Cambodia - Education Quality Improvement Project

Document of The World Bank Report No: 19065 KH PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF US$5 MILLION EQUIVALENT TO THE KINGDOM OF CAMBODIA FOR AN EDUCATION QUALITY IMPROVEMENT PROJECT August 23, 1999 EASHD Southeast Asia and Mongolia Country Unit East Asia and Pacific Regional Office  CURRENCY EQUIVALENTS (Exchange Rate Effective August 23, 1999) Currency Unit = Riel Riel = US$0.000260 US$1 = 3844 Riel FISCAL YEAR July - June ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank DflD Department for International Development (U.K.) DOE District Office of Education EMIS Education Management Information System EU European Union LACI Loan Administration and Change Initiative LCSC Local Cluster School Committee MEF Ministry of Economy and Finance MoEYS Ministry of Education, Youth, and Sport NCES National Committee on Effective Schooling PCSC Provincial Cluster School Committee PGMC Provincial Grants Management Committee PHRD Policy and Human Resources Development Fund (Japan) PIU Project Implementation Unit PMR Project Monitoring Reports POE Provincial Office of Education PPIU Provincial Project Implementation Unit SOE Statement of Expenditures UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific, and Cultural Organization UNICEF United Nations Children's Fund TAC Technical Advisory Committee VSO Voluntary Service Overseas (U.K.) Vice President: Jean-Michel Severino Country Director: Ngozi Okonjo-Iweala Sector Director: Alan Ruby Team Leader: Christopher Thomas  Kingdom of Cambodia Education Quality Improvement Program CONTENTS Page A. Project Development Objective ....................................................2 1 . Project development objective ...................................................2 2. Key performance indicators ...................................................2 B. Strategic Context ....................................................2 1 . Sector-related CAS goal supported by the project ....................................................2 2. Main sector issues and Government strategy ....................................................2 3. Learning and development issues to be addressed by the project .............................................3 4. Learning and innovation expectations ....................................................4 C. Project Description Summary ....................................................5 1. Project components ...................................................5 2. Institutional and implementation arrangements ....................................................6 3. Monitoring and evaluation arrangements ....................................................7 D. Project Rationale ....................................................8 E. Summary Project Analyses ....................................................8 l . Economic ....................................................8 2. Financial ...................................................9 3. Technical ...................................................9 4. Institutional ................................................... 10 5. Social ................................................... 10 6. Environmental assessment ...................................................1 1 7. Participatory approach ...................................................1 I F. Risks......................................................................................................................................... 12 1. Critical risks ......................... 12 2. Possible controversial aspects ......................... 13 G. Main Loan Conditions ......................... 13 1 . Effectiveness conditions ......................... 13 2. Other ......................... 14 H. Readiness for Implementation ......................... 14 I. Compliance with Bank Policies ......................... 14  ii Annexes Annex 1. Project Design Summary Annex 2. Project Description Annex 3. Details of the Quality Improvement Grants Process Annex 4. Estimated Project Costs Annex 5. Outcomes of the Pilot Cluster Schools Grant Program Annex 6. Financial Summary Annex 7. Procurement and Disbursement Arrangements Table A. Project Costs by Procurement Arrangements Table Al. Consultant Selection Arrangements Table B. Thresholds for Procurement Methods and Prior Review Table C. Allocation of Loan Proceeds Annex 8. Project Processing Budget and Schedule Annex 9. Documents in Project File Annex 10. Statement of Loans and Credits Annex 11. Country at a Glance Annex 12. Framework of Educational Development Activities and Assistance in Cambodia Annex 13. Framework of Effective Schools in Cambodia Annex 14. Framework for an Information System to Track Progress of Project Interventions toward the Meeting of Objectives Annex 15. Monitoring and Evaluation Annex 16. Draft ToR for the National Committee on Effective Schooling Map IBRD 28781  Kingdom of Cambodia Education Quality Improvement Program Project Appraisal Document East Asia and Pacific Regional Office Southeast Asia and Mongolia Country Unit Date: August 23, 1999 Team Leader: Christopher Thomas Country Director: Ngozi Okonjo-Iweala Sector Director: Alan Ruby Project ID: PE-P059971 Sector: Human Development Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Education Poverty Targeted Intervention: [ ] Yes [x] No Project Financing Data [ I Loan [x] Credit I[] Grant [] Guarantee [ ] Other [Specify] For LoanslCreditslOthers: Amount (US$m): $5.0 (SDR) 3.7 million Grace period (years): 10 Years to maturity: 40 Commitment fee: standard Service charge: 0.75% - F ---inackg ;p*a n-: . j T-; beEf-In; SoureLoA Fug Tota Government 0.55 0.55 IDA 3.14 1.86 5.00 Other (specify) Total: 3.69 1.86 5.55 Borrower: Kingdom of Cambodia Guarantor: Responsible agency: Ministry of Education, Youth and Sport Estimated disbursements (Bank FYIUS$M): Annual 0.7 1.5 1.3 1.3 0.2 Cumulative 0.7 2.2 3.5 4.8 5.0 Project implementation period: 53 months Expected effectiveness date: October 29, 1999 Expected closing date: March 31, 2004 Implementing agency: Ministry of Education, Youth and Sport Contact person: Ou Eng Address: Project Preparation Unit, 169 Norodom Blvd., Phnom Penh, Cambodia Tel: (855-12) 804-183 Fax: (855-23) 210-349 E-mail: ppuAbigpond.com.kh OCS LIL PAD Form: January 5, 1998  Page 2 A: Project Development Objective 1. Project development objective: (see Annex 1) The objective of the project is to develop a demonstration model, shown to be effective for extension to other provinces, of a participatory approach to school quality improvement and performance based resource management. 2. Key performance indicators: (see Annex 1) By the end of the project: * Schools participating in the program should increasingly demonstrate characteristics of effective schools (see Annex 13), and ultimately demonstrate improvements in student enrollment, attendance, student flows, and achievement (see Annex 14). * Government should draw lessons from p;actice for policies to improve teacher motivation, lower the cost of education, reduce repetition and dropout, and increase the time available for learning. B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 16255-KH Date of latest CAS discussion: 20 February 1997 The project supports the CAS objective to strengthen the human resource base by improving the quality of education. This is the first Bank-funded project in the education sector in Cambodia, and we hope to use it to: a) demonstrate how to build an effective school system to lay the basis for a sustained, holistic renewal; b) engage in parallel dialogue about policy development with government and donors; and c) build capacity at the central ministry and provincial levels and evaluate the school-based initiatives. In the longer terrn, we hope to: d) expand the project in basic education across a number of provinces, engaging an increasing number of other donors; e) move up to secondary, repeating steps a)-d); and f) move down to pre-school and non-formal education. 2. Main sector issues and Government strategy: The devastation of the education system in the 1970s resulted in lasting problems of capacity, organization, and finance for Cambodia's educational institutions. The issues span all sub-sectors - from primary education to higher education - and are well documented in the Asia Development Bank's 1996 Education Sector Strategy', the report of the National Higher Education Task Force2, and the report on the evaluation of UNICEF/Sida Support for Basic Education in Cambodia.3 Challenges within the primary education system are illustrative of the whole: Teachers and teaching working conditions. Teacher skills are weak, with 91% of primary teachers educated only to the level of lower secondary school or less. There are 47 pupils per teacher and 60 'Asian Development Bank. Cambodia: Education Sector Strategy. Manila: Asian Development Bank, 1996. 2National Higher Education Task Force. National Action Plan, 15 April 1997. 3 Wheeler, Christopher and Oleg Popov. Synthesis Report on the Joint Evaluation of UNICEF/Sida Support for Basic Education in Cambodia. July 30, 1998.  Page 3 pupils per classroom. Teachers' salaries are below a living wage for a typical family, forcing teachers to spend time working outside the school to supplement their income, rather than devoting more of their time to school activities or professional development. Repetition and dropout. Repetition and dropout are so high that it currently takes 19 student years to produce a primary school graduate. Repetition rates generally decline throughout the primary cycle (from 41% in grade I to 8% in grade 5), while dropout rates increase (from 12% to 21% in the same grades). Textbooks and materials. While significant progress has been made in developing and printing textbooks and teachers' guides, large numbers of schools still face shortages (only 58% of schools have grade I teachers' guides and 34% of schools have grade 2 teachers' guides). Schools and teachers have no official budget for materials. Furthernore, few teachers understand how to make good use of books and teachers' guides. Time for learning. It is estimated that under the best of circumstances Cambodian children receive only between 450 and 650 hours of instruction per year, well below the international norm of 900 hours. Costs andf inancin . It is common practice for schools to seek contributions from students and communities in order to cope with the shortage of funds for development and materials. In urban areas many teachers engage in tutoring to supplement their incomes. However, the lack of a clear and transparent framework for collecting, accounting for, and spending local resources works to the disadvantage of the poorest members of the community and raises questions about the efficiency of resource management. Management and administration. Management and administration remain very highly centralized despite considerable progress over the last 3-5 years in building capacity at the sub-national level. Weak linkages and rigidities in the system make it very difficult for capable local educators to pursue creative solutions to local problems of timetabling, curriculum, teaching strategies, training, and materials. Donor coordination. There are many donors to education, however the sum total of the programs does not yet add up to a comprehensive framework for development of the sector, or even a complete framework of support for effective schools at the primary level. Contributions are overwhelmingly focused on inputs (buildings and administration) and much less on issues related to school climate or teaching and learning processes (see Annex 12). The Government's overall strategy, as reflected in its submission to the February 1999 Consultative Group Meeting in Tokyo, is to: (i) strengthen the resource base for education by increasing the share of government expenditure on education, encouraging private contributions, and attracting more donor aid; and (ii) build capacity and enhance quality by spending on teacher training, curriculum development, strengthening planning and management skills, institutional restructuring, and developing cluster schools and resource centers. At the primary school level the MoEYS has listed 10 main priorities, including among others, improving the living conditions of teachers, promoting student centered learning, expanding the school day to 6 hours, and forging closer links between the curriculum and community development needs.4 3. Learning and development issues to be addressed by the project: The Government's 10 priorities for primary education represent a major step in the right direction, but in themselves fall short of what international research suggests might be needed to make schools effective' (see Annex 13). The challenge during the course of this project will be to expand the Government's vision of effective schools by drawing on the best domestic practice and international knowledge. A second challenge is to develop an effective implementation strategy. Most of the government's For more information , see MoEYS Circular #05, 1998. For a synthesis of effective schools research see: Heneveld, Ward and Helen Craig. Schools Count. Washington: World Bank, 1996.  Page 4 development proposals are for large centrally managed schemes. This project seeks to demonstrate that a more participatory strategy - one that seeks out partners at the school, community and local administrative levels - would be more effective in achieving change at the school level than the more centralized strategies currently being practiced. In this sense, the model of development proposed with this LIL is a major innovation in the way affairs are currently managed in the MoEYS. 4. Learning and innovation expectations: H Economic [ ] Financial [1 Technical [x] Institutional [ Social [ I Environmental [x] Participation [ ] Other The model of a participatory approach to school quality improvement and performance based resource management that the LIL aims to develop should introduce the MoEYS to a more adaptive and less mechanistic approach to management. One could compare and contrast these two management styles in terms of how they deal with leadership and authority, communications, monitoring and evaluation, and staffing.6 By modeling some of the major elements of an adaptive approach in the LIL we hope to create an opportunity for the MoEYS to experiment with a new, more participatory approach to management and to improve the effectiveness of its operations. Mechanistic and Adaptive Management Compared Mechanistic Management Adaptive Management Leadership and Authority Authority Centralized Deconcentrated or decentralized Basis of authority Position, information Status, technical knowledge Use of formal rules Very high Moderate or low Leadership style Command Collegial, participatory Communications Flow of communications Top-down Top-down and interactive, with external input Managerial priority Very low Moderate-high Content Directives and inquiries Professional guidance, inquiries, evaluation Purpose Control Assessment, learning, adjustment, redirection Style Formal and consultative Formal, informal, and interactive Orientation toward environment Closed Open, client oriented Coordination Form of coordination Command Negotiated authority, plan, facilitation, mutual adjustment Instruments of exchange Allocated budget Negotiated budget, goal attainment, information, prestige Need for commitment Very low High Use of persuasion Very low High Use of incentives Very low High Importance of "boundary Very low High spanners" 6 See: Rondinelli, Denis, John Middleton and Adriaan Verspoor. Planning Education Reforms in Developing Countries: The Contingency Approach. Duke Press Policy Studies: Durham and London, 1990.  Page 5 Mechanistic and Adaptive Management Compared Mechanistic Management Adaptive Management Monitoring, Control, and Evaluation Purpose of monitoring Control Improve performance Control Ex-ante Mixed ex-ante and ex-post Focus Work, outputs Targets, performance Use of top-down orders Very high Moderate-low Use of job descriptions Very detailed, emphasize Moderately detailed, emphasize activities activities and objectives Use of professional self-control Very low Moderately high Use of persuasion and advice Very low Moderately high Use of performance appraisals Top-down, non-participatory Selective participation, peer review, interactive Staff ng Basis of jobs Functional specialization Functional specialization, objectives Use of professional development Very low Moderately high Incentives Limited, monetary Monetary, professional Employee motivation Job security, loyalty to Loyalty to organization, professional organization status, service to beneficiaries Use of employee self control Very low Moderate Performance measures Conformance to rules Rules and performance C: Project Description Summary 1. Project components: (see Annexes 2 and 3 for a detailed description and Annex 4 for a detailed cost breakdown) indicative Bank- J /' * Component Sector GCdts % of -financing fBank- . : . : jS} - Toal (U$$ME finaiin Quality Improvement Grants EE 3.95 71% 3.94 79% Program: (i) animator services; (ii) provincial grants management committee; (iii) grants to school clusters; and (iv) monitoring and evaluation Institutional Strengthening: EE 0.72 13% 0.21 4% (i) support for the National Committee on Effective Schooling; (ii) policy studies (incl. grade 4 exams and decentralization); and(iii) operational support for provincial and district education offices. Project Management EE 0.88 16% 0.85 17% Total Project Costs 5.55 100% 5.00 100%  Page 6 2. Institutional and implementation arrangements: Project Management Implementation period. The LIL will be implemented over four years. The expected starting date is about October 29, 1999; the completion date is September 30, 2003; and the closing date is March 31, 2004. The project will be reviewed at mid-term to assess progress against the development objective and to make any necessary adjustments in the design. Executing Agencies. The project will be implemented at the national, provincial, district and school level. The Ministry of Education, Youth and Sport (MoEYS) will have overall responsibility for the implementation of the project. The MoEYS will establish a Project Implementation Unit (PIU) to assist in the implementation of the project. The PIU will coordinate relations with donors and government bodies, facilitate technical assistance, provide training, and carry out the project implementation, financial and accounting monitoring and evaluation responsibilities. At the provincial level a Provincial Project Implementation Unit (PPIU) will be established to coordinate provincial level project activities, including the training, coordination and management of animators, and implementation and monitoring and evaluation of school cluster grants. Each province will also establish a Provincial Grants Management Committee (PGMC) that will review all the grants proposals and award grants to school clusters based on established criteria in the Grants Operational Manual. Animators will be based at the district level and given the responsibility for animation services to assist the school clusters in formulating a vision for effective schools, developing a cluster improvement plan and writing a grant proposal for submission to the PGMC. The animator will also provide guidance on the implementation of the approved grants and monitor and evaluate grant outcomes. Project Oversight and Policy Guidance. At the national level there will be a National Committee on Effective Schooling (NCES) (see Annex 16 for draft ToR). The NCES will provide overall guidance on policy and planning to the project and advise the MoEYS on how to use the lessons learned from the project to improve resource management processes and to develop the MoEYS vision of effective schools. For the purposes of providing this advice to the MoEYS, the NCES will formally report lessons to the Annual Education Meeting. The NCES will have representation of major stakeholders that provide resources for primary education and will meet under the general Chairmanship of the MoEYS. Project Implementation and Procurement Plan. The PPU has provided a project implementation and procurement plan and timeline that details all expected project activities. The PIP is in the project files (see Annex 9). Accounting, financial reporting, and auditing arrangements. A Financial Management Assessment was carried out by a Bank Financial Management Specialist. He concluded that because the Government departments in Cambodia do not maintain general ledger accounts at line ministry level there are no accounting systems that can be assessed for the purpose of OP/BP 10.02. Agreement was reached to install an accounting system acceptable to IDA. Details of this system and the financial management arrangements, disbursement, special account operations, and audit arrangements are in Annex 7.  Page 7 3. Monitoring and evaluation arrangements: The PIU will be responsible for reporting to MoEYS and IDA on issues related to the management and implementation of the project. Key inputs into the PIU's monitoring system will include reports from PPIUs, animators, and Local Cluster School Committees (LCSCs) on the progress of grants and other provincial level activities. Financial reporting will be carried out monthly; grants implementation progress will be assessed at the end of each funding tranche; and project monitoring and evaluation at the provincial level will be carried out both on an ongoing and annual basis. Consolidated national-level reports will be produced on a quarterly and annual basis7 (see Annex 15 for additional details). The learning objective of the loan is to develop a denmonstration model for school quality improvement and performance based resource management. The intended goals are that: * schools participating in the program increasingly demonstrate characteristics of effective schools, and ultimately improvements in student enrollment, attendance, student flows and achievement; and * Government should draw lessons from practice for policies to improve teacher motivation, lower the cost of education, reduce repetition and dropout, and increase the time available for learning. Three basic questions for evaluation flow from these goals and objectives: * Did the grants result in the desired outputs and outcomes at the school level? The economic analysis for the project (see Annex 14) would test the association between grant interventions and outcomes at the school level, as measured by enrollment, girl's enrollment repetition, dropout, and grade 4 learning achievement. The analysis would also allow one to compare the cost of achieving a given percentage improvement on any of the performance indicators (over and above any improvement occurring nationally without the benefit of the grant interventions) across different interventions tried under the project. * Were policies better informned as a result of learning from practice? The project will depend on the observations of the PIU, the National Committee on Effective Schooling and ongoing IDA supervision for the qualitative observations and data necessary to make these judgements. This question will be the subject of an evaluation at project mid-term and completion. * Did the grants process function as intended and achieve the desired results (e.g. develop a functioning model of performance based funding, build capacity and motivation at the cluster, provincial and Procedures for Grants Progress Reporting: The animators should keep notebooks noting issues, progress and outcomes of cluster activities supported by the grants program. At the end of the first funding tranche, the animators will compile and submit grants implementation progress reports to the PPIU that provide information on implementation progress, expenditures, project outputs, and problem areas. At the end of the second (final) tranche, district animators will produce grant monitoring and evaluation reports which will summarize the outputs, outcomes, impressions and lessons learned of strengthening school effectiveness of each grant funded by the project. These reports will be submitted to the PPIU. At the end of the project cycle year, the animators will tneet with the PGMC and the DOE and POE officials to discuss the outcomes of the individual projects and lessons learned. These discussions, and especially the lessons teamed from the implementation of the grants, will form the basis of the PPIU-produced annual monitoring and evaluation report which will be the primary project-related input into the National Committee on Effective Schooling (NCES) and the Annual Education Meeting. The PIU will prepare a quarterly consolidated progress report on the overall implementation of the project for review by the National Committee on Effective Schooling and the World Bank task team leader. The final quarterly consolidated progress report of each year will constitute the annual report of project progress which will consolidate data, observations and recommendations from the full project year. This will be submitted to the MoEYS, the NCES and the World Bank.  Page 8 national levels, encourage suppliers of training and materials to cater to schools needs)? As is the case in the previous question, the project will depend on the observations of the PIU, the NCES and IDA supervision missions for the judgements needed to answer this question. The observations and report of the district animators will be critical in providing information to answer this question. Like the previous question, this will be the subject of an evaluation at project mid-term and completion. In order to aid in the process of project evaluation, and especially in answering the three questions cited above, the project will support an international consultant for a month each year to work with project implementation units and district animators to monitor and analyze the progress of the project over the length of its implementation. D: Project Rationale: (This section is not to be completed in a LIL PAD) E: Summary Project Analysis: (detailed assessments for those analyses applicable to LIL are in the project file, see Annex 9) 1. Economic: (supported by Annex 14) [x] Cost-Benefit Analysis [x] Cost Effectiveness Analysis [ ]Other (specify) The development objective of the loan is to develop a demonstration model (shown to be effective for extension to other provinces) of a participatory approach to school quality improvement and performance-based resource management. The key performnance indicators used to evaluate the success of the model include improved enrollment rates, better student flow statistics and higher learning achievement scores in basic education. To achieve these outcomes, schools participating in the project should increasingly demonstrate the characteristics of "effective schools" as identified in international research on the subject (Heneveld et al., 1996). These include: (a) evidence of essential supporting inputs (e.g., parent and community support, support from the system, adequate supplies of books and materials), (b) the presence of the necessary enabling conditions (effective leadership, capable teachers, adequate time in school, sufficient school-level flexibility and autonomy), (c) a conducive school climate (good order and discipline, an organized curriculum, positive teacher attitudes, high expectation of students, adequate time on task) and (d) good teaching and learning processes (effective teaching strategies, frequent homework, student assessment and feedback, good attendance and high continuation and completion). The Cambodian MoEYS has recently set out ten priorities for basic education, consisting of: (1) increased availability and use of teaching aids, (2) concentration of more experienced teachers in grades I and 2, (3) increased participation of teachers in Thursday "technical group meetings" (in-service teacher training), (4) a longer (6-hour) school day, (5) encouragement of age-appropriate school participation, (6) stronger community links, (7) improved living conditions for teachers, (8) encouragement of child-centered learning methods, (9) regular supervision of schools, and (10) increased access for disadvantaged children. While there is already considerable overlap (see Annex 13) between the Ministry's ten priorities and the international findings on effective schools, an explicit second-order objective of the loan is to expand the Government's understanding of and vision for basic education. An economic analysis of the demonstration model would involve a comparison of changes in enrollment rates, student flows (repetition and dropout) and achievement test scores in the school clusters supported under the project with comparable changes in a control group of school clusters. The logical control group would be school clusters in the same three provinces (Takeo plus two others to be decided) that will not be supported by the project but will receive only the regular government financial and  Page 9 administrative support. However, because all clusters in the three provinces are likely to receive some .level of support under the project, the exact amount to be decided on a competitive basis, it would be impossible to construct a truly random control group without purposefully restricting the participation of school clusters in the three provinces. For this reason, the analysis will consist of a comparison of the three provinces supported under the project with progress over the same period for the education system as a whole. The educational outcomes tracked here (enrollments, student flows and learning achievement) will be affected, not only by the interventions supported under the project, but by other factors as well, for example, by initial teacher and administrative capacity, which can differ very much across provinces in Cambodia. Takeo is in many respects (by Cambodian standards) an advantaged province -- and has been chosen for inclusion in the pilot program for this very reason (to facilitate the development of a good demonstration model), but the extension of the program to two additional pilot provinces would be expected to result in more diversity in terms of management capacity and poverty. Moreover, even within Takeo, institutional capacity varies significantly. The framework for the economic analysis will begin with a simple matrix such as the one presented in Annex 14. Outcome indicator information will be made available on an annual basis by the EMIS Center of MoEYS' Department of Planning and the Grade 4 achievement exam supported under this project. Project intervention data will be assembled by the district project animators and collated by the three Provincial PlUs. A simple cost-effectiveness analysis can be carried out directly with the information in the matrix. The cost of achieving a given percentage improvement on any of the performance indicators (over and above any improvement occurring nationally without the benefit of the project interventions) can be computed and compared across different interventions tried under the project. A cost-benefit analysis could be carried out by introducing additional information on the economic value of unit improvements in the values of each of the performance indicators. The required market weights are not readily available, but rough estimates are possible. The value of increased enrollments and reduced student drop-out which result in more children completing the full six years of primary education can be estimated by comparing the productivity of rural workers with and without this educational credential. Similarly, the value of higher examination pass rates can be estimated by the increased productivity on the part of those with higher learning achievement levels. A rough estimate of the value of increased female enrollments can be obtained by measuring the increased health and reduced mortality and, as a result, reduced medical costs and increased productivity on the part of children who are raised by more educated mothers. Finally, the value of reduced repetition can be estimated by the reduced social (private plus fiscal) costs of students who pass more quickly through six years of education, i.e., in fewer years on average, thereby saving on what is spent per school completer. 2. Financial: (for LIL, enter NPV=US$ Million; FRR= % data if applicable or 'Not Applicable. See also Annex 6) Not Applicable 3. Technical: The project's principal technical challenge is to align the vision of effective schools in Cambodia with the best of international and domestic practice. This "vision" is important because it helps to define the work of the animators and it helps to inform policy directions (See Annex 2: Detailed Project Description). As noted above (and in Annex 13), the Government's 10 priorities for primary education represent a step in the right direction, but in themselves fall short of what international research suggests what might be  Page 10 needed to make schools effective. The impressive performance of the pilot program for school quality improvement grants that was run under the PHRD grant makes the team confident that the participatory process and dialogue generated as a result of the project will considerably advance technical standards. However, key to the continuing learning process will be the use of technical assistance to inject new ideas into the system, careful monitoring and evaluation of grants by the animator service to determine what works to improve schools. The project staff will need to carefully analyze and transmit that information to key committees such as the Provincial Grants Management Committee and the National Committee on Effective Schooling in order to create a "feedback loop" needed to improve policy. 4. Institutional: Executing agencies. This is the first education project for the Kingdom of Cambodia. In order to deal with the lack of institutional structures for implementation of IDA-supported projects, a PHRD grant piloted the project concept in Takeo Province and began to develop the required institutions to support the IDA-financed project. Based on the experience of the pilot program, the appraisal mission concluded that the national, provincial, district and school level organizations have been able to build appropriate organizational, managerial and communication structures to implement IDA projects. The capacity of the implementers was strengthened through intensive training programs and continuous site-visits to the pilot area. However, there are still some issues that the project must pay special attention to: * The implementation capacity of new districts and provinces as they are phased into the project. As the project expands to all districts in Takeo province and two more provinces are phased into the LIL, there is a risk that their institutional capacity will be strained by the demands of project implementation. The project design has taken this into account and has incorporated continuous training at the provincial and district levels for implementation staff. IDA supervision missions will carefully assess the institutional capacity of new implementation units and make adjustments to the training programs as needed. * Coordination between NCES and school cluster activities. The appraisal mission reviewed a mechanism for feeding the results and lessons learned from the school based grant activities back to the national level policy decision makers. The IDA task team is assisting the government to create a structure that will feed information back to the national level policy makers. The task team will monitor this project activity closely through the PIU and during supervision. 5. Social: There was considerable debate during identification about project targeting. The Government initially proposed a project which would direct resources toward areas which have to date received little else in the way of donor financing. It discussed with the identification team: (a) the alternative of directing resources - especially in the experimental LIL phase - to areas where some demonstrated level of capacity to implement the project exists and where the project could be regularly monitored; and (b) the need to focus the small amount of money on a few objectives in a relatively concentrated area. The Government and the IDA agreed that under the initial IDA credit, project activities would be concentrated in just one to three provinces that have already, usually with donor support, developed school clusters. Subsequent loans would permit expansion to other provinces, building on the experience acquired in this first LIL. The program would thus expand out from an area from which: * The program can be monitored closely as animation methods and grant procedures are developed; and * TA can be easily provided for training, until such a time that core services develop to stage where supply is available in more remote provinces  Page 1 1 The program would be expanded into provinces based on the following criteria: * Accessibility for monitoring and provision of TA * Availability of potential animators * Security * Capacity of school clusters * Management capacity at the provincial level * Expressed interest by the provincial staff and clusters in participating in the program * Proximity to the original province (to allow efficient provision of animator and TA services and to allow clusters to learn from one another) The project will begin by serving Takeo province and expand to two additional plains provinces. As a condition of negotiations, the Government will develop a proposal for selecting additional provinces to participate in the project based on the above criteria. The Government will propose to the IDA weights that are to be assigned to the criteria. The plains provinces will then be evaluated against the agreed selection procedures and final selection completed by January 2000. To promote equity of grants allocation across the province and clusters the project would calculate a single per student per year expenditure estimate based on the overall amount of grant money available and the number of student years in the project in the selected provinces.8 Each province would be provided with a notional allocation for grants over the life of the project, calculated by multiplying the number of student years in the project by the per student per year expenditure. In turn, each cluster would have a notional allocation based on the same formula. The first grant to a cluster would not exceed 25% of its notional allocation. No subsequent grant would exceed 40% of its notional allocation, and the total of all its grants would not exceed 100% of its notional allocation. Grants would only go to those clusters that manage to put forward proposals determined to be feasible and to have a good chance of success (see criteria for grants selection in the Operational Manual). A cluster that does not manage to do this, therefore, will not make use of all of its notional allocation. To decrease potential disparities, animators will give extra technical assistance to those clusters that wish to participate in the program but find it difficult to develop acceptable proposals. 6. Environmental assessment: Environmental Category [ ] A [ ] B [x] C The project is not expected to have any significant effect on the environment. 7. Participatory approach: a. Primary beneficiaries and other affected groups: The primary beneficiaries of the grants will be students and their families, teachers, and school managers. The mechanisms for participation in this project involve these beneficiaries as collaborators in developing quality improvement grants. b. Other key stakeholders: Other key stakeholders include MoEYS staff at the national, provincial and district level, NGOs and donors. MoEYS staff collaborate in designing and assessing grants, while NGOs and other donors play a key consultative role through the National Committee on Effective Schooling and support to provincial management. ' Student years in the project will equal the number of students (as reported in the 1998/99 EMIS statistics) multiplied by the number of years the province is scheduled to participate in the project. Adjustments will be made to account for the rate at which provinces are phased into the project.  Page 12 F: Risks 1. Critical Risks: (reflecting assumptions in the fourth column of Annex 1) From Outputs to Objective Assumes the availability of a pool of qualified S The project will include significant people who can be trained to become effective resources for training of animators. animators in a relatively short period of time. A parallel project with DflD will provide VSO volunteers to build the capacity of animators. Government support for operational budgets at S Key staff will be supported by the the provincial and district levels has project. Counterpart funds will be traditionally been very weak. dedicated to increasing operational budgets for other staff at the provincial and district levels. However, the timely availability of counterpart funds for donor projects has been a consistent problem in Cambodia. IDA is engaged in a dialogue with the MEF on this issue. Assumes remuneration at such a level that key H Following the practice of most staff are motivated to perform to the best of development agencies, the project their abilities. will pay supplements to key staff, according to regulations set forth by the MEF with the IDA and other donors. Assumes availability of goods and services for M The provincial grants committee schools to access or purchase (e.g. trainers, should adjust the number of books, materials) proposals approved based on availability of goods and services and the ability of the province and private suppliers to organize delivery. Assumes that constraints on improving quality M IDA will engage in a parallel at the school level can be overcome through a dialogue with Government on key combination of participatory processes at the constraints to improving quality at cluster level and guidance and funding from the the national level. MoEYS.  Page 13 . ~ ~ ~ ~ U& ,. , ... ,_Rk From Outputs to Objective The proposal assumes willingness among key S There has been frequent turnover of actors to support what, for the MoEYS, is a senior staff in the MoEYS and this radically new change strategy, replacing an is expected to continue with the institutional culture which demands rigid proposals to lower the mandatory conformity with one that tolerates and promotes age of retirement to 55. The project diversity. has tried to anchor operations at the provincial level where staff turnover is slower and among a broad range of stakeholders. Assumes a willingness to systematically gather N Lessons should be presented in lessons from practice and to use findings to Khmer in an easily accessible and inform policy. There may be occasional readable format, and should be the conflicts with bureaucratic or political decision subject of structured discussions making processes. between policy makers and project staff and between IDA staff and MoEYS staff during supervision. Perhaps most importantly, the project promotes discussion of key lessons through existing forums, such as the Annual Education Meeting and the Cluster School Committee structure. Overall Risk Rating M/S = Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk) 2. Possible Controversial Aspects: Selection of provinces that will participate in the project is a potential subject of controversy. MoEYS leaders are sensitive to the need to share resources but also to balance this with concerns for good management at the local level and to increase the chances for successful implementation. IDA and the Government will agree on a transparent framework for selection of provinces by negotiations, and the government will be given a generous amount of time (until January 2000) to build consensus among key stakeholders on the selection procedures. G: Main Loan Conditions 1. Conditions of negotiations and effectiveness * Conditions of negotiations * Final agreement on the ToRs for the key positions in the PIU (National Director, Chief Technical Advisor, Financial Officer). * Agreement on the weighting of selection criteria for 2 provinces that will enter the project in during second year of implementation. * Formal commitment by the Government (MEF ) for the provision of counterpart funds.  Page 14 * Conditions of effectiveness * Approval by IDA of an operational manual for the grants program and of the project implementation plan. * PIU has been established, and the national project director, chief technical advisor and financial officer duly appointed. * Deposit into the project account of the first project year's counterpart funding. 2. Other: (classify according to covenant types used in the Legal Agreements) Financial covenants: * Submission to IDA by December 31 of each year of an audit report covering the previous fiscal year. Implementation covenants * Submission to IDA by April 30 of each year of a project work program for the following project year (July-June). * Submission to IDA by December 31 of each year of a project progress report covering the previous fiscal year (July 1- June 30). * To make available, on a timely basis, counterpart funding for project management and for operational budgetary support to project provinces. H: Readiness for Implementation [ ] 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. [x] 1. b) Not applicable. [ ] 2. The procurement documents for the first six month's activities are complete and ready for the start of project implementation; and a framework for agreement on standard bidding documents that will be used for ongoing procurement during the project has been established. [x] 3. The LIL's implementation plan has been appraised and found to be realistic and of satisfactory quality. [ ] 4. The following items are lacking and are discussed under loan conditions (Section G): I: Compliance with Bank Policies [x] 1. This project complies with all applicable Bank policies. [ ] 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. [signature] Team Leader: Christopher Thomas [signature] Sector Director: Alan Ruby [signature] ! Country Director: Ngozi Okonjo-Iweala  Annex 1: Project Design Summary Kingdom of Cambodia: Education Quality Improvement Program Hirarchy of Objectiv Key Pert ance Monitoring and CrWiti Assumptions ____________ Idje$or R>UatiOII Sector-related CAS Goal: Sector Indicators: Sector / Country Reports: (from Goal to Bank Mission) Strengthen the human Greater educational EMIS and examinations unit The Bank's mission is to resource base by improving achievement of the school data. reduce poverty. This the quality of education. age population, evidenced project will contribute to by improved enrollment and this goal to the extent that: Follow-on Development flow statistics in basic (i) improving the quality of Objective: education and improved education improves Build a more adaptive achievement scores (see productivity; (ii) improving management structure in the Annex 14). productivity results in MoEYS in which the higher earnings and Ministry: (i) forges stronger ultimately to a reduction in partnerships at the local poverty; (iii) improving the level to improve school quality of education operations; (ii) manages contributes to better health, resources according to reduced rates of population performance; (iii) increases growth, and more even flexibility in decision income distribution, and making by devolving consequently to a reduction authority to the provincial in poverty; (iv) investments and school level; (iv) uses in basic education have lessons from practice to particularly high social improve policy; and returns. (v) promotes greater coordination of donor inputs to support effective primary schools. Project Development Objective: Outcome I Impact Indicators: Project Reports: (from Objective to Goal) Develop a demonstration Schools participating in the Project monitoring reports The philosophy behind the model, shown to be program should increasingly of outputs and outcomes, project implies a cultural effective for extension to demonstrate the making use of available shift in the relationship other provinces, of a characteristics of effective EMIS and examinations between the MoEYS and participatory approach to schools (See Annex 13). data. school clusters. It school quality improvement Clusters should begin to encourages the MoEYS to through performance based realize improvements in Mid-term and completion be more "adaptive" and less resource management. student enrollment, evaluations, drawing on "mechanistic" in its attendance, student flows, MoEYS policy documents. management style. It also and achievement. encourages the MoEYS to support bottom-up, Government draws lessons participatory program from practice for policies to implementation as opposed improve teacher motivation, to more top-down, lower the cost of education, command style program reduce repetition and implementation. dropout, and increase the time available for learning.  Annex I Page 2 of 4 Output from each component: Output Indicators: Project Reports: (from Outputs to Objective) The primary outputs of the Project mid-term and LIL will be (i) an completion evaluations assessment of the viability of a participatory approach to school quality improvement and (ii) lessons from practice for key policy issues. Effective extension service Skills and work habits: A Evaluations of the skills of Assumes the availability of group of resourceful and animators and the quality of a pool of qualified people effective animators working their work by lead TA, who can be trained to to support quality MoEYS management and become effective animators improvement programs in NCES. in a relatively short period the majority of clusters in of time. participating provinces Assumes remuneration at Processes: Animators learn such a level that key staff from their work and use are motivated to perform to lessons to further develop the best of their abilities. their animation processes and to inform policy makers. Schools have financial and Outputs: School clusters Project monitoring reports Assumes availability of human resources needed to participating in the program of outputs and outcomes, goods and services for implement quality demonstrate more making use of available schools to access or improvement programs. characteristics of effective EMIS and examinations purchase (e.g. trainers, schools (see Annex 13). data. books, materials) Capacity: By contrast with Evaluation of the quality of Assumes that constraints on the baseline proposals proposals by MoEYS improving quality at the prepared during the pilot personnel and external school level can be program in 1998, grant evaluators. overcome through a proposals and performance combination of participatory show evidence of improved processes at the cluster level ability of cluster participants and guidance and funding to define their own quality from the MoEYS. improvement priorities, design action plans to realize those priorities, and mobilize all available resources inside and outside of the province to achieve their development goals.  Annex I Page 3 of 4 Uierarcby of Objectves Crltkf.i Assusptions MoEYS services are geared Service improvement: EMIS reports. The proposal assumes toward supporting informed EMIS data is available at the willingness among key decision-making and school cluster level and Project to mid-term actors to support what, for program implementation at utilized for planning and evaluation to examine the MoEYS, is a radically the sub-national level. evaluation purposes. changes in the policy new change strategy. process and the extent to replacing an institutional Processes: (a) Establish which field level culture which demands rigid model methods of policy participants feel and conformity with one that fornation and supervision demonstrate a sense of tolerates and promotes that are more responsive to empowerment to take diversity. stakeholder experience, by responsibility for their own strengthening participatory development. Government support for mechanisms at each level operational budgets at the (national advisory board, provincial and district levels national committee on has traditionally been very effective schooling, weak. provincial grants committees, district committees, cluster committees, PTAs); (b) MoEYS regulations include provisions for increased devolution of authority for decision making for school and classroom management. Qualitative change: Greater variance evident in school management practice, e.g. with regard to timetables, curricula, extra-curricular activities, reading and instructional materials, and school and classroom appearance. Policies show evidence of More flexibility noted in Review of education policy Assumes a willingness to greater sensitivity to the national policies on such and practice in mid-term systematically gather realities of field key issues as school hours, and completion evaluations. lessons from practice and to performance and institutional management of use findings to inform stakeholder vision. fees, curriculum, and policy. There may be promotion policies. occasional conflicts with bureaucratic or political decision making processes.  Annex I Page 4 of 4 Project Components/Sub- Inputs: (budget for each Project Reports: (from Components to Outputs) components: component) Quarterly project reports 1. Quality improvement 1. $3.95 million Disbursement reports grants program 2. $0.72 million a. Staff and train provincial 3. $0.88 million animator services b. Support for the Provincial Grants Management Committee c. Quality improvement grants for school clusters d. Monitoring and evaluation 2. Institutional strengthening: a. Support for the National Committee on Effective Schooling b. Policy studies, including development of a grade 4 achievement test and a study to propose a framework for deconcentration of authority for decision making. c. Operational support for provincial and district education offices. 3. Project management  Annex 2: Project Description Kingdom of Cambodia: Education Quality Improvement Program By Component: Project Component 1 - Quality Improvement Grants Program - US$3.95 million The Quality Improvement Grants Component is the centerpiece of the LIL. The goal is to establish a process in which a MoEYS policy both supports and is enriched by practice at the school level. The grants process begins with development of a vision for effective schools, based on input form a variety of experts within the MoEYS, key stakeholders and practitioners. A set of animators with that vision in mind, then works with community and school cluster leaders to engage them in a discussion about effective schools, in identifying problems and solutions in their own schools, and in developing cluster improvement plans as a basis for preparing grant proposals. Those proposals are reviewed by a grants committee to ensure that they are in line with national priorities and informed by best practice. The committee provides a preliminary list of approved proposals to the provincial directors who then work out a program of support to schools and adjusts the number of proposals to be approved based on capacity constraints (e.g. for the number of teacher trainers available). Once final decisions are made, clusters are notified that their grants have been approved and funds are distributed in an open and transparent manner. Animators return to help clusters implement their programs and to assist in monitoring and evaluation. Their lessons from practice are systematically gathered and fed back into further development of the vision of effective schools and improvement of their animation process. Details on steps in the process may be found in Annex 3 and in the Operational Manual for Education Quality Improvement Grants and the Animators Manual. Grants Process MoEYS Policy Define vision for effective schools Animation process v Grants review v POE support plan V Grants award V Implementation V. Monitoring and evalustion Lessons  Annex 2 Page 2 of 7 In parallel to the this LIL, DfID will support up to 12-15 Voluntary Services Overseas (VSO) volunteers to help build the capacity of animators. The volunteers will be experienced teachers or teacher trainers and will help animators to broaden their vision of effective schools, to develop the animation process, and to monitor and evaluate grants. Each volunteer will support approximately three animators. Most volunteers will be based in the districts, however in each province one volunteer may be based at the provincial level. In addition to supporting animators in neighboring districts, that volunteer will work closely with the PPIU on issues of training, monitoring and evaluation, and team building within the animation team. The component will provide funds to (i) staff and train animator services in participating provinces, including provincial teams consisting of a Technical Assistant, Animator Coordinator, Accountant, and district-based Animators in the ratio of approximately one for every five school clusters; (ii) support for a provincial grants management committee in each province that will meet annually to evaluate grant proposals against agreed criteria and periodically to assess progress of grants (honoraria for the PGMC are to be funded by Government counterpart contributions); (iii) quality improvement grants to school clusters (provinces are also eligible to apply to the PGMC to use up to 5% of grant funds for provincial level activities in support of cluster grants, e.g. for the training of trainers); (iv) and training, monitoring and evaluation funds for activities related to the professional development of animators and to assist in the monitoring and evaluation of grants by other officials. Project Component 2 - Institutional Strengthening - US$.72 million Institutional strengthening/capacity building of Cambodia's education sector is an important secondary objective of the LIL (the primary objective being the development of a participatory approach to school quality improvement which could, if effective, be replicated throughout the country). Institution building will be a by-product of the grants program itself, but a small Component 2 will be included in the project and devoted explicitly to this objective. Component 2 will comprise the following sub-components: First, the Technical Advisory Committee, established during the PHRD phase (preparation) of the project to serve as a steering and oversight body for the project, will be provided with expanded terms of reference and transformed into a sub-committee of the National Committee on Effective Schooling (NCES) (see Annex 16). (Honoraria for the NCES are to be funded from Government counterpart contributions.) Second, the process of conducting policy studies on key policy issues in the education sector, begun under the PHRD, will be supported under this component of the project on an as-needed basis. During project preparation, studies were carried out on the following topics: the development and current status of school clusters in Cambodia, EMIS support needs for school clusters, a manual for administration of the grants program for quality improvement in school clusters, teacher employment models in other countries and their relevance for Cambodia, and individual studies on incentives for primary teachers, local school accountability and effective teaching hours in Cambodia. Two studies planned currently for financing under the project are (1) the development of a national learning assessment examination to be administered on a sample basis at the Grade 4 level, and (2) a review of school decentralization experience, both in Cambodia and in other countries, and specification of the necessary institutional and legal framework which might make further decentralization both possible and effective. Third, while the project provides support for animators based at the district level (under component 1) it also recognizes the critical role of other provincial and district education staff in providing support to schools. It therefore provides for a separate sub-component to enhance the operational budgets of provincial and district offices. This sub-component will be funded fully out of counterpart funds.  Annex 2 Page 3 of 7 National Committee on Effective Schooling (NCES). A National Committee for the Support of Effective Primary Schools (NCES) will be organized with the principal goals of: (a) providing policy guidance and technical advice on the implementation of the LIL project, and (b) ensuring that the lessons learned from the management of the LIL project are effectively transmitted to Cambodian policy makers. (See Annex 16 for draft TOR.) The long-term goals of the NCES could well be expanded to embrace other sub-sectors (pre-school, non-formal education and lower secondary) to cover the whole sector and to other provinces. This Ministry committee will deal with issues of policy, planning, process and budget functions for the effective operation of primary schools. The committee will include representation from stakeholders involved in providing resources for primary education, and will meet under the general chairmanship of the Ministry. The functions of the NCES will be to: (a) provide annual inputs to the Annual Education Meeting on improvements in primary education and for the development of the National Vision of Effective Schools; (b) use the lessons learned from the management of the LIL project to improve the resource management practices within the Ministry, between donors, and between donors and the Ministry; (c) advise the Ministry on the management of the LIL project; and (d) assist IDA in monitoring the implementation progress of the LIL-supported project. Grade 4 learning assessment examination. In order to provide one measure of the impact of the project's interventions, it will be important to be able to assess whether or not there have been improvements in pupil learning achievement in schools supported by the project. The project will therefore support the development and implementation of a grade four pupil learning achievement test.9 The test, limited to Khmer and mathematics, will attempt to measure pupil literacy and numeracy at the end of each year of the project and will cover all project- supported. In order to measure the impact of the project on clusters supported by the project, a sample of non-project-supported clusters will also be included in the testing process as a control group. The test materials will be developed by various units within the Ministry of Education Youth and Sport (MoEYS) under the leadership of and with technical advice from the Cambodia Australia National Examinations Project (CANEP). Other units that should have an important role in the development of the fourth grade test will be the Departments of Primary and Pre-School Education, Secondary Education, Teacher Education and Pedagogical Research and other units as are appropriate. It is expected that CANEP, and especially the Cambodian counterpart staff who have recently taken part in the development of the national Grade Nine and Grade Twelve examinations, will take the lead in designing the test. The test will be administered at the school level by the district animators in the project-supported provinces and by the Provincial Inspectors in the selected non-Project provinces. Plans call for the test to be administered in May of 2000, 2001, 2002 and 2003. Presented below is a rough schedule for the development, preparation, production, and administration of the test and the analysis of the results. The results from the project-supported clusters will be used by the animators in their discussions with school clusters at beginning of the proposal cycle in the year 2000, 2001 and 2002. Achievement data from these tests will also be used in cost effectiveness analysis for the project. ' Grade four has been chosen as a point at which basic literacy and numeracy skills can be tested while there still remain a substantial number of pupils in rural schools.  Annex 2 Page 4 of 7 Academic Academic Academic Academic Year Year Year Year 1999/00 2000/01 2001/02 2002/03 Activity Preparation of Activity TOR Sep-99 Annual Contract with Nat'l Examination Unit Sep-99 Sep-00 Sep-01 Sep-02 Appointment of Steering Committee Oct-99 Preparation Workshop - 12 days x 10 people Nov-99 Nov-00 Nov-01 Nov-02 Question Writing Wkshp - 6 days x 5 people Dec-99 Dec-00 Dec-01 Dec-02 Trial of test questions Jan-00 Jan-01 Jan-02 Jan-03 Results and Review Wkshp - 6 days x 10 people Feb-00 Feb-01 Feb-02 Feb-03 Production of Test Mar-00 Mar-01 Mar-02 Mar-03 Test administration May-00 May-01 May-02 May-03 Analysis of Test Results - 6 days X 10 people Jun-00 Jun-01 Jun-02 Jun-03 Study of school decentralization. Can further decentralization improve the efficiency and effectiveness of the Cambodian education system? By shifting some decision-making responsibility to local education authorities and school cluster committees, can decentralization improve the transparency, timeliness and responsiveness (to local needs) of decisions regarding the allocation of resources for education? Will it improve the accountability of local officials, school principals and teachers and, by doing this, reduce wastage and improve performance? There is a growing literature reflecting experience in many countries, both OECD and developing, which could provide some answers to these questions and give guidance to Cambodian policymakers as to what is possible and appropriate. About mid-way through the LIL, a study will be carried out to review the international experience and reflect also the experience with decentralized decision making in Cambodia (including experience under the project) and to suggest directions for further development. An important aspect of the study would be discussion of legislation and institutional changes needed to make decentralization possible and effective for education in the country. Operational support for provincial and district offices. The operational budgets for provincial and district offices are currently provided through the Government's Chapter 11 funding. Among other items of expenditure, this chapter includes funds for transportation, utilities, furniture, materials and equipment, allowances, maintenance, and training. Chapter 11 budgets have historically proved inadequate to ensure the provision of key services to schools by provincial and district officials, for example, regular visits to schools by inspectors and directors, record keeping, and training. Furthermore, actual expenditures have historically fallen short of budgeted expenditures because actual transfer of funds through the government's finance system have fallen short of expectations, with the result that actual funds available at the district level fall far short of need. 1 0 The project would address this shortfall by requiring that counterpart funds be made available to increase operational funds for the provincial and district offices. With enhanced funding the province and district would be expected to demonstrate improved levels of service for schools as a whole and thus improved ' The shortfalls at the district and provincial level are partially compensated for by a component of the EU-funded PASEC program which provides support to district and provincial offices based on agreed budget proposals. In the program, PASEC provides an allocation for operational expenses to each province. The provincial and district education offices each propose operational budgets in fornats that are compatible with Chapter 11 guidelines. They then aggregate proposals and jointly decide how funds from Chapter 11 and PASEC are most effectively distributed. The PASEC program is scheduled to close in 2001.  Annex 2 Pagge 5 of 7 support for development, implementation and monitoring of cluster improvement plans funded through component 1 of this project. US$440,000 base costs ($504,096 including contingencies) in Government counterpart funds would therefore be made available to provinces participating in the project on the following basis: * Funds would be made available to the project through an account established for project counterpart funds and will, at minimum, reach annual targets set forth in the table below. * Distribution and use of funds at the provincial and district levels would be decided through practices established by the provinces and the PASEC program (see footnote 10). However, we would expect at least 60% of the counterpart money to be allocated to district offices. * Counterpart contributions must be additional to actual transfers through the previous year's chapter 11 funding for the province. * Funds would be made available on the following timetable: To: FY 2000 FY 2001 FY 2002 FY 2003 Project province 1 $20,000 $40,000 $50,000 $50,000 (20,700) (43,666) (57,300) (60,166) Project province 2 $40,000 $50,000 $50,000 (43,666) (57,300) (60,166) Project province 3 $40,000 $50,000 $50,000 (43,666) (57,300) (60,166) Project Component 3 - Project Management - US$.88 million The project will be implemented at the national, provincial, district and school level (see table below). The Ministry of Education, Youth and Sport (MoEYS) will have overall responsibility for the implementation of the project. This component will provide support for a national Project Implementation Unit (PIU) and a Provincial Project Implementation Units (PPIU) in each participating project province to implement the project. Project Implementation Unit (PIU) The PIU consists of national project manager, chief technical assistant and project financial officer and other support staff. It will be responsible for managing the overall direction of project for the MoEYS. The PIU will continuously review the grants management process, assist all groups in identifying difficulties, and facilitate technical assistance as well as provide training and technical support to the district animators, PPIU and PGMC in screening and evaluation of the proposals. In addition, PIU staff will monitor all financial aspects of the project and provide the required reports to the MoEYS, Ministry of Finance and IDA. The project will support technical assistance, honoraria, equipment and furniture, goods and supplies, other operating expenses, and transportation for the PIU. Expenses for office rental will be paid from Government counterpart contributions. Provincial Project Implementation Unit (PPIU) The PPIU consists of a provincial project coordinator, lead technical assistant, and translator and provincial project accountant. It will promote and coordinate all project activities at the provincial level,  Annex 2 Page 6 of 7 training district animators and overseeing the animation processes, proposal review and monitoring and evaluation activities. PPIU staff will review incoming grant proposals and assist the PGMC in the annual selection of proposals as well as the transparent distribution of grant funds to the LCSCs. The PPIU will also coordinate with other donor projects at the provincial level to ensure that project resources are being used effectively and efficiently. The PPIU will also review monthly financial and implementation progress reports to identify problems, issues, or concerns related to overall project implementation and submit monthly reports to the PIU on provincial activities. It will maintain a sound database of all project information in order to facilitate assessment and reporting of project activities. The project will support technical assistance, honoraria, equipment and furniture, goods and supplies, other operating expenses, and transportation for the PPIUs. Expenses for office rental will be paid from Government counterpart contributions.  Annex 2 Page 7 of 7 LEVEL STRUCTURE CHARACTERISTICS PROJECT MANAGEMENT RESPONSIBILITIES NATIONAL National Committee Membership TBD, but to Project Oversight and Policy Guidance: on Effective include key heads of Transmits lessons learned from the project to policy Schooling (NCES) concerned departments in the makers. MoEYS, provincial and Advises the PIU on operational issues. (activities funded animator representation, and through component 2) key donors to primary education. Project National Project Manager, Project Management: Implementation Unit Chief Technical Advisor, Supervises implementation of the grants process in (PIU) Project Financial Officer, accordance with LIL agreement, seeks resolutions for other project support staff. equity and funds availability issues. Reviews projects approved by the PGMC to identify potential areas of policy conflict or question in relation to operational manual and or vision for effective schools and submits to NCES for information purposes. Provides training and technical support to PGMC in screening, and evaluation of the proposals as needed. Provides financial management and facilitation of all technical assistance, oversee studies, seminars and workshops and Donor and NGO relations. PROVINCIAL Provincial Cluster Director of POE, Vice Project Review, Evaluation and Approval: School Committee, Director, the Chiefs of the Discusses with Animators results of previous years grants. Provincial Grants provincial education offices Reviews and approves all project proposal submitted by Management of accounts, pre-school and DCSC based on the criteria set forth in the Operational Committee (PGMC) primary education, general Manual.. secondary education, teacher Notifies grant applicants if of the decision and oversee the (activities funded training, inspection, and disbursement of funds to recipient clusters. through component 1) planning and management, Discusses with PPIU once the status of implementation. plus the PPIU lead Technical Meets with Animators, LSCS, and DOE to discuss its assistant and project vision for coming year at the end of the school year. accountant. *Chief DOE as observer. when the District's proposals are being reviewed. Provincial Project Provincial Project Provincial Project Co-ordination: Implementation Unit Coordinator, Lead Technical Co-ordinates provincial project activities. (PPIU) Assistant, Translator, Project Trains District Animators and other staff. Accountant Oversees the animation, proposal development, and monitoring of approved school Cluster Project activities. Facilitates TA and co-ordination of donor projects at provincial level. Promotes sound financial management practices and oversees the provincial disbursement of project funds. Assists PGMC in implementing guidelines in the operational manual, as needed. DISTRICT DOE District Education Officer, Monitoring and Evaluating Grants Impact: Deputy Chief, Assistant Works with district-based animators to support (activities funded chiefs of primary education, implementation and monitoring of the grants to local through component 2) accounts section, and cluster school committees. community representative, with animator(s), project accountant and VSO as facilitators District-based District Animators/VSOs Cluster Animation: Animators Team LCSC directors Assists clusters in developing a vision for effective schools, conducting needs assessments, planning, resource (activities funded mobilization, proposal development, implementation, and through component 1) monitoring and evaluation.   Annex 3: Details of Quality Improvement Grants Process Grants Process MoEYS Policy A. Define vision for effective schools v B. Animation process C. Grants review V D. POE support plan 7 E. Grants award v F. Implementation G. Monitoring and evaluation H. Lessons A. Effective Schools Vision 1) Each year a National Committee on Effective Schooling gathers to discuss its vision for effective schools. (The Committee would be a working group of the Annual Education Meeting, and would prepare its work in advance of the annual September Meeting.) Its vision informs the animators' discussions with school clusters. Its provides a mechanism to transmit the MoEYS' expert knowledge and development priorities to the school level. 2) Practical experience with implementing that vision is channeled back to the committee through reports of lessons learned by animators and POE officials. B. Draft Animation Process 1) Introductory meeting - meet the cluster committee members, teachers, community members to introduce self and gauge interest in participating in the program 2) Cluster committee and PTA meeting a) Explain how the grants program works b) Discuss a vision for effective schools  Annex 3 Page 2 of 6 (if no PTA, begin process to form one) (suggested format: meet separately with committee and PTA and then together) 3) Action planning a) Needs identification (using EMIS, test, attendance, repetition, dropout, school schedule data) i) Identify problems ii) Assign further investigation (make mini-grant available for this purpose) b) Solutions discussion i) Identify solutions ii) Prioritize solutions c) Planning discussion i) Discuss who could do what, when, and how ii) Discuss costs and sources of funds iii) Discuss how results can be monitored and evaluated d) Develop a cluster improvement plan as a basis for the preparation of annual grants proposals 4) Proposal writing and submission (3-4 weeks) 5) Notification of grants award a) If successful, plan to receive money i) Provide evidence of a public meeting to announce grant ii) Provide training in record keeping/grants accounting iii) Develop a calendar of implementation activities iv) Develop a supervision plan b) If not successful i) Explain why and how to improve ii) Return to step 3) if desired 6) Grant award distribution ceremony 7) Implementation of phase I a) Identify resources (trainers, suppliers, etc.) b) Schedule implementation activities c) Purchase goods and services d) Check accounting  Annex 3 Page 3 of 6 8) Implementation of phase 11 a) Review results/outcomes of phase I b) Check accounting c) Submit request for second installment of funds d) Repeat 7. 9) Monitoring and evaluation a) Monitor outputs - e.g. number of books purchased, teachers trained, etc. b) Evaluate outcomes - e.g. increase in enrollment, perceived changes in motivation, improved leaming, increased pass rates 10) Animators meet as a group to discuss: a) Results of step 9. b) Lessons for improving educational development vision and process c) Lessons for improving the animation process 11) Animators meet with Provincial Grants Management Committee and POE officials to report results of the grants process and lessons learned. C. Grants review I) Provincial Grants Management Committee (PGMC) meets with animators to discuss the results of the previous year's grants 2) PGMC meets with the National Committee on Effective Schooling to discuss its vision for effective schools and the national priorities for the coming year 3) Review proposals for preliminary approval a) Is the proposal embedded in a coherent cluster improvement plan? b) Does the proposal advance the national vision and meet priorities? c) Is the proposed grant based on well thought out needs assessment, beginning with the cluster's statistical summary (to include enrollment, girls enrollment, repetition, dropout, achievement (if available) and other indicators as appropriate)? d) Is there a clear linkage between objectives, needs, activities, outputs (measures of activities) and outcomes (as measures of objectives)? e) Has the proposal been approved by school directors in the LCSC and community representatives? f) Do the proposed activities reduce differences among schools within the cluster by addressing the needs of the weakest schools within the cluster? g) Is the implementation plan realistic (e.g., is an organized plan presented, is the timetable realistic, what evidence is there of the cluster's capacity to implement the plan)? h) If the cluster received a grant in the previous year, does it have a record of successful implementation: i) Is the budget reasonable for the tasks proposed?  Annex 3 Page 4 of 6 4) Summarize potential demands on provincial services (e.g. for trainers) and adjust the number of approved proposals if necessary. (make adjustments based on a clear set of priorities, criteria, or a clear plan for providing POE support to clusters) 5) Notify grant applicants a) Invite winners to a grants distribution ceremony b) Provide those clusters rejected with a report on reasons for rejection and suggestions for improving their application in the next round. D. POE support plan I) Following step C) 3) above POE officials summarize potential demands by cluster for services, e.g., trainers, training programs, libraries, etc. 2) The POE assesses available capacity and develops a plan to serve cluster needs. This might require, for example, identifying qualified teacher trainers, allowing some schools to move their regular training from Thursday to Tuesday (to take better advantage of scarce trainers), or identifying resources for community participation or school management training. 3) POE informs PGMC of scope for supporting programs so that PGMC can adjust the number of grants to be awarded based on capacity. E. Grants award I) Notify clusters that are to receive grants 2) Certify that cluster has submitted evidence of cluster school committee, teacher and community meeting to announce grant award (see B) 5) a) i) above) 3) Certify that cluster has received training in grants accounting (see B) 5) a) ii) above) 4) Distribute grants in a public ceremony with cluster committees and community representatives present F. Implementation Cluster school leaders work with animators to implement grants: see B) 7) and B) 8) above. G. Monitoring and evaluation 1) A monitoring and evaluation plan is built into the grants process.  Annex 3 Page 5 of 6 2) Animators work with Cluster leaders (see B) 9) above): a) To monitor outputs - what the cluster said it would purchase, e.g. train 80 teachers, purchase 400 books, create 20 additional afternoon classes. b) To monitor outcomes - what the cluster said it would achieve, e.g. increase enrollment, reduce repetition, improve motivation, and improve teaching methods. Relate to data used at the beginning of the needs identification process (see B) 3) a) above) H. Lessons 1) Animators meet as a group to discuss educational development lessons of monitoring and evaluation process (see G) above). 2) Animators meet with PGMC and POE authorities to discuss lessons learned. 3) A representative of the animator group from one or more of the provinces participates as a member of the National Committee on Effective Schooling (see A) above).  Annex 3 Page 6 of 6 A Note on Animator Training Needs 1) Animators will should be knowledgeable of: a) The national vision for effective schools (see A) above). b) The animation process (see B) above). c) Community development techniques, e.g. action planning, building successful groups, identifying and encouraging the participation of at-risk populations d) Educational development resources in Cambodia. e) Suppliers of books, furniture, materials, and training. f) Other donors that might provide resources to schools, e.g. the social fund, embassies grant funds, private benefactors, better off schools that will enter into cooperative agreements for training, etc. g) Budgeting and accounting procedures h) Ways to use data to identify issues, e.g. enrollment, repetition, dropout, attendance and test data. i) Factors or causes commonly associated with problems of enrollment, repetition, dropout attendance and low achievement in Cambodia. j) Means to organize a schedule of training and visits to several clusters. 2) Animators should be led by a TA with experience in building staff capacity and participatory program development. 3) New animators may be paired (in a ratio to be determined) with an experienced animator or teamed up with an overseas volunteer to build capacity on a day to day basis until such a point where they are confident in operating independently.  Annex 4: Estimated Project Costs Kingdom of Cambodia: Education Quality Improvement Program Project Cost by Category Local Foreign Total - US$ million A. Grants 2.23 0.56 2.79 B. Technical Assistance Costs 0.33 1.11 1.44 1. International Consultants 0.00 0.94 0.94 2. Studies 0.05 0.10 0.15 3. Training and Workshops 0.28 0.07 0.35 C. Goods 0.03 0.05 0.08 D. Operating costs 0.23 0.04 0.27 E. Provincial and District Operational Costs 0.44 0.00 0.44 F. Physical Contingencies 0.01 0.00 0.01 G. Price Contingencies 0.42 0.10 0.52 Total Project Costs 3.69 1.86 5.55 Note: Due to rounding, some figures suppressed to zeros.   Annex 5:Outcomes of the Pilot Cluster School Grants Program Paper TAC 8.2 MINISTRY OF EDUCATION, YOUTH AND SPORT PROVINCIAL OFFICE OF EDUCATION, TAKEO OUTCOMES OF THE PILOT PROGRAM 28.5.99 Hak Sengly, Director, P.O.E. Operations The pilot program was conducted in ten clusters divided equally between two districts (Tramkak, 28 schools in five clusters, and Treang, 37 schools in five clusters). This meant that only some clusters in each district participated in the program. The program was managed on behalf of the province by five full-time officers - the Pilot Program Officer and National Counterpart, a District Animator for each district, and an interpreter. Each district assigned two officers part-time as district trainers and each cluster had one of its personnel operating part-time as cluster trainer. Provincial Supervision The grants process was supervised by the Provincial Grants Management Committee, made up of Directors and Assistant Directors from the Provincial Education Office, the Chiefs of the two districts concerned and the Provincial Grants Management Officer. The committee approved 20 proposals from the ten clusters (average two proposals per cluster) for activities shared by all the schools in their cluster. The clusters also submitted individual school activity proposals from 61 of their 65 schools and 56 of these were funded. All told, approximately $84,000 in grant funds were distributed, of which some $64,000 was spent on shared cluster activities (averaging $6400 per cluster for shared activities) and $20,000 on individual school activities averaging $350 per school. Taken together, the average expenditure per cluster was $8400 and the average expenditure per school (shared cluster activities plus individual school activities) was $1400. The Grants Proposal Process The clusters spent two months (October and November) considering the national vision of effective schools (the ten points), defining the application of that vision to their own local situation, debating what were their priority needs, then planning and costing actions to meet those needs. The clusters then had to prioritise the actions and write proposals to detail what they would do, how they would finance those activities, when they would implement them, what outcomes they expected and how they would evaluate the outputs.  Annex 5 Page 2 of 4 During December the Provincial Grants Management Committee reviewed the cluster proposals in detail, checked with the clusters where necessary to clarify the proposals, reviewed the costs and set costing rules where necessary, then determined which proposals to approve and the amount of funding for each approved proposal. The proposals were then reviewed at national level by the members of the Technical Advisory Committee and signed off for funding by the Under Secretary responsible at the end of December. Transparency of Funds Management While awaiting the grants funding the cluster and school directors were trained in using the expenditure record forms. Clusters were only entitled to a second and third installment if they were able to demonstrate that they had good records accounting for every cent that they had spent from the previous installment. Considerable effort went into making the funds management process transparent, not only to Ministry officers but also to community members. There have been three installment delivery ceremonies at Takeo, attended by some 250 representatives of cluster school committees, teachers, communities and parents. At each ceremony a Ministry leader has presented the cash grant to the representatives of each cluster school committee and the cluster director has checked the cash and publicly confirmed the correctness of the amount. Cluster directors have then returned to their core schools and arranged public ceremonies, usually at the Wat, to describe the proposed activities, announce the grant and the details of how it will be spent. Cluster and school directors have made a practice of displaying posters recording progress in grants expenditure so that all interested community members have a chance to inform themselves as to exactly how the money is being spent. Supervision and Evaluation At the request of the Provincial Grants Management Committee, teams of PGMC and PPU members regularly visit all pilot program clusters to monitor their progress in proposal implementation. The teams have designed a special Inspection Bulletin form for this purpose. The bulletin monitors not only progress in funds expenditure but also effectiveness in achieving the quality improvement objectives of each of the proposal activities. Outcomes The intended outcomes are more effective schools, improved quality of instruction, higher pupil achievement. As a result there should be improved enrolment, attendance and pupil promotion through the primary grades with a corresponding fall in repetition and drop-out rates. It is too early to be sure of any of these outcomes but there are some interesting indicators which give hope that some of the outcomes might be achieved: * There is improved morale and enthusiasm among teachers in the program, for example through participation in full day Thursday training workshops * Directors and their staff, Cluster School Committees and communities are highly motivated to promote activities which they have chosen as meeting priority needs  Annex 5 Page 3 of 4 * The clusters have given priority to training activities leading to teacher capacity improvement and this is evident in the attached pie graph illustrating the distribution of grant funds amongst the different types of activities * As a result there is much more activity in the classrooms and this is illustrated by more posters, teaching aids, libraries, maths etc. comers and other pedagogical improvements in the appearance of the classrooms * Children are motivated by the improvement in teacher activity and materials and this leads to much more life in the classrooms Needed Improvements One of the purposes of a pilot program is to try out new methods and learn how to make further improvements. If the project is to continue, we would like to make the following improvements: * training of community members for more active participation in the work of the school, not only through contributions but in helping to identify the needs and to choose the development priorities for the school program * announcement of the grants selection criteria at the beginning of the school year, so that the clusters have clearer guidelines as to exactly how to develop successful proposals for grant funding * closer liaison with other donor projects in the province, so that all donor activities reinforce each in supporting the development of education in the province * more effective involvement of the Teachers College, particularly in training the trainers to develop the skills of the trainers working with the teachers in the clusters * greater attention to training Directors and cluster committee participants in the interpretation of the EMIS data, as a guide to measuring progress and needs and in setting cluster development priorities.  Annex 5 Page 4 of 4 GRANTS DISTRIBUTION BY PROPOSAL PURPOSE Co munity Participation Class Inspection Program Teacher Capa ~ etiionR eReduction  Annex 6: Financial Summarv Kingdom of Cambodia: Education Quality Improvement Program Years Ending 2004 Implementation Period Year 1 Year2 Year3 Year4 Year S Total Financing Required l Project Costs Investment Costs 0.72 1.66 1.49 1.50 0.18 Total Project Costs 0.72 1.66 1.49 1.50 0.18 Financing __ IDA 0.69 1.52 1.31 1.31 0.17 Goverment a' 0.03 0.14 j 0.18 0.19 0.01 Provincial Co-financiers Fees/Beneficiaries Total Project Financing 0.72 1.66 1.49 1.50 0.18 a/ Counterpart funding would be dedicated to operational support for district and provincial offices of education (US$500,000), office rental for the project implementation units at the national and provincial levels (US$30,000), and payment of honoraria for technical committees (US$20,000).   Annex 7: Procurement and Disbursement Arrangements Kingdom of Cambodia: Education Quality Improvement Program Procurement Capability Assessment The proposed project builds on the implementation experience gained by the PPU at the national and provincial levels during the PHRD grant-supported pilot program. This pilot included grants to 10 school clusters. The three basic procurement principles of efficiency, economy and transparency were observed during the implementation of the PHRD grant activities. Goods were bought by the PPU as well as the ten school clusters in accordance to Bank guidelines using national shopping procedures. Consultant services were selected on the basis of comparisons of qualifications, in accordance to Bank consultant guidelines. Local training programs and workshops were carried out in accordance with agreed terms-of- reference with IDA. The procurement capabilities of the national and the provincial as well as the school cluster levels were found adequate to carry out the procurement activities of the project, which is an extension of the pilot program under the PHRD grant. Financial information on school grants (total grant, distribution of funds, and expenditures) financed by the PHRD grant were posted on public boards at schools for all to see. Expenditures were carefully recorded in schools' accounts books and checked by the provincial project accountant. Therefore, we believe there is low risk for carrying out the procurement functions under the project. Procurement Procurement methods (Table A) Procurement of goods and services will follow the "Guidelines for Procurement under IBRD Loans and IDA Credits" published in January 1995 and revised in January and August 1996, September 1997 and January 1999 (the Guidelines). Contracts for consultant services would be procured in accordance with the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers", published in January 1997 and revised in September 1997 and January 1999 (the Consultant Guidelines). Under the quality improvement grants procurement of goods, small civil works and consultants will follow national shopping or community participation procedures as stated in the Grants Operational Manual. Grants (US$3.09 million) - grant contracts will be very small ranging from US$500 to US$25,000 for each primary school cluster on an annual basis (a cluster contains three to ten schools). The Education Improvement Grant Program will cover three provinces, phasing from I province in the first project year to 3 provinces in the second project year. Aggregation of the procurement activities of various grant agreements signed separately is not practically feasible, given different locations, procurement items, and the school clusters' grant implementation schedules. The procurement procedures and lists of eligible expenditures acceptable to IDA would be stipulated in the Grants Operational Manual by negotiations. Due to the nature of the grants, contract amounts are expected to cost less than US$ 1,000 each covering small expenditure items such as school teaching materials, furniture, teacher training workshops, small incentives, minor renovations (e.g. building of latrines, windows, doors), consumables (paper, cardboard, pens), and children's story books. National shopping with comparison of at least three price quotations and community participation procedures will be used when procuring these goods and small works. Consultant services for training and workshops will follow the individual selection procedures on the basis of comparison of qualifications. The contracts that clusters will make with trainers are expected to  Annex 7 Page 2 of 6 be less than US$500 each. It is unrealistic to put a ceiling amount on each of the procurement methods due to the unforeseen nature of school cluster proposals. Technical Assistance Costs (US$1.56 million) - These costs include consultant services for the PIU and PPIU and studies (US$1.16 million), and local training and workshops (US$0.4 million). Selection procedures will follow the individual selection procedures. Goods (US$0.08 million) - Goods contracts, including small amounts of personal computers, office equipment and consumables, are expected to cost less than US$25,000 each and will follow national shopping procedures with comparison of at least three price quotations. Operating costs (US$0.32 million) - Operating costs cover the expenses of the PIU and PPIUs, including honoraria for committees, rental of office space, supervision and operational costs, such as communication expenses and utilities. These expenditures will follow government procedures acceptable to IDA. Prior review thresholds (Table B) Prior review would be required for (a) any grant contract exceeding or equal to US$25,000; (b) any goods contract exceeding or equal to US$25,000; and (c) any individual consultant contract exceeding or equal to US$25,000. In addition, terms-of-reference, regardless of contract amount, for all ccnsultant services and training programs would also be required for prior review. These arrangements would ensure prior review by IDA of contracts worth an estimated US$1.61 million, or about 32 percent of the value of all contracts to be procured under the project. Ex-post review would be carried on a sample basis of one out of four contracts for those contracts not subject to prior review. Operating costs will be subject to random ex-post review. The project team will pay particular attention to the procurement practices of the grants during supervision. Accounting, Financial Reporting, and Auditing Arrangements Financial Management Arrangements. A Financial Management Specialist from the Bank has contacted several international accounting firms in Cambodia and agreed on a system using the Asia Development Bank model as the model for the project accounting system for all projects in the country. IDA will continuously review the operations of the new accounting system. Accounting Arrangements and Funds Flow. The PPU has contracted with an international accounting firm in Phnom Penh to install a project accounting system acceptable to IDA. The accounting system shall contain the following features: (a) application of consistent principles of accounting for documenting, recording, and reporting its financial transactions; (b) use of the accrual method of accounting; (c) a double entry accounting system; (d) a chart of accounts and a coding system that allows meaningful financial reporting to IDA and the Government; and (e) the production of quarterly and annual financial statements acceptable to IDA. Project expenditures will be recorded and reported by the PIU, based on the various project accounts maintained by the PIU and information from the PPIU on provincial project activities and grants  Annex 7 Page 3 of 6 expenditures.) I The financial statements will include, at a minimum, the following documents: (a) a Summary of Sources and Uses of Funds; (b) Uses of Funds by Project Activity; (c) Contract Expenditure Report Consultants (d) a project consolidated balance sheet; (e) comparative figures from the previous year; and (f) notes to the financial statements. Additional output monitoring reports will be developed, if appropriate, during implementation. In order to establish the project accounting and reporting systems, PIU shall appoint a Project Financial Officer with terms of reference acceptable to IDA by negotiations. He or she shall be assisted with adequate support staff. The Project Financial Officer shall be responsible for operation of the accounting system, supervision of the PPIU bookkeepers, and training of PIU and PPIU staff. The project funds will be disbursed through a special account under the supervision of the Ministry of Economy and Finance. Funds flow arrangements for the grants to school clusters is based on a contract agreement between the PIU and the school cluster are detailed in the Project Operational Manual.'2 The suitability of the Project Management Report (PMR) -based disbursement under the Bank's Loan Administration Change Initiative (LACI) will be considered during the project mid-year review at the end of June 2002. Audit. The Borrower shall appoint an independent auditor acceptable to IDA. The auditor shall be responsible for the annual audit of the financial statements, providing an opinion on the eligibility of the expenses disbursed on the basis of SOEs and transactions from the Special Account. The audited financial statements, together with audit reports for SOEs and the Special Account, shall be submitted to IDA within six months of the end of the Project's fiscal year. The audit shall be conducted in accordance with auditing standards acceptable to IDA and under IDA terms of reference. Disbursement Allocation of loan proceeds (Table C) Use of statements of expenditures (SOEs) Disbursement would be made against SOEs for: (a) grants costing less than US$25,000 each; (b) goods contracts costing less than $25,000 each; (c) consultant contracts with individuals costing less than US$25,000 each; and (d) all operating costs. Documentation for these expenditures would be retained by " LCSCs, assisted by the district animators, will submit Monthly Financial Reports on grant expenditures to the Provincial Project Implementation Unit (PPIU). The PPIU will prepare a reconciliation for each individual grant at the end of the funding tranche and, based on this reconciliation, will authorize release the second tranche to the cluster. The PPIU will submit monthly financial reports to the PIU which will cover the grants and any other project-related expenditures (e.g., provincial training, support of PPIU, animator support, etc.) incurred at the provincial level. 12 Funds are held in the project special account. Once the grant proposals are approved by the PGMC, the PIU prepares contracts for POE and LCSC signature. The PIU also prepares one check for signature and disburses the first tranche to the PPIU. The PPIU will distribute the funds to the LCSC at district level in a public and transparent ceremony. Payment for a second tranche follows certification by the PPIU that LCSCs have spent and accounted for their first-tranche funds according to their contract obligations.  Annex 7 Page 4 of 6 the PIU and PPIUs and made available to IDA on request. All other disbursements from the Credit would be supported by full documentation and signed contracts. Special account: To facilitate disbursement of the credit, the MoEYS PIU will open and maintain a separate special account with or a commercial bank specifically authorized for the purpose by the Borrower, on terms of conditions satisfactory to IDA, including appropriate protection against set-off, seizure and attachment. The Special Account, which would cover IDA's share of eligible expenditures in all disbursement categories, would have an authorized allocation amounting to US$400,000 with an initial withdrawal of US$200,000 to be withdrawn from the Credit account and deposited in the Special Account. The full $400,000 allocation shall be withdrawn when the amounts committed and disbursed total SDR 1.5 million. Applications to replenish the Special Account, supported by appropriate documentation, would be submitted regularly (preferably monthly, but not less than quarterly) or the amounts withdrawn equal to 50 percent of the initial deposit. The Special Account shall be audited annually by independent auditors acceptable to IDA.  Annex 7 Page 5 of 6 Annex 7, Table A: Project Costs by Procurement Arrangements (in US$million equivalent) Procurement Method Total Cost Expenditure Category (including Other N.B.F contingencies) 1. GrantS/a 3.09 3.09 (3.09) (3.09) 2. Technical Assistance Costsb 1.56 1.56 (Consultant services, studies and local (1.56) (1.56) training) 3. Goods' 0.08 0.08 Goods/c ~~~~~~~~~~(0.08) (0.08) 0.27 0.05'e 0.32 4. Operating costs/d (0.27) (0.27) 5. Provincial and District Operational Costs 0.50 0.50 Total 5.00 0.55 5.55 (5.00) (5.00) Note: N.B.F. = Not Bank-financed. Figures in parenthesis are the amounts to be financed by the IDA credit. /a Grant expenditures will follow agreed procedures documented in the Grants Operational Manual. /b Consultant services selection methods will follow the individual selection procedures. kC National shopping with at least three price quotations. /d Operating costs include office space rental, supervision, small amount of honoraria, and operational costs. /e These N.B.F. costs include rental for office space and PGMC and NCES honoraria. Annex 7, Table Al: Consultant Selection Arrangements (in US$ million equivalent) Consultant Services Selection Method Total Cost (including contingencies) Expenditure Category er 1.16 1.16 A. Individuals (1.16) (1.16) Total 1.16 1.16 (1.16) (1.16) Note: Other = Selection of individual consultants (per section V of Consultants Guidelines). Figures in parenthesis are the amounts to be financed by the IDA credit.  Annex 7 Page 6 of 6 Annex 7, Table B: Thresholds for Procurement Methods and Prior Review c Q~~ontract Value Pouemn Total Contract EFxpenditulare Category (Threshod)Metho Amount Subect to Prior Review 1. Grants/a > 25,000 Other 50,000 2. Consultant Services/b Individuals > 25,000 Other 960,000 All TORs Other 600,000 Total value of contracts subject to prior review: 1,610,000 (32%) Overall Procurement Risk Assessment: High Average Low Frequency of procurement supervision missions proposed: One every 6 month(s) (includes special procurement supervision for post-review paying particular attention to the procurement practices of the grant.) / Grant expenditures will follow agreed procedures in Grants Operational Manual. All TORs are subject to Prior Review regardless of cost including local training. Annex 7, Table C: Allocation of Loan Proceeds 1. Grants 3.09 100% 2. Consultants' Services 1.56 100% 3. Goods 0.08 100% of foreign expenditures and 95% of local expenditures. 4. Operating Costs 0.26 100% 5. Unallocateda! 0.01 Total 5.00 a/ only includes physical contingencies  Annex 8: Project Processing Budget and Schedule Kingdom of Cambodia: Education Quality Improvement Program Project Schedule Plauaed (At final PCD stage) Atu Time taken to prepare the project (months) 9 9 First Bank mission (identification) 9/17/1997 9/17/1997 Appraisal mission departure 6/1/1999 6/1/1999 Negotiations 9/1/1999 8/9/1999 Planned Date of Effectiveness 10/1/1999 10/29/1999 Prepared by: Ministry of Education, Youth and Sport Preparation assistance: PHRD Trust Fund Bank staff who worked on the project included: Name Specialty Christopher Thomas General Educator, Task Manager Vincent McNamara Education Consultant, Chief Technical Advisor Ou Eng Education Consultant, PPU Director Peter Moock Principal Economist Carol Hau-Lai Ball Operations Officer/Procurement Specialist Halsey Beemer Senior General Educator/Procurement Accredited Sandra Erb Education Consultant Kathy Li Tow Ngow Program Assistant Wijaya Wickrema Senior Financial Management Specialist Yoko Nagashima Operations Analyst Frans Lenglet Educator/Training Specialist Renganaden Soopramanien Senior Counsel Omowunmi Ladipo Financial Management Specialist Peer reviewers: Ruth Kagia, Eluned Roberts-Schweitzer, Sheldon Schaeffer.  Annex 9: Documents in the Project File* Kingdom of Cambodia: Education Quality Improvement Program A. Project Implementation Plan Project Implementation and Procurement Plan Grants Operations Manual Draft Contract between Government and Local School Cluster Committees B. Bank Staff Assessments Environmental clearance C. Other (Reports funded under the PHRD Grant) Quarterly and Annual Reports of the progress of preparation activities under the PHRD grant. Review of the Various Models of Cluster School Development and Recommendations to Strengthen the Cluster School Program of Cambodia Incentives for Primary Teachers: Status and Issues Results of the National Teacher Survey Study on Effective Teaching Hours in Cambodian Primary Schools: Findings and Recommendations Resources for Schooling: A Model for Local Accountability Quality Improvement Grants to School Clusters: EMIS Support Needs Models of Teacher Employment *Including electronic files.  Annex 10 Page I of 2 Status of Bank Group Operations in Cambodia Operations Portfolio As of 12-Jul-99 Difference Between expected Original Arsount in US$ Millions and actual Fiscal disbursements a/ Project ID Year Borrower Purpose Project ID Year Borrower Purpose IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Number of Closed Projects: 2 Active Projects KH-PE-4030 1999 GOVT OF CAMBODIA KH-RD REHABIT. 0.00 45.31 0.00 43.22 0.00 0.00 KH-PE-50601 1999 KH-SOCIAL FUND II 0.00 25.00 0.00 23.95 1.00 0.00 KH-PE-58841 1999 CAMBODIA KH NORTHEAST VILLAGE 0.00 5.00 0.00 4.82 .50 0.00 KH-PE-45629 1998 CAMBODIA URBAN WATER SUPPLY 0.00 30.96 0.00 27.05 6.62 0.00 KH-PE-4033 1997 GOVT OF CAMBODIA AGRI.PRODUCT IMP. 0.00 27.00 0.00 24.17 13.80 .98 KH-PE-4034 1997 KINGDOM OF CAMBODIA DISEASE CONTROL&HEAL 0.00 30.40 0.00 21.82 10.72 0.00 KH-PE-4032 1996 KINGDOM OF CAMBODIA PHNOM PEHN POWER REH 0.00 40.00 0.00 4.25 9.17 0.00 KH-PE-34755 1995 GOVT. OF CAMBODIA TECHNICAL ASSISTANCE 0.00 17.00 0.00 3.02 3.56 0.00 KH-PE-37088 1995 KINGDOM OF CAMBODIA SOCIAL FUND 0.00 20.00 0.00 .16 1.62 0.00 Total 0.00 240.67 0.00 152.46 46.99 .98 Active Projects Closed Projects Total Total Disbursed (IBRD and IDA): 72.65 101.77 174.42 of which has been repaid: 0.00 0.00 0.00 Total now held by IBRD and IDA: 240.67 102.70 343.37 Amount sold 0.00 0.00 0.00 Of which repaid : 0.00 0.00 0.00 Total UJndisbursed : 152.46 0.00 152.46 a. Intended disbursements to date minus actual disbursemernts to date as projected at appraisal. Note: Disbursement data is updated at the end of the first week of the month and is currently as of 30-Jun-99.  Annex 10 Page 2 of 2 Cambodia STATEMENT OF IFC's Committed and Disbursed Portfolio As of (In US Dollar Millions) Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic Total Portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals Pending Commitment Loan Equity Quasi Partic 1998 CPP 15.00 0.00 4.30 45.20 1997 SLP INVESTMENTS 5.25 0.00 0.00 2.25 Total Pending Commitment: 20.25 0.00 4.30 47.45  Annex 1 1 Page I of 2 Cambodia at a glance 9118198 East POVERTY and SOCIAL Asia & Low- Cambodia Pacific income Development diamond* 1997 Population, mid-year (millions) 10.5 1,753 2,048 Life expectancy GNP per capita (Atlas method, US$) 300 970 350 GNP (Atlas method, US$ billions) 3.2 1,707 722 Average annual growth, 1991-97 Population (%) 2.7 1.3 2.1 Labor force (%) 2.4 1.4 2.3 GNP - Gross per primary Most recent estimate (latest year available, 1991-97) capita enrollment Poverty (% of population below national poverty line) Urban population (% of total population) 22 32 28 Life expectancy at birth (years) 54 69 59 Infant mortality (per 1, 000 live births) 102 38 78 Child malnutrition (% of children under 5) 38 16 61 Access to safe water Access to safe water (% of population) 13 84 71 Illiteracy (% of population age 15+) 35 17 47 Gross primary enrollment (% of school-age population) 122 115 91 Cambodia Male 134 118 100 Low-income group Female 109 116 81 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1976 1986 1996 1997 Economic ratios GDP (US$ billions) .. .. 3.1 3.1 Gross domestic investment/GDP 20.6 16.5 Trade Exports of goods and services/GDP . 26.4 29.7 Gross domestic savingslGDP 486 4.8 Gross national savings/GDP . 6.4 .. Current account balance/GDP . -15.4 -11.2 Domestic \nvestment Interest paymentslGDP . 0.2 0.2 Savings Total debt/GDP 67.1 66.2 S Total debt service/exports . 1.2 0.6 Present value of debt/GDP . 48.0 Present value of debt/exports .. .. 181.6 Indebtedness 1976-86 1987-97 1996 1997 1998-02 (average annual growth) GDP 25.4 70 2.0 Cambodia GNP per capita . 22 3 9 -0.3 Low-income group Exports of goods and services .._.._.._.._.. STRUCTURE of the ECONOMY 1976 1986 1996 1997 Growth rates of output and investment (%) (% of GDP) 57 5. Agriculture 50.7 51.0 8 Industry . 153 15.3 e Manufacturing . 5.3 5.7 4 Services . 34.0 33.7 2 Private consumption .. 87.1 86.4 92 93 94 95 9s 97 General government consumption .. .. 8.2 8.8 GDI0 GODP Imports of goods and services .. .. 42.4 41.4 1976-86 1987-97 1996 1997 (average annual growth) Agriculture . 3.1 2.4 2.1 Industry 9.1 18.2 2.9 Manufacturing 7.2 12.8 8.8 Services 6.8 6.9 1.3 Private consumption General government consumption Gross domestic investment Imports of goods and services Gross national product 5 .2 6.5 2.0 Note: 1997 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.  Annex I I Page 2 of 2 Cambodia PRICES and GOVERNMENT FINANCE 1976 1986 1996 1997 Inflaion (-) Domestic prices (% change) 150 - Consumer prices ..... 9.0 9.1 91D Implicit GDP deflator .. .. 7.1 10.0 50 Government rinance _ (% of GDP, includes current grants) 92 93 94 95 96 97 Current revenue .. .. 9.2 9.5 -s0 Current budget balance . . -0.6 0.8 GDP deflator 0PI Overall surplus/deficit .. .. -6.6 -4.5 TRADE (US$ millions) 1976 1986 1996 1997 Exportand Import levels (USS millions) Total exports (fob) . . 659 734 , soo Rubber . . 32 36 Logs .. . 149 103 0 Manufactures .. . 113 258 1000 Total imports (cif) . . 1,110 1,037 Food 500 Fuel and energy Capital goods .Ad _1 91 92 93 94 95 96 97 Export price index (1995= 100) Import prce index (1995=100) .. . Exports * Imports Terms of trade (1995=100) ..- .. .. .. I BALANCE of PAYMENTS (US$ millions) 1976 1986 1996 1997 Current account balance to GDP ratio() Exports of goods and services 831 920 o Imports of goods and services .. ,332 1,281 Resource balance -501 -361 -5 l Net income . 9 -5 Net current transfers . -10 - Current account balance . -485 -346 Financing items (net) 5.. 37 376 Changes in net reserves .. -52 -30 -20 - Memo: Reserves including gold (US$ millions) .. .. 234 264 Conversion rate (DEC, local/lUS$) .. .. 2,624.1 2,989.0 EXTERNAL DEBT and RESOURCE FLOWS 1976 1986 1996 1997 (US$ millions) Composition of total debt, 1996 (US$ millions) Total debt outstanding and disbursed .. .. 2,111 2,049 IBRD .. .. 0 0 G:19 B: 108 IDA .. . 108 132 F: 10 C:S9 Total debt service 10 5 D 84 IBRD 1