Strengthening the National
Statistical System of the Islamic
Republic of Afghanistan /

PROGRESS REPORT

STRENGTHENING THE NATIONAL

STATISTICAL SYSTEM OF THE ISLAMIC REPUBLIC OF AFGHANISTAN

Prepared by: PICT

October 2011

Table of contents

ABBRIVIATIONS...... 3

1. iNTRODUCTION...... 5

2. IMPLEMENTATION ISSUES...... 6

2.1. Financial issues...... 6

2.1.1. Conducting an Interim Un-audit financial report...... 7

2.1.2. Project replenishment of designated account...... 8

2.1.3. Project refunding of initial advance budget to the MoF...... 8

2.1.4. Disbursement of funds...... 8

2.1.5. WB financial management and disbursement capacity building workshop...... 10

2.1.6. Financial officer's information on training's facilitation...... 11

2.2. Procurement issues...... 12

2.2.1. Submission of RFP and further action on twinning arrangement...... 13

2.2.2. ICB for the IT equipment and its results...... 14

2.2.3. Local training courses arrangements...... 15

2.2.4. Procurement plan revision in regard to IT issues...... 16

2.2.5. State of play of Web Development of CSO’s website and its maintenance...... 17

2.2.6. Announcement of new positions for PICT...... 18

2.2.7. Procurement of anti-viruses for CSO personnel...... 18

3. SRF PROJECT RELATIONSHIP WITH OTHER ONGOING PROJECTS...... 18

3.1. ADB activities at CSO...... 19

3.2. MICS, NRVA and other CSO field operations‘ activities...... 20

3.2.1. Multiple Indecators Claster Survey...... 20

3.2.2. National Risk and Valneability Assesment...... 20

3.2.3. Social-Demorpaghic and Economical Survey...... 21

3.2.4. The household listing and preparing skerch map for Bamyan...... 21

3.3. UNDP/NIBP Capacity Development Advisor activities...... 22

4. CONSULTING ACTIVITIES...... 23

4.1. First MCMC meeting...... 24

4.2. Meetings with TICA...... 24

4.3. Meeitngs with the Kabul University...... 25

4.4. Training course for financial staff of CSO and MoF...... 26

4.5. PICT activities‘ report at the SRF meeting...... 27

4.6. User satisfaction survery...... 28

5. Problems and challenges of the PROJECT...... 29

6. ANNEXES...... 32

Abbreviations:

ACBARAgency Coordinating Body for Afghan Relief

ADBAsian Development Bank

AFGHANSTATThe same as SRF or SNSS

ANDSAfghanistan National Development Strategy

ANSPAfghanistan National Statistic Plan

ARDSAfghanistan Reconstruction Development Strategy

CDACapacity Development Advisor

CSOCentral Statistics Organization

DABDa Afghanistan Bank

DFIDDepartment for International Development (UK)

FMFinancial Management

FYFiscal Year

GIRAGovernment of the Islamic Republic of Afghanistan

ICBInternational Competitive Bidding

ICONICON Institute (Germany)

ITInformation Technology

IUFRInterim Un-audit Financial Report

JICAJapan International Cooperation Association

KOICAKorea International Cooperation Agency

KUKabul University

MCMCMonitoring and Change Management Committee

MDGMillennium Development Goals

MHEMinistry of Higher Education of Afghanistan

MICSMulti-Indicator Cluster Survey

MISManagement Information System

MoFMinistry of Finance of Afghanistan

MoLSAMinistry of Labor and Social Affairs

MoSPIMinistry of Statistics and Programme Implementation of India

MoUMemorandum of Understanding

MoWAMinistry of Women Affairs of Afghanistan

NIBPNational Institution Building Project

NOLNo-objection letter

NRVANational Risk and Vulnerability Assessment

PADProject Appraisal Document

PICTProject Implementation and Coordination Team

POMProject Operational Manual

PPProcurement Plan

QBSQuality Based Selection

QFRQuarterly Financial Report

REOIRequest for Expressions of Interest

RFPRequest for Proposal

SAStatistical Agency (the same as TAJSTAT)

SBDSpecial Bid Documents

SDUSpecial Disbursement Unit

SNSSStrengthening the National Statistic System project

SRFStatistics for Results Facility

SSSSingle source selection

STCStatistical Training Centre

STFStatistical Task Force

TACTechnical Advisory Committee

TAFThe Asia Foundation

TAJSTATTajikistan Statistical Agency

TICATurkish International Cooperation Administration

TNATechnical Needs Analysis

TORTerms of Reference

TTLTask Team Leader of the project

TTTTraining and Technology Transfer

TUIKTurkish Institute of Statistics

UNDPUnited Nation Development Program

UNFPAUnited Nation Population Fund

USSUser Satisfaction Survey

WBWorld Bank

1. Introduction

Statistical Capacity Building,on its own, is an integral part of the rehabilitation and reconstruction process of the Islamic Republic of Afghanistan that is providing reliable statistical data on most of activities implemented in the country. The importance of statistical organizations’ activity has been explicitly reflected in the Statistical Law 2006 where was mentioned the crucial role of this organization in the monitoring and evaluation of ANDS and MDG.

The short experience of the SRF/PICT with the CSO unambiguously indicates that the importance of statistics and in time data providing is still not fully understood by most of the Government institutions that are involved in data collection, producing the statistical information and presenting it to the public. Statistics still remains an activity that can be easily developed by most of the institutions without detail checking and analysing of the obtained data which causes producing of a wide range of statistical information by different agencies on the same activity.This, by itself, clearly shows the lack of understanding the importance of statistics in the rehabilitation, reconstruction, planning and developmental actions as for the entire country as well as on the regional level. It is obvious that CSO,with the given capacity, is not able to provide all the statistical information according to the modern standards, but it needs to emphasised explicitly that this organization has been applying all its efforts, especially for the last three years, to produce available statistical information and present them to all the users within the country and outside. During that time CSO website was developed and reflects most of the required information that can be easily obtained at any time.

Based on the latest development CSO had shown real commitment towards the development and standardization of statistical data during the last three years and with the help and support of international organization had developed ANSP that contains the essential requirements for its further improvement during the next five years. ANSP is a well designed document that contains the entire statistical activities and was summarizedin the SRF project the actual implementation of which has been started from the beginning of 2011 (last quarter of 1390).

Presented progress report reflects all the activities have been implemented by the project during the second quarter of afghan calendar year of 1390 or third quarter of 2011, while it has not been entered its main activities with the twinning partnership, that it does hope to arrange in the last quarter of 2011 and prepare the project for its full operation from the beginning of the next year.

2. Implementation actions.

2.1. Financial issues

Presented previous reports and especially the last one indicated that the main project activities had started from the end of the second quarter of 2011 or first quarter of FY 1390. The project had planned several important actions in the budget that supposed to be started during the reporting period (it is essential to emphasize that the first year budgeting was prepared on the bases of the ANSP and SRF project appraisal document that indicated the beginning of twinning arrangement after six months of project effectiveness date, i.e. by end of September 2011).

Although SRF financial activities had been started at the end of May it managed to set upgood relationship with the MoF and organized the fund request in planned time and it really appreciates MoF help and support on this matter. SRF had envisaged to arrange a joint CSO and MoF training and experience exchange with the neighboring countries and sent the financial staff of both organization to SA (TAJSTAT) of Tajikistan. According to the MoF information this was the first experience of joint action that happened with MoF although it is controlling over 50 projects only with WB and this experience needs also to be shared with other government institutions, which is really leading not only to capacity building at the CSO level but MoF as well.

The project put all its efforts to implement the planned actions, but as the QFR and Progress report do reflect some aspects of action are out of the projects control and have a direct impact on its implementation process which will be reflected in the provided financial and procurement issues.

During the reporting period the project managed to implement the following financial activities:

a) Conducting of interim un-audit financial report;

b) Project replenishment of designated account;

c) Project's refunding of initial advance of the budget to the MoF;

d) Disbursement of funds;

e)WB financial management and disbursement capacity building workshop;

f)Financial officer's information on training's facilitation.

2.1.1.Conducting of interim un-audit financial report.According toplan of the WB office in Kabulall projects needs to take once per quarter an interim un-audited financial visit to check the project implementation status, its financial and disbursement problems to help them to overcome any unforeseen issues during its realization and insure that the implementation process is going on as it was planned and reflected in the budget. SRF project tookits interim un-audit financial report on July 27, 2011 during which the project achievements and shortfalls, accuracy of financial documentation preparation according to WB and Government rules and regulations were checked.

The key purpose of conducting this review was to strengthen further the client’s project FM systems through an enhanced understanding of the various requirements/good practices in order to ensure the achievement of its objectivesfor improving project financial management performance and to provide acceptable assurance on the use of Bank's funds. In particular, it was geared towards sharing knowledge with clients through a highly interactive process on the specific topics to provide greater clarity.

The IUFR checked the following issues: a) financial report and physical progress; b) compliance of opening bank balance with closing balance; c) variance between planned and actual costs; d) quality of the financial report; e) review of project sources and uses of funds; f) review of disbursement statement in conjunction with the Loan Department and g) review of special account system.

The IUFR did not check the procurement plan and the status of its implementation.

Revising the financial issues of the project during the interim un-audit financial review the following comments were reflected in the report: a) statement of Cash receipts and payments where was mentioned that "the opening balance for the current quarter is indicated as USD 700,300.16 whereas only USD 700,000 was deposited in the designated account. Furthermore, the openings balance for cumulative to date is indicated as nil, this should be the same as for the current quarter, since this is the first quarter for the project".The discrepancy had happened due to the unexpected and extraordinary support of the MoF for the project cost the amount of $30 000 as an initial advance for retroactive financing that was spent for the PICT salaries for the last quarter of 1389, and remaining amount was included in the opening balance account and increased the total amount of project opening balance by the time of receivingits own funds in the special account.

2.1.2. Project replenishment of designated account. Based on the information given above PICT needs to indicate that SRF project for the first time submitted its M16 forms with the invoices of the project expenditures for the period of both quarters of 1390 to MoF/SDU in order to replenish the project designated accounts. SRF project has got an amount of $101,915.28 for the project expenditure that has been implemented in first and partially in second quarters.

2.1.3.Project's refunding of initial advance budget to the MoF. As it was indicated in the previous project reports the selection of PICT was finalized by the end of December 2010 and partially (with two team members) it started its activities right from the beginning of 2011 and gradually the two others members were also joinedthe project in January and February. Unfortunately, the project did not have any funds and $100 000 that was expected to be given from UNFPA costs and supposed to be returned at the later stages was not documented accordingly and submitted to MoF that created shortage of funds during the last quarter of 1389 (first quarter of 2011).For covering the project costs MoF with the support of WB office in Kabul gave a loan of $30 000 and agreed that this amount will be refunded after the project effectiveness. The project, as it was indicated earlier, became effective from March 24, 2011 and the refunding was done only in September and that is why this amount is reflected in the financial report in the second quarter of 2011. So, now project cost has become clear and limpid to be checked by WB and the MoF gave the time-bound for this cost up to April 11, 2011 and was used in time.

2.1.4.Disbursement of funds. Implementation of SRF project activities can be observed through its funds disbursement that the project provides on the quarterly bases to WB, CSO and MoF. It is important to mention that the project budget indicates in the planned budget for the reporting quarter as $217 000 in total from which as the disbursement table below shows it was able to assimilate only $87,238.44. This amount is over 40% of the project plan for the reporting quarter. Calculating this amount with the total amount of disbursement we can get $169,076.88 or something close to 11% of the planned budget for current year and 1,21% for the entire amount of its budget (from the $14 million). Realization of the project activities indicated that it will come across a great deal of problems during the remaining of time for the current fiscal year if CSO will not act accordingly and accelerate the assimilation of funds and allow the project to speed up the implementation of certain activities that are directly related to their decision.

It is envisaged that if CSO will act with full understanding and implement some of the project activities in time without any delay the project still has chance to implement at least 75% of its planned budget for the current year. These two main actions are; a) ICB for the IT facilities and b) Twinning arrangement that are the most important actions not only for the current year, but the entire project implementation depends on these actions.

Moreover, PICT do understand that there are some other activities that are envisaged in the action plan and need CSO official approval for action and realization, such as statistical yearbook that needs to be published with the support of the SRF project, internet facilities for CSO staff and so on.

The budget disbursement is indicated in the Table 1.

IDA (US $14,000,000)

FY/Qtr. / Amount Disbursed / Cumulative Disbursed
1390.1 / 81,838.44 / 81,838.44
1390.2 / 87,238.44 / 169,076.88

Below is given the percentage of the planned budget and its actual assimilation in a type of pie which clearly indicates that SRF activities were more successful during the first quarter rather than the second. In first quarter SRF was able to disburse 63.4% of the planned budget, while during the second quarter this amount was reduced to 40.2%. As for the annual plan and actual it is still quite far from planned action and has been accomplished only by almost 11%. It means that SRF needs to speed up its action and dramatically increase the assimilation of funds in the remaining next two quarters.

1st quarter of 1390 2nd quarter of 1390

Annual plan and actual

It is expected that during the next quarter several main activities of the project are being envisaged and the total budget expenditure has been planned as $640 000 which exceeds the current budget disbursement of both quarters by 3,8 times and will bring the percentage of annual assimilation of project fund along with these two quarters up to 52%, provided that CSO will act accordingly and in time.

2.1.5. WB financial management and disbursement capacity building workshop.WB has been implementing over 50 projects in Afghanistan in 2011 and some of thses projects are justs have been started in current year. According to the bank's plan of actions these projects do need to obtain some knowledge of the WB financial ruels and procedures that can help to run the financial acitvities of projects and make it much easier to manage the disbursement process. For that purpose WB offfice in Kabul has planned a workshop on the above mentioned topic and SRF and CSO team also was involved which was arranged by financial team of WB office in Kabul on September 7, 2011 at the Serena Hotel.

This event aimed to build on the strong foundation laid in the previous workshops and capacity building activities undertaken on a periodic basis. This workshop focused on specific areas/topics under project financial management requirements, interim unaudited financial reports and disbursements and the training materials were customized to address those specific areas. The topics were based on the findings of the FM team from the various implementation support missions, review of IUFRs and the queries received from the project finance teams.
The key purpose of this workshop was to strengthen further the client’s project FM systems through an enhanced understanding of the various requirements/good practices in order to ensure the achievement of the objective of improving project financial management performance and to provide acceptable assurance on the use of Bank funds. In particular, it was moved towards sharing knowledge with clients through a highly interactive process on the specific topics to provide greater clarity.
Achievement of training objectives. There was unanimous acknowledgement by the participants on the benefits of this kind of workshop. There were a lot of questions raised and clarifications provided covering budget, project payments, disbursements by World Bank, documentation requirements and general procedures of World Bank and MoF with respect to financial management and disbursements.

2.1.6. Financial officer's information on training's facilitation.The main aim and goal of the experience sharing with neighboring countries was to become familiar with analogical activity and learn some important aspects of financial actions that can be implemented at CSO, knowing that financial system of these countries are different and sometimes even controversial to Afghanistan system. Although the training report was prepared by the financial team and submitted to PICT which contains the gist of the trip results, in the capacity of facilitators from PICT it is important to indicate some valuable points.