1 - Institutional Development by lonyoo

VIEWS: 37 PAGES: 58

									Islamic Republic of Afghanistan
Ministry of Finance
Office of the Deputy Minister for Administration
Reform Implementation & Management Unit

Ministry
Quarterly Progress Report On Strategic Plan

Mezan - Qaows, 1386 (23rd Oct - 21st Dec, 2007)
(With focus on 9 month progress of major activities)

Submitted to: H.E Minister of Finance CC: H.E DM Admin, H.E DM Finance, H.E DM Customs & Revenues and DGs Submission Date: 25th Jadi 1386 (15th Jan 2008)

RIMU/M&E

1

MoF 3rd Quarter Progress Report

TABLE OF CONTENTS: EXECUTIVE SUMMARY: ........................................................................................................................................3 1. CUSTOMS DEPARTMENT ..................................................................................................................................7 1.1 OBJECTIVES .........................................................................................................................................................7 Results /Activities/ Problems/Proposed Solutions ................................................................................................7 2. REVENUE DEPARTMENT ................................................................................................................................ 11 2.1 OBJECTIVES ....................................................................................................................................................... 11 Results /Activities/ Problems/Proposed Solutions .............................................................................................. 11 3. TREASURY DEPARTMENT .............................................................................................................................. 17 3.1 OBJECTIVES ....................................................................................................................................................... 17 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 17 4. BUDGET DEPARTMENT ................................................................................................................................... 23 4.1 OBJECTIVES: ...................................................................................................................................................... 23 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 23 5. INTERNAL AUDIT DEPARTMENT ................................................................................................................. 29 5.1 OBJECTIVES ....................................................................................................................................................... 29 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 29 6. STATE OWNED ENTERPRISES DEPARTMENT ......................................................................................... 32 6.1 OBJECTIVES ....................................................................................................................................................... 32 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 32 7. PROPERTIES DEPARTMENT ......................................................................................................................... 35 7.1 OBJECTIVES ....................................................................................................................................................... 35 Results /Activities/ Problems / Proposed Solutions ............................................................................................ 35 8. ADMINISTRATION DEPARTMENT ............................................................................................................... 37 8.1 OBJECTIVES ....................................................................................................................................................... 37 Results/Activities/ Issues/ Proposed Solutions ................................................................................................... 37 9. MINISTER’S OFFICE ......................................................................................................................................... 41 9.1 OBJECTIVES ....................................................................................................................................................... 41 Results/Activities/ Problems/ Proposed Solutions .............................................................................................. 41 10. PROCUREMENT POLICY UNIT .................................................................................................................... 44 10.1 OBJECTIVES: .................................................................................................................................................... 44 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 44 11. FISCAL POLICY UNIT .................................................................................................................................... 46 11.1 OBJECTIVES ..................................................................................................................................................... 46 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 46 12. REFORM IMPLEMENTATION & MANAGEMENT UNIT ........................................................................ 49 12.1 OBJECTIVES ..................................................................................................................................................... 49 Results /Activities/ Problems/ Proposed Solutions ............................................................................................. 49 13. GENDER BUDGETING UNIT .......................................................................................................................... 54 13.1 OBJECTIVES ..................................................................................................................................................... 54 Results/ Key Activities/ Problems / Proposed Solutions..................................................................................... 54

RIMU/M&E

2

MoF 3rd Quarter Progress Report

Executive Summary:
Noteworthy progress has been made towards achieving MoF strategic goals till end of the 3 quarter. Domestic revenues (both tax and non tax) has reached to Afs. 23.13 B, 94% of quarterly target and 65% of the annual target. It is worth mentioning that the annual revenue target for 1386 is Afs. 35.721B, 33% higher than that of last year. It should be noted that the first semester revenue collections were Afs. 15,869m against the Afs. 14,996m target. While we have exceeded the target by Afs. 873m, this includes an Afs. 807m over flight charge payment received earlier than previously expected, so meeting future targets will continue to be challenging. The total budgetary revenues as % of legal GDP has exceeded the Afghan Compact benchmark of 8% and is now 8.2%. Revenue covers 66% of the recurrent budget and 76% of the core budget shortfall is covered by external assistance. Revenues collected as of end of 3rd Quarter: % of quarterly target achieved 92% 106% 94% % of annual target achieved 18% 44% 65%
rd

Total Domestic Revenues ( Tax and Non Tax) 1st Quarter 2nd Quarter 3rd Quarter
Figures in millions of Afs.

Planned 7,037 14,996 24,600

Achieved 6,441 15,869 23,130

25,000

20,000

15,000

Planned Achieved 10,000

5,000

0 Planned Achieved

1st Quarter 7,037 6,441

2nd Quarter 14,996 15,869

3rd Quarter 24,600 23,130

Figure 1: Domestic Revenues 3rd quarter 1386

As far as law execution is concerned, priority tax law amendments (lowering and matching of personal and corporate income tax rates, introduction of 10% business receipts tax category on selected services, introduction of withholding tax on rent, and replacement of tax holidays with more targeted tax incentives for investors) is enacted With regard to customs revenues, as of end of 3rd quarter 1386, around Afs. 13.45 billion revenues have been collected by Afghanistan Customs Department, which is 75% of the total annual target of the customs revenues, Afs. 18 billion. To automate the entry system processes, the ASYCUDA Declaration Processing module has been implemented at Kabul Customs and arrangements for introducing Declaration Processing System (DPS) at Jalalabad Customs and Kabul Airport Customs have been finalized . The ASYCUDA transit module has been implemented at four major trade routes, Hairatan- Mazar – Kabul, Torkham-Jalalabad- Kabul, Islam Qala – Herat – Kabul and Torghundi- Heart-

RIMU/M&E

3

MoF 3rd Quarter Progress Report

Kabul. ASYCUDA Declaration via internet has commenced. Now traders and brokers can get into the system from their offices via internet. The temporary importation procedure was reviewed and revised to make it in line with international best practices. Customs procedures for international transit, internal transit and exemption have been finalized and approved. Additionally, work was initiated for revising the customs law and reviewing it in compliance of I-ANDS / international best practices/ revised Kyoto convention. The Customs Enforcement Directorate has commenced the operation of a Mobile verification Team (MVT) at Nimroz. With the introduction, the total number of the MVT now reached to six with the connectivity of wireless system. The team has seized two trucks of cigarettes at Nimroz and Nangarhar provinces Afghanistan Customs Department (ACD) has agreed to split the current Headquarter Tariff Directorate into 3 units (Tariff Research Unit, Tariff Classification Unit and Valuation Administration Unit) to provide more efficient works oriented mostly towards the reforms instead of the day-to-day works. ToRs have been developed for these three new units. The construction work of ACD Headquarters at Jalalabad Road has been completed. The building is being furnished and will be ready for inauguration shortly. Progress is made towards establishing a transparent public financial management. AFMIS rollout was successful in 2 line ministries (MoEd and MRRD) and groundwork is completed in 2 more ministries (MoC and MoF) in Kabul. AFMIS rollout for the provinces has also begun. Transactions processing have begun in Herat Mustofiat and Communications is established in Parwan province. The core budget audit financial statement was submitted to the Ministry for Parliamentary Affairs. As far as Verified Payroll Program is concerned, more than 90,000 employees is covered under VPP and Salaries of over 40,000 employees are being transferred to individual bank accounts of employees. Audit is completed for all World Bank loans and grants, and reports are submitted to the World Bank, including audited statements for ARTF Recurrent Budget Grant. Also, internal audit activities are on going as per plan. 45 offices of MoF (Departments, Revenue Divisions, Custom Points and Mustofiats) have been audited till now and the reports have been prepared and issued to auditees. Internal Audit Manual which has two parts was developed which includes Code of Ethics, Charter, Procedures for the Department; Checklists, Audit Plan and Audit Standards. The core budget has increased to USD 2.9 billion in 1386 compared to USD 2.2 billion in 1385. MTBF has been introduced and the allocations of the all budget resources were based on MTFF and MTBF. For the first time, nine month calendar was used to prepare 1386 budget and was published on MoF website. Ministry ceilings for the operating and development budget as part of MTFF and MTBF were introduced. Core development budget execution rate has improved: 54% in 1385, 44% in 1384 and 31% in 1383. However, timely donor reporting of projects, underreporting especially of security related budget and lower than expected execution rate in core development budget is still a problem. Operating and development budget have been integrated in selected line ministries through program budgeting which has been expanded to four more ministries in this year, totally seven ministries. Budget circular was issued as scheduled in the budget calendar and 3 workshops were conducted on budget circular and preparation process for the line ministries. To build the capacity of budget department staff, one advanced workshop was conducted at the World Bank in Washington for managers and for senior budget officers, a second workshop was conducted in Delhi. Totally about 40 staff attended these two workshops. Total Budget:
Figures in USD million

Fiscal Year External Budget External Budget as % of Total budget Core Development Budget Operating Budget Total Budget

1384 3707.3 68% 1032.26 693 5432.56

1385 1769.9 45% 1320.87 884.02 3974.79

1386 2795.11 49% 1796.84 1096.3 5688.25

RIMU/M&E

4

MoF 3rd Quarter Progress Report

4000

3500

3000

2500

2000

1500

1000

500

0 External Budget Core Development Budget Operating Budget

1384 3707.3 1032.26 693

1385 1769.9 1320.87 884.02

1386 2795.11 1796.84 1096.3

Figure 2: Total Budget in USD Million

39% 1386( 3rd Quarter)

54% 1385

44% 1384

0%

10%

20%

30%

40%

50%

60%

Figure 3: Core Development Budget Execution

First draft of the macroeconomic framework is developed by Fiscal Policy Unit (FPU) and sent to different concerned agencies and donors for their comments. MTFF was revised with the projections set out up to 1391 and the projections for next three years for all the sectors and line ministries were completed. With the input from various departments, the first quarterly fiscal bulletin was prepared, published and distributed. However, due to data rd th constraints, the second bulletin couldn‟t be published in time and FPU is planning to publish the bulletin for 3 and 4 quarter together.

RIMU/M&E

5

MoF 3rd Quarter Progress Report

Procurement system development is in progress. The new procurement law is enacted and rules of procedures are in place. Transaction of Business Rules for Special Procurement Commission (SPC) was adopted and implemented. Furthermore, Manual of Procedures for Appeal & Review was prepared and notified to stakeholders. 12 Circulars/Guidelines were issued. 6 Standard Bidding Documents have been developed, 6 local trainers were hired, trained and the ToT was completed. Training for 20 procurement staff of 6 selected ministries (MOF, MOPW, MOEd, nd MRRD, MOPH and MoAg) and IARCSC and AISA was conducted in Dec. The 2 training with 18 participants of the 7 selected ministries (MOF, MOPW, MOEd, MRRD, MOPH, MoAg and MoEW) was conducted at the end of Dec. Divestment of SOEs is under way. 15 SOEs were approved by the Cabinet of Ministers and the assessment of their assets and liabilities, drafting of liquidation plans and implementation of asset auctions, cancellation of liabilities and dissolution of SOEs is undergoing; 5 SOEs were approved by the SOE Evaluation Commission (Cabinet of Ministers approval expected in the very near future). So far 32 auctions have taken place 15 of which were successful and 17 of which were unsuccessful. So far, 1028 employees of the liquidated SOEs have been paid severance payment and the cost of that reach up to US$. 1,398,766 Liquidation of the un-relicensed stated owned banks is almost achieved. Most of Properties of the Mortgages and Constructions Bank (MCB 80%), Industrial Development Bank (IDB 90%) and Agriculture Development Bank (ADB 75%) have been liquidated. As far as PRR process is concerned, as of end of 3 quarter, PRR has been completed 83.6% in HQ, 57% in seven Mustofiats (Kabul, Kandahar, Herat, Nangarhar, Balkh, Kunduz and Parwan) and 26% in all Custom Points. Total approved Tashkeel of MoF is 5750 staff (3318 PRR posts, 1218 Non PRR posts and 1214 Ajeers). All PRR posts filled so far were based on open competition and merit. Computerization of Admin Systems is on going. MoF staff were trained on Automation System of documents. Development of a new database for asset management is under process and HRMIS is being upgraded. Regarding provincial offices, so far 7 Custom Points and 5 Mustofiat are networked With reference to capacity building, as of end of third quarter, 1629 staff of different departments have been trained in - house and overseas. The in-house trainings conducted include computer fundamentals, leadership and management, English, accountability and transparency, reporting, book-keeping, database, hardware and trouble shooting, democracy, budgeting, gender, women‟s rights, procurement, dealing with anti corruption, time management and human rights. Totally 1557 staff of MoF have been trained in house, of which154 staff of different Mustofiats managers are trained in management, accounting and computer. In house training also includes orientation for the newly recruited staff. The overseas trainings conducted include project monitoring and evaluation, finance, policy and promotion in development economics, public expenditure management, business advisor‟s training, information technology, empowerment of woman through enterprises, macroeconomic management and fiscal policy issues and banking. Totally 72 staff of MoF have been trained abroad. Under the Minister‟s Office, on daily basis an average of 40 internal and external correspondences were processed. The monthly newsletter was published and distributed, press events were held, press releases were issued and interviews took place on different issues, which makes a total of 200 interviews, 40 press conferences and 90 press releases, 9 newsletters from beginning of the year till now. Insurance procedures were finalized and Afghan Insurance Company (AIC) has issued license to SISI and Poyesh Insurance Brokerages and shall soon issue license to Afghanistan Insurance Corporation. Thus far, 1 company and 2 brokerages are active in the field of insurance in the country (Afghan National Insurance Company and SISI, Lebanese and Poyesh, Iranian Insurance Brokerages) As of now, 6379 people have bought insurance from Afghan National Insurance Company as the other SISI and Poyesh Insurance Brokerages are recently established and have no clients yet. Under RIMU, results based M&E system has been established in the ministry and the reporting template was modified and made simpler but completely result oriented where under each objective, there is a performance framework (a performance indicator a baseline, an annual target and progress). Accordingly, MoF Strategic plan progress was monitored and the monthly and quarterly progress reports were prepared and submitted to MoF Leadership. In addition, the major problems at the ministry level with recommendations were highlighted and submitted to HE DM Admin. Also follow up was made on the recommendations. M&E focal points in each department have been established and most of them were provided with on the job training. The focal points are responsible for monitoring and reporting. However, there is still problem of timely reporting and provision of accurate and up to date data. The required reports to ANDS on MoF related AC benchmarks as well as to Administrative Affairs Directorate (Idaare Omoor) were prepared .Additionally, Financial Management Manual for PFMR and PACB projects was developed and training was provided to finance staff of the PFMR and PACB projects on the implementation of manual.
rd

RIMU/M&E

6

MoF 3rd Quarter Progress Report

The Gender Budgeting Unit has worked closely with the budget department of the MoF and revised the budget submission forms from gender perspectives. These forms were then shared with the line ministries after approval of the budget department.

1. Customs Department
1.1 Objectives
Results /Activities/ Problems/Proposed Solutions 1.1.1 Revenue collection

Results: Performance Indicator
Increase revenues in Custom

Baseline 1385
15,479,183,173 Afs.

Benchmark for the year 1386
18 Billion AFS

Progress against annual benchmark
13.45 Billion

% of progress against annual benchmark
75%

Brief Detail of the Activities: rd As of end of 3 quarter 1386, around Afs. 13.45 billions Afs have been collected, which is 75 % of the annual target. The total customs revenue target for 1386 is Afs. 18 billion, 16.2 % higher than the total customs revenue collected in 1385. Problems: Proposed Solutions: 1.1.2 Automation of the Custom Processes Brief Detail of the Activities:  The ASYCUDA transit module has been implemented/introduced at Torgundi –Herat –Kabul trade route. With the introduction of this route, four major trade routes are now covered under ASYCUDA transit modules. ASYCUDA transit office, broker‟s area has been prepared.  A survey was conducted for implementation of ASYCUDA transit module in Kunduz-Hairatan-Mazar route.  The ASYCUDA Declaration Processing module has been implemented at Kabul Customs and arrangements for introducing Declaration Processing System (DPS) at Jalalabad Customs and Kabul Airport Customs have been finalized. ASYCUDA network installation and configuration has been completed in Nangarhar Customs for implementation of ASYCUDA DSP.  Advance ASYCUDA training for the national and regional team members was conducted by customs experts from Iran.  Using Eurotrace, trade data and statistics are collected by the Customs Data Unit. The data are submitted to the DM, DG and other authorized organizations.  For the trade facilitation, the ASYCUDA Declaration via internet has commenced. Now traders and brokers can get into the system from their offices via internet.  A meeting was held in office of DG customs with representative officials and advisors of Treasury, Revenue and ACD to discuss the revenue collection reconciliation issues. A number of decisions were made with consensus to resolve the disputed figures.  The updated data regarding revenue and trade statistic has been provided to the International Monetary Fund and US Embassy. Problems/Proposed Solutions:  Ministry of Finance Admin department has to release funds to UNOPS as because of shortage of funds the project is being affected.  The introduction of ASYCUDA requires specialized personnel for its operations. The request for hiring these personnel has been made in the revised tashkeel, which needs to be approved by the admin department of MOF and Civil Services Reform Commission.  To check the exact impact of automation for trade facilitation, independent surveys shall be conducted at all places where ASYCUDA has been introduced.

RIMU/M&E

7

MoF 3rd Quarter Progress Report

1.1.3 Update Legislation and Procedures Brief Detail of the Activities:  Temporary importation procedure was reviewed and revised by the legislative reforms team of ACD to make it in line with international best practices.  Terms of reference for international customs unit, media coordination unit and a reformed tariff directorate were drafted.  Work was initiated for revising the customs law and reviewing it in compliance of I-ANDS / international best practices/ revised Kyoto convention.  A meeting was held with ministry of commerce in which a detail presentation on the new international transit procedure was given.  The legislative team has finalized the customs procedures for international transit, internal transit and exemption. ACD senior Management has approved these new procedures.  The TRSU is finalizing the list of industrial raw material for the domestic manufacturing sector in line with the IMF recommendation.  The changes & amendments of HS 2007 have been inserted in the English and Dari versions of Afghan National Tariff.  ACD held meeting with two different teams from Minister‟s office and IMF regarding clarifications on customs legislation. Problems:  Ministry of Commerce has not replied to customs proposal of international transit procedure finalized by ACD.  Proposed Solutions: 1.1.4 Enforcement and Voluntary Compliance

Brief Detail of the Activities:  A meeting was held in the chamber of Deputy Minister with the BMI (Border Management Initiative) team of US embassy, USAID to discuss the proposals and future plans of the BMI project.  The Enforcement directorate has commenced the operation of a Mobile verification Team (MVT) at Nimroz. With the introduction, the total number of the MVT now reached to six with the connectivity of wireless system.  Equipping Paktia, Khost and Andkhoy Customs with radio communication system has been completed.  The UNOPS technical team is working on the given operation plan to activate and cover the complete customs radio communication system  The MVT has seized two trucks of cigarettes at Nimroz and Nangarhar provinces and sent back to respective customs stations for further actions.  2090 grams Heroin (in 176 Capsules) in Kabul international airport in two different operations was confiscated  65 boxes for verification precursors and narcotics to Customs Houses distributed (Donated by UNODC). Problems/ Proposed solutions:  The whole operational procedure, working, reporting mechanism and administrative setup of enforcement directorate needs to be revised and reformed.  ACD requires ample powers to reorganize the whole in enforcement administrative setup in consultation with national and international advisors and ACD directors.  It is required to make capacity building of enforcement officers more result oriented.  ACD Enforcement Directorate shall be recognized as an independent enforcement agency with appropriate administrative powers. 1.1.5 Human Resources and Organization Development Brief Detail of the Activities: The Human Resource Management survey has been completed at Herat, Torghundi & Islam Qala, Kandahar and Nimroz. Preliminary reports have been prepared and submitted to DG ACD. The survey team is present at Mazar-eSharif Regional Customs office for the subject survey.  Evaluation regarding Super Scale Salaries of ACD Officials was conducted by HR Directorate.

RIMU/M&E

8

MoF 3rd Quarter Progress Report

   



Performance regarding PRR of Balkh, Andkhoy, Kunduz and Takhar Customs was undertaken by HR Directorate. For developing a Customs Team for Balkh Airport preparatory work was done by HR Directorate. The new Tashkeel of General Customs Directorates and Regional Customs for the year 1387 was made. The Tashkeel has been prepared after considering the essential operational requirements of ACD. The Tashkeel has been submitted to Administration Director General office for consideration. The ACD has finalized the program budgeting structure for Customs programs and sub-programs and activities. ACD also finalized the performance indicators and overall costing for each program activities. Several meetings were held with program management team to finalized the component of the main structure of program budgeting. ACD have designed the new terms of reference of the 3 sub units of Tariff Directorate. It has been decided to transfer the 25 staff trained last year in Pakistan to the Tariff Research and Classification Units. The Tariff Research Unit has started its activities, while the tariff Classification Unit has to wait until the Headquarter moves into the new building. Customs management has agreed to split the current Headquarter Tariff Directorate into 3 units to provide more efficient works oriented mostly in the reforms instead of the day-to-day works. The new units will be: a. Tariff Research Unit, b. Tariff Classification Unit and c. Valuation and Administration Unit.

Training:   The Advance Training of ASYCUDA was conducted for ASYCUDA focal points in Customs Training Center by customs expert from Iran. From October 27 to November 16, 2007, the Appeals and Litigation advisor conducted specific training on customs legislation in the province of Herat. The new plan of conducting intense three weeks training in each province aims to train as many customs officials as possible on level I training before the end of the Year st (March 21 ). The specific focus on this new plan includes exemptions, valuation, certificate of origin, smuggling as well as penalties. Training on ASYCUDA for focal points & “Valuation, Examination and Customs procedure” for 20 ACD officers from different province was conducted in Customs Training Centre. Training courses were conducted on ASYCUDA. th With the support of USAID two employees of the Afghan Customs attended the 6 meeting of the Economic Cooperation Organization of Heads of Customs Administration in Baku, Azerbaijan, held from September 26 to September 28. During the conference, ACD members made presentation on the Afghan Customs Department. After the conference Afghan Customs Department staff visited Azerbaijan Customs for two additional days. Training on “Valuation, Examination and Customs procedure” for 20 ACD officers from different province was conducted in Customs Training Center by customs experts from Iran. A training “Anti Smuggling & Law Enforcement” was held in Customs Training Center. The training was conducted by British Embassy “Drug Training team” for MVTs officers. Kabul Airport Customs Officers have been trained for implementation of ASYCUDA import/export declaration system The appeals and litigation team went to Herat to conduct a training of first level of Customs Legislation for 90 Customs officers of Herat, Nimroz and Farah. Training on “English Language” was conducted for twenty five ACD employees at Customs Training Center. These ACD officers will soon be leaving for Customs and IT training at NIBAF, Islamabad. A Technical assistance agreement was signed between ACD and Islamic Development Bank. Accordingly 25 ACD officers will be trained on Customs laws and procedures, Basic English and Basic IT skills at National Institute of Banking and Finance , Islamabad. The training arrangements have been completed and the training will commence on Jan 14, 2008.

  

     

Problems/Proposes Solutions:    There is lack of technical budgeting human resource in ACD. Previously the preparation for ACD component of budget activity was done by the Budget Department of Ministry of Finance. There is need for a specific budget unit with trained budget experts. The HR powers for recruitment, disciplinary proceedings within ACD is required. Technical assistance (International and National Advisor) is needed for HR and training Reforms of ACD.

1.1.6 Infrastructure and Equipment Brief Detail of the Activities:

RIMU/M&E

9

MoF 3rd Quarter Progress Report

    

  

The construction work of ACD Headquarters at Jalalabad Road has been completed. The building is being furnished and will be ready for inauguration shortly. The Land ownership problem at Hairatan Custom‟s office was amicably resolved by the active intervention of DM Customs & Revenue and ACD. The preparation for the Final Opening Ceremony of the Tourkham Customs Facility, have started. The ACD briefed the new EC Team in Afghanistan on the Customs Reform, past achievement, current status and plans for future. EC funded customs project in Torkham is close to completion, in Sher Khan Bandar it is on-going and customs construction in Hairatan is planned to start before the end of this year. The first of the Scanners financed by the European Commission has started operation at Tourkham. Five Afghans have been deployed in Tourkham as members of the newly established Scanner Team. The start of operation of the scanner in Tourkham creates necessary conditions for the implementation of the Risk Management strategy. Infrastructure work for Torghundi ASYCUDA operations was completed.. Cargo handling equipment worth US 2.44 million US $ is being procured for smooth Customs operations and Trade facilitation. Arrangements were made to finalize the signing of Financing agreement with Government of Japan for the Takhar Border crossing project. ACD is in liaison with the Japanese embassy at Kabul and has been providing necessary support and guidance as asked by the embassy of Japan.

Problems/ Proposed Solutions:  Donor support for the construction projects is still required. European community is the biggest financer of the construction projects. The commitment of EC and other donors is still to be taken. World Bank has committed about 10 million US $ for Customs project and a major portion will be utilized for infrastructure projects.  Law and order situation is also affecting the initiation of new projects.  Lack of a proper infrastructure Management unit is also affecting the progress of the Infrastructure projects. 1.1.7 Legal Reforms:

Brief Detail of the Activities:  Appeals and Litigation Team was fully engaged in dealing with three cases related to smuggling good in the country. So far, two cases out of three are resolved and the remaining one is still pending.  The appeals and litigation team have been informed by the Director General to prepare a road map for initiation the Legal reforms projects as enumerated in the approved Strategic Five Year Plan. Problems: Proposed Solutions: 1.1.8 Business Partnership

Brief Detail of the Activities:  Director General Customs attended the Afghanistan Pakistan meeting/Workshop on Customs reform Transit th st and Trade Development (t was held on 30 Oct to 1 Nov) at Dubai. The main purpose of the meeting was to increase cooperation & coordination amongst customs officials of both countries and implementing international best practices in cargo clearance at the borders.  Afghan Customs Department has prepared the response to the query from USAID on the non-tariff obstacles to trade between Afghanistan and Pakistan.  The ACD briefed the Trade Policy Advisors from the Ministry of Commerce on the status of the Customs Reform.  Two ASYCUDA/IT staff has been assigned to maintain the Helpdesk operations within ASYCUDA Project. Telephone, email and facility for oral interface have been made available for public access to reach to help desk. All received complains and queries are being logged into register and computer database for follow up and provision of professional services.  The website has been further upgraded and improved, work on making it more useful to the general public is continuing.  The Terms of reference for the International Customs and Media unit have been drafted. The unit will be made operational soon with the support of donors and implementing partners.  Regional Director Conference was held in the Khyber Hall of Ministry of Finance for three days. The purpose of the conference was (1) discus revenue enhancement measures. (2) understand the problems and issues being faced by regional customs as well as ACD headquarter in relations to the customs operations (3) communicate to the regional customs the recent changes in policies, procedures, to update them on the customs automation program and the Five Year Strategic Plan of ACD. Apart from the regional directors, ACD head quarter directors, national and international advisors, the Director General ACD, Deputy Minister

RIMU/M&E

10

MoF 3rd Quarter Progress Report



(revenue and customs) participated in the seminar. His Excellency the Finance Minister graced the event and addressed the participants. Cargo handling equipment worth US 2.44 million US $ is being procured for smooth Customs operations and Trade facilitation. Problems: Proposed Solutions:

1.1.9 Other Developments:  The CURE team with support of the international advisors and advisor to Finance Minister finalized the revised five years Strategic Plan after detailed discussions. Cost estimates for the different project of Five Year Plan as well as the executive summary of the five year plan was prepared. Additional amendments and editing of the plan was conducted as per the advice of Director General and senior economic advisor to Minister of Finance. The finalized 5 years Strategic Plan for Afghan Customs Department has been approved by the Minister of Finance, Deputy Minister of (Customs and Revenue) and Director General of Afghan Customs Department (ACD). The main targeted outcomes of this strategic five year plan are that at the end of the five year period, Afghanistan will have established a responsible and professional customs service capable of delivering services to the country in terms of its contributions to the national treasury, strengthening the Afghan economy, maintenance of security, economic and social development. A broad out line of the Customs Economic & Statistical Bulletin was framed by the tariff research & statistic unit. ACD team attended the costing, performance indicators and program structure workshops organized by Admin wing of MOF. The program budget practices parallel with the traditional/ manual budget has been completed The appeals team completed the legislative training at Herat province that is expected to commence on th October 27 , 2007.



   

2. Revenue Department
2.1 Objectives
Results /Activities/ Problems/Proposed Solutions 2.1.1 To collect the revenue in accordance with the target for domestic revenues to ensure overall objective achieved and IMF PRGF met Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark ( and quarterly targets if any) % of progress against annual benchmark 65%

National revenues increase in line with budget estimates Total domestic budgetary revenue as % of legal GDP Revenue as % of total recurrent expenditures in core and external development budget % of core budget shortfall covered by external assistance Cost of collection as a % of revenues collected

Afs. 28,788m

Afs. 35,721m

Afs. 23,130 m ( 94% of the quarterly target, Afs. 24,600 m) 8.2%

8%

102%

66%

76%

Brief Detail of the Activities: rd Revenue recorded in AFMIS till the end of 3 quarter is Afs. 23.13B (A short fall of Afs. 1.47B to the target of Afs. 24.6B). Almost no Revenue Sweeps has happened in the last two weeks of month 9 and it shows the very lowest

RIMU/M&E

11

MoF 3rd Quarter Progress Report

revenue compared with other months of the year (Month 9 revenue is Afs. 1.7 B including 325 million transferred from IATA) we do expect that there will be some more changes in the month 9 revenue which may result in to achieving the third quarter revenue target of the year. It should be noted that the first semester revenue collections were Afs. 15,869m against the Afs. 14,996m target. While we have exceeded the target by Afs. 873m, this includes an AFA 807m over flight charge payment received earlier than previously expected, so meeting future targets will continue to be challenging. The total budgetary revenues as % of legal GDP has exceeded the Afghan Compact Benchmark of 8% and is now 8.2%. Revenue covers 66% of the recurrent budget and 76% of the core budget shortfall is covered by external assistance. Problems: Proposed Solutions: 2.1.2 To introduce a comprehensive legislative base for taxation policy and administrative reform Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

New Income tax law and regulations promulgated and under implementation

Priority tax law amendments (lowering and matching of personal and corporate income tax rates, introduction of 10% business receipts tax category on selected services, introduction of withholding tax on rent, and replacement of tax holidays with more targeted tax incentives for investors) is enacted

Brief Detail of the Activities:  Co-organized an MOF/business community Tax Policy and Administration Workshop in October 2005 which resulted in the development of two joint MOF/business working parties.  Co-facilitated the joint MOF/business working parties on nuisance tax abolition and business receipts tax reform which led to the development of a proposed “tax simplification” income tax amendment package (currently under consideration by Parliament).  Substantial involvement in developing MOF tax exemption policies, particularly as they apply to donor provided assistance, and their application in individual cases.  Prepared a comprehensive tax/revenue policy position paper for Afghanistan.  Enactment of priority tax law amendments (lowering and matching of personal and corporate income tax rates, introduction of 10% business receipts tax category on selected services, introduction of withholding tax on rent, and replacement of tax holidays with more targeted tax incentives for investors).  Discussed proposed “tax simplification” amendments to the tax law with the Economic Committee of Parliament and submitted those amendments via MoJ Taqnin/Council of Ministers to Parliament.  Communications with IMF regarding taxation code plans and double taxation agreement plans. Problems  Awaiting Parliament discussion on tax simplification amendments (nuisance tax abolition, BRT reform, income tax/fixed tax reform for small businesses) – amendments referred to Parliament in April 2007. Proposed Solutions  Follow up with Parliament on current amendments.  Request assistance from IMF with double taxation agreement stance for Afghanistan and with training for selected staff. 2.1.3 To implement a set of organizational changes that reflect a modern organizational model for revenue administration based upon taxpayer segments Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

ARD reorganized as per

Medium Taxpayer Office was established and is operational

RIMU/M&E

12

MoF 3rd Quarter Progress Report

the needs

Brief Detail of the Activities:  Developed and progressively implementing a Five Year Plan for the Revenue Department, reviewing and updating that Plan and subsidiary plans.  Prepared PRR submissions and received approval for new organization structures for the Large Taxpayer Office (implemented from March 2004), the balance of Revenue HQ (implemented from July 2005), and 7 priority provinces (Kabul and Nangarhar implemented during 2006, Herat and Mazar-i-Sharif Kunduz and Kandahar implemented so far in 2007 with Parwan to follow).  Review and preparation of an updated and expanded organization structure for all Revenue sites in Kabul (including a “pilot” Medium Taxpayer Office which became operational from October 2007) ready for submission to the Civil Service Commission. Problems  Delays have been experienced in completion of recruitment for the Medium Taxpayer Office which in turn has held up training (now due to commence 23 September).  Interim accommodation for MTO (Agricultural Development Bank building) recently allocated but not yet ready for staff to move in. Proposed Solutions  Follow up on accommodation issues to ensure MTO staff can move to new accommodation as soon as possible. (Note – IMF benchmark requires MTO to be operational by 30 September 2007). 2.1.4 To ensure that the revenue administration is adequately equipped, furnished and housed in suitable accommodation to permit effective functioning Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

ARD in HQ adequately equipped and furnished Number of Revenue Provincial Offices reconstructed, equipped and furnished The action plan on the role of MoF provincial offices - in the seven priority mustofiats fully implemented

Brief Detail of the Activities:  Mustofiats Reform Committee established under chairmanship of DM Administration to determine allocation of $300,000 to appropriate provinces during 1386. Problems  Resourcing continues to be a significant problem, particularly at provincial level. Many provinces have insufficient furniture, few computers and suffer from lack of electricity (in some cases with insufficient funds to pay for fuel for generators). Proposed Solutions  Continued efforts to get MoF Administration to allocate more funding for infrastructure. 2.1.5 To develop revenue administration systems and procedures that minimize the costs of compliance for business, increase business confidence and certainty about taxation affairs

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual

RIMU/M&E

13

MoF 3rd Quarter Progress Report

benchmark Availability of guides, rulings and information Website available and updated Website usage ( number of hits) Tax rulings program in place

Brief Detail of the Activities:  Regular liaison meetings held with the Afghanistan Bankers Association and their members.  Tax rulings program in place – initial taxpayer contacts now with local staff rather than with advisor. Problems: Proposed Solutions:

2.1.6 To educate the Afghan community on the need for revenue for the central government and to build community confidence in a fair & honest revenue administration Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Number of provinces where Taxpayer revenue awareness program launched

Brief Detail of the Activities: Taxpayer revenue awareness program and rights and responsibilities charter is established and is effective Comprehensive information for taxpayers is prepared and published on MoF website. Draft rights and responsibilities charter prepared. Problems  Lack of funding from MoF or donors to fund taxpayer awareness campaigns Proposed Solutions  Updating of taxpayer awareness campaign plan and continue to seek funding for its implementation. 2.1.7 To provide effective and diverse set of enforcement responses in order to improve compliance and manage the highest risks Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Brief Detail of the Activities:  Continuing to address non-compliant sectors and taking enforcement action where appropriate. Problems  Airline sector largely non-compliant compared with other sectors. Proposed Solutions  Appropriate enforcement action against non-compliant airlines.

RIMU/M&E

14

MoF 3rd Quarter Progress Report

2.1.8 To develop appropriate policies, procedures, governance standards and controls that demand from staff the highest ethical standards, respect for the rule of law and reflect community expectations for accountable and transparent revenue administration Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark of

Code of Conduct that sets out expectations of staff and the community for fair & honest tax administration adopted and enforced Effective and transparent complaint and appeal system in place

Civil Service Commission Code Conduct introduced for Kabul Staff

Brief Detail of the Activities:  Vulnerabilities to corruption reviewed and work on remedial action has commenced.  Civil Service Commission Code of Conduct introduced for Kabul staff.  Establishment of RD internal audit/program evaluation function deferred until updated organization structure approved by Civil Service Commission. Problems: Proposed Solutions: 2.1.9 To provide timely and impartial mechanisms for the review of revenue decisions and the resolution of disputes

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Dispute resolution processes in place and effective

Independent dispute processes in place.

resolution

Brief Detail of the Activities:  Independent dispute resolution processes in place. Problems  Reluctance of taxpayers to use dispute resolution processes – instead they approach various persons in authority to try and resolve their disputes. GoA key players thus approached try and resolve problem themselves rather than refer cases to go through the established processes. Proposed Solutions  Publicize dispute resolution processes and encourage GoA key players to refer their cases through these processes. 2.1.10 Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

To have information technology and work practices that support self assessment, market segmentation and principles of modern revenue administration

Brief Detail of the Activities:  Proposal for acquisition of integrated tax software resubmitted to donor.

RIMU/M&E

15

MoF 3rd Quarter Progress Report

Problems  Awaiting donor approval before information technology development can commence.  Inadequate amount of computer hardware.  Staff with limited information technology ability. Proposed Solutions  Follow up with donors re tax software and hardware.  Identify best ways to attract and retain information technology qualified staff.

2.1.11

To rapidly build capacity & develop a professional work force capable of a modern taxation system in a transition economy and is responsive to government needs

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Number of staff attended relevant trainings

Brief Detail of the Activities:  Training in Kabul largely conducted through a network of trained internal trainers, supplemented by specialist training (e.g. on accounting and tax auditing).  Training in provinces via a team of local staff with focus on offices as recruiting is finalized. Problems: Proposed Solutions: 2.1.12 To develop and maintain a professional and committed workforce through innovative human resource systems Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Number of staff PRRed in HQ and provincial offices Number of staff recruited based on merit and open competition

Brief Detail of the Activities:  Recruitment program completed to schedule.  Performance management system established and managed effectively.  Staff redeployment program operating effectively.  Revenue collection staff incentive program operating effectively.  Recruitment program progressing ahead of schedule.  Research has commenced into performance management and staff incentive programs. Problems  Civil Service Commission has not yet developed performance management guidelines.  Lack of staff incentive program for RD. Proposed Solutions  RD has offered to be pilot performance appraisal site. If no response RD will proceed to pilot its own performance appraisal process initially at management level.  Continue research into staff incentive program.

RIMU/M&E

16

MoF 3rd Quarter Progress Report

2.1.13 To have the administrative means for a fully functioning and independent revenue administration across the whole of government Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

Brief Detail of the Activities:  Continual monitoring and research into potential “nuisance” taxes.  Research has commenced on relationship between central government and local government (municipality) revenue collection authorities. Problems: Proposed Solutions:

3. Treasury Department
3.1 Objectives
Results /Activities/ Problems/ Proposed Solutions 3.1.1 Budgets are implemented in a predictable manner. Results:
Performance Indicator Baseline 1385 The gap between allotment and expenditure for 1385 was: Overall – 12% Development – 20% Operating 3% Benchmark for the year 1386 10% or less Progress against annual benchmark % of progress against annual benchmark NA

The gap between total budget allotments and execution is reduced

Progress cannot be evaluated till the end of current fiscal year.

Budget Execution Rate:

For Central Ministries:
Major Code 21 Wages and Salaries % Major Code 22 Goods and Services % Major Code 25 Acquisition of Assets %

For Provinces:
Major Code 21 Wages and Salaries % Major Code 22 Goods and Services % Major Code 25 Acquisition of Assets %

Brief Detail of the Activities :
 All Ministerial budget changes resulting from the mid-year review have been entered to AFMIS. Remaining to be entered are the Special / Reserve funds

Problems: Proposed Solutions:

RIMU/M&E

17

MoF 3rd Quarter Progress Report

3.1.2 Treasury has full custody of, and efficiently consolidates, government receipts. Results:
Performance Indicator Baseline 1385 Some revenue bank accounts with sizable balances are swept with frequency > 30 days Benchmark for the year 1386 All accounts swept with a frequency of < 30 days Progress against annual benchmark % of progress against annual benchmark

All revenue bank accounts are swept to the TSA daily.

Customs consolidation accounts opened in provincial DAB branches Balances in customs bank accounts are transferred to the provincial consolidation account on a daily basis in large customs collecting provinces and on weekly basis in other provinces.

Brief Detail of the Activities:
  Letter sent to DAB for o Opening customs consolidation accounts in all major customs collecting provinces o Daily sweeps of customs accounts in borders branches to provincial revenue account or customs consolidation accounts Discussions held with Customs Department for establishing improved customs collection procedures and effecting regular sweeps and transfers from DAB accounts at the border collection centers

Problems: Proposed Solutions: 3.1.3 Accurate, meaningful and timely information is available regarding Government’s debt activities, creditors are paid when due and old debts are reconciled and renegotiated on terms and conditions favorable to Afghanistan. Results:
Performance Indicator Baseline 1385 Old debt not reconciled with 3 countries ( Iran, Czech Republic (former Czechoslovakia) and Bulgaria Delays in reconciliation to GL exceeding 3 months. Benchmark for the year 1386 Planned for 1387 Progress against annual benchmark % of progress against annual benchmark

All old (pre-1381) debt is reconciled with Lenders

Receipt and Repayment of loans reconciled to GL 20 days after end of each month.

Planned for 1387

Brief Detail of the Activities:
 Letters were sent to two vendors seeking expressions of interest/proposals for the supply of debt management software to the Treasury

Problems: Proposed Solutions: 3.1.4 Government’s fixed assets are registered in accordance with asset accounting policies. Results:
Performance Indicator Baseline 1385 0% of assets registered centrally. Benchmark for the year 1386 Asset Module available in 2 Line Ministries. Progress against annual benchmark % of progress against annual benchmark

% of all assets registered, including valuation and location and verified by audit.

Process for procurement and establishment of asset modules has been started

Brief Detail of the Activities:

RIMU/M&E

18

MoF 3rd Quarter Progress Report



An assessment of the current practices on capital assets acquisition conducted by team from FreeBalance as a pre implementation exercise of the asset module.

Problems: Proposed Solutions: 3.1.5 Cash Management supports efficient use of cash assets as well as informing execution of the Budget. Results:
Performance Indicator Baseline 1385 Monthly cash needs are transferred. Around USD $500million equivalent of public monies is sitting idle. Benchmark for the year 1386 Nil Progress against annual benchmark % of progress against annual benchmark

Daily cash needs are transferred. All funds are efficiently utilized.

After receiving DAB audited statements for 1385, ensure that profits to be distributed to MOF are received into consolidated revenues.

Nil

Brief Detail of the Activities : Problems: Proposed Solutions: 3.16 AFMIS functionality is developed in line with Ministerial objectives. Results:
Performance Indicator Baseline 1385 Only core module functionality available. Benchmark for the year 1386 AFMIS Purchasing Module Procured and configured for pilot. Progress against annual benchmark % of progress against annual benchmark 25%

Full functionality of AFMIS: Asset Revenue HRM/Payroll Purchasing Debt Management AFMIS rolled out to line ministries and Mustofiats

Process map drawn for implementation of Procurement, Asset and Revenue modules

AFMIS not available in any Line Ministries or Mustofiats.

AFMIS rolled out to 4 Line Ministries ( MoEd, MRRD, MoC and MoF) AFMIS rolled out to 4 Mustofiats ( Herat, Parwan, Nangarhar, Mazar)

AFMIS rollout successful in 2 Line Ministries and groundwork completed in 2 more ministries in Kabul Transactions processing have begun in Herat Mustofiat and Communications established in Parwan province

50%

Brief Detail of the Activities:
   Team from treasury visited Heart and rolled out the AFMIS functionality to the Mustofiat after establishing satellite based communications. Connectivity established with Parwan Mustofiat, but AFMIS could not be established due to lack of adequate and continuous electricity AFMIS upgraded from version 4.7 to version 6.1

Problems:
 Non availability of adequate infrastructure facilities at the Mustofiats including computer hardware, electricity, generator etc.

Proposed Solutions:
 Plan to establish requisite resources in coordination with the Admin Department.

RIMU/M&E

19

MoF 3rd Quarter Progress Report

3.1.7 Accurate and relevant financial information is available in a timely manner . Results:
Performance Indicator Baseline 1385 Deadline for submission of Qatia Core Budget Statements met in SY 1384, however coverage of these statements is incomplete. Benchmark for the year 1386 Statements to National Assembly by 20 Sunbola Progress against annual benchmark % of progress against annual benchmark 100%

Timely submission of audited financial statements to Parliament and published bi-annually in accordance with the regulations

Achieved Transaction processing completed till the end of 3rd quarter. Status of bank and line ministry reconciliations is „current‟. Financial statements compliant with International Standards prepared (IPSAS)

Brief Detail of the Activities:




All reconciliations completed as at the end of period 8 Audit completed for all World Bank loans and grants, and reports submitted to the World Bank, including audited statements for ARTF Recurrent Budget Grant.

Problems: Proposed Solutions: 3.1.8 The control environment around public expenditures is continually reviewed and improved and findings from external and internal auditors are addressed. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark 40%

Documentation of control environment and its verification by audit.

Control environment partially documented.

Required revisions to the Accounting Manual identified and a plan for their release prepared.

Assessments of control environment relating to payments and documentation are being conducted

Brief Detail of the Activities: Problems: Proposed Solutions 3.1.9 The tracking/audit and efficiency of payment processing and payment mechanisms are improved. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

No paper processing of payments and Valid payment requests receipts are sent for payment by the next working day.

Valid payment requests receipts are sent for payment in more than two days after receipt.

Establish mechanisms with DAB to facilitate paperless payments (EFT)

First draft of data upload structure obtained from DAB for new core banking software being implemented by DAB.

Brief Detail of the Activities:  Discussions held with DAB and its implementation partners for understanding the capabilities of the new accounting software post implementation.

RIMU/M&E

20

MoF 3rd Quarter Progress Report

Problems:  The Core Banking System will be implemented in the centre by end of 1386, and EFT functionality is expected in the first half
of 1387.

Proposed Solutions:

3.1.10 Government Payroll is paid on-time, for the full amount to verified individuals in budget and tashkeel. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

All Government employees under VPP process

86,000 out of approximately 400,000 government employees paid under VPP

110,000 employees paid under VPP and salaries of 65,000 employees paid to individual bank accounts

More than 90,000 employees covered under VPP. Salaries of over 40,000 employees are being transferred to individual bank accounts of employees.

Brief Detail of the Activities:


 
 

Panel of four commercial banks established for partnering VPP activities, with significant reduction in costs compared to previous year. VPP activities extended to provinces. Employee registration completed in Laghman and Kunar Provinces, ongoing in Nangarhar. Training conducted for six ministries identified for rollout of payroll software in the 3rd Quarter

Problems:
Delays in availability of employee data from Ministry of Education Slow progress in Ministry of Defense enrolment registration

Proposed Solutions:
 Dedicated VPP resources will be provided to the Ministry of Defense and Ministry of Education to help speed the process, aligned with the overall goals of VPP

3.1.11 Accountability and information is disseminated to Line Ministries and Mustofiats/Provinces . Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark 85%

Building capacity of staff to work with computers

File Transfer Protocol (FTP) – electronic transfer of M22 (summary monthly expenditure report; M23 (monthly payment report and M29 (monthly revenue report) in the 4 Mustofiats which have Internet (Herat, Jalalabad, Mazar, Kunduz)

Support MOF efforts in provision of the needed IT infrastructure at the Mustofiats. Provide regular capacity building and training on computers and other technical skills at 1 Mustofiat

Work on 7 priority Mustofiats to provide them the required IT infrastructure.

Work on 6 provinces is in progress.

Provide regular capacity building and training on computers at 5 Mustofiats and use of FTP

Completed in 1 Mustofiat. Work in other mustofiats will be taken up after testing of FTP.

3.1. 12. An accrual-based accounting system is adopted. Results:
Performance Indicator Baseline Benchmark for the Progress against annual % of progress

RIMU/M&E

21

MoF 3rd Quarter Progress Report

1385 Completion of adoption of accrual accounting by 1395. Cash-based IPSAS currently applied.

year 1386 Begin assessment of suitability/ application of accrual accounting and financial reporting. Develop model for single set of financial statements.

benchmark Financial statements in compliance with IPSAS prepared.

against annual benchmark

Brief Detail of the Activities:  Financial statements compliant with IPSAS prepared. As a first step, these will be aligned with the Qatia presentation Problems: Proposed Solutions: 3.1.13 Procedures for disbursements under the core budget are aligned in support of full integration of the operating and development budgets. Results:
Performance Indicator Baseline 1385 Payments processed in PPU (operating) and SDU (development), following different procedures. Benchmark for the year 1386 All allotments entered to AFMIS by Treasury Budget Execution Unit. Progress against annual benchmark Completed. % of progress against annual benchmark 100%

No Central Core Budget Payments processed outside the Payment Processing Unit.

Brief Detail of the Activities : Problems: Proposed Solutions 3.1.14 Treasury Organization Structure is adequate to meet its role and existing PRR positions are filled. Results:
Performance Indicator Baseline 1385 Line functions of the Treasury are completed by 190 PRR staff and 30 National Consultants. Benchmark for the year 1386 Progress against annual benchmark % of progress against annual benchmark

All of Line Management Functions are executed by civil service staff.

Brief Detail of the Activities: Problems: Proposed Solutions

3.1.15 Mustofiat Offices have adequate resources to manage and control the processing of expenditures, receipt of revenues and other treasury-related responsibilities.

RIMU/M&E

22

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 No PRR staff working in Treasury positions in Mustofiats. Benchmark for the year 1386 Mustofiat PRR Proposal approved by Civil Service Commission Progress against annual benchmark Proposal submitted to Civil Service Commission % of progress against annual benchmark

Mustofiat offices are restructured and fully staffed with PRR.

Brief Detail of the Activities: Problems:
 IARCSC is awaiting proposals from Administration and Revenue departments for finalizing the PRR process for treasury

Proposed Solutions:
 Consolidated PRR proposal should be submitted by the Admin Department of MoF

3.1.I6 International Support is used optimally to develop Financial Management Capacity in MOF, Line Ministries and Mustofiats. Results:
Performance Indicator Baseline 1385 No standardized requirements. Benchmark for the year 1386 Standardized requirements for finance personnel Established. Progress against annual benchmark % of progress against annual benchmark

Government Finance criteria established and applied.

Brief Detail of the Activities: Problems: Proposed Solutions

4. Budget Department
4.1 Objectives:
Results /Activities/ Problems/ Proposed Solutions 4.1.1 Secure increased commitments and disbursements from donors and increase funding channeled through the Core Budget. Results:
Performance Indicator Baseline 1385 USD 2.2 billion 46 percent Benchmark for the year 1386 USD 2.9 billion 44 percent Progress benchmark against annual % of progress against annual benchmark

core budget increased to % of total external assistance going to the core budget Proportion of donor commitments through Core Budget compared to proportion through External Budget.

External budget is underreported in 1385

46 percent through the core budget compared to 54 percent through the external budget

44 percent through the core budget compared to 56 percent through the external budget

Brief Detail of the Activities: Harmonized reporting format circulated to ministries and donors, Portfolio reviews, grant and loans profiles, improve grants and loans database, „invest in Afghanistan‟ guidelines on procedures for channeling funds through core budget,

RIMU/M&E

23

MoF 3rd Quarter Progress Report

Problems: Timely donor reporting of projects is still a problem. Underreporting especially of security related budget and lower than expected execution rate in core development budget. Proposed Solutions: Improved core development budget execution, improved monitoring mechanism, alignment of budgets with ANDS strategies, and better donor coordination through CG and other mechanisms. 4.1.2 Introduce a medium-term approach to sector ceilings consistent with fiscal sustainability. Results:
Performance Indicator Baseline 1385 Introduced MTFF Operating budget based MTFF Benchmark for the year 1386 Introduced MTBF Progress benchmark Achieved against annual % of progress against annual benchmark 100 percent achieved

MTFF, MTBF and MTEF introduced and updated Allocation of all budget resources based on the MTFF and MTBF

is on

Operating budget is fully based on MTFF. Development budget is partially based on MTBF

MTFF achieved MTBF partially achieved

100 achieved Partially achieved

Brief Detail of the Activities: Clear budget circulars, CG donor meetings, IMF program, and MTFF and MTBF, collaboration with ANDS. Problems: Information on donor funding was not available on time for the MTBF and budget ceilings were not respected by line ministries. Proposed Solutions: Cabinet approval of MTBF and develop mechanism to get donor commitments early for budget. Plan MTBF process early during budget year 4.1.3 Effective and predictable formulation and implementation of the Budget. Results:
Performance Indicator Baseline 1385 Nine month budget calendar not used to prepare 1385 budget ANDS action plan and budget process. Benchmark for the year 1386 First time, nine month calendar used to prepare 1386 budget and published on website Extensive ANDS provincial consultations and provincial budget meetings. Progress benchmark Achieved against annual % of progress against annual benchmark 100 % implemented

Nine month budget calendar introduced

A strategy and timebound action plan to enable participation of key stakeholders (civil society and private sector) in the budget process developed by the MoF Budget formulation includes sector ceilings for budget year plus two more years of projections

Consultations stakeholders.

with

provincial

completed

Not used for 1385 budget

Introduced ministry ceilings for the operating and development budget as part of MTFF and MTBF

Achieved

completed

Brief Detail of the Activities: detailed budget activities in budget calendar are followed by weekly managers meetings in budget department, hired new staff to support line ministries, developed criteria for prioritization, integrated MTFF full with the annual budget process. MTBF introduced for 1386 Problems: private sector is still not an active partner in the budget process Proposed Solutions: Seek inputs from private sector in budget formulation and cabinet approval of budget ceilings and prioritization approach.

RIMU/M&E

24

MoF 3rd Quarter Progress Report

4.1.4 Identify impediments to lower execution rates in core development budget and prepare a clear strategy to improve execution rates. Results:
Performance Indicator Baseline 1385 Less frequent meetings of Budget Committee Impediments identified Benchmark for the year 1386 Monthly meetings held regularly Progress benchmark Completed against annual % of progress against annual benchmark Completed

Bi-monthly Budget Committee meetings to monitor budget, economic and fiscal performance. Number of impediments identified

Strategy prepared and implemented to improve execution

A clear Strategy prepared and implemented a number of recommendations

Number of initiatives taken including new mechanism and improved project templates. Continue to implement strategies to improve budget execution

Completed

Completed

Completed

Mostly completed.

Budget Execution rate: core development budget execution rate has improved: 54% in 1385, 44% in 1384 and 31% in

1383. Brief Detail of the Activities: Weekly monitoring mechanism to track budget execution rates, program budgeting, new mechanism, and improved budget process by improved project preparation and appraisal. Problems: weak capacity at line ministries, lengthy procurement processes, etc Proposed Solutions: strengthen budget preparation process at line ministries, improve procurement processes, and improve monitoring and extend program budgeting to all ministries by 1389. 4.1.5 Ensure each unit prepares a single core budget (with operating and development budgets integrated) and that ensure that ANDS costings will feed into selection criteria in choosing program and projects.

Results:
Performance Indicator Baseline 1385 No Integration Benchmark for the year 1386 Integrated in 4 line ministries through program budgeting I-ANDS priorities partially integrated Progress benchmark against annual % of progress against annual benchmark 100% achieved

Operating & Development Budgets Integrated ANDS incorporated formulation. priorities budget

Program budget introduced planned in four line ministries

as

in

Some attempts made

Alignment of budget formulation process with provisions of PFEM Law.

Mostly PFEM law respected

PFEM Law almost fully respected.

Budget submitted to Parliament on time and other procedures respected.

Brief Detail of the Activities: program budgeting was introduced in 4 line ministries. A mechanism developed to align budget allocations with ANDS priorities. PFEM law is respected in budget formulation, execution, and reporting activities. Problems: ANDS costing was not done for 1386 budget Proposed Solutions: Program budgeting in all line ministries by 1389 will have integrated core budget. Costing of ANDS sectors are expected by Oct 2008. 4.1.6 Establish and implement an effective budget process

RIMU/M&E

25

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Issued clear budget circular for operating and development budget Workshops and training conducted on budget circular and preparation process Most submissions are in line with budget circular Progress benchmark against annual % of progress against annual benchmark 100% achieved.

Issuance of clear Budget Circular.

Budget circular issued as scheduled in the budget calendar.

Training completed of line ministries on budget process and Budget Circular requirements Alignment of line ministry budget formulation with provisions in Budget Circular.

Workshops conducted on budget preparation process Budget preparation was not fully aligned with budget circular

3 days of training/workshops conducted for line ministries

100% achieved.

Introduction of budget circular has improved budget process

Brief Detail of the Activities: A standard budget circular, workshops and training, and close coordination between MOF focal points and line ministries Problems: Line ministries do not get sufficient time to prepare good projects. Many line ministries do not have capacity to prepare their submissions according to the budget circular. Proposed Solutions: Issue budget circular in October and improve capacity at line ministries and provide project preparation guidance, which was done for the 1387 budget. 4.1.7 Ensure fiscal implications are considered in policy development and review fiscal implications of Cabinet Decisions. Results:
Performance Indicator Baseline 1385 MOF has sector, fiscal and budget specialists Introduced MTFF and IMF program Benchmark for the year 1386 Cabinet Approval of MTFF. MTFF was fully integrated with 1386 budget and fiscal implications included in budget statement and tables and Cabinet is brief accordingly Progress benchmark against annual % of progress against annual benchmark 100% completed.

MoF have sector and issue specialists (e.g. wage bill, pensions). Proposals before Cabinet include full costings of implications.

Detailed MTFF was prepared and extensive work has been done on wage bill and pension reform and all fiscal issues and implications were considered.

Brief Detail of the Activities: MTFF was updated and fully integrated with budget. MTFF was officially approved by the Cabinet. Fiscal implications are included in all budget documents. IMF three year program is in place Problems: Proposed Solutions: 4.1.8 Ensure that budget calendar is followed throughout the formulation process. Results:
Performance Indicator Baseline 1385 Compressed budget timetable Benchmark for the year 1386 9 moth budget table issued Progress benchmark against annual % of progress against annual benchmark 100% completed.

Budget process completed according to timeframes set out in Budget Circular and the Budget Law. approved budget calendar published in web site

Most of the budget preparation process is based on budget calendar and followed the Budget Law

Budget Calendar published on website

Budget calendar was published in website by May 30th

100% completed

RIMU/M&E

26

MoF 3rd Quarter Progress Report

Brief Detail of the Activities: CG meetings, consultations with line ministries, budget circular, MTBF, and budget negotiations Problems: Some activities delayed as per the budget calendar. MTBF ceilings were not fully respected by line ministries. Proposed Solutions: Cabinet approval of budget calendar.

4.1.9 Introduce program budgeting in key line ministries Results:
Performance Indicator Baseline 1385 3 ministries Benchmark for the year 1386 4 line ministries. Progress benchmark against annual % of progress against annual benchmark 100% completed

# of ministries with program budgeting mechanisms introduced

Program budgeting is introduced successfully in four line ministries

Brief Detail of the Activities: Program Budgeting has been introduced to seven line Ministries (MRRD, MoEd, MoPH, MoWP, MoPW, MoA and MoF) on pilot basis Problems: Proposed Solutions:

4.1.10 Develop and implement an open and transparent public information strategy on the National Budget. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 Budget documentation including Dari version is published on web. Press release issued with budget details Progress benchmark against annual % of progress against annual benchmark

Timely publication and public accessibility of budget documentation (including public summary versions) in national language covering a complete picture of central government fiscal forecasts, budget and composition: Annual budget documentation, Quarterly fiscal bulletins, Monthly fiscal bulletins, End of Year Reports as required by budget law within 6 months of end of budget year.

MTFF and budget documentation was incorporated in budget statement which was published on web.

1384 end budget report completed.

1385 end budget performance report completed within 6 months and quarterly budget bulletins issued

1385 Performance reports published

100% achieved.

Brief Detail of the Activities: Weekly fact-sheets and quarterly budget bulletins are produced. Problems: More staff needed to produce these reports Proposed Solutions: Hire more staff. 4.1.11 Effective and transparent management of allotments and appropriations with adherence to strict fiduciary standards.

RIMU/M&E

27

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Allotment process and payment system improved Progress benchmark against annual % of progress against annual benchmark

Extent to which budgeted resources transferred to spending units in a timely and transparent manner. Compliance with fiduciary standards required by budget law and procurement law. Procurement Law was passed

Procurement procedures were improvement in most line ministries

Understanding of procurement procedures improved a lot in most budgetary units.

Brief Detail of the Activities: More trained budget execution officers, better use of AFMIS/operating budget database, filling
system improved.

Problems: Coordination between treasury and budget department Proposed Solutions: Better coordination is needed between treasury and budget department on issues related to allotment/payment procedures 4.1.12 Ensure delivery of Budget Department’s products and services to key stakeholders and clients. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Providing Donors regular information on achievements & Challenges through CG & Coordination Meetings Progress benchmark against annual % of progress against annual benchmark 100% achieved

Provision of regular information regarding achievements and challenges to donors

CG meetings were held regularly and aid coordination unit is in touch with donors through its focal points regularly

Brief Detail of the Activities: Regular CG meetings and presentations by budget department on budget process including budget ceilings and financing issues. Problems: lack of donors‟ financing commitments on time Proposed Solutions: Donors need to submit their financing plans 2 months before the budget goes to the Parliament

4.1.13 Develop capacity of line ministries by providing both formal and informal assistance at key times during the budget process Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Preparation effective guidelines, Circulars, and the Budget Provide formal and assistance Ministries of budget Reports National regular informal to Line MoF focal points provide informal assistance to line ministries on daily basis 100% achieved Progress benchmark against annual % of progress against annual benchmark 100% achieved

Timely preparation of effective guidelines, circulars, reports, the budget.

Clear budget circulars prepared and budget guidelines in the budget statement to help line ministries

Provision of effective and timely formal and informal assistance

Regular conduct of workshops, courses and

4 workshops on budget preparation,

World Bank workshops conducted during 1385-1386.

were

RIMU/M&E

28

MoF 3rd Quarter Progress Report

technical notes.

costing, and project analysis

Brief Detail of the Activities: Workshops on public finance management, costing, procurement processes, project management and analysis were conducted. Problems: Line ministries do not send relevant staff Proposed Solutions: Comprehensive training for all relevant staff from line ministries 4.1.14 Ensure Budget Department staff attends relevant training and conduct themselves with professionalism and integrity Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Two workshop Washington New Delhi Weekly hours major in and Progress benchmark against annual % of progress against annual benchmark 100% achieved

Number of staff that attend relevant training.

Conduct of in-house learning hours and number of technical notes circulated to staff.

learning

One advanced workshop was conducted at the World Bank in Washington for managers. For senior budget officers, a second workshop was conducted in Delhi A number of weekly presentations were conducted.

Brief Detail of the Activities: USAID financed World Bank managed workshops held in Washington and Delhi. About 40 staff attended these two workshops. Problems: Proposed Solutions:

5. Internal Audit Department
5.1 Objectives
Results /Activities/ Problems/ Proposed Solutions 5.1.1 To assess internal control systems and procedures, financial and accounting systems and issue recommendations. Results: Performance Indicator
IA Department issue reports on the findings of internal control systems and procedures, financial and accounting systems and issue recommendations.

Baseline 1385
31 reports were issued

Benchmark for the year 1386
75 reports

Progress against benchmark

annual

% of progress against annual benchmark
60%

45 reports have been issued

Brief Detail of the Activities: The audit teams are assigned to the offices (MoF Departments, Revenue Divisions, Custom Points and Mustofiats) identified to be audited in the annual plan. They have performed the audits to achieve the objectives mentioned above. The audit reports are finalized and issued to the auditees. Those reports which are completed are sent to MOF leadership. Problems:

RIMU/M&E

29

MoF 3rd Quarter Progress Report

Although the audits are completed, some of the report finalization process is not completed since senior auditors are assigned to provinces for audits. Proposed Solutions: Upon their return the department will assign these auditors to complete the reports 5.1.2 To assess primary procurement documents including requests, availability of allocation, and compliance with procurement rules Results: Performance Indicator
IA Department issue reports about findings on procurement.

Baseline 1385
31 reports issued

Benchmark for the year 1386
67 reports

Progress against benchmark

annual

% of progress against annual benchmark
55%

37 reports have been issued

Brief Detail of the Activities: The audit teams are assigned to the offices (MoF Departments, Custom Points and Mustofiats) identified to be audited in the annual plan. They have performed the audits to achieve the objectives mentioned above. The audit reports are finalized and issued to the auditees. Those reports which are completed are sent to MOF leadership. Problems: Although the audits are completed, some of the report finalization process is not completed since senior auditors are assigned to provinces for audits. Proposed Solutions: Upon their return the department will assign these auditors to complete the reports

5.1.3 To monitor the management of fixed, movable and cash assets Results: Performance Indicator
IA Department issue reports about findings on MoF assets.

Baseline 1385
31 reports issued

Benchmark for the year 1386
75 reports

Progress against benchmark
45 have been issued

annual

% of progress against annual benchmark
60%

Brief Detail of the Activities: The audit teams are assigned to the offices (MoF Departments, Revenue Divisions, Custom Points and Mustofiats) identified to be audited in the annual plan. They have performed the audits to achieve the objectives mentioned above. The audit reports are finalized and issued to the auditees. Those reports which are completed are sent to MOF leadership. Problems: Although the audits are completed, some of the report finalization process is not completed since senior auditors are assigned to provinces for audits. Proposed Solutions: Upon their return the department will assign these auditors to complete the reports 5.1.4 To develop audit work plans to especially focus on high risk areas Results: Performance Indicator
Completion and approval of risk based audit work plans.

Baseline 1385
0

Benchmark for the year 1386
15 on MoF units

Progress against benchmark
9

annual

% of progress against annual benchmark
60%

RIMU/M&E

30

MoF 3rd Quarter Progress Report

IA Department issue reports on highly risked areas

NIL

15

9

60%

Brief Detail of the Activities: The auditors assigned for on the job training have prepared their audit plans with the risk based audit approach on 9 MoF Units. The audits of 9 MoF Units are completed under the guidance of international consultants and the reports are under review. Problems: Proposed Solutions:

5.1.5 To recruit and develop qualified staff according to professional standards Results: Performance Indicator
% of IA department staff PRRed Number of recruits hired under PRR # of IA Department staff completed class room training on accounting and audit # of MoF other Departments Staff and line ministries completed training on accounting and audit # of IA Department Staff provided with On-The-Job training

Baseline 1385
100 91 0

Benchmark for the year 1386
100 20 77

Progress against benchmark
100 20 77

annual

% of progress against annual benchmark
100% 100% 100%

82

82

100%

0

77

41

53%

Brief Detail of the Activities:  Total approved PRR Taskheel of IA Department is 165 staff, of which 111 are recruited through PRR, which shows 100% of the achievement of the annual target i.e. 111 staff to be recruited under PRR in 1386.  The IA staff and MoF other Department and line ministries audit staff went through two cycle of the class room training each having duration of 5 months which has covered the basic accounting, auditing and English language courses.  First cycle of on the job training has completed. 9 teams were assigned under 3 international trainers for on the job training. Problems: Access was not given by ministries to conduct on the job trainings. Proposed Solutions: Designed to conduct on the job trainings in the MoF units only. 5.1.6 To prepare Internal Audit Manual. Results: Performance Indicator
IA manual developed

Baseline 1385
Nil

Benchmark for the year 1386
1

Progress against benchmark
1

annual

% of progress against annual benchmark
100%

RIMU/M&E

31

MoF 3rd Quarter Progress Report

Brief Detail of the Activities: The manual part 1 and 2 includes Code of Ethics, Charter, Procedures for the Department; Checklists, Audit Plan, Audit Standards, International Consultant has prepared Internal Manual for the Department. Problems: Proposed Solutions:

6. State Owned Enterprises Department
6.1 Objectives
Results /Activities/ Problems/ Proposed Solutions 6.1.1 State Owned Enterprises Department has control over the revenue of all SOEs in the country and they are transferring the net profit to the individual bank account of each SOE. Results:
Performance Indicator Baseline 1385 Afs Benchmark for the year 1386 Afs Progress benchmark against annual % of progress against annual benchmark

Value of SOEs‟ net profit transferred to individual SOE bank account

Brief Detail of the Activities: The SOE Department is under the restructuring program. By the implementation of this program new knowledge, capacity and technical know-how will be brought to the Department and then it will be feasible to assess and value transferring of net profit of each individual SOE to the each SOE bank account. Problems: Insufficient capacity in the SOE Department Proposed Solutions: PRR of the Department and recruitment of new technical staff 6.1.2 Social Safety Net expenditures calculated per each SOE. SOE’s will be divested in an orderly way Results:
Performance Indicator Baseline 1385 0 Benchmark for the year 1386 5 Progress benchmark 0 against annual % of progress against annual benchmark 0%

Number divested

of

SOEs

Brief Detail of the Activities: 15 SOEs were approved by the Cabinet of Ministers (assessment of their assets and liabilities, drafting of Liquidation Plans and implementation of asset auctions, cancellation of liabilities and dissolution of SOEs is undergoing); 5 SOEs were approved by the SOE Evaluation Commission (Cabinet of Ministers approval expected in the very near future). So far 32 auctions have taken place 15 of which were successful and 17 of which were unsuccessful. Two properties of Samoon Dried Fruit Enterprise was auctioned and sold on 11 Jadi 1386 by 97% over starting price (Afs.126,001,000) and Hairatan Technical Services Enterprise was sold on 8 Jadi 1386 for Afs. 39,800,000 New auctions are scheduled which will take place in Jadi and Dalwa of the current year. So far, 1028 employees of the liquidated SOEs have been paid severance payment and the cost of that reach up to US$. 1,398,766 Problems: Ownership of documentation particularly real estate of SOEs and valuation of assets. Proposed Solutions: Assignment on the basis of quiet possession (Most probably 37 years), valuation of assets on the basis of specific economic references (leasing income and annual sales). 6.1.3 Costs of privatization are calculated per each SOE and SOE privatization to proceed on a predetermined schedule

RIMU/M&E

32

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 11 Benchmark for the year 1386 12 Progress benchmark 4 against annual % of progress against annual benchmark 25%

Number of SOEs privatization proposals approved by Cabinet

Brief Detail of the Activities: 4 SOE privatizations were approved on 13 Hamal 1386 and 5 more proposals expected to be approved before end 1386. Problems: Assess economic and financial viability with available information in the SOEs Proposed Solutions: Focus on numerical approach, balance sheets. 6.1.4 Valuation of 45? SOEs was done and calculation of cost of making employees redundant was done Results:
Performance Indicator Baseline 1385 45 Benchmark for the year 1386 0 Progress benchmark 0 against annual % of progress against annual benchmark 0

Number of SOEs valuated

Brief Detail of the Activities: Assets valuation will be carried out after approval of Liquidation Proposals. Problems: Proposed Solutions:

6.1.5 SOE department has inventory of all SOE assets. Liquidation procedures for securing assets in place Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of SOEs, the assets of which inventoried

Brief Detail of the Activities: Problems: Proposed Solutions:

6.1.6 SOE Dept prepares valuation reports on each SOE and collects quarterly financial statements from each SOE Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

45? valuation reports on file

RIMU/M&E

33

MoF 3rd Quarter Progress Report

Quarterly financial statements on file

Brief Detail of the Activities: Problems: Proposed Solutions: 6.1.7 Divestiture plan developed to move assets into private sector as quickly as possible without jeopardizing open and transparent process Results:
Performance Indicator Baseline 1385 0 Benchmark for the year 1386 10 Progress benchmark 6 against annual % of progress against annual benchmark 40%

Number of SOEs, the privatization plan of which submitted to the President

Brief Detail of the Activities: 6 Liquidation Plans approved by President in November 2007, and 4 are expected to be approved before the end of 1386. Problems: Proposed Solutions: 6.1.8 Department holds regular workshops and meetings for colleagues at other line ministries and will begin holding regular workshops for potential auction participants and potential claimants Results:
Performance Indicator Baseline 1385 0 Benchmark for the year 1386 9 Progress benchmark 9 against annual % of progress against annual benchmark 100%

Number of meetings and workshops held

Brief Detail of the Activities: SOE Department explained Privatization Program and existing opportunities for investment to local investors in Jalalabad, Mazar, Heart, Kandahar and Kabul. In addition to that, three presentations were made to Parliament to know about the privatization program. Problems: Still we need to have a sort of well focused public awareness program Proposed Solutions: 6.19 Staff trainings: How to explain Social safety net benefits to workers How to explain auction procedures to investors How to explain claims filing to claimants How to secure SOE assets How to strength the reporting system Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of attended trainings

SOE staff relevant

RIMU/M&E

34

MoF 3rd Quarter Progress Report

Brief Detail of the Activities: After approval of the proposal for each SOE, according to the procedure, SOE Department appoints Liquidation Committee and normally they explain the Social Safety Net benefits to the workers (severance payment and retraining opportunities). As it was mentioned before, that SOE Department has launched several seminars for the awareness of domestic investors during 1386 and auctions procedures were explained to them. Liquidation Procedures are very cleared about the claim filing and how to assess assets and liabilities of each SOE. By restructuring of the Department, reporting system will be strengthening. Problems: Proposed Solutions:

7. Properties Department
7.1 Objectives
Results /Activities/ Problems / Proposed Solutions 7.1.1 To liquidate the stated owned un-relicensed banks Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 MCB, IDB and ADB to be liquidated 100% Progress benchmark against annual % of progress against annual benchmark MCB 80% IDB 90% ADB 75%

Number of stated owned un-relicensed banks liquidated

Most of the properties of the MCB, IDB and ADB have been sold

Brief Detail of the Activities: Thus far, after the auctions, most of the properties of the Mortgages and Constructions Bank, Industrial Development Bank and Agriculture Development Bank have been sold and noteworthy progress has been made in this regard. Problems: Proposed Solutions: 7.1.2 To follow up on the MoF asset of the ministry of finance, which has been illegally, seized by people and government organs Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of the assets of MoF recovered

Not identified

Follow up has been made on the properties of MOF in Murad Khani, 7154 sqm in Second District of Kabul Municipality and 13547 sqm adjacent to MoF.

Brief Detail of the Activities: With regard to assets of MoF, the Properties Department has tried to obtain reliable documents from Maintenance and Repair Unit of MoF since the Properties Department is facing with problems while following up with different organs regarding MoF assets. Follow up was made on the properties of MOF in Murad Khani, 7154 sqm in Second District of Kabul Municipality and 13547 sqm adjacent to MoF. Problems:

RIMU/M&E

35

MoF 3rd Quarter Progress Report

Proposed Solutions: 7.1.3 To liquidate surplus assets of National and Pashtany Banks Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Valuation done to be Progress benchmark against annual % of progress against annual benchmark 10%

Number of surplus assets of National and Pashtany banks liquidated

Follow up has been made with Ministry of Justice in this regard

Brief Detail of the Activities: Valuation of the National and Pashtany Banks‟ surplus assets was followed up through several letters with the Ministry of Justice (as per the presidential order, valuation takes place under the supervision of the ministry of justice). A delegation from the Property Department was assigned to register the surplus assets of the mentioned banks.

Problems: Proposed Solutions: 7.1.4 To develop the Human Resources of the properties department Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of staff trained

1 staff member introduced to Audit training program.

Number of conducted

trainings

Not identified

Brief Detail of the Activities: One staff member of the Properties Department, Mr. Amir Shah, was introduced to Audit Training Program which st started on Qows 1 . Problems: Proposed Solutions: 7.1.5 To PRR the staff of the properties department Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 All staff to be PRRed totally 16 Progress benchmark against annual % of progress against annual benchmark 87.5%

Number of staff PRRed

14 staff have been recruited under PRR

Brief Detail of the Activities: After the announcement of four positions, based on merit and open competition, 14 staff have recruited and assigned to their jobs. Problems: Proposed Solutions:

RIMU/M&E

36

MoF 3rd Quarter Progress Report

8. Administration Department
8.1 Objectives
Results/Activities/ Issues/ Proposed Solutions 8.1.1 Reducing overlaps and improving high priority service delivery through the reforms & creating standardized system of employment with high standards of staff integrity Results:
Performance Indicator Baseline 1385 HQ: 764 posts Mustofiats: 155 posts Customs: 252 posts N/A Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of staff PRRed in HQ, Mustofiats and Custom points

Number of approved tashkeel posts vacant Number of new candidates recruited on the basis of open competition & merit Number of MoF staff‟s performance appraised using CSC form % of male staff in HQ, Mustofiats and Custom points % of female staff in HQ, Mustofiats and Custom points

Not identified

Progress has been made with reference to PRR, in HQ 1123 , in seven priority mustofiats 522 and in all Customs points 282 posts have been PRRed N/A

HQ: 764 Customs: 252 Mustofiats: 155

Not identified

In HQ 1123 posts, in Mustofiats 522 posts and all Customs points 282 posts have been recruited on the basis of open competition and merit 1896 staff have been appraised thus far 87% HQ, 95% Mustofiats and 97% Customs. 13%HQ, 5% Customs. Mustofiats and 3%

1024

Not identified

N/A

Not identified

N/A

Not identified

Brief Detail of the Activities: PRR As of end of Qaows, PRR has been completed 83.6% in HQ, 57% in seven Mustofiats (Kabul, Kandahar, Herat, Nangarhar, Balkh, Kunduz and Parwan) and 26% in all Custom Points. Total approved Tashkeel of MoF is 5750 staff (3318 PRR posts, 1218 Non PRR posts and 1214 Ajeers). All PRR posts filled so far were based on open competition and merit. Performance Appraisals: Appraisal is being conducted by Human Resource Management Department of those staff who are PRRed and have worked for at least one year in MoF. The result will be sent to Civil Service Commission. As of end of Qaows, 1896 staff has been appraised Gender Balance: Category HQ Male Female 87% 13%

Mustofiats 95% 5%

Customs 97% 3%

Problems: Annual targets for 1386 is not identified for the indicators of the above mentioned objective Proposed Solutions: In the year 1387 target for the year should be identified, in the strategic plan of Admin Dept

RIMU/M&E

37

MoF 3rd Quarter Progress Report

8.1.2 Computerization of Admin systems and extension of IT to the MoF provincial offices & Mustofiats Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

HR and S database developed & functioning

HRMIS was developed and work is continuing on its further improvement

Payroll and Goods and Accounting modules developed & functioning Number of Mustofiats linked with the MoF headquarter through the installation of computers & IT equipment

5%

Not identified

30% of the development has been completed

5 Custom Points and 5 Mustofiats

24 offices, (including Mustofiats and Custom Points)

7 Custom Points and 5 Mustofiats are networked

50%

Brief Detail of the Activities:  Customs of Kabul, Kabul Airport, Herat, Jalal Aabad, Kunduz, Mazar-e-Sharif and Kandahar are networked.  Mustofiats of Herat, Jalal Aabad, Kunduz, Mazar-e-Sharif and Kandahar are networked.  Even viewer of all servers is checked on daily basis and no obstacles are seen.  In Aqrab 60 staffs of different departments are given internet connections.  More than 300 different kinds of IT related problems are resolved by IT help disk.  PBAX station of MoF is repaired and ready to use.  Training for Automation System of documents is accomplished to Treasury, Budget, Customs, Internal Audit and SOE departments  The new building for Revenue and Customs will be soon equipped with new technology Problems: Proposed Solutions:

8.1.3 Intensive Professional Development of MoF Staff Results:
Performance Indicator Baseline 1385 43 different trainings conducted 564 staff trained in different fields Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of conducted

trainings

47 different sort of capacity building trainings are conducted

Number staff attended relevant trainings

Not identified

1629 staff of different departments trained in - house and overseas

Brief Detail of the Activities: The in-house trainings conducted include computer fundamentals, leadership and management, English, accountability and transparency, reporting, book-keeping, databases, hardware and trouble shooting, democracy, budgeting, gender, women‟s rights, procurement, dealing with anti corruption, time management and human rights. Totally 1557 staff of MoF have bee trained in house. Training also includes orientation for the newly recruited staff. The overseas training conducted include project monitoring and evaluation, finance, policy and promotion in development economics, public expenditure management, business advisor‟s training, information technology, empowerment of woman through enterprises, macroeconomic management and fiscal policy issues and banking. Totally 72 staff of MoF have been trained abroad.

RIMU/M&E

38

MoF 3rd Quarter Progress Report

Problems: Benchmarks for the year 1386 is not identified in the strategic plan of Training and Development.

Proposed Solutions: 8.1.4 Reconstruction & Reform of Mustofiats Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of Mustofiats reformed, policies, procedures and internal control mechanisms implemented Number of Mustofiats reconstructed

PPR process has been completed 57% in seven priority Mustofiats

Number of staff trained

Mustofiats

5 Mustofiats (Khost, Paktika, Badghis, Farah & Kapisa ) 31

Not identified

67% construction work of Mustofiats buildings is completed.

11

Not identified

The action plan on the role of MoF provincial offices - in the seven priority Mustofiats fully implemented

N/A

Not identified

154 staff of different Mustofiats are trained in management, accounting and computer. See above

Brief Detail of the Activities: The reconstruction work of 5 mustofiats ( Kapisa, Badghis, Farah, Paktika and Khost) has been completed; whereas the reconstruction work of 11 mustofiats ( Kabul, Parwan, Logar, Kunar, Kunduz, Balkh, Herat, Helmand, Noristan, Panjshir and Daikundi) is underway The repair work of 2 Mustofiats (Paktia and Bamyan) has been completed and the repair work of 4 Mustofiats (Takhar, Jawzjan, Nimroz and Ghor) is under way. The rest 12 mustofiats‟ buildings reconstruction will be planned for the coming years.

Problems: Proposed Solutions:

8.1.5 Results:

Expenditure Management & Monitoring & Implementation of Rules & Procedures

Performance Indicator

Baseline 1385 Ordinary: Afs 848,565,298 Development Afs 104,4481,904 1647

Benchmark for the year 1386 Operating 100% (Afs705,225,000) Development 100%(1,689,450,000)

Progress benchmark

against

annual

% of MoF operating and development budget spent

Afs 528,918,750 spent from operating budget and Afs690,274,766 spent from operating budget

% of progress against annual benchmark 75% operating budget 41% development budget 77%

# of procurement requisitions processed on time # of procurement reports sent to Treasury

1700

1303 procurement processed

requisitions

12 reports

12 reports

9 reports submitted

75%

RIMU/M&E

39

MoF 3rd Quarter Progress Report

Brief Detail of the Activities: As of end of Qaows, 75% of the operating budget and 41% of the development budget of MoF has been spent. The procurement requisitions are processed on time Problems: Proposed Solutions:

8.16


8.17

Maintenance and Cleanliness of the MoF HQ Maintenance and cleanliness of MoF is done on daily basis. Documentation and Record Keeping

Results:
Performance Indicator Baseline 1385 75,786 Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of MoF documents and records digitized

46,700 different documents records are digitized.

and

Brief Detail of the Activities: Problems: Proposed Solutions:

8.1.8 Asset Management Results:
Performance Indicator Baseline 1385 590 kinds of assets of (Afs 75,468,054) value Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of MoF asset managed through computerized system

620 kinds of assets are managed through computerized system of (Afs 7,8341,688) value

Brief Detail of the Activities: In 1385 assets were recorded according to the following %  IT and communications assets 49%  Stationary 6%  Transportation and fuel 27%  Office equipments 5%  Electricity equipments 4%  Furniture 1%  Small constructions 2%  Food 2%  Cloths and wearing 2%  Others 2% In the year 1386 assets were recorded according to the following %  IT and communications assets 49%  Stationary 5%  Transportation and fuel 32%  Office equipments 3%  Electricity equipments 4%  Furniture 2%

RIMU/M&E

40

MoF 3rd Quarter Progress Report

   

Small constructions 1% Food 1% Cloths and wearing 1% Others 2%

Problems: Proposed Solutions:

9. Minister’s Office
9.1 Objectives
Results/Activities/ Problems/ Proposed Solutions 9.1.1 Results:
Performance Indicator Baseline 1385 N/A Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Maintain Internal and external communications of the Ministry of Finance

Number of interviews, press conferences and press releases Number of of Etelat –I – Mali publication published

As of end Qaows, 200 interviews took place, 40 press conferences were held and 90 press releases were issued 9 newsletter have been published and distributed 75%

12

12

Number of internal and external correspondence processed and managed

40 on daily basis

An average of 40 on daily basis

An average of 40 in internal and external correspondence was processed on daily basis

75%

Brief Detail of the Activities: Correspondence:  On daily basis an average of 40 internal and external correspondence was processed

Updates & Publication:  The monthly newsletter was published and distributed Press Events:  Joint press conference with Minister Ahady and Juan Miranda on ADB‟s grant of $ 176 million to Afghanistan was held in this month  Joint press conference with Minister Ahady and Alastair Mckechnie, World Bank‟s Country Director for Afghanistan on transparency in public finance management systems was held in this month.  The opening of the Medium Taxpayer Office (MTO) took place, which was followed by a press conference with the Minister  The opening of the UNDP‟s Accountability and Transparency Project took place, which was followed by a joint press conference.  Only during the third quarter, a total of 9 press conferences were held on various issues, mostly by H.E. Minister Ahady. Press Releases:  Press release on ADB‟s $176 million grant to Afghanistan was issued  Press release on transparency in public finance management systems was issued  Press release on Minister Ahady‟s trip to Washington DC for WB/IMF annual meetings was issued

RIMU/M&E

41

MoF 3rd Quarter Progress Report

   

Press release on consulting forum with manufacturers was issued Many other press releases which were covered by various media outlets were issued A series of forums with NGOs about their tax obligations took place, which had a photo opportunity for the press on the first day, and a press conference in the last day by DM Ibrahimi Only during the third quarter, a total of 19 press releases on various issues were sent out to the press.

Interviews:  MoF Spokesperson gave a number of interviews to different media outlets during this quarter, including interview with USAID‟s Capacity Development Project on Aid Expenditure; Interview with Salam Watandar Radio on Imported Cars; Interview with UN‟s Media Department on Development Budget for Diakundi Province; Interview with Kabul Weekly on Aid Delivery, and many follow up interviews on corruption, transparency, and aid delivery after the press conference.  A total of interviews 50 interviews were conducted during this quarter, mostly with Arian Sharifi, MoF Spokesperson and a few with H.E. Minister Ahady by both local and international press. Anti- Corruption:  Educational sessions on anti-corruption were conducted and covered about 1,300 MoF employees. Further, extensive work on preparing complaint registry procedures – from the minute a complaint is received to the point an action is taken by the Minister – have been done. Posters, announcing the MoF anti-corruption hotline have been designed and printed to be posted in all MoF offices.  The bi-weekly meetings on MoF‟s anti-corruption efforts, chaired by Arian Sharifi, MoF Spokesperson, and attended by employees/advisors from the various departments of the MoF, were held. Regular Updates:  Regular news monitoring, using major local papers, TVs and radio channels, the internet, Moby Media Update, Afghanistan News Center, and the bulletin from the Presidential Palace, took place.  Regular daily news updates through “MoF Communications” were distributed.  Regular daily news briefs for the Minister were submitted. Website:  A series of meetings, chaired by Arian Sharifi, MoF Spokesperson, were held on MoF website, but the website has been under technical construction by IT Unit, so not much of editorial work has been done on it. Tax Awareness:  Extensive work has been carried out on a tax awareness campaign for the Revenue Department – talks with radio stations, creation of the messages for radio spots and billboards, preparation of photographs for the billboards, designing the billboards, administrative procedures for sending out tenders, etc – have all been done, and the campaign is pending for the final approval by DG Revenue.  Initiative to collect tax/charge information from all government ministries and entities has been taken so clear information regarding charges by various government departments will be prepared for investors and traders. Posters will be designed and printed to be posted in various government departments so taxpayers are aware of their legal obligations/which charges are legal and which ones are not.

Problems: Proposed Solutions:

9.1.2 Results:

Provide timely, efficient and effective secretariat services to the minister

Performance Indicator

Baseline 1385 48

Benchmark for the year 1386 48

Progress benchmark

against

annual

Number of regular meetings organized

Every other fifteen day management meetings with DGs and DMs was held , up to now totally 36 meetings

% of progress against annual benchmark 75%

Brief Detail of the Activities:  Every other fifteen day meetings of the deputy ministers with the minister was organized as per the schedule

RIMU/M&E

42

MoF 3rd Quarter Progress Report



Every other fifteen day management meeting was organized as per the schedule

Problems: Proposed Solutions: Strengthen Administrative functions of the Minister’s Office

9.1.3 Results:

Performance Indicator

Baseline 1385 N/A

Benchmark for the year 1386 Not identified

Progress benchmark

against

annual

% of progress against annual benchmark

Number of advisors hired for the minister

5 advisors have been hired for the minister

Brief Detail of the Activities: Five advisors were hired for the minister (3 national advisors, Regional Cooperation, Communication, Law and Policy and 2 international). They have started their work.

Problems: Proposed Solutions:

Afghanistan Insurance Commission
9.1.5 Develop the insurance industry and a culture of marketing and buying insurance as well as promote dependence on insurance, instead of personal resources in case of calamities that result in injury and financial loss created Results:
Performance Indicator Baseline 1385 2 ( Afghan National Insurance and Brokerage, SISI) Benchmark for the year 1386 5 companies brokerages operational and Progress benchmark against annual % of progress against annual benchmark 60%

Number of insurance companies operational

Thus far, 1 company and 2 brokerages are active in the field of insurance in the country ( Afghan National Insurance Company and SISI, Lebanese and Poyesh, Iranian Insurance Brokerages) Afghanistan Insurance Corporation is also going to be established soon.

Brief Detail of the Activities: Afghan Insurance Company (AIC) has issued license to SISI and Poyesh Insurance Brokerages and shall soon issue license to Afghanistan Insurance Corporation. In fact, it is trying to attract more Insurance Companies around the world to invest in Afghanistan. It has sent emails to more than 35 companies for this purpose. AIC is working to bring amendments in insurance laws and has finalized procedures. It is working on simplifying the insurance applications for new investors via website and developing a website, two different brochures and logo for the Commission. To attract donors for the AIC, it has met with World Bank, UNDP, Bearing Point and Australia Embassy. To build the capacity of the AIC staff, training on Insurance and English Language is in progress and also Australia Embassy was requested to prepare training courses for AIC staff abroad. PRR process of the AIC is underway.

RIMU/M&E

43

MoF 3rd Quarter Progress Report

Problems: AIC doesn‟t have suitable office space and lacks staff Proposed Solutions: AIC should be provided with suitable office and professional staff with suitable salaries should be recruited. 9.1.6 Protect the interests of the policy holders by assuring transparency and fairness of policies issued, claims, investigations, evaluation and payments

Results:
Performance Indicator Baseline 1385 6907 people bought insurance from Afghan National Insurance Company Benchmark for the year 1386 8500 people shall buy insurance from Afghan National Insurance Company Progress benchmark against annual % of progress against annual benchmark 75%

Number of people buying insurance

As of now, 6379 has bought insurance from Afghan National Insurance Company as the other SISI and Poyesh Insurance Brokerages are recently established and have no clients yet

Brief Detail of the Activities: Problems: Proposed Solutions: 9.1.7 Results:
Performance Indicator Baseline 1385 1 (Afghan National Insurance Company) Benchmark for the year 1386 All the operational Insurance Companies shall be monitored Progress benchmark against annual % of progress against annual benchmark 75%

Monitor Insurance companies

Number of insurance companies monitored

Monitor and audit of the 3 Insurances Companies (Afghan National Insurance Company, SISI Insurance Brokerage and Hamdard Hospital) was carried. Poyesh Insurance Brokerages hasn‟t been monitored yet.

Brief Detail of the Activities: The 3 mentioned insurance companies were audited and as a result it was found that Hamdard Hospital, selling health insurance, did not have any license and the hospital was told to stop their activities until they get license. Additionally, the SISI Insurance Brokerage was found to be involved in a fraud case in which they have not paid the food supplier their money. The supplier has provided the SISI Construction Company, another company belonging to SISI, with food, but hasn‟t received any money from them yet and the case has been referred to the police by supplier. Thus, AIC has decided to cancel the license of SISI .The Afghan National Insurance Company activities are going well. Problems: Proposed Solutions:

10. Procurement Policy Unit
10.1 Objectives:
Results /Activities/ Problems/ Proposed Solutions

RIMU/M&E

44

MoF 3rd Quarter Progress Report

10.1.1 To prescribe policies and propose improvements in procurement practices to accomplish the purposes of the Procurement Law in all areas of public procurement including policy and professional development and to function as a performance monitoring organ in the field of procurement. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 7 Ministries, (MOF, MOPH, MOE, MOA, MRRD, MOPW, MOWE) and 6 provinces ( Herat, Balkh, Kandahar, Kunduz, Nangarhar and Bamyan) Xxx staff of 7 Ministries, (MOF, MOPH, MOE, MOA, MRRD, MOPW, MOWE) and 6 provinces (Herat, Balkh, Kandahar, Kunduz, Nangarhar and Bamyan) have been identified to be trained. Progress benchmark against annual % of progress against annual benchmark 30 %

Number of line ministries and provincial offices of line ministries conducting stand-alone procurement

Please Refer to below box

Number of line ministry and mustofiats procurement staff completing duty-specific procurement training and accredited.

New public procurement law and regulations promulgated and under implementation

Procurement development

MIS

PPU staffed servants

by

civil

Procurement Law, Rules of Procedures (regulations), Transaction of Business Rules for Special Procurement Commission(SPC), Manual of Procedures for Appeal & Review, 12 circulars/guidelines, SBDs, P. Code of ethics, P. Manual to be completed PMIS strategy and requirement analysis to be done and MIS to be developed Planned for 1387

The training for 7 selected ministries has already started. The first training for 6 ministries MOF, MOPW, MOEd, MRRD, MOPH and MoAg plus IARCSC and AISA started on 1st December and ended on 13th December, 07 for 20 participants. The 2nd training with 18 participants of the selected 7 ministries started on 29th December, 07 which will continue up to 10th January 2008. At the same time the intermediate training of 6 local trainers is being conducted by CKP. Procurement Law was promulgated, Rules of procedures were adopted and implemented, and Transaction of Business Rules for SPC was adopted and implemented. Manual of Procedures for Appeal & Review was prepared and notified to stakeholders. 12 Circulars/Guidelines were issued. 6 SBDs have been drafted.

30 %

50 %

PMIS Strategy and Requirement Analysis was completed.

10 %

0%

Brief Detail of the Activities:  Draft of 6 Standard Bidding Document for Procurement of Goods, works, small works and request for quotations under Open Tendering (National) is prepared and is currently under review by WB.  A procurement capacity assessment of line ministries/procuring entities at central level was conducted as part of training needs assessment as a precursor to planning of the institutional development initiatives of selected procuring entities.  The Training Needs Assessment Report containing stakeholders‟ analysis, training modules and training strategy was accomplished. 6 local trainers were selected and training of trainers for these 6 local trainers was th commenced and completed by 7 November 2007.

RIMU/M&E

45

MoF 3rd Quarter Progress Report

 The training for 7 selected key ministries staff has started. The first training for the 20 staff of 6 ministries st th (MOF, MOPW, MOEd, MRRD, MOPH and MoAg ) and IARCSC and AISA started on 1 Dec and ended on 13 nd December, 2007 in Civil Service Institute . The 2 training with 18 participants of the 7 selected ministries started on 29th December which will end on 10th Jan 2008. Also the intermediate training of 6 local trainers is being conducted by CKP.  PMIS Strategy and Requirement Analysis was completed. Tools needed to be purchased were proposed and NOL of WB was received which was given to ARDS for international advertisement to be procured through open tendering.  Two Training workshops were conducted by PPU in IARSCS for two days, and 13 days for Control and Audit Office.  The PPU provides guidance and issues written clarifications to all Line Ministries / Procuring Entities on procurement policy issues (Law & Rules of Procedure). The forenoon session during office hours is mostly devoted to consultative discussions with representatives of various procuring entities on their queries pertaining to procurement policy issues.  The PPU provides assistance to the Contract Management Office (CMO) for review and submission of development budget contracts to the meetings of the Special Procurement Commission (SPC). The PPU reviews contracts and agreements referred to it and provided comments / assistance / support to other units of MoF. Problems: Proposed Solutions:

11. Fiscal Policy Unit
11.1 Objectives
Results /Activities/ Problems/ Proposed Solutions 11.1.1 To prepare a reliable macroeconomic framework that leads to a reliable fiscal policy frameworks (MTFF/MTBF/MTEF) and budget process. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 Complete drafting the macroeconomic framework Progress benchmark against annual % of progress against annual benchmark 100%

Macroeconomic framework developed

The first ever macroeconomic framework for Afghanistan has been drafted

Brief Detail of the Activities: As decided, MoF took the lead on drafting the macroeconomic framework; FPU arranged and chaired the macroeconomic framework advisory group meetings. The projections from all concerned agencies have been received and are incorporated in the framework. Write up for the macro economic framework is also completed and is sent to the concerned agencies for their comments. Problems: The main problem faced during drafting the macroeconomic framework was limited data and reliability of the data. Proposed Solutions: 11.1.2 To make sure that the budget is aligned with the ANDS priorities. Results:

RIMU/M&E

46

MoF 3rd Quarter Progress Report

Performance Indicator

Baseline 1385 Only MTFF in place

Benchmark for the year 1386 Done

Progress benchmark

against

annual

% of progress against annual benchmark 100%

MTFF and MTBF prepared to ensure budget alignment with ANDS priorities

MTFF and MTBF are prepared which has ensured budget alignment with ANDS priorities

Brief Detail of the Activities: FPU prepared and updated the MTFF and the Budget Department prepared and updated MTBF which has ensured the budget alignment with ANDS priorities. Problems: Proposed Solutions: 11.1.3 To analyze the sustainability of expenditure estimates across budget sectors in particular expenditures that are affected by demographics or Government policies (pensions, social transfers etc.) Results:
Performance Indicator Baseline 1385 6 Benchmark for the year 1386 12 Progress benchmark against annual % of progress against annual benchmark 92%

Number of analysis made

So far more than 11 analysis have been carried out

Brief Detail of the Activities: FPU carried out many analysis of issues which had fiscal implications i.e. different analysis were done for ANA, ANP, P&G, MoE (Teachers), Pension etc. The Unit attended a round table and series of meetings with the World Bank, MoLSA, and Civil Service Commission. Steering Committee on pensions which comprises of DM Samadi, DM Shahrani, DM Bashiri (MoLSA), and a senior member from Civil Service Commission will be established soon. A technical working group on pension is formed which includes members from FPU, which will provide technical recommendations to Steering Committee on pension. The Group finalized a proposal on pension reform which was soon shared with the Steering Committee for their comments. Problems: Data constraints in some cases Proposed Solutions: Increase the capacity in line ministries 11.1.4 To liaise with International Financial Institutions and contribute to the briefs, reviews and following up on the agreements. Results:
Performance Indicator Baseline 1385 16 Benchmark for the year 1386 20 Progress benchmark against annual % of progress against annual benchmark 65%

Number of contributions made to the briefs and reviews Number of followed up agreements

More than 13 briefs prepared by the unit Achieved

has

been

4

4

100%

Brief Detail of the Activities: FPU prepares briefs regularly on issues such as ARTF, LOTFA, P&G, MTFF, IMF, WB, ADB and other Fiscal sustainability issues etc. FPU also follows agreements with IMF, WB, ADB and other donors. Problems:

RIMU/M&E

47

MoF 3rd Quarter Progress Report

Limited staff Proposed Solutions: Expansion of FPU 11.1.5 To prepare reports and briefs for deputy ministers and minister of finance. Results:
Performance Indicator Baseline 1385 An average 24 briefs prepared Benchmark for the year 1386 An average 24 briefs in year regarding fiscal issues Progress benchmark against annual % of progress against annual benchmark 58%

Number of reports and briefs prepared

As of end of third quarter, around 14 briefs have prepared

Brief Detail of the Activities: FPU prepares regular briefs and reports to deputy minister for finance and the minister on fiscal affairs and other assigned issues. As of now, 14 briefs on different fiscal and assigned issues have bee prepared and submitted to deputy minister for finance and the minister. Problems: Proposed Solutions:

11.1.6To prepare fiscal quarterly fiscal bulletin and fiscal strategy document. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 4 Progress benchmark against annual % of progress against annual benchmark 25%

Number of fiscal quarterly bulletins prepared

1 ( first quarterly fiscal bulletin was published)

Brief Detail of the Activities: With the input from various departments, FPU has prepared the first quarterly fiscal bulletin, which was published and distributed. The bulletin provides the updates on government revenues and expenditures quarterly and the first bulletin covered the first quarter of 1386 Due to data constraints, we couldn‟t publish the second bulletin in time. However, we are planning to publish the rd th bulletin for 3 and 4 quarter together. Problems: Inputs from different departments do not come in time which makes the process very slow. Proposed Solutions: Departments should submit what is requested from them in time.

11.1.7 To introduce a medium-term approach to sector ceilings consistent with fiscal sustainability. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 MTFF update and MTBF prepared and updated Progress benchmark against annual % of progress against annual benchmark 100%

MTFF, MTBF and MTEF Introduced and updated

MTFF was updated and MTBF was prepared and updated

Brief Detail of the Activities:

RIMU/M&E

48

MoF 3rd Quarter Progress Report

FPU prepared and updated the MTFF and the Budget Department prepared and updated MTBF which has ensured the budget alignment with ANDS priorities. Problems: Proposed Solutions: 11.1.8 To mentor the counterparts in different departments of the MoF. Results:
Performance Indicator Baseline 1385 An average of 84 Benchmark for the year 1386 Mentoring shall be provided on an average of 84 issues as they come up Progress benchmark 63 issues against annual % of progress against annual benchmark 75%

Number of issues regarding which mentoring was provided

Brief Detail of the Activities: FPU regular mentors different departments of MoF mainly revenue, treasury and budget departments regarding fiscal issues. And thus far, advice has been given regarding an average of 63 different fiscal issues. Problems: Proposed Solutions:

12. Reform Implementation & Management Unit
12.1 Objectives
Results /Activities/ Problems/ Proposed Solutions 12.1.1 To consolidate recent PRR results that have been completed on a department- by-department basis for improving functional linkages between departments (clarifying organizational responsibilities, staffing needs, job descriptions and qualifications); Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 PRR results in HQ, Mustofiats and Custom points consolidated Progress benchmark against annual % of progress against annual benchmark

Number of departments, the PRR results of which consolidated

Follow up was made regularly with regard to progress of the PRR with Administration department and the results were reported to the DM Admin and the Minister

% of staff PRRed in MoF

Brief Detail of the Activities: RIMU makes regular follow up with the Administration department on the results of the PRR and consolidates the reports for analysis and report submission to MoF leadership. Problems: PRR results is slow particularly at seven priority Mustofiats and Custom points Proposed Solutions: PRR process should be accelerated so that MoF be a leading ministry in the field of reform. 12.1.2 To prepare plans for the de-concentration of treasury, audit and procurement operations to line ministries and strengthening mustofiats; and a program to increase transparency and integrity in public procurement;

RIMU/M&E

49

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 All implementing units ( PPU, Internal Audit, Treasury, RIMU, CAO and ARDS ) have work plan ,procurement plan, budget and performance monitoring framework and all the plans are consolidated Progress benchmark against annual % of progress against annual benchmark 100%

Number of implementing units of the Public Financial Management Reform Project (PFMR )and Public Administration Capacity Building Projects (PACB )projects, which have WP, procurement plan, budget and performance monitoring framework

All implementing units have work plans; procurement plans, budget and performance monitoring framework and RIMU consolidated all and submitted the copies to WB.

Brief Detail of the Activities: RIMU closely followed up and coordinated with all PFMR and PACB projects implementing units and consolidated all work plans, procurement plans, budget and performance monitoring framework and submitted the copies to WB. The benchmark is 100% achieved. Problems: Proposed Solutions: 12.1.3 Monitoring and coordinating of PACB/PFMR Project components, administering contracts, project procurement, financial management Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 2 Progress benchmark against annual % of progress against annual benchmark 50%

Number of progress reports submitted to DM and WB Development of the Financial Management Manual

PACB project progress was consolidated and reported to WB for the WB supervision mission RIMU developed the financial Management Manual for the PFMR and PACB projects, which was approved by WB. Its implementation has started.

Nil

Financial Management manual developed and under implementation

50%

Brief Detail of the Activities: RIMU followed up with all departments regarding their progress in PACB project and compiled the information and submitted the report to WB for the WB supervision mission. Additionally, RIMU developed the Financial Management Manual, which was approved by WB. RIMU will hold a session for the implementing units soon to train them on the usage of the manual. Problems: Proposed Solutions:

12.1. 4 To prepare a roadmap for the medium term for reducing dependence on contracted operations in support of capable national staff; Planned for 1388 12.1.5 To coordinate a capacity building program for national staff through a strengthened Human Resources Department and strengthen this department to undertake new human resources management functions;

RIMU/M&E

50

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 All HR staff shall be trained on Pay and Grading System, civil service law and procedures Progress benchmark against annual % of progress against annual benchmark 0%

# of HR Staff trained on new civil service laws and procedures

Contact has been made with IARCSC regarding the issue, but no training has yet to start

Brief Detail of the Activities: Problems: Proposed Solutions: 12.1.5 To implement the first round of re-grading and pay policy in the MOF with the IARCSC; Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

# of staff hired under pay and grading

Brief Detail of the Activities: The activity is pending for National Assembly Approval Problems: Proposed Solutions: 12.1.6 To prepare annual work programs for improving performance on each department based on agreed indicators and performance benchmarks, and conduct annual reviews of progress. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 All departments have completed their five year performance framework Progress benchmark against annual % of progress against annual benchmark 60%

All departments have annual plan with agreed indicators and benchmarks

Thus far, most of the departments have completed their five year performance framework with agreed indicators and benchmarks. This report also addresses this issue. Once completed, departments will agree with the indictors and set their annual benchmarks.

Annual Review progress conducted

of

Annual progress review shall be conducted and reported to DM Admin

0%

Brief Detail of the Activities: RIMU developed the performance framework template for all departments five strategic plan with indicators and annual targets. Most of the departments (Customs, Revenues, Treasury, Budget, Internal Audit, RIMU, and PPU) have completed them, whereas Admin, SOE, Properties and GBU a haven‟t. The already completed also needs to be updated as there can be changes in strategic plan of the departments particularly when the program budgeting was introduced. Problems: Proposed Solutions:

RIMU/M&E

51

MoF 3rd Quarter Progress Report

12.1.7. Annual Work Program (AWP): To assess issues that is impediments to the achievement of the goals of the Strategic Plan. RIMU would then collaborate with department heads to agree on operational steps that would be practical in realizing these goals. Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 7 reports on problems with recommendations submitted to DM Admin and recommendations followed up Progress benchmark against annual % of progress against annual benchmark 60%

Number of reports identifying Impediments with recommendations submitted to DM Admin and recommendations followed up

4 reports on problems and recommendations has been submitted to DM Admin and follow up has been made on the recommendations

Brief Detail of the Activities: RIMU has started monitoring the progress of the strategic plan sine the month of Asad 1386 (Aug 2007). Till now 3 reports on impediments to the achievement of the goals of the strategic plan with recommendations has been submitted to DM Admin and follow up has been made on the recommendations. Problems: Most departments don‟t mention their major problems with recommendations in regular reports Proposed Solutions: All departments should be advised to address their major problems through the regular reports 12.1.8 Annual Program Review (APR) – to produce an annual review of achievements (APR) covering all reform measures undertaken in the MOF Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark 100%

Report on Annual progress review covering reform measures prepared and submitted to DM Admin

Nil

Prepare a report on the reforms in MoF

RIMU prepared a report on the last three years reforms in MoF and submitted to DM Admin and the Minister.

Brief Detail of the Activities: RIMU compiled information from all departments with regard to the last three years reforms, analyzed it and prepared a report both in Dari and English languages. The report was submitted to DM Admin and the Minister. A copy of the report was also submitted to the Council of the Minister‟s through minister‟s office as per their request Problems: Proposed Solutions:

12.1.9 To conduct an annual event that considers the results of the APR and the formulation of the AWP that follows from it. This would include the participation of donors and other stakeholders . Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

RIMU/M&E

52

MoF 3rd Quarter Progress Report

Event held on Annual Progress Review

Nil

An annual event on the MoF strategic plan progress shall be conducted

RIMU has talked with DM Admin in this regard and shall again discuss it him on how to achieve this goal

Brief Detail of the Activities: Problems: Proposed Solutions:

12.1.10 To conduct a “strategic review of progress in meeting overall Strategic Plan goals Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark 63%

Timely production and submission of the monthly and quarterly progress/monitoring reports to the DM Admin Timely production and submission of the TA quarterly progress/monitoring reports to the DM Admin Periodic Progress/Monitoring Reports produced and submitted to ANDS on AC benchmarks and

Nil

8 progress reports shall be submitted to DM Admin and the Minister 2 quarterly progress reports on TA shall be submitted to DM Admin and the Minister 2 quarterly reports submitted to ANDS

3 monthly and 2 quarterly progress reports was submitted to the DM Admin and the Minister

Nil

Nil

After the consideration of the views of DGs and decision of the DM Admin, it was decided that TA projects, it was decided that TAs should submit a copy of their reports, which they submit to donors, to RIMU as well One quarterly progress report on MoF related AC benchmarks was submitted to ANDS

0%

50%

Brief Detail of the Activities: RIMU simplified the quarterly reporting template, but made it completely result oriented where with each objective, there is a performance indicator, a baseline and an annual target is associated and the departments were advised to show their progress against the annual targets to know where we are as of now. RIMU compiled the information on progress of each department according to strategic plan, analyzed the information and submitted monthly and quarterly progress report to DM Admin and the Minister. The reports also include a separate annex with problems and recommendations. RIMU also provided the required reports to ANDS on AC benchmarks and to Idaara-e- Omoor. RIMU also provided on the job training to most of the M&E focal points and the activity is on going. With reference to TA projects in the ministry, it was decided that all TAs should submit the summary sheet as well as a copy of their progress reports, which they submit to their donors, to RIMU. After this quarterly report, RIMU will ask all the TAs for their reports and updated summary sheets. RIMU also filled the ANDS reporting templates on MoF related AC benchmarks and submit them to ANDS Problems: Proposed Solutions:

RIMU/M&E

53

MoF 3rd Quarter Progress Report

13. Gender Budgeting Unit
13.1 Objectives
Results/ Key Activities/ Problems / Proposed Solutions 13.1.1 To work closely with the budget department of the ministry during the budget formulation process in order to make sure that the ministries which are piloted, submit their budget gender sensitive.

Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 All ministries Progress benchmark against annual % of progress against annual benchmark 50%

Number of ministries which submitted their budget gender sensitive

All ministries have

Brief Detail of the Activities: The Gender Budgeting Unit has worked closely with the budget department of the MoF and revised the budget submission forms based on the requirement from gender perspectives. These forms were then shared with the line ministries after approval of the budget department. The Budget Call Circular for 1387 has been analyzed from gender perspectives and was shared with the line ministries. Problems: Proposed Solutions: 13.1.2 To work closely with the pilot ministries during the budget formulation for the upcoming year in order to help them make their budget gender sensitive.

Results:
Performance Indicator Baseline 1385 Nil Benchmark for the year 1386 All ministries Progress benchmark against annual % of progress against annual benchmark 30%

Number of worked with

ministries

2 workshops have been conducted

Number of monitored

ministries

Brief Detail of the Activities: A three day workshop on budget preparation was held in Khyber Hall in Nov. GBU also had a presentation on gender budgeting issues and the modified formats were explained to them. Additionally, GBU had presentations on gender budgeting in the Civil Service Institute regarding the Program budgeting. This one-day workshop was organized by the Program and Provincial budgeting Unit of the budget department of MoF. Problems: Proposed Solutions: 13.1.3 To work on the policy and strategy papers of different departments of MoF in order to analyze from gender perspectives. them

RIMU/M&E

54

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of policy and strategy papers analyzed from gender perspective

Brief Detail of the Activities: Most of the strategy and policy papers of MoF departments have been collected and is under review. However, the analysis isn‟t completed yet. Problems: Proposed Solutions: 13.1.4 To collect all the development projects of MoF and analyze them from gender budgeting perspectives.

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of development projects analyzed from gender perspective

Brief Detail of the Activities: All the development projects of the ministry have been collected and is under review. However, the analysis isn‟t completed yet. Problems: Proposed Solutions:

13.1.5 To work closely with the training unit of the ministry and see if all there trainings and training curriculum is gender sensitive.
Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

% of female staff trained

Brief Detail of the Activities: List of the trainings have been collected to be analyzed from gender point of view. GBU has also for the training plan in this regard. Problems: Proposed Solutions:

13.1.6

To conduct a series of trainings within the country and overseas on gender budgeting and gender mainstreaming.

RIMU/M&E

55

MoF 3rd Quarter Progress Report

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of trainings conducted overseas

Number of staff trained overseas

Brief Detail of the Activities: Gender Budgeting Unit is planning to send a team of 20 ( 16 staff of MoF and 4 from line ministries) to India on Gender Budgeting and Gender Mainstreaming. We have already contacted Public Financing Institute, Center for Management Solutions and Administrative Staff College of India for proposals. We will discuss all the documents later on and after finalization it will be shared.

Problems: Proposed Solutions: 13.1.7 To train the civil servants of the Gender Budgeting Unit of the ministry on gender budgeting and gender related activities.

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Not identified Progress benchmark against annual % of progress against annual benchmark

Number of conducted

trainings

5 trainings conducted

Number trained

of

GPU

staff

Not identified

33 staff of MoF ( 3 staff from GBU, 4 staff from Budget Department and 2 from other each department)

Brief Detail of the Activities: So far five trainings of shorter durations have been conducted during the last 4 months for the staff of the Gender Budgeting Unit and 33 staff of MOF have been trained on Gender Budgeting and Gender Mainstreaming. We are in the process of developing training materials on Gender budgeting and gender mainstreaming. The trainings which are already conducted had more contribution from GTZ-GM project. They helped us bringing the trainers from US, Germany and India.

Problems: Proposed Solutions: 13.1.8 To organize computer and English language courses for the civil servants of the Gender Budgeting Unit.

Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 2 courses ( English and Computer) Progress benchmark against annual % of progress against annual benchmark

Number organized

of

courses

Both courses has started

RIMU/M&E

56

MoF 3rd Quarter Progress Report

Number of staff trained in English and Computer

3

2

Brief Detail of the Activities: 2 Staff of the GBU are attending the English and Computer courses regularly from the last three months. The course and transportation fee is provided to them through GBU. Both courses duration is planned to be one year . Problems: Proposed Solutions: 13.1.9 Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

To develop a comprehensive trainings schedule (Capacity Building Program) for the next year.

Training developed

Schedule

Brief Detail of the Activities: Problems: Proposed Solutions: 13.1.10 To finalize a PRR proposal of the gender budgeting unit and send it to IARCSC ,for the approval and announce the PRRed positions and recruit the PRRed civil servants to work with the Gender Budgeting Unit. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 All staff ( 3) Progress benchmark against annual % of progress against annual benchmark

Number of staff PRRed

Brief Detail of the Activities: GBU had already submitted the PRR proposal to the Civil Service commission, which has been approved. The positions shall soon be announced by MoF Problems: Proposed Solutions: 13.1.11 To accept proposals from different departments of the ministry, if they need small projects like trainings. (In order to fund them through GTZ-GM). Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Progress benchmark against annual % of progress against annual benchmark

Number of small projects funded through GTZ-GM

Brief Detail of the Activities:

RIMU/M&E

57

MoF 3rd Quarter Progress Report

Problems: Proposed Solutions: 13.1.12 To establish a small resource center (Library) within the Gender Budgeting Unit so that all the staff of the ministry benefit from it equally. Results:
Performance Indicator Baseline 1385 Benchmark for the year 1386 Established, equipped functioning fully and Progress benchmark against annual % of progress against annual benchmark 50%

Small resource established

center

Resource Center is established and functioning

Number of staff making use of the resource center

Brief Detail of the Activities: A small resource center (Library) has already been established and we are planning to purchase more books and other materials needed.

Problems: Proposed Solutions:

RIMU/M&E

58

MoF 3rd Quarter Progress Report


								
To top