China - Effective Teaching Services Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 20632 IMPLEMENTATION COMPLETION REPORT (24710) ON A CREDIT IN THE AMOUNT OF SDR72.1 MILLION (US$100.0 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF CHINA FOR AN EFFECTIVE TEACHING SERVICES PROJECT June 22, 2000 Human Development Sector Unit East Asia and Pacific Region rThis document has a restricted distribution and may be used by recipients only in the performance of their 'official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective March 2000) Currency Unit = Yuan Yuan 1.00 = US$ 0.12 US$ 1.00 = Yuan 8.27 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS FILO - Foreign Investment & Loan Office IAG - Innovation Assessment Group ICB - International Competitive Bidding ICR - Implementation Completion Report IDA - International Development Association LAN - Local Area Network LCB - Local Competitive Bidding MOE - Ministry of Education MOF - Ministry of Finance NC - Normal Colleges NU - Normal Universities SDR - Special Drawing Right SEdC - State Education Commission TIS - Teacher Information System UBE - Universal Basic Education Vice President: Jemal-ud-din Kassum Country Director: Yukon Huang Sector Director: Alan Ruby Task Team Leader: Dingyong Hou  FOR OFFICL USE ONLY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 11 6. Sustainability 12 7. Bank and Borrower Performance 13 8. Lessons Learned 15 9. Partner Comments 16 10. Additional Information 16 Annex 1. Key Performance Indicators/Log Frame Matrix 17 Annex 2. Project Costs and Financing 18 Annex 3. Economic Costs and Benefits Annex 4. Bank Inputs 21 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 22 Annex 6. Ratings of Bank and Borrower Performance 23 Annex 7. List of Supporting Documents 24 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: P003567 Project Name: CN-EFFECTIVE TEACHING S Team Leader: Dingyong Hou TL Unit: EASHD ICR Type: Core ICR Report Date: June 22, 2000 1. Project Data Name: CN-EFFECTIVE TEACHING S L/C/TFNumber: 24710 Country/Department. CHINA Region: East Asia and Pacific Region Sector/subsector: ES - Secondary Education KEY DATES Original Revised/Actual PCD: 01/23/90 Effective: 01/11/94 Appraisal: 08/07/92 MTR: 08/01/96 Approval: 03/16/93 Closing: 12/31/98 12/31/99 Borrower/lmplementing Agency: PRC/STATE EDUCATION COMMISSION Other Partners: STAFF Current At Appraisal Vice President: Jemal-ud-din Kassum Gautum Kaji Country Manager: Yukon Huang Shahid Javed Burki Sector Manager: Alan Ruby Zafer Ecevit Team Leader at ICR: Dingyong Hou Richard Durstine ICR Primary Author: Dingyong Hou; Hon-chan Chai with inputs from Grace Mak and Hena Mukherjee 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: HL Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S S Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: 3.1.1 The central objective of the project was designed to contribute to improved teaching and student learning at lower middle schools in 16 provinces by providing for better teaching services,  including instructional methodology, teacher training and management of teacher selection and assignments. This central objective was supported by four functional objectives: (a) to improve the condition of teaching and student learning at lower middle schools (LMS (b) to improve training of LMS teachers nationwide; (c) to improve management and planning capabilities for teacher selection, training and assignment at the national, provincial and county levels; and (d) to facilitate innovative and productive activities in teaching and teacher training. 3.1.2 When the project was being prepared in early 1992, China's objective of providing nine years of universal basic education (UBE), aimed at nationwide fulfillment by 2000, had more than 95 percent of children aged 6 to 11 years in the first six years of schooling and 60 percent of those aged 12 to 14 years in lower secondary school. It was therefore important to expand access to the final three years of the UBE cycle covering the lower middle school (LMS) and to improve its quality. The key to the qualitative improvement of the target area was the training of LMS teachers. The Government sought Bank assistance to strengthen the development of teacher education nationwide for the LMS (grades 7 through 9). The focus was of economic importance because LMS schooling was increasingly required by employers as the minimum qualification for productive work in the modem sectors. 3.1.3 The rapid increase in enrollments in primary and secondary schools over the past few decades had correspondingly increased the number of teachers. Many teachers, supported by local communities mainly for primary schools, were inadequately trained or not trained at all. In the LMSs in the mid-1980s, it was estimated that close to 80 percent were unqualified. With LMS enrollment expected to rise from about 40 million in 1991 to about 55 million in 2000, the supply of qualified teachers was a critical issue. Depending on teacher-student ratios, which varied widely between urban and rural areas, the number of teachers was projected to increase from 2.5 million in 1991 to 3.3 million in 2000. 3.1.4 Traditionally, the pre-service training of primary school teachers has been the responsibility of the normal schools, that of LMS teachers the normal colleges (NCs) and that of high school teachers, the normal universities (NUs). NCs are post-secondary institutions which provide two or three years of teacher training, while NUs are four-year higher education institutions offering academic and professional programs leading to a degree. Some of the NUs train both LMS and high school teachers. In that system, the teacher as an authoritative figure was the central source of knowledge and transmission of knowledge was the central aim of classroom teaching. While in practice there were important variations, generally conditions in rural schools were not conducive to good teaching quality. Those conditions included deficient facilities and equipment as well as students' home background and low staff standards. With the publication in 1985 of the "Decision to Restructure the Education System" and the Compulsory Education Law of 1986, the Ministry of Education (MOE) mandated and encouraged the introduction of reforms in teacher training. The effect has been a gradual shift from emphasis on knowledge acquisition to the development of student abilities. Nevertheless, the general mode in schools and teacher training institutions has been the lecture method and rote learning, with little focus on individualized leaming. 3.1.5 The key issues, therefore, were identified as (a) teacher supply and demand and the related - 2 -  problem of managing teacher supply and training; and (b) the training of teachers, including teaching methodology and practice. 3.1.6 Experience in China had shown that, given the complexities of estimating teacher demand and supply, calculations must be made at the provincial and/or county level, based on decentralized responsibilities and on a commitrnent to effective management. The quantitative and qualitative dimensions of training teachers would require flexibility in training capacity, with the emphasis on cost-effective utilization of facilities and teacher trainers. Effective teacher utilization would require preparing teachers to teach more than one subject. More classroom, laboratory and library space would be needed and their use more efficiently programmed on an institutional basis. Instructional equipment, especially laboratory equipment, needed more effective utilization through hands-on practical work by students. In teacher deployment, provincial management needed to ensure that disadvantaged areas, especially in the very poor districts, should be adequately represented in terms of teacher trainees who generally would return to teach in their home counties. 3.1.7 The traditional teaching methodology and practice, which had served the requirements of earlier generations, needed to be made more responsive to the changing demands of the technological age. It was recognized, however, that the necessary revisions to teaching content and methods should be based on national and local development needs, while respecting the indigenous strengths and recognizing prevailing realities which would constrain rapid change. The project design was therefore guided by the principle that any qualitative change in teaching or teacher training should widen options rather than prescribe set actions. Those problems would be best addressed by the proposed teaching methodology core seminars and innovation programs. 3.2 Revised Objective: Original objectives were not revised. 3.3 Original Components: The project had three components: (a) The Institutional Element 3.3.1 Designed to improve the quality of LMS teacher training through better physical inputs in training facilities, instructional equipment, library development and staff training, the component consists of the following inputs: Facilities Upgrading consists of new construction and rehabilitation of LMS facilities at project institutions to be carried out by the provincial authorities. Instructional Equipment Provision includes materials and equipment essential for all the - 3 -  project NCs and for teaching in the LMSs, excluding purely research equipment. Training for equipment use would be provided under the project for professional and technical staff. Short courses would train a total of 740 laboratory directors, 760 laboratory technicians and 500 laboratory administrative staff. Library Development supports the purchase of library equipment and books. Library construction, included under the project's civil works, would increase reading places from about 48,000 (one place for every four students) to 65,800 (one place for every three students). Library hours would be extended with an open-shelf policy in 50 percent of the libraries; each library's stock would be increased by 3,000 to 4,000 additional essential books; library operations would be computerized, and staff at different levels would be upgraded through training. Staff Upgrading provides about 4,500 staff-years of in-country training for over 6,000 participants and 135 one-year overseas fellowships. (b) The Management Element 3.3.2 The second component was designed to increase management and planning capabilities for teacher selection, training and assignment at national, provincial and lower levels through management training and development of a Teacher Information System. The component provides support specifically for: National Management Development provides overseas study tours and one-year training programs for national level (mainly MOE) staff responsible for education planning and project development, implementation and administration. Provincial Management Development provides specialist services and in-country and overseas training to strengthen the capabilities of the education offices in the 15 project provinces in teacher management and project management. Teacher Information System to be developed through the provision of hardware and software for 281 TIS units: one within MOE's Educational Management Information Center (EMIC), 15 in the participating provinces as part of their management information system, 141 in selected counties, and the 124 project institutions. EMIC would provide general guidance on the management of the TIS. To support the TIS, staff training would consist of a range of training courses, including hardware and software applications, programming, local and national networking and communications, and data collection, processing and presentation. (c) The Quality Enhancement Element 3.3.3 This third component was designed to facilitate and promote innovations and improvements in teaching and teacher training through the introduction and encouragement of new approaches and methodology. It consisted of a series of teaching methodology core seminars, pilot programs and an innovation fund. The component consists of the following interventions: - 4 -  Teaching Methodology Core Seminars would develop new teaching methods, with a primary focus on innovative teaching methodologies and a secondary focus on subject area curricular materials. The national-level seminars, led by a small team of foreign and Chinese experts, would train about 200 participants and the provincial-level seminars about 1,250 participants. Each seminar would be held at a different normal university. Each project province would be represented by two or three participants, who would then lead the provincial level seminars to be held at the project institutions. The institutions would be selected for their efforts to innovate, experiment with and introduce new teaching methodology. Pilot Programs would enable two project teacher training institutions selected for each of the five subject areas to experiment with ways of disseminating the ideas and practices developed by the core seminars. The Innovation Programs would provide teacher training institutions the opportunity to design and carry out experimnental teaching methodologies. An Innovation Assessment Group (IAG), which would have overall responsibility for implementing this component, would ensure that the evaluated results would be disseminated nationally through seminars, videotapes and publications. 3.3.4 Through these components, the project aimed to address key aspects of providing qualitative teaching and teacher training at the LMS level. The quantitative dimension of planning for the supply and deployment of teachers would in due course be addressed through the application of the proposed teacher information system (TIS) to be introduced under the project. 3.4 Revised Components: Components were not revised. 3.5 Quality at Entry: 3.5.1 In hindsight while the overall project concept was sound, there was no "disconnect" between the development objectives and the Country Assistance Strategy and the design complied with the quality assurance requirements at the time, two issues in design seem deficient. The project did not initiate reforms/revision of training curriculum in explicit terms, and no direct inputs were provided for this purpose in an operation aiming to address quality and efficiency in teacher training. Institutionally, the project supported the policies and trends of decentralization but failed to address the issue of diversity of institutional capacity, the project included 15 provinces which were locally managed by education authorities of variable capabilities and the 124 colleges had no prior experience in managing a complex project. This presented real operational risks. However, during implementation, both deficiencies were partially mitigated through complementary programs and processes such as the innovation programs and technical assistance in building local capacity. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: -5 -  4.1.1 The key project input and outcome indicators as shown in Annex 1. amply demonstrate that the project achieved its objectives of improving the condition of teaching and student learning at lower middle schools (LMS); improving training of LMS teachers nationwide; improving management and planning capabilities for teacher selection, training and assignment at the national, provincial and county levels; and facilitating innovative and productive activities in teaching and teacher training. The quality of the teacher training programs of the project institutions has risen substantially. Evidence for this is provided by behavior changes demonstrated by a community of policy makers, school administrators and teachers in closing the gap between theory and practice in order to enhance classroom activities. Planning and management capabilities have improved significantly with considerable efficiency gains, and innovation in teaching and teacher training is spreading beyond the project institutions and to secondary schools through the new teachers graduating from the teacher training institutions. 4.1.2 Along with the overall expansion of educational enrollment in the country. the project succeeded in achieving an impressive rise in enrollment and in particular female enrollment in project institutions. The quantitative achievements have given special added value to the qualitative gains in teacher education whose expected long-termn impact on the LMSs is reasonably assured. The increased and improved physical facilities have enabled the project institutions to increase training college enrollments from about 205,000 in 1990 to 391,400 in 1999, of which 306,250 (78.2 percent) were enrolled in teacher education programs. Female enrollments totaled 190,997 (48.8 percent of overall student enrollment), representing a 24 percent increase, compared with the appraisal expectation of a 20 percent rise. Of the females enrolled, about 77 percent were in. teacher training programs. During the same period, teaching staff increased by 25 percent from 30,135 to 37,770. The institutions have also become more efficient in staff utilization, as reflected in the student-teacher ratio change from 6.8 in 1991 to 10.36 in 1999, a 52 percent improvement. This translates into a significant lowering of unit costs. Furthermnore, about 31 percent of graduating teachers had double-subject teaching qualifications, thereby enhancing another aspect of teacher efficiency. In 1991, very few Normal College teachers had postgraduate degrees, whereas in 1999, 16 percent of the teaching force had a master's degree or higher qualification, while about 10,700 or 28 percent had received non-degree postgraduate courses. 4.1.3 Prior to the project, the lack of equipment and laboratory space restricted much of science teaching to theoretical classroom lectures by the teacher. As a result of the project, the ratio of science experiment classes reached 28 percent of total science classes, and, most importantly, the average rate of science class experiments in all the project provinces reached 99 percent of national curriculum requirements. The average number of laboratory opening hours per week in 1999 was 35; the laboratory utilization rate was 77 percent, which is about the maximum, having regard to time allowed for laboratory cleaning, preparation work and general maintenance. The average classroom opening hours per five-day week was 57, suggesting that classrooms were often used for students' self-study after regular school hours. 4.1.4 Books and journals procured and delivered to the project institutions totaled 18.7 million copies. As of December 1999, the total library stock of the project provinces amounted to 55.8 -6 -  million books and 6.62 rnillion journals. Together, they accounted for about 6 million titles. At appraisal, the project provinces collectively had about 37 million books. The project increased the collection by 18.7 million books and journals, making the average book-student ratio (BSR) about 141, or 70.5 percent of the appraisal recommended BSR of 200. The lower-than-expected BSR is due to the larger-than-expected project institution increases in student enrollments, which had risen by 91 percent, from about 205,000 in 1991 to 391,000 in 1999. The library opening hours for borrowing books averaged 70 hours per week, with only minor variations among the provinces (Annex 8). 4.1.5 The total number of all categories of staff trained under the project was 20,610, a 162 percent increase over the planned target of 12,723. The most striking expansion was in in-country training of teaching staff, from a planned number of 7,906 to the actual of 14,240. The 180 percent increase reflected the priority given to upgrading the quality of teaching staff. Overseas training, with a completion rate of 104 percent, included teaching and non-teaching staff. This included 129 (out of a planned 124) teaching staff and 42 non-teaching (out of 40 planned). Seven of the 42 non-teaching staff were from MOE and the remaining 35 were from the provinces. In all, 17 Overseas Study Tours against 15 planned were completed, involving 90 participants compared with 79 planned. The ideas and experience learned from the study tours provided valuable feedback to the formulation of teacher training strategies and management improvement processes at national and local levels. 4.1.6 The Innovation Programs, which fell into eight research areas, by January 1999, produced over 4,200 reports, 7,186 journal articles, 792 books, 686 audio tapes, 869 video tapes, and 523 computer software items. A further 3,748 journal articles and 774 book manuscripts were due for publication. The programs involved over 10,000 people, mainly project institution students and teaching staff. Dissemination seminars had over 390,000 participants 4.1.7 Apart from the above measurable outputs, the Innovation Programs had a positive impact by broadening the roles of the teacher training colleges and their faculty from teaching to teaching and research. For the first time, the research potential of large numbers of faculty members was unleashed, boosting their professional self-concept and morale. In the long run the impact would hopefully translate into a continuous quality improvement in teaching in both the training colleges and the LMSs. The status and morale of many training colleges have also been raised: some have been upgraded from two-year to three-year colleges, and three-year institutions to four-year universities. Many have built on their research base developed through the project, attracting more research grants from other sources. A considerable number involved in the research projects have been promoted to senior positions, and the consequent increase in the number of senior ranking staff has elevated the profile of their institutions. 4.1.8 As the long-term objective of the project is to improve teaching and learning in the LMSs, the potential or actual impact on the LMSs may be gauged from three aspects: content of research, involvement of secondary school teachers in research, and higher quality of new teacher college graduates. With about 15 to 20 percent of the research projects aimed at improving different aspects of LMS teaching, the applied research yielded imnmediate results for practical application. The research benefits have also trickled down to secondary schools. Full details of - 7 -  the outcomes and effects of the Innovation Programs may be obtained in three reports by the IAG. 4.2 Outputs by components: (a) The Institutional Element 4.2.1 The completed civil works for the new and renovated physical facilities exceeded the overall space target by 17 percent, despite counterpart funding difficulties in some provinces and general price increases. The actual space constructed was about 1.08 million square meters, compared with the planned construction of about 922,300 square meters. The majority of provinces exceeded their original targets, except three (Heilongjiang, 93.8 percent; Hebei, 88 percent; and Hainan, 76.4 percent). The construction shortfalls did not materially affect the basic institutional needs. 4.2.2 Equipment procurement was successfully completed and the equipment (under the main categories of science and engineering, computers, biology, music, audio-visual and language laboratory and physical education) is being used effectively. The greater proportion of the equipment is for the teacher training institutions and directly related to preparing teachers for teaching in the LMSs. 4.2.3 Library space provided totaled about 668,000 square meters for reading rooms (234,000 square meters); stacks (231,000 square meters); and other, mainly administration, space (203,000 square meters). 4.2.4 Staff upgrading for institutional development has been a notable success in terms of the numbers of staff trained when seen in the context of the relative dearth of trained staff before the project. A total of 14,215 teaching staff, 180 percent of the original target of 7,906, were trained. They included 2,779 entrusted (commissioned) teachers on postgraduate courses; 3,508 assistant teachers and 1,438 key backbone teachers on short advanced studies, and 1,259 domestic visiting scholars. The large increases in the number of teaching staff trained were due to the corresponding increases in teaching staff of the project institutions resulting from the rapid expansion in student enrollments. At appraisal, the total teaching staff in project institutions amounted to 65,593 and that number increased to 74,823 at project completion, a net (14 percent) increase of 9,230. The total number of laboratory staff trained was 2,390, an increase of 14 percent over the planned target of 2,094. The increased number of higher qualified staff contributed to the achievement of virtually 100 percent of the recommended laboratory experiment rate and optimum laboratory utilization rate. The total number of college administrative staff trained was 861, a 7 percent increase over the appraisal target of 804. They included 231 college presidents, 218 teaching administrative staff, 195 financial administrative staff and 217 equipment management staff. This has strengthened overall management of the teacher training institutions. Similarly, library services have improved significantly as a result of the training of 1,091 library staff, about 35 percent more than the original plan of 810 staff. (b) The Management Element -8 -  4.2.5 94 provincial officers were trained, comprising 43 planning staff, 23 financial management staff, and 28 administrative staff. For the TIS, the total number of staff trained was 1,934 or nearly 90 percent more than the planned number of 1,020, reflecting the importance placed by the provinces on developing the TIS. All the project provinces reported that they had established, or would soon be establishing, their TIS as part of their operating MIS which, with better trained staff and new equipment, was beginning to provide strategic support to the process of improving education management, office automation, and raising the level of teaching and research in the TCs and TUs. The computerization of educational data collection and analysis will help improve efficiency in educational management. Many of the project institutions have established their campus intranet which, in many cases, is linked with a multimedia high-speed network joining cable television. Several institutions are experimenting with long-distance teaching, which in turn has stimulated the development of related software. All the project provinces have prepared plans for the operation of their respective TISs for the next two to five years. 4.2.6 The Educational Management Information Center (EMIC) at MOE is responsible for providing guidance in the development and operation of the provincial MISs and the intranets of individual higher education institutions. During the first three years, it could not fully carry out its function as a guide until its internal organization and the linkage with the national systems were settled and its role clarified. Eventually EMIC resolved the early problems of designing a system that would meet local needs and simultaneously be compatible with the larger national systems, such as CERNET (China Education and Research Center Network), the latter having been set up in 1995, initially linking ten leading universities, including Peking University and Qinghua University. 4.2.7 In the rapidly changing social and economic conditions in China, EMIC has redefined its role as the supplier of technical standards used in information exchange between various MISs serving school management, instead of merely being the provider of unitary MIS software to the project provinces and counties. Thus, the concerned educational authorities would be enabled to fulfill unified technical standards for the various MISs when they are engaged in the secondary development of MIS software. (c) The Quality Enhancement Element 4.2.8 The pilot program which comprised core methodology seminars and the innovation programs to stimulate new ideas in teaching, had a highly successful outcome which far exceeded expectations. The five Teaching Methodology Core Seminars (on Biology, Chemistry, Mathematics, Physics and English) were held between April 1995 and May 1997. They involved 290 participants, compared with the planned 200 (40 for each of the five seminars). As each core seminar was completed, dissemination seminars were held to spread the results among project as well as non-project teacher training institutions, municipal education bureau research divisions and secondary school teachers. Ten Pilot Programs were carried out, two for each of the core methodology subjects, aimed at integrating the newly acquired knowledge in theory and practice on teaching methodology in the subject concerned from both international and Chinese experience. 9-  4.2.9 The Innovation Program, with a total of 460 sub-projects under eight major research areas, achieved outstanding success. The programs had a slow start, due largely to research proposals that the Bank did not approve because they were basically academic and theoretical. Only after nearly two years of patient coaching did the IAG succeed in getting proposals that were action-based and classroom-oriented. What was lost were quality improvements that might have been realized sooner on the training institutions and through them on the LMSs. Notwithstanding the delay, the programs nevertheless have provided a substantive foundation for the quality improvement in teaching and teacher training. The quality and scale of the research projects, unprecedented in the history of teacher education in China, have unleashed the research potential and enhanced the quality of teaching of TC and TU faculty. They have also directly and indirectly contributed to raising the quality of teaching in the LMSs. As part of the project, an assessment was carried out in late 1998 and completed in January 1999 by an independent team from Nanjing Normal University on the educational and social impact of the innovation program. The main findings affirmed that the clearly formulated research topics were targeted at relevant issues; the conclusions were supported by solid empirical data; the research output was rich, and the research benefits had high potential for sustainability. The success of the innovation program has prompted the MOE and other funding agencies to pay more attention to research in teacher education. 4.2.10 Technical Assistance, covering specialist services and staff training in-country and overseas, was effectively utilized, as evidenced by the highly successful staff training programs and the activities under the Quality Enhancement component (core methodology seminars, pilot programs and innovation programs). The focus on developing local staff resources and stimulating research in new approaches to teaching and learning will likely have a strong positive long-term impact on teacher education and its management in China. 4.2.11 The Innovation Assessment Group (IAG), comprising national academicians and key MOE officials, played a pivotal role in the successful outcome of the Quality Enhancement component, which has generated a large output of journal articles, books, audio and video tapes and other computer software items. The innovation projects have had a positive impact on the TCs and TUs and indirectly on the LMSs. In the initial years, the work of the IAG was hampered by lack of pre-fmancing by MOE, an arrangement which could have greatly facilitated and expedited the innovation program. Individual IAG members often had difficulty pre-financing their travel and perdiem expenses when carrying out their project duties. 4.3 Net Present Value/Economic rate of return: N/A 4.4 Financial rate of return: N/A 4.5 Institutional development impact: 4.5.1 The project had substantial institutional impact on two aspects: first, there has been an increased recognition of the value of better communication and participatory processes among stakeholders, policy makers and practitioners at national, provincial and institutional level. This - 10-  was evidenced by better implementation performance following the Mid-term Review of the project in terms of improved information flow and collaboration and increased accountability in project management and reporting. Secondly, a gradual behavior change of policy makers in their perception of and attitude towards quality and policy support for addressing the issues and consequently increased willingness to sustain the reforms and good practice initiated under the project such as the innovation program. 5. Major Factors Affecting Implementation and Outcome 5. 1 Factors outside the control of government or implementing agency: 5.1.1 A major govermment reorganization that took place in the later period of the project could have slowed down the good rate of implementation. However, with efforts made to minimize its impact, it did not affect the steady implementation and completion. 5.2 Factors generally subject to government control: 5.2.1 Implementation Capacity. Implementation had a slow start, partly because of the diversity of implementation capacity and experience among the 15 provincial foreign investment loan offices (FILOs), partly because of initially weak project coordination and insufficient proactive implementation planning. The momentum picked up in the second year, but progress was uneven. Activities in which the provincial FILOs and project institutions had experience tended to move faster, such as civil works construction and provincial staff training, but those requiring central coordination, such as equipment and book procurement, continued to be delayed. 5.2.2 Counterpart Funding/Cost Overruns in Civil Works. Counterpart funds, cost overruns and slow disbursements were problems faced, in the initial years, by several provinces which did not get, on a timely basis, sufficient local funding for government-financed activities and reimbursements for Bank-funded items. The problem was due partly to the lack of agreement at the start of the project between MOF, which held the Special Account, and MOE on reimbursement procedures for project expenditures. Actually, MOE was authorized to open an account of US$2 million for payments against project expenditures. Furthermore, MOE/FILO could only process reimbursement applications every three months. A cost overrun of 54.4 percent was incurred for civil works construction as a result of price increases and the need for more space arising from larger-than-expected student enrollments. Other cost overruns were in staff upgrading, library development and equipment procurement, but the cost savings in the TIS, Innovation Programs and other activities offset the overall cost overrun which finally was only 3.3 percent of the appraisal estimate. Disbursements were slow during the first two years due partly to incomplete understanding of disbursement procedures, need for clarification on the provisions of DCA regarding disbursement and partly to the complicated and protracted local processing procedures among some provinces. Following clarification of these problems at an implementation review meeting in Hainan in late 1995 and follow-up action by MOE-FILO, disbursements accelerated. Nevertheless, at the end of 1998, the original Closing Date, only 71 percent of the Credit had been disbursed, mainly because of the delay in the second ICB. - 11 -  5.3 Factors generally subject to implementing agency control: 5.3.1 Procurement. Equipment procurement was delayed under the first and the second ICBs, partly because of the complexities of coordinating and rationalizing equipment lists and specifications for 124 project institutions. While the two ICBs, as a whole, were satisfactory, several provinces voiced some dissatisfaction with the first ICB over some equipment - low quality, damaged goods, receiving more sets of equipment than requested, late delivery of certain items, and poor after-sales service. The feedback from the provinces helped improve preparation of the second ICB which consequently, although also delayed, had fewer problems. 5.3.2 Audit and Financial Reporting. On the whole, the audit and financial reporting was timely and in compliance with the credit covenants. However, the Bank's review of the 1998 Audit Report discovered some weakness in internal control in Fujian Province and minor non-compliance of Bank requirements in Inner Mongolia. In Fujian Province, the problem arose from a procedural matter in regard to local accounting practice that was not in conformity with international good practice. In Inner Mongolia, it was a misunderstanding of the use of counterpart funds for two colleges. Both issues were satisfactorily resolved. 5.4 Costs andfinancing: 5.4.1 Project Costs and Disbursements. At appraisal, the total base costs were estimated at $204.3 million, physical contingencies at $15.9 million and price contingencies at $36.2 million, bringing the total project cost to $256.4 million. Financing was distributed as follows: central govermment, $53.0 million; provincial governments, $103.4 million, and IDA, $100.0 million. At completion, the total project cost was $266.5 million equivalent, an overrun of 3.9 percent. Cumulative disbursements as of April 30, 2000, when the credit account was closed, totaled $101.6 million. The credit was fully disbursed. The additional $1.6 million was due to the exchange rate between US dollar and SDR for the original credit of SDR72.1 million. 6. Sustainability 6.1 Rationale for sustainability rating: 6.1.1 The benefits flowing from the investments made under this project have a high probability of being sustained. A major benefit of China's policy of decentralization has been the strengthening of provincial, prefecture/municipal and county authorities' role in providing and operating education services for the people. Particularly relevant is the fact that the operational control of teacher training for LMSs is vested in the province and prefecture; for higher middle schools and higher education, the responsibility is vested largely in the provincial government. As the 124 project teacher training colleges are established, on-going institutions, they are assured of operational funds by the relevant authorities. The incremental operational costs resulting from new project inputs (better classrooms, laboratories, libraries and computer facilities) would be offset by cost savings through more efficient utilization of these facilities, teachers and administrative staff. While a possible risk might arise from the operation of the TIS, all the provincial reports at the project implementation completion seminar in December, 1999, in Beijing, presented reasonably realistic plans for post-implementation operation for the next five - 12 -  years, for which they provided assurance of budgetary support. The rapidly spreading computerization of educational administration and the development of provincial and regional computer networks linked to CERNET and guided by MOE's EMIC would provide the impetus for the effective development and operation of the TIS. 6.1.2 The spin-offs from the innovation research projects, a huge number of publications including books, journal articles, audio and video tapes and computer software produced as of January 1999, would generate income for the colleges to continue supporting the innovation research projects in the coming years. This would be in addition to the financial support that is likely to come from the provincial and central authorities who are convinced of the great value of the teaching methodology innovation programs to raising the quality of teacher training and eventually of secondary education. The project has strengthened the overall provincial capability in managing the provincial teacher training system, thus reinforcing the decentralization of educational management, which in turn enhances sustainability. It is hoped that the high value Chinese culture places on education, which accounts for the remarkable achievements over the last half century China has made in providing universal basic education and the development and expansion of higher education, will help to sustain the strong commitment to education and assure national and provincial budgetary support for the project's operation phase. 6.2 Transition arrangement to regular operations: 6.2.1 Following project completion, MOE is working with each province to develop an action plan to sustain the project and its impact in the next five years. The action plan is based on the education development plans of each province for the next five years and the lessons leamed from the project including such steps: (a) maintain steady investment in project institutions so as to consolidate and expand the project achievement; (b) widely disseminate the lessons and best practice to non-project institutions and other education programs; (c) follow-up on the pilot programs of core seminars of teaching methodology; (d) provide budgetary support for maintenance of the project funded facilities and equipment and TIS operations; (e) rollover staff training for all staff and teachers, (f) increase investment in TIS at provincial and institutional level for operation and upgrading; (g) continue the project initiated reforms towards greater efficiency and effectiveness. 7. Bank and Borrower Performance Bank 7.1 Lending: 7.1.1 Bank team provided able assistance in the identification and preparation of the project. The government had strong ownership. The project was designed to respond to the objectives defined in the government strategy ( see par. 3.1.4) and consistent with IDA's CAS. The preparation process was efficient. 7.2 Supervision: 7.2.1 The project benefited from the supervision and advice of more than 130 staff weeks. The - 13 -  scope of the project which covered 124 teacher training institutions with a total enrollment of about 205,000 in 15 provinces posed a challenge for project supervision. The supervision missions had to be selective in visiting project provinces and institutions. Soon after credit effectiveness following an initial delay caused by Borrower's internal administrative procedures, the project suffered a setback when the first task manager, who designed the project, died suddenly. Following an unprecedented implementation review in Hainan in late 1995, attended by representatives from all the 15 provinces, the new task manager succeeded in getting the project back on track by working closely with MOE/FILO on detailed implementation plans, key project monitoring indicators, project reporting and reimbursement procedures. 7.2.2 Resident mission staff provided efficient and timely back-up support to supervision missions, especially in procurement and project accounting matters. Bank project supervision was ably aided by the efficient and conscientious work of the IAG, which effectively implemented the project's Quality Enhancement component. Careful scrutiny by the Bank of proposals for innovation programs ensured that the most relevant to teaching methodology and related issues and design, were selected so that high standards were established at the outset. 7.3 Overall Bank performance: 7.3.1 Overall, Bank performance during project preparation and supervision is satisfactory. The Bank's mature working relations with MOE/FILO, MOF and the provincial FILOs as well as its encouragement extended to the development work of the teacher training institutions helped the project reach a successful conclusion. Borrower 7.4 Preparation: 7.4.1 Borrower performance was considered satisfactory during project preparation. Its strong ownership and collaboration with the Bank team was essential to enable the project be prepared quickly and efficiently. 7.5 Government implementation performance: 7.5.1 Borrower performance was satisfactory during most of the implementation period. Implementation issues occurred during the first half were successfully addressed at the joint Mid-term Review. The performance was improved and effective since the MTR. 7.5.2 In regard to Audit Reports and Annual Progress Reports, the Borrower has been in compliance with Bank requirements. The Borrower provided timely and satisfactory support to Bank supervision missions. Special mention must be made of the supportive role of the IAG in setting high standards of professional work and producing timely detailed reports on the project activities under its supervision. Its dedicated and highly professional approach to implementing project activities ensured the successful achievement of the objective of facilitating innovation in teaching and teacher education. 7.6 Implementing Agency. - 14 -  7.6.1 The delay of the first ICB affected teaching programs of project institutions which had been planned with the use of the new equipment to be procured. Similarly, the delayed procurement of books upset the planning of certain courses that depended on the availability of the new books. Provincial FILO requests in the first two years for reimbursement encountered delays, partly because some provincial authorities were unfamiliar with reimbursement procedures, partly because a few provinces had protracted procedures. Several provinces experienced difficulties in securing timely counterpart funding. Despite the availability of funds from the Special Account, some provinces had problems in pre-financing certain project activities. Delay in completing the second ICB necessitated an extension of the Closing Date by one year to December 31, 1999. 7.7 Overall Borrower performance: 7.7.1 Borrower performance was considered satisfactory overall in that despite the implementation difficulties and issues during the early phase, the project succeeded in achieving the objectives it set to achieve which is not possible without borrower continued commitment and collaboration throughout the implementation period. 8. Lessons Learned 8.1 The experience in the design and implementation of this project provides the following valuable lessons: (1) Ownership and participation of local stakeholders. Where a project objective is in close harmony with the larger national aim, such as reform through innovation to improve education quality, success of the project is assured by strong ownership and active participation of the local stakeholders. (2) Leadership/Communication. Where the project involves a large number of institutions and sub-implementation agencies spread over a wide geographic area, a strong central implementation agency characterized by dedicated and decisive leadership is necessary to guide and coordinate provincial implementation and ensure timely execution of centralized project activities that are linked to provincial and institutional activities. A clearly articulated communication system should be in place at project start to ensure an effective two-way information flow from and to the center, the province and the project institutions to facilitate project action-planning and implementation, monitoring and evaluation, and project and financial reporting. (3) Implementation Capacity/Coordination. To ensure the centralized activities be carried out efficiently without adverse affect on other key project entities and the overall pace of implementation, the Borrower and IDA should thoroughly assess institutional capacity to manage such a large and complex project at appraisal. Action plans for the first year, therefore, should be one of the requirements for negotiations. It is essential for all implementation agencies receive adequate training and guidance and be familiarized with operational procedures and principles including project management, disbursement, monitoring and evaluation, and project reporting. - 15 -  (4) Procurement Planning. Procurement of equipment and educational materials requiring ICB or local competitive procedures should be given top priority planning and preparation so that bidding may start as soon as the project becomes effective. (5) Monitoring and Evaluation. Key project monitoring indicators should be clearly established and a standard reporting format adopted before the start of implementation to facilitate data collection, analysis and integration, as necessary, for institutional, provincial and national progress reports. Implementation agencies should use continuous project monitoring and evaluation as a planning tool to prepare the action plans for the following year. (6) Participation. The Innovation Programs demonstrate that, where the project seeks to improve education quality, practical research activities involving staff and students to address actual quality issues are likely to produce outcomes that will meet project objectives. (7) Support and Commitment to Research. In research projects, the benefits tend to be short-lived where the leaders seem more interested in acquiring equipment through research funds than in the value of the research per se; but where administrative support is genuine, the research benefits are longer-lasting. Staff commitment to research is also a very important factor. (8) Impact on Education Policy. The success of the innovation program provides clear evidence that well designed and implemented innovations are likely to produce positive and strong impact on policy making by influencing the thinking and behavior of policy makers to support reforms and dissemination of good practice. 9. Partner Comments (a) Borrover/lnplementing agencv: 9.1 The Borrower thinks that the ICR made a clear description of the project and its implementation in terms of project targets, implementation experience and results. The statistical data supporting the report is trustworthy. The Borrower agrees on the whole to the viewpoints, analysis and recommendations made in the ICR. 9.2 Project Background. In 1991, the government in its Ouitline of Ten-year Program for National Economic Development and the Eighth Five-year Plan: developed the targets and action plans to further expand nine-year compulsory education in all provinces of China at a rate commensurate with local conditions of three geographical region. A main problem in achieving this strategic target was the shortage of teachers and the poor quality of teachers. For example, in 1991 only about 51.8 percent of the teachers in lower middle schools were considered qualified. To address the problem, the Ministry of Education decided to target 16 densely-populated. autonomous and minority provinces and regions to assist in their efforts of achieving universal nine-year compulsory education with a credit from the World Bank and counterpart funding from the government. Following thorough preparation and negotiations, the project, Effective Teaching Services, became effective in January, 1994. 9.3 Project Objective. The agreed objective of the project was to improve learning - 16 -  quality at the LMS level by providing with better teaching services, including instructional methodology, teacher training, and better management of teacher training and assignment. While improving the teacher delivery services, the project will have three functional objectives: (a) improve the quality of LMS teacher training through better physical inputs, management and staff training; (b) increase management and planning capabilities for teacher selection, training and assignment at national, provincial and lower levels; and (c) facilitate innovative activities in teaching and teacher training. The credit and the counterpart funding was to finance innovation programs, civil works, teaching equipment, books, technical assistance and teacher information system in teacher training colleges and provincial education departments. 9.4 Project Irnplementaltion anad resuilts. As ETS project was the second teacher training project in the series of educational projects financed by the World Bank, its implementation benefited from the lessons learned of the first teacher training project and other previous projects. That was the increased focus on quality and innovations. It is clear that among all the projects funded by the World Bank, the innovation program of this project is one of the most successful ones. The main characteristics of the project were solid preparation, broad scope of its coverage and a large number of provinces and institutions participating. During the implementation of the project, the World Bank, MOE, Ministry of Finance and all the project implementing departments demonstrated their diligence and cooperated closely, which ensured all parts of the project were implemented smoothly. To ensure the project activities to be carried out in compliance with the policy and procedures of the World Bank and that of the Government, MOE provided not only project management training for the staff from the project provinces, but also adopted a decentralized approach in implementation by delegating more autonomy to the project provinces and the institutions which in part contributed to the success of implementation of all project activities, including innovation programs, civil work construction, equipment and book procurement, technical assistance and teacher information system. The World Bank credit was fully disbursed at credit closing and the government provided counterpart funding in amounts exceeding the original plan. What is particularly noteworthy, was the innovation program of the project, the Chinese and foreign experts and the participating institutions did an excellent job and achieved a complete success, which greatly push forward the teaching and research work of the project institutions. Most project perfonnance indicators were reached or exceeded. The management capability at provincial and institutional level was strengthened, and a Teacher Informnation System (TIS) was established and operational, which accelerated the development of the project institutions in tenn of capacity and efficiency. A few implementation issues related to procurement and disbursement were identified and addressed in the course of implementation. They were fully discussed in the Bank's analysis in this report. No further explanation will be given here. 9.5 Project Sustaincability. The Chinese government has set a high target for teacher development in the 21st century. As this project is a major component supporting that goal, the MOE is working with each province to develop an action plan to sustain the project and its impact beyond the implementation period. The action plan will be based on the education development plans and policies of each province for the next five years and the successful experience of the project to include such a elements and steps: (a) to maintain steady investment in the project so as to consolidate and expand the project achievement; (b) to make full use of the - 17 -  project's exemplary function by applying its successful methods in other educational projects; (c) to further disseminate the achievement of the innovation programs and to follow-up on the pilot programs of core seminars of teaching methodology; (d) to provide budgetary support for maintenance of project funded facilities and equipment and TIS operations and etc.; (e) to carry on the training for all staff and teachers, (f) to increase investment in TIS at provincial and institutional level for completing a national TIS network; (g) to keep the focus on the reforms of project institutions, and deepen the structural reform for greater efficiency and effectiveness, and (h) to maintain the stability of project management staff at all levels and make full and sustainable use of the human resource. 9.6 Comment on World Bank's Performance. The WB officials and the consultants being sent to China were all possessed with high professional and management abilities. Some of them had worked harmoniously with the Chinese counterparts in previous projects. During the implementation period of the project, the WB project task manager and consultants made many constructive suggestions when visiting and supervising the project, and helped solve some problems appeared in the project implementation, which contributed to the successful progress of the whole project. During the period of the project's appraisal and initial preparations, the WB project task manager, who did not know much about the project implementation background in China, had made some project designs unsuitable for the actual conditions, which hampered the project, and the rate of implementation had also been affected. For example, it is stated in the Development Credit Agreement that the credit can only pay for 55% of the domestic goods procured in ICB and the counterpart funds should pay for the left 45%. As the result, the total project cost was not accordance with what reckoned by the project design at appraisal, which caused a big shortage in counterpart funds. This had suspended the implementation during the first half of the project. And the implementation began to be carried on smoothly only when the agreement was amended; this is a lesson worthy to be learned. 9.7 Borrower's Perjbrmance. At the beginning of the project implementation, it was not easy to carry out the project because of the weak management capacity of the provinces and the large number of the institutions included. However, the project management training combined with the decentralized arrangements, the project provinces began to develop an experienced project management team to handle the complex tasks. The Ministry of Education conducted site supervisions of the project in each province during implementation to find problems and solve them timely. MOE also provided guidance and coordination for overall implementation and in particular for procurement and overseas training programs. Overall, MOE as the Borrower's implementing agency successfully fulfilled its responsibilities for project implementation, management and coordination. - 18-  (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information - 19 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: IndicatorIMatrx Prcte in last #fR A iEOJct atest mate Output Indicators: IndicatodMatrix projce in last PSR :aDLt Estimate Institutional Element Female enrollment rates 50 % of enrollment Increased 24% Double-subject graduates 60% of trainees 72.5% of trainees Percent of qualified teachers 10% increase Increased 30% Teacheres weekly contact Hours 10% increase Increased 23% Lab weekly open hours 75% increase Increased 75% Library weekly open hours 70 hours weekly 69.7 hours weekly Percent of experiments performed 100% prescribed 99% performed Percent of science course lab work 25% of course time 27.7% of course time devoted to lab work Copies of library books per student 200 per student 143 copies per student Percent of standard equipment operational 100% 99% operational Management Element Percent of planned training carred out 100% 167% completed Percent of planned TA carried out 100% 100% completed Teacher Information System operational 100% at national and provincial level 100% operational Quality Enhancement Element Core Seminars carried out 100% 100% completed Pilot programs carried out 100% 100% completed Innovation programs carried out 100% 300% completed End of project -20 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) _ _ . .. Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Project Cost Byr C;omponent LUS$ million US$ million Facilities Upgrading 78.00 120.40 154.4 Instructional Equipment 100.10 104.70 104.6 Library Development 8.00 11.10 138.8 Staff Upgrading 4.20 15.30 261.9 National Management Development 0.30 0.50 34.2 Provincial Management Development 0.40 0.50 83.9 Teacher Information Systems 7.30 7.50 102.7 Core Seminars 0.40 0.40 100 Pilot Programs 0.10 0.10 100 Innovation Programs 5.60 6.00 107.2 Total Baseline Cost 204.40 266.50 Physical Contingencies 15.90 Price Contingencies 36.20 Total Project Costs 256.50 266.50 Total Financing Required 256.50 266.50 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other N.B.F. Total Cost 1. Works 0.00 0.00 0.00 100.50 100.50 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 93.00 10.00 23.80 0.00 126.80 (69.50) (7.50) (14.50) (0.00) (91.50) 3. Services 0.00 4.30 7.20 0.00 11.50 (0.00) (2.20) (6.30) (0.00) (8.50) 4. Miscellaneous 0.00 0.00 0.00 17.70 17.70 (0.00) (0.00) (0.00) (0.00) (0.00) Total 93.00 14.30 31.00 118.20 256.50 (69.50) (9.70) (20.80) (0.00) (100.00) -21 -  Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) Prouremient MethtodI Expenditure Category | Iroc N.B.F. Total Cost 1. Works 0.00 0.00 0.00 127.20 127.20 (0.00) (0.00) (0.00) ( (0.00) 2. Goods 0.00 0.00 80.00 40.00 120.00 (71.90) (14.90) (0.00) 0 (86.80) 3. Servic-es 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (8.50) (0.00) (8.50) 4. Miscellaneous 0.00 0.00 1.60 17.70 19.30 (0.00) (2.50) (3.80) (0.00) (6.30) Total 0.00 0.00 81.60 184.90 266.50 (71.90) (17.40) (12.30) (0.00) (101.60) Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 3' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) iPerentage of Appraisal Apraisal Estimate Actua t e | Bank Govt CoF. Bank Gov. Co;F. Bank Govt. CoF. All components 100.00 156.40 101.60 164.90 101.6 105.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -22 -  Annex 3: Economic Costs and Benefits Not Applicable. -23 -  Annex 4. Bank Inputs (a) Mlissions: !Stae of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 09!90 2 Educators S S I Economist 06/92 3 Educators, S S I Economist I MIS Spi. I TA Appraisal/Negotiation 08/92 4 Educators S s I Economist i / MIS specialist I TA specialist 02/93 3 Educators S S 2 Economist I MIS specialist I TA specialist 08/93 3 Educators S S 2 Economist I MIS specialist I TA specialist Supervision 07/94 S S 2 Educators I Operations officer I Procurement specialist 04/95 S S 4 Educators I Operations officer I Procurement specialist I MIS specialist I Disbursement specialist - 24 -  11/95 U S 2 Educators I Operations officer I Procurement specialist I Management specialist 09/96 S S 2 Educators I Operations officer I Procurement specialist I Management specialist I Disbursement specialist 08/97 S S 2 Educators I Operations officer I Procurement specialist I Management specialist I Disbursement specialist 11/98 S S 2 Educators I Operations officer I Procurement specialist I Management specialist I Disbursement specialist 05/99 5 S I Educators I Operations officer I Evaluation specialist ICR 12/99 S S I Teacher educator, I Evaluation specialist I Operations officer (b) Staff |[ Stage of Project Cycle Actual/Latest Estimate No. Staff weeks USS (.000) Identification/Preparation 106.5 233.3 AppraisaVNegotiation 20.5 50.7 Supervision 130.6 220.5 ICR 8.0 16.8 Total 263.8 521.3 - 25 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating D Macro policies O Sector Policies N Physical *OH OSUOM ON ONA O Financial Z Institutional Development OH 0 SU O M O N O NA I Environmental Social O Poverty Reduction O Gender O Other (Please specify) 0 Private sector development O Public sector management O H * SU O M O N O NA 0 Other (Please specify) - 26 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating r Lending OHS OS OU OHU E Supervision OHS OS OU OHU E Overall OHS OS OU O HU 6.2 Borrower performance Rating O Preparation O HS * S O u O HU O Government implementation performance 0 HS 0 S 0 U 0 HU O Implementation agency performance O HS * S O U O HU O Overall OHS OS 0 U O HU -27 -  Annex 7. List of Supporting Documents 1. Aide-memoire, Implementation Completion Mission, the World Bank 2. Borrower's contribution to the ICR by FILO, MOE ( in project files ) 3. Implementation Completion Report by 15 participating provinces ( in project files ) 4. The Social Effects of Innovation Programs - Assessment Report ( in project files ) - 28 -  China Effective Teaching Services Project (Cr. 247 1-CHA) Implementation Completion Review Mission December 13 - 27, 1999 Aide Memoire Introduction 1. A World Bank mission consisting of Messrs./Mmes. Dingyong Hou (mission leader), Hon-chan Chai (implementation evaluation specialist, consultant) and Grace Mak (teacher training specialist, consultant) visited China during December 13 - 27, 1999 to provide advice and assistance to MOE and the project provinces on implementation completion and reporting of the captioned project. The mission held discussions with officials of the Foreign Investment and Loan Office, Teacher Education Department and Education Management Information Center of Ministry of Education and officials from Hebei Provincial Education Commission and visited project institutions in Shijazhuang and Baoding city. On return to Beijing, the mission in collaboration with MOE held a stakeholder workshop participated by representatives from 16 project provinces and the project's Innovation Assessment Group to identify good practice and share the lessons learned. A wrap up session was held with MOE on December 27, 1999. The mission wishes to express its gratitude to the staff and management of these institutions for their good cooperation and warm hospitality. The Aide-memoire records the mission's findings and recommendations which are subject to review by Bank's management. 2. The main objectives of the mission were to assess: (a) the degree to which the project achieved its development objective and outputs as set out in the project document; (b) other significant outcomes and impact and prospects of sustainability; (c) lessons learned and arrangement for dissemination and (d) the data and analysis to substantiate the assessment. Summary of Project Inmplenmentation and Achievenment of Development Objective Project Status at Completion 3. The project became effective in January, 1994 and will close on December 31, 1999. The original Closing Date was December 31, 1998 and an one-year extension was requested by the government and granted by the Bank to facilitate smooth implementation and dissemination of the innovation program and remaining procurement. Despite a rocky startup and faced with difficulties arising from delayed effectiveness, disbursement issues and a transitional period between the unexpected death of the Bank's former task team leader and the taking over by a new task team leader in  the early years of implementation, the project achieved steady progress, especially following the mid-term review. To date, the project has essentially completed all the planned implementation activities including all planned procurement actions except four on-going dissemination workshops for the innovation program which are taking place in December. Disbursement will continue for the expenditures incurred in the past few months and those to be incurred prior to the Closing Date. The cumulative credit disbursement recorded by the Bank and the disbursement report from FILO, MOE show that a balance of approximately US$1 million equivalent would remain undisbursed and will be cancelled when credit accounts are finally closed. Each project province has provided data and analysis on the project and its implementation experience, including lessons learned and an operation plan to sustain the benefits of the project. Towards Achieving Development Objective 4. The development objective of the project was to contribute to improved learning at the lower middle schools (LMS) by providing for better teaching services, including instructional methodology, teacher training and management of teacher training and assignment. This central objective is supported by forr functional objectives: (a) to improve the conditions of teaching and learning at lower secondary middle schools: (b) to improve training of LMS teachers nationwide; (c) to improve management and planning capabilities for teacher selection, training and assignment; and (d) to facilitate inn zovations in teaching and teacher trainiig. The project at completion appears to have achieved these fi4nctional objectives as set out in the Staff Appraisal Report. Measured by the key project monitoring indicators, the project has effectively: (a) strengthened institutional capacity through the provision of new and rehabilitated or extended physical facilities, equipment, books and staff training for teaching, library services and general administration; (b) improved management of teacher training through staff development and establishing the Education Management Information System (EMIS) in general and Teacher Information System (TIS) in particular; and (c) improved the quality of teacher training through staff upgrading and innovation in teaching methodology in mathematics, science and English language. Project Impact and Sustainability 5. An initial assessment of the impact of the project is encouraging. A good and surprising example was during the project completion workshop, a top teacher training official applauded the success of the innovation program and voiced his genuine support for further expansion and dissemination. He spoke enthusiastically of its impact on the development of a national policy to encourage such innovations in teacher training. It is particularly worth noting that this official who, as the Bank's main counterpart in MOE at 2  appraisal, had opposed the idea of including an innovation program was now openly embracing the change towards quality education as the direction in the new millennium. 6. The probability of maintaining the project achievements appears to be high as the project has created an enabling environment and set in motion a process of continuing improvement which contributes to the long term development objective. The developments under the project took place in the larger context of the country's drive for improvements in the quality of the teaching force, status of teachers, emphasis on the contribution of education and science to national strength, and greater efficiency. In turn, the successful outcome of the project and in particular the success of the innovation program and active dissemination has had a positive impact on the development of national and provincial teacher training policies to support innovation in teaching and learning. It has also generated renewed commitment by local governments to provide budgetary resources to finance on-going and future dissemination and expansion of the successful pilot innovations to non-project institutions nationwide. As confirmed at the Project Completion Workshop and in their respective project completion reports, each of the 16 project provinces has provided an Operation Plan with budgetary support to sustain the project operation and benefits for the next five years and beyond. Institutional Element Civil Works/Physical Facilities 7. The provision of new and renovated physical facilities has been successfully completed, despite price increases during implementation and difficulties faced by some provinces in obtaining the necessary increase in counterpart funding. Some provinces experienced higher price increases than others and their provision of counterpart funds for civil works varied accordingly. This accounted for the variation in actual space constructed among the provinces. Nevertheless, the overall civil works construction target has been exceeded by 17 %. The actual total space constructed was 1,078,818 square meters compared with the planned construction of 922,313 square meters. The majority of provinces exceeded their original targets, with three exceptions: Heilongjiang (93.8 %), Hebei (88 %) and Hainan (76.4 %). 8. In Heilongjiang, the shortfall of 3,870 square meters for the six project institutions translates into an average of 645 square meters per institution. In Hebei, with 10 project institutions, the shortfall averaged 996 square meters per institution. In Hainan, with only two project institutions, the shortfall per institution averaged 3,671 square meters. In all the three provinces, however, the construction shortfall has not materially affected the basic needs of the teacher training institutions because the shortfalls concerned mainly proposed renovations or extensions to old buildings which are still usable. 9. Of the total space constructed, 874,409 square meters or 81 percent were for new facilities and 204,410 square meters or 19 percent were for rehabilitated and extended facilities. The total cost of civil works was RMB 674.6 million, comprising RMB 620.9 million for new construction and RMB 53.7 million for renovation and extension. This 3  represents a 57% cost overrun, which was due mainly to excess construction and price inflation. Equipment 10. The equipment procurement was successfully completed and the equipment is being put to good use. The greater proportion of the equipment is for teaching in the teacher training institutions. The equipment, which is directly related to the preparation of teachers for teaching in the lower middle schools, includes basic instruments and other necessities for demonstration laboratory experiments and practice in the teaching of science (physics, chemistry, biology), social science (geography, psychology), fine arts, music, audio-visual aids and physical education. Other things include computers and equipment for language laboratories and libraries. 11. As of December 1999, the project provided the following categories of equipment: science and engineering, computers, biology, music, audio visual and language labs and physical education. Utilization of Facilities and Equipment 12. As a result of the project, the average rate of class experiments has reached 99 % of curriculum requirements; the average number of laboratory opening hours per week is 35; the laboratory utilization rate is 77 %; and the average classroom opening hours per week is 56. Library Space, Books and Reference Materials 13. Library space provided under the project totaled 667,980 square meters, of which reading space totaled 233,719 square meters; space for stacks, 231,459 square meters; and other (mainly administration) space, 202,802 square meters. The project aim was to provide 3,000 to 4,000 essential books and reference materials for the library of each project institution as part of the support for the development of library services. Book procurement would give preference to the acquisition of dictionaries, reference books and other materials necessary for improving knowledge of recent developments in academic subject matter and teaching methodology. 14. The procurement and distribution of books and reference materials were essentially completed in 1998. Books and journals procured and delivered to the project institutions totaled 18.7 million copies worth US$8 million. As of December 1999, the total library stock of the project provinces amounted to 55.8 million books and 6.62 million journals. Together they account for 5.99 million titles. At project appraisal, the project provinces collectively had about 37 million books. The project accounted for an increase of 18.7 million books and journals. 15. The average book-student ratio (BSR) is about 141, which is only 70.5 % of the appraisal recommended ratio of 200. Only two provinces (Hebei and Anhui) have 4  reached the recommended target. The BSR among the provinces ranges from a low of 69 (Jilin) and 78 (Guangdong) to a high of 169 (Fujian) and 172 (Henan). The average number of journals per student is about 16, ranging from less than one journal per student for Jiangxi to about 33 for Hainan. Library opening hours for borrowing books averaged 70 hours per week, with only minor variations among the provinces. The larger-than- expected student enrollment increases have been responsible for the lower BSR. The total enrollments of 205,186 in the project institutions in 1991 had increased by 91 % to 391,366 in 1999. Staff Upgrading in Institutional Development 16. Staff upgrading in institutional development included training for (a) teaching staff; (b) laboratory staff; (c) institutional administrative staff; and (d) library staff of project institutions. 17. Teaching Staff Academic Upgrading. A total of 14,215 teaching staff, or 180 % of the original target of 7,906, received training. They included 2,779 entrusted (commissioned) teachers on postgraduate courses; 3,508 assistant teachers and 1,438 key backbone teachers on short advanced studies, and 1,259 domestic visiting scholars. In addition, 5,321 staff received various short-term training courses. The three provinces with the largest numbers of teaching staff trained were Sichuan (1,909), Guangxi (1,387) and Liaoning (1,049). In percentage terms, the three provinces with the highest increases were Sichuan (309%), Chongqing (298%) and Jiangxi (238%). 18. The large increases in the number of teaching staff trained are due to the corresponding increases in teaching staff of the project institutions as a result of the rapid expansion of student enrollments. At project appraisal, the teaching staff in project institutions amounted to 65,593 and that number increased to 74,823 at project completion. A net increase of teaching staff of about 9,000. 19. Laboratory Staff Skill Upgrading. The planned total number of laboratory staff who were to receive training was 2,094. The actual number trained was 2,390, an increase of 14%, ranging from the lowest at 74.4% (Jilin) to the highest at 158% (Sichuan). They included 637 laboratory directors, 1,192 laboratory teaching staff and 561 laboratory administrative staff. The three provinces with the, largest numbers of laboratory staff trained were Henan (410), Sichuan (319) and Shandong (235). The increased number of higher qualified laboratory staff contributed to the achievement of 99% laboratory experiment rate and 77% laboratory utilization rate (para. 12 above). 20. Administrative Staff Management Skill Upgrading. The planned number of college administrative staff for training was 804. The actual number trained was 861 (+ 7%). They included 231 college presidents, 218 teaching administrative staff, 195 financial administrative staff and 217 equipment management staff. Supported by the reinforced provincial management information system, the skill upgrading of management staff has strengthened overall management of the teacher training institutions. 5  21. Library Staff Skill Upgrading.. The project provided for the training of a substantial proportion of the library staff of the project institutions and the upgrading of library services to make the college libraries more dynamic and interactive. Seminars led by experts dealt with library computerization, multimedia developments and reader services. Overseas study tours for key library staff acquainted them with modern library services in other countries. The actual total number who received training was 1,091 or about 35% more than the original plan of 810 staff. Bearing in mind that many staff participated in more than one training program, the trainees were made up of 668 in short-term in- country training; 145 in long-term training; 291 in national seminars, and 156 were on one-year overseas fellowships. Management Element Management Improvement 22. The project provided for staff training at the national and provincial levels to strengthen central-level and provincial-level management of teacher education. This would be supported by a Teacher Information System (TIS) at the central level as part of the Educational Management Information Center (EMIC) at the MOE and at provincial level in each of the 16 project Provincial Education Commissions (PEdCs) and selected county education offices as part of the Educational Management Information System (EMIS). 23. The project provided for the training of 20 MOE planners out of which, 6 were trained through short overseas studies, and another 6 were through national training workshops. For the provinces, training was carried out for a total of 94 persons comprising 43 planning staff, 23 financial management staff and 28 administrative staff. It should be noted that Guangdong and Chongqing did not participate in this training program; and Jilin did not participate in the financial management and administrative staff training programs. Teacher Information System (TIS) 24. Training for the TIS was practically completed by the end of 1998. It was coordinated with the procurement of equipment under the second ICB. As of December 1999, the total number of staff trained was 1,934 or 89.6% more than the planned number of 1,020. It should be noted that Jilin and Chongqing did not participate in this training program. (Jilin had planned for 8 staff to be trained, but none took part; as Chongqing was originally part of Sichuan, its quota may have been included in the number of trained staff for Sichuan.) Among the provinces, the number of TIS staff trained ranged from a low of 12 for Shandong to a high of 584 for Henan- Discussions were held during the wrap up session about the above variation of data. The Training Division of FILO explained that in the case of high number given it maybe resulted from counting person times rather than number of persons. And in the case of low number, it's possible that the number was referred only to the yearly data rather than cumulative. 6  FILO agreed to investigate this discrepancy for the provinces concerned and furnish the Bank the updated data. 25. All the provinces have reported that they have established, or will soon be establishing, their TIS as part of their operating EMIS. Some are more advanced than others, but all have declared that the improved information system (as a result of the project inputs of staff training to complement the acquisition of new equipment) has accelerated the process of improving education management and office automation and raising the level of teaching and research in the teacher training colleges and university teacher training departments. The computerization of educational data collection and analysis will improve efficiency in educational management. Many of the project institutions have established their campus intranet which, in many cases, is linked with a multimedia high-speed network joining cable television. Several institutions are experimenting with long-distance teaching, which in turn has stimulated the development of related software. All the project provinces have prepared plans for the operation of their respective TISs for the next two to five years. The Educational Management Information Center (EMIC) 26. The EMIC has effectively carried out its responsibility of providing leadership and guidance in the development and operation of the provincial management information systems (MISs) and the intranets of individual higher education institutions. It has successfully resolved the early problems of designing a system that would meet local needs and simultaneously be compatible with the larger national systems, such as CERNET. 27. In the rapidly changing social and economic conditions in China, EMIC considers that the focus of its work as the agency responsible for processing of statistical information at the national level should "shift from the supply of unitary MIS software to the project provinces and counties to the supply of technical standards used in exchange of information between various MISs serving school management." In this way, the concerned educational authorities would be enabled to fulfill unified technical standards used in the exchange of information between various MISs when they are engaged in the secondary development of MIS software. 28. With this redefined role in mind, EMIC has drawn up a provisional program for sustaining the benefits of the TIS. It would host annual meetings with the provincial authorities to help them develop their MISs and facilitate the mastery of new IT knowledge and skills by staff. Special efforts would be made to disseminate to other higher education institutions in project as well as non-project provinces the database development techniques fostered by this project. Software would be updated every two years and provinces would be given support in their efforts to develop relevant software applications. This is to further the project objective of enabling provincial and county authorities to incorporate relevant informatioLn in their basic databases so that they may provide more detailed and accurate information for decision-makers in the education departments. 7  Staff Upgrading 29. Staff upgrading comprises all training activities in the project, including (a) teaching and non-teaching staff of project institutions; (b) management staff at national, provincial, county and institutional levels; and (c) teaching methodology core seminars and pilot programs. This section reports on the first two categories, the third category will be covered in the section on Quality Enhancement Element. 30. In-country shortAong term training. Training activities have been completed. The overall rate of completion is 162%. A breakdown of the completion rates by categories of training is shown in Table 1. below. All training categories have exceeded their target numbers of persons, with the highest rate for Teacher Information System (190%) and the lowest for In-country training of institutional administrative staff (107%). When absolute numbers are considered as well, the most striking expansion has taken place in In-country training of teaching staff, from a planned number of 7,906 to the actual number of 14,240 (180%). This reflects an emphasis on the priority of upgrading the quality of teaching staff. 31. As reported in the aide-memoire for the mission dated April 26-May 8, 1999, these were adjusted figures based on negotiation between FILO, MOE and the provinces and institutions. The gist of adjustment was an increase in long-term training that is more relevant to institutions' needs, and a corresponding decrease in less desirable short-term training. 32. At the Project Completion Workshop held on December 17 and 18, 1999, the representatives from the 16 provinces (including Chongqing) expressed satisfaction with the training activities. They indicated that training had generally enhanced the quality of both teaching and non-teaching staff. The amount of funds, and the emphasis that it represented, for training of teachers college staff, was unprecedented. The positive feeling was grounded in both extrinsic and intrinsic terms. For the latter, many provincial representatives stated that teachers college staff usually had little access to training abroad or at top universities in China, and the ETS project had made this possible to them and raised their self-esteem. Nevertheless, some weaknesses were reported by a few provinces in the provision of training in terms of related cost and relevance of the training content. Table 1. Status of Training Category (A) (B) Completion rate Total no. planned Total no. completed thru (B/A) In-country training of 7906 14215 180% teaching staf9 In-country training o 2094 2390 114% laboratory staff 8  In-country training of 804 861 107% institutional administrative staff la-country training o 810 1091 135% library staff In-country training o 89 94 106% provincial administrative staff Teacher Information 1020 1934 190% System All 12723 20610 162% Note: The table does not include training of MOE planners and overseas training. 33. The overall figures do not reflect the disparities among provinces. Table 2. below provides the extent of disparity by category of training. Neither the FILO, MOE Implementation Progress Report nor the provincial reports explained the disparities. In some instances the striking rates may be due to a low base number. For example, Nei Mongol had a total planned of 8 persons for TIS training and an actual of 251, thus a completion rate of 3,138%. However, other extremes in high or low rates, especially the 0% of Guangdong, Chongqing, and Jilin, still await an explanation. The mission had stressed in each of its previous supervisions the importance of both the description and analysis of statistics. This continues to be an area that needs improvement. Table 2. Inter-province Variation in Training Cate%orv Overall conml)[etion rate Highiest compiction rate Lowest completion rate ln-country training of 180% 309% (Sichuan) 105% (Nei Mongol) teaching staff In-country training o 114% 158% (Sicltan) 74% (Jilin) laboratory staff In-country training o 107% 154% (Chongqing) 80% (Jilin) institutional administrative staff In-country training o 135% 273% (Henan) 90% (Liaoning) library staff In-country training o 106% 200% (Slhandong) 0% (Guangdong, provincial Chongqing) administrative staff Teacher Information 190% 3,138%/ (Nei M{ongol) 0%/ (Jilin) System I 34. Overseas trainin . This sub-component comprises training for teaching and non- teaching staff. Its overall completion rate is 104% (N= planned 164, actual 171), with a breakdown at 104 % for teaching staff (N= planned 124, actual 129), and 105% for non- teaching staff (N= planned 40, actual 42). 7 staff out of the 42 were from MOE and the remaining 35 staff were from the provinces. 35. The provinces expressed a general satisfaction with overseas training, but provided little detail. However, the head of Baoding Teachers College, which the mission visited 9  on December 15, 1999, reported that a teacher of its English Department stayed in Australia between April 1996 and June 1997 as a visiting scholar. There, in the process of completing his research, he came to know current developments in English teaching in Australia and came up with some solutions for problems in this field in China. 36. Overseas study tours. As reported in the last aide-memoire, 17 study tours had been completed, as compared to the planned number of 15. The actual number of participants was 90, as compared to the planned number of 79. According to FILO's report, the ideas and experience learned from these study tours were feedback to the formulation of teacher training strategies and management improvement processes at national and local levels by the participants. Another benefit is that the study tour provided an opportunity for the Chinese Co-chairs for the five core seminars to meet and discuss about the program with their overseas counterparts. This type of exchange facilitated the planning and successful delivery of these seminars. Quality Enhancenment Element Innovation Program 37. The quality enhancement element has had a successful outcome. It comprises a total of 462 research projects, most of which were conducted by institutions and a few by PEdCs. Due to unanticipated personnel reasons and with the consent of all parties concerned, two projects were cancelled. The actual number is therefore 460. They fell into eight areas of research: (a) Professional skills enhancement and use of educational technology (21% of total, N-95); (b) Teaching methodology in specialisms and laboratory experiments (20%, N=93); (c) Objectives, scale and curriculum of tertiary- level teacher education (17%, N=79); (d) Reform in educational administration (10%, N=48); (e) Quality education (as opposed to examination-oriented education) (9%, N=40), (f) Relevance of teacher education to local community needs (9%, N=40); (g) Reform in education and teaching at lower middle schools (7%, N=31); and (h) Other significant areas of reform such as education for minority groups and girls, population, environment, and special education (7%, N=34). 38. The research projects have been completed, and their output continues to be published in books, journals, videotapes, newspapers, and seminar presentations. The latest output is the volume entitled Quality-oriented Education for Modernl Teachers: The Locomotive of Basic Educationt Reform. copies of which were distributed to participants at the Project Completion Workshop. This volume, published in November 1999, was edited by Professor Tu Guohua (Chairman of the IAG group) and Mr. Jin Changze (former director of the Teacher Education Department, MOE). A collection of reports of 63 award-winning research projects, this publication is an outstanding testimonial of the impact of this project on teacher education in China. 39. The provinces also published their collection or selection of reports of research projects conducted by their respective institutions. According to the representative from Heilongjiang province, the research outcome was particularly significant at a time of 10  policy change in teacher education. Traditionally, teacher institutions monopolized teacher supply. In recent years, graduates from other types of institutions have been able to join the teaching profession if they have taken additional courses in teaching. Some key schools have recruited graduates from comprehensive universities rather than those from normal universities. The new competition has urged teacher institutions to convince school principals of their unique value in teacher education. The presentation of the research results has accordingly contributed to the search for a distinctive identity of teacher education to reflect its growing esteem. 40. According to some provinces, the innovation research projects, together with staff upgrading and institutional improvement in the other components of the ETS project, have had a positive impact on the quality of graduates from the project institutions. For example, Shandong and Heilongjiang reported that it has taken shorter time (varying from one to two years) for the making of a lead teacher in lower middle schools than before (about 10 years). Fresh graduates from the project institutions tend to be more versatile and able to use new teaching methods, and therefore are welcomed by forward- looking LMSs. 41. The report on the assessment of the social impact of the innovation programs, headed by Professor Yu Jiayuan of Nanjing Normal University was completed in January 1999. The main findings are: clear and accurate choice of research topics, solid work supported with empirical data, rich research output, and good potential for sustainability of research benefits. 42. Officials from FILO, MOE and FILO/PEdCs generally applauded their achievements in the research projects. They appeared to appreciate the long-term value of this kind of qualitative enhancement in indigenous capacity building. A former top teacher training official of MOE recalled that during negotiation of the ETS project in the early 1990s, he was opposed to including the research projects, maintaining that it was too much to allocate 5% of the credit to them. In hindsight, if he were to negotiate the project again, he said, he would argue for at least 10% for them. The Chairperson of the IAG group reiterated that because there had been no precedents for this sub-component, he and his colleagues had been learning by experimenting as they carried out the project. Teaching Methodology Core Seminars and Pilot Programs 43. The findings from this supervision on Teaching Methodology Core Seminars and Pilot Programs are similar to those of the last one. The new development since the last supervision is that the tenth Pilot Program, conducted in Chongqing, was completed in November 1999, bringing this sub-component to completion. 44. Evaluation, Dissemination and Sustainability. As reported in the last supervision, a spiral cycle of research, review and dissemination characterized the research projects and Teaching Methodology Core Seminars. Participation in this model of evaluation and dissemination proved to be effective in hands-on experience and of increasing awareness of increasing cost-effectiveness through evaluation and dissemination. At the Project II  Completion Workshop, provincial representatives in their reports spelt out their plans to sustain these achievements. Some provinces said they would continue the dissemination effort, others declared they planned to set aside a sum to continue the research effort. Audit, Disbursenment and Financing and Other Compliance 45. Cumulative disbursement as of December 20, 1999 is USS98.5 million against the credit of US$ 100 million equivalent. A balance of US$3.1 million remains. According to the FILO, MOE's disbursement record, an additional US$2 million has been committed and will be disbursed prior to credit account closing and a remainder of US$1 million equivalent will be cancelled. The 16 participating provinces provided counterpart funding amounting to RMB988 million, equivalent to USS120 million, to finance civil works, library books and materials and local training. This cumulative amount exceeded the original funding target of RMB743 million by 33%. The total project cost at completion amounted to US$220 million excluding the final accounting of the counterpart funding at the national level which was planned for US$53 million. FILO, MOE will furnish the Bank the updated data on this funding. The breakdown of cumulative disbursement by category is shown in the table below. Cumulative Disbursement by Category In US dollars Category Amount Disbursed Amount Undisbursed Equipment/materials 87,658,918.71 2,452,554.98 (Coinpotient 1, 11) Equipment/materials 1,699,417.59 98,731.61 (Component 1I1) Consultant/Pilot (Component 1I1) 139.849.88 -614.09 Consultant/Training (Coat III) 3,019,354.11 250, 714.31 Training/Pilots (Comilponent 1, II, 3,480,351.29 2,671,753.36 III) Special Account 2,500,612.63 -2,300,888.73 Unallocated 0.0 0.0 Total 98,498.504.21 3,172.251.44 46. The Bank's review of the Audit Report 1998 indicated non-compliance of requirements and internal control weaknesses. The mission followed up on the following issues with MOE: a) Inner Mongolia. Accounting of completed civil works as counterpart fiLnds. MOE presented the mission with a written explanation from Inner Mongolia's Education Commission that the building of Baotao Teacher College was part of the overall civil works project completed prior to project start but it was agreed at appraisal that such newly completed building would be part of the facility upgrading as required by the 12  project and therefore was considered in part as counterpart contributions from the college to the project. The mission requested official response by the Inner Mongolia authorities to the Bank for further review. Inquiry was also made in the case of Chifeng Teacher College about a portion of the counterpart funds which were tentatively used for purposes other than planned project usage. The explanation from the Inner Mongolia officials and a written statement from the college confirmed that the funds were wrongly used by the college itself and not by a third party. Action has been taken to return the funds and assurance obtained to prevent similar incidents in the future. An official response in writing from the authorities was also requested. b) Fujian Province. The provincial PIO did not prepare its own financial statements and separate accounts for counterpart funding. FILO, MOE explained that the financial management was structured as such that project expenditures by project institutions were directly reported to FILO, MOE and no expenditure occurred at the provincial level. Based on current accounting practice in China, the provincial PIO was therefore not required to prepare such a statement. The task team felt that such a practice was not the best practice in terms of sound project management and financial management and recommended that this be corrected in future implementation arrangements. c) Shortfall of counterpart funds in Shandong and Hebei. The mission requested an explanation for the above. Documents were produced by FILO stating that the shortfalls were a reflection of tentative financial difficulty of the local authorities but all the funding gaps have been closed and final accounting of the counterpart funds showed that the original commitment has been exceeded. 47. No other non-compliance issues, financial or legal were reported at completion. Actions Agreed and Next Steps 48. During the wrap up session held with MOE on December 27, 1999, agreement was reached on the following actions: * FILO and Teacher Education Department of MOE will ensure timely completion of the on-going dissemination activities by December 31, 1999 and timely completion of disbursement by April 30, 2000 or any earlier date the Bank may establish. * FlLO, MOE will prepare its own Implementation Completion Report for the project on behalf of the Borrower following the format and content agreed with the mission shown in Annex 2. * FILO, MOE will prepare an Operation Plan for sustaining the project operation and benefits and submit it together with the ICR. 13  * The Bank will prepare its ICR and provide MOE with the draft ICR for comment no later than March 15, 2000 and MOE will furnish to the Bank its comment no later than April 30, 2000. * The project will close on December 31, 1999. The Bank will notify the Borrower of the closing and the grace period for completing final disbursement. Annex 1 Project Monitoring Indicators Annex 2 Suggestions for Preparing the ICR. Annex 3 Implementation Progress Report - FILO, MOE 14