces of training programs for management, supervisory and teaching staff in institutional and curricular management techniques. Although this effort was limited and has not been formally evaluated with respect to the pedagogical transactions occurring in the classroom, greater motivation and commitment to the transformation of education has been observed among the beneficiaries. The positive training experiences funded by PRODYMES I were subsequently absorbed by the NMCE's Federal Network for Continuing Teacher Training. (c) Supply of textbooks, teaching materials and equipment. This sub-component was not universally applied in all provinces. Some provinces, like Mendoza, Misiones and Neuquen, purchased, by their own initiative, a limited amount of textbooks under PRODYMES I. In other cases, like in Mendoza, Misiones and Santa Fe, PRODYMES I funded substantial distribution of didactic materials. In the latter, teachers received: (i) workbooks consistent with the curricular designs per area and grade; (ii) teacher orientation manuals; and (iii) other support documents, including materials on evaluation, cross-disciplinary content (environmental health, first aid, traffic and safety education, consumer information and violence prevention); and (iv) pedagogical links between the different levels. In addition, at a number of EGB3 schools in certain provinces, the project provided (in limited quantities as compared with the subsequent Bank-financed sector investment of PRODYMES II) laboratories, teaching materials, multimedia centers and basic computer equipment. Given that these teaching inputs were acquired during the last stages of PRODYMES I, no impact evaluation studies were carried out. Thus, there is now a need to evaluate their use in the classrooms and their relevance in supporting teaching activities under the new curricular framework. These evaluation studies are being now required under PRODYMES II. Finally, the ICR noted that the development of school-based grant programs included in the definition of the quality improvement component under PRODYMES I was never carried out. The Borrower informed the ICR mission that the complexity involved in implementing PRODYMES I recommended deferring the implementation of this component to PRODYMES II in 630 high-risk EGB3 and polimodal schools in the entire country. Component 3. Infrastructure (a) Infrastructure in the provinces. PRODYMES I financed the construction and furnishing of 196 works, of which 191 were completed at the time of the ICR mission and the remaining 5 showed significant - 14 -  progress. This sub-component contributed effectively to providing greater access to the EGB3 and polimodal levels, thus increasing the net rates of enrollment of the relevant population cohort. This component also helped to reduce expenditures on rental of school and administration buildings. Of the finished works, 31 are new schools, 152 are reconditioned schools, 5 are reconditioned administrative offices and 3 are new administrative offices for education management. Of the 5 works in progress at the time of the ICR mission (all completed by October 31, 2001), one was a new school in Santa Fe, one was the reconditioning of a regional office in Santa Fe, and three were new administrative offices (one of them, currently housing the Provincial Board of Education of Neuquen and the other two are in Santa Fe). The ICR mission observed that: (i) the physical layout of the construction projects emphasized the spatial distribution with the aim of promoting a greater degree of openness with the community, basically in terms of multimedia resource centers, multi-use rooms and patios; (ii) the architectural designs fit the basic standards for school architecture (Normativa bdsica de arquitectura escolar), maintaining the recommended relationship between areas and buildings, and general occupancy ratios by area and building; and (iii) there was design diversity among provinces with respect to their respective climates, environmental conditions (cold in Neuquen, tropical in Misiones and desert in Mendoza) and building materials and techniques (traditional masonry, open brick, light roofing, etc.). The ICR mission also noted that in terms of average costs per square meter, except for the building of the Provincial Board of Education of Neuquen (which cost around US$1,200 per square meter), the differences ranged from US$500 per square meter in Mendoza, Misiones and Santa Fe to US$800 in Neuquen and Rio Negro. This range is quite reasonable considering that, on average, the market cost for standard schools is about US$600 per square meter. (b) Infrastructure at a national level. PRODYMES I financed the following three construction works on NMCE property which were satisfactorily completed: (i) remodeling of the National Teachers' Library; (ii) renovation of the "Anexo Paraguay" building (housing REDFIED and SINEC, currently merged in IDECE); and (iii) renovation of the "Galp6n de la Reforma" (an education-related public meeting place). The first two works were considered in the original design, whereas the third was included as an agreement reached during the June 1997 supervision mission. Although these works do not have a direct effect on the objectives of increasing coverage and improving the quality and relevance of the EGB3, they were significantly important to strengthen the image and effectiveness of the NMCE as the governing body of the Argentine education system. Finally, the carrying out of an inventory of NME's facilities was done as part of the diagnosis requested by the Jefatura de Gabinete de Ministros for the State Modernization Project. 4.3 Net Present Value/Economic rate of return: Not applicable. 4.4 Financial rate of return: Not applicable. 4.5 Institutional development impact: The ICR mission noted three significant, long-term, institutional development impacts from PRODYMES I: (i) the curriculum reform in EGB3 and polimodal cycles; (ii) the learning assessment and the education statistical information systems; and (iii) PREGASE. Curriculum reform. The new EGB3 and polimodal curricular frameworks were implemented satisfactorily during the life of the project to different extents in the provinces. Except for Neuquen, all of them completed the curricular transformation of EGB3. Mendoza, Misiones and Santa Fe applied the new - 15 -  curricular framework in the first polimodal grade, and the province of Buenos Aires had completed the design in all the grades of polimodal education at the time of the ICR mission. National and provincial education authorities continue to address curricular reform in order to consolidate the complex transformation process. Learning assessment and statistical information systems. Recognizing that at the outset of PRODYMES I, the AG did not have a reliable, timely and relevant management information system with respect to education statistics and learning assessment outcomes, the successful implementation of REDFIED and SINEC, their institutionalization in IDECE, and the initial, albeit yet modest, utilization of IDECE's information in policy decision making, became important institutional development achievements that the ICR mission highlights. PREGASE. Through PREGASE, several provinces have made organizational and structural changes to their Ministries of Education or equivalent institutions, and have prepared and put into operation more simplified management procedures and corresponding staff training, including, as mentioned before: (i) processing of documents; (ii) functional organizational units; (iii) single personnel roster (adjusting the degrees of teaching personnel and the areas of their pedagogical competency to the school needs created by the new curricular framework); (iv) medical leave authorization; (v) payroll and compensation; (vi) buildings and premises administration; (vii) school mapping; and (viii) condensing all existing legal regulations in digitalized form (legal digest) to expedite their subsequent distribution and use through the web pages of the respective PMEs. In those provinces like Salta (non-project province) and Rio Negro (project province) where the single personnel roster has been articulated with the monthly payroll system: (a) the timing involved in the hiring, appointment, leave, dismissal and payroll of the teaching staff has decreased significantly; (b) inconsistencies in the school placement of teachers have been identified and addressed; (c) the abuse of medical-related teaching absenteeism drastically reduced; and (d) improvements have been made in achieving better expenditure control and a more realistic budget planning adjusted to the real student enrollment. As a consequence of the above, administrative efficiency in these provinces has improved, making it possible to generate a certain level of savings. For example, and as noted before, during the first month of operation of the payroll system based on the single teacher roster in Salta, inconsistencies in their education system adding up to 6% of savings in the monthly payroll were detected. Rio Negro uses the information to rationalize the use and distribution of teachers to schools and scholarships to students. As mentioned above, at the time of the ICR mission, PREGASE was operating in 23 provinces, of which 16 showed significant progress and the remaining seven had only recently been included in this scheme. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The timely provision of counterpart funds at the national and provincial level was seriously affected by delayed transferences from the Ministry of Economy due to frequent fiscal economic crisis, severe budgetary restrictions, limited access of the AG to the international financial markets and national disasters (winter flooding) in some project provinces. 5.2 Factors generally subject to government control: PRODYMES I implementation start-up experienced a significant delay of almost twelve months after Board approval. Six months elapsed between loan approval by the Bank Board and signing of the Loan Agreement on March 24, 1995 by the Argentine Minister of the Economy and Public Works and Services. Another six months elapsed to loan effectiveness on August 18, 1995. Once PRODYMES I was declared - 16 -  effective, and the first disbursement had been deposited in the Special Account, this project maintained relatively low disbursement levels during 1996 and 1997 of about US$20 million in the aggregate (10.5% of the originally contracted amount of US$190 million). The ICR mission noted four main reasons for this delay. First, the Bank insisted on conducting management and efficiency studies of the provincial education structures as a condition of disbursement for civil works. The provinces failed to meet the Bank's requirement, because, among other reasons, they lacked the capacity to carry out the studies. The Bank subsequently withdrew the initial disbursement condition, and replaced it with action-plans and provision of institutional strengthening through technical assistance to the PMEs. Second, it took significant amount of time for NMCE and the PMEs to appropriately internalize the Bank's procurement procedures, in spite of the procurement training provided by the Bank in 1995 (two more protcurement training were provided by the Bank in 1997 and 2000). In addition, at the early stages of project implementation, both national and mainly provincial control agencies (Tribunales de Cuentas and Contralorias Provinciales), were unaware of the Bank procurement framework, resulting in significant delays at the approval and signing stages of bid tenders and contracts. Third, the envisaged project management and implementation roles of the NMCE and the PMEs in the context of the recently enacted Federal Education Law and devolution of secondary schools to the provinces needed further clarification. Finally, the change of elected national and provincial governments in December 1995, led to changes in the implementation teams, instability of the senior management layers and finally, the need to rebuild project implementation capacity all over again. The ICR mission also noted that the following three additional government-controlled activities also slowed down project implementation during the first couple of years: (i) the educational reform lacked clarity and consensus between the national and provincial governments with respect to the new educational structure and curricular content, specifically the focus of the EGB3 (alternating between primary and the secondary education cycles); (ii) the school decentralization model was financed with 30% of locally-generated resources and 70% of national transfers that were allocated to the provinces with no clear funding formula causing tensions between these two levels of government; and (iii) investment plans lacked coordination among the different national or international sources of funding, producing overlap, saturation and confusion in the provinces. Finally, the ICR mission noted other organizational, administrative and financial factors controlled by the national and provincial governments adversely affected project implementation, such as a lack of counterpart funds and action plans in provinces, and signing delays (see Section 3.4), that justified the first Loan amendment of December 1995. 5.3 Factors generally subject to implementing agency control: PRODYMES I was the first Bank-financed investment in the Education Sector in Argentina. The ICR mission noted that, as a first experience, the Bank and the Borrower gave insufficient attention to the following implementing agency-controlled factors during project preparation and the first year of project implementation. They needed to ensure at the onset of project implementation: (i) the hiring of qualified personnel familiarized with the Bank's administrative, financial and procurement procedures, both at the national and provincial project implementation units; (ii) an appropriate project monitoring system; (iii) further clarification with respect to the lines of responsibilities of national and provincial project implementation teams and more effective coordination among these actors; and (iv) sufficient number of timely visits by the national project implementation team to project provinces to provide assistance in programming activities and fostering the start-up process. Additionally, the ICR mission observed that the NMCE could have been more effective in terms of facilitating dissemination of good practices and cross-fertilization among provinces. In this venue, NMCE could have: (a) systematically carried out an - 17 -  inventory of useful innovations of the provinces in the areas of institutional strengthening, quality improvements, education management and decentralization; and (b) disseminated them through training, workshops, seminars, technical assistance, demonstration events and/or conventions. The fact that the project's management design include one national and six project coordination units added complexity to the execution of the project and slowed down the implementation pace. Significant turn-over of qualified personnel at the different project coordination units during the life of the project, especially of project coordinators, also delayed project execution. This lesson learned was incorporated in the design of PRODYMES II which included only one project coordination unit. 5.4 Costs andfinancing: Financial situation. The estimated total cost of PRODYMES I at appraisal was US$268.67 million, of which US$190 million were to be provided by the loan (70.7% of the total) and US$78.67 million by national and provincial counterpart funds (29.3% of the total). In 1999, the AG requested a cancellation of US$20 million of the loan (10.5% of the total contracted) and the project underwent a financial restructuring. This loan cancellation in turn resulted in a reduction of US$20.36 million in counterpart funding, for a total project cost reduction of US$40.36 million. The total adjusted amount of the project remained at US$228.31 million, of which US$170.00 million were Bank funded and US$58.31 million were provided via national and provincial counterpart funding. In 2000, the Bank declared misprocurement of a bid in Neuquen thus canceling an additional US$1.31 million of the loan. This new cancellation resulted in turn a reduction of US$3.36 million of counterpart funding, for a total cost reduction of US$4.67 million. At the time of the ICR mission, the total adjusted amount of the project was US$223.64 million, with US$168.69 million provided by the Bank and US$54.95 million by counterpart funds. PRODYMES I progressed satisfactorily in financial terms with respect to the last restructuring of the project total cost (US$223.64 million). At the time of the ICR mission, the total disbursements amounted to US$213.23 million (95.3% of the project estimated total cost after the second cancellation), of which US$161.32 million were provided by the loan (94.8% of the amount contracted after the second cancellation) and US$51.91 million from local funds (94.5% of the restructured amount). On April 16, 2001 the Bank agreed to extend the reimbursement period for finishing the 59 civil works until October 31, 2001. As mentioned before, by the time of the ICR mission, five of these 59 civil works were still in progress and the rest had been completed. The amount committed up to October 31, 2001 was US$3.89 million (US$3.30 million from the loan and US$0.59 million from local contribution) and was used to complete the five works under construction including their supervision, and to pay the necessary salaries and cover the operating expenditure associated with the skeleton staff at the national and provincial implementation units required to close down PRODYMES I. The outstanding amount that was not expended was estimated to be US$6.5 million, of which US$4 million were from the loan (2.4% of the total restructured amount) and US$2.5 million from local contribution (4.5% of the total restructured contribution). At the request of AG dated September 6, 2001, the Bank cancelled US$4 million of undisbursed Loan proceeds effective September 28, 2001. The Special Account was closed on November 2, 2001. - 18-  TABLE 5.1 COMPARED BY COMPONENT BASED ON THE SECOND COST RESTRUCTURING In million US dolars Componente Rescheduled Actuals at 30/06/01 Componente_______ Total Bank Local Total Bank Local Institutional Strengthening 78.39 66.26 12.13 76.59 65.21 11.38 Quality improvement 29.01 24.37 4.64 27.29 23.02 4.26 Infrastructure 104.53 64.44 40.09 95.60 60.88 34.73 Implementation units 16.38 14.93 1.45 13.75 12.21 1.53 SUB-TOTAL 228.31 170.00 58.31 213.23 161.32 51.91 'Misprocurement -4.67 -1.31 -3.36 |TOTAL 223.64 168.69 54.95 213.23 161.32 51.91 In looking at actual expenditures with estimates of the total restructured amount of US$228.31 million before the cancellation due to misprocurement, we note (see table 5.1 above) that: (i) total expenditure on institutional strengthening was US$76.59 million compared to US$78.39 million restructured estimate (97.7%); (ii) total expenditure on quality of education was US$27.29 million compared to US$29.01 million restructured estimate (94.1%); (iii) total expenditure on infrastructure was US$95.6 million compared to US$104.53 million restructured estimate (91.5%); and (iv) total expenditure on the national and provincial project implementation units was US$13.75 million compared to US$16.38 million restructured estimate (83.9%). TABLE5.2 COMPARED BY COST CATEGORY BASED ON THE SECOND COST RESTRUCTURING _____________________ _ In million US dolars Categoria Rescheduled Actuals at 30/06/01 Total Bank Local Total Bank Local Works 97.22 58.45 38.77 91.70 57.43 34.26 Goods 36.43 28.97 7.46 35.58 28.70 6.88 Services 65.36 58.83 6.53 61.14 54.99 6.14 Scholarships 6.77 6.77 0.00 7.84 7.84 0.00 Implementation Units 7.22 7.22 0.00 4.86 4.70 0.15 Operation Costs 5.46 3.77 1.69 4.16 2.88 1.30 Other Imp,lementation Costs 9.64 5.78 3.86 7.95 4.78 3.17 Non assigned 0.21 0.21 0.00 SUB-TOTAL 228.31 170.00 58.31 213.23 161.32 51.91 ,Misprocureent -4.67 -1.31 -3.36 |TOTAL 223.64 168.69 54.95 213.23 161.32 51.91 According to table 5.2 above, the actual cost by expenditure category with respect to the total restructured amount of US$228.31 million before the cancellation due to misprocurement shows that: (i) total expenditure on civil works was US$91.7 million compared to the US$97.22 million restructured estimate (94.3%); (ii) total expenditure on goods was US$35.58 million compared to the US$36.43 million restructured estimate (97.7%); (iii) total expenditure on consulting work was US$61.14 million compared to the US$65.36 million restructured estimate (93.5%); and (iv) total expenditure on scholarships was US$7.84 million compared to the US$6.77 million restructured estimate (115.8%). -19-  TABLE 5.3 COMPARISON BY COMPONENT-NATION AND PROVINCES in millions EXPECTED ACTUALS AT ______ ______ _____ 30/06/0 1 _ _ _ _ _ _ NACION 61.56 60.74 98.66 fi,kidAsz M~~~~~1.7 M 6.65 89.04 PROFOR 9.87 9.00 91.17 SINEkC 7.79 625 80.26 ECSE 3.4464 i79 SAF 3.44 6.27 182.57 INFRASTRUCTURE 2.89 2.57 88.93 PROJECT COORDINATION UNIT 6.72 5.84 86.90 BUENOS AIRIS 23.49 23.27 99.06 INSTITUTIONAL STRENGTHENING 9.07 10.73 118.30 QUAflTY OF bZEDCA fib; S. 74 3.86 67.25 INFRASTRUCTURE 7.69 7.66 99.61 PROJECT COORDINA TION UNIT 0.99 1.02 103.03 MENI)UZA 35.03 34.38 98.14 INSTITUTIONAL STRENGTHENING 2.11 .9127 Q1UALIT6OFEDUCfATIO1 is.4t6141 INFRASTRUCTURE 15.49 15.389.2 PROJeCT CORIATINUI .9 2-.2-4 ii r* ISIO NES 21.56 20.74 INSTITUTIONAL STRENGTHENINVG 1.57 1.65 i05.10 0vALiTy6j4b66Afi6N ~4.1 4.05 98.7 iNFRASTRUCfTURE 14.4 13.65 94.2 PROEC COORDINATION UITWI 1.41 1.39 98.58 NELIQLI EN jj6 M0.21 .6 INVN.SIIILINAV.L SIRENGT.HENJNIG 1.91 1.42 14.35 QUALITY OF EDUCATION ~~~~2.12 1.42 66.98 INFRASTRUCTURE 27.93 26.11 93.48 PROJECT COORDNA TION UNIT 1.73 1.26 72.83 RIO NEGRO 2.i i6.9 ~ 06.6 INS