project appraisal document ona …...1997/10/17 · document of the world bank report no. 17113 co...

Document ofThe World Bank

Report No. 17113 CO

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED LOAN

IN THE AMOUNT OF US$40.0 MILLION EQUIVALENT

TO

THE DEPARTMENT OF ANTIOQUIA

IN THE

REPUBLIC OF COLOMBIA

FOR A

BASIC EDUCATION PROJECT

October 17, 1997

Human and Social Development GroupColombia, Venezuela and Ecuador SubregionLatin America and the Caribbean Region

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CURRENCY EQUIVALENTS

Currency Unit = Peso

(As of May 9, 1997) (As of October 8, 1997)US$1.00 = 1150.00 Pesos US$1.00 = 1244.00 Pesos

FISCAL YEAR ACADEMIC YEAR1 January - 31 December 1 February - 30 November

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance StrategyCMU Country Management UnitDNP National Planning Department (Departamento Nacional de Planeacion)EDI Economic Development InstituteFER Regional Education Fund (Fondo Educativo Regional)FIS Social Investment Fund (Fondo de Inversion Social)FMM Financial Management ManualFSD School Management Accounts (Fondo de Servicios Docentes)IBRD International Bank for Recontruction and Development ("World Bank")ICFES Secondary School Existing ExamsICN National Investment Budget (Ingresos Corrientes de la Nacion)ICR Implementation Completion ReportIEC Information, Education and CommunicationJUME Municipal Education Board (Junta Municipal de Educaci6n)LCSHD Latin America and the Carribean Social and Human Development GroupMIS Management Information SystemMOE Ministry of EducationNEBI Unattended Basic Education Needs (Necesidad Educativa Bdsica Inmediata)PEI School Education Project (Proyecto Educativo Institucional)PEM Municipal Education Plan (Plan Municipal de Educaci6n)POA Annual Investment Plan (Plan Operativo Anual)SEDUCA Departmental Secretariat of Education and Culture of Antioquia

(Secretaria Departamental de Educacion y Cultura de Antioquia)SIP School Improvement PlanTTA Training and Technical Assistance

Vice President: Shavid Javed Burki, LACCMU Director: Andres Solimano, LCC4CManager: Julian Schweitzer, LCSHDEducation Specialist Donald Winkler, LCSHDSector Leader Constance Corbett, LCC4CTask Manager: Joel Reyes, LCC4C

COLOMBIAANTIOQUIA BASIC EDUCATION PROJECT

Table of Contents

Page

BLOCK 1: PROJECT DESCRIPTION ......................................................................................... 2

1. PROJECT DEVELOPMENT OBJECTIVES ..................................................................................................... 22. PROJECT COMPONENTS ...................................................................................................... 23. BENEFITS AND TARGET POPULATION ..................................................................................................... 34. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS ........................................... 4............... 4

BLOCK 2: PROJECT RATIONALE ......................................................................................... 6

5. CAS OBJECTIVES SUPPORTED BY THE PROJECT. 66. MAIN SECTOR ISSUES AND GOVERNMENT STRATEGY. 67. SECTOR ISSUES TO BE ADDRESSED BY THE PROJECT AND STRATEGIC CHOICES. 98. PROJECT ALTERNATIVES CONSIDERED AND REASONS FOR REJECTION .109. MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER DEVELOPMENT AGENCIES 1210. LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN ...................................................................................... 1311. INDICATIONS OF BORROWER COMMITMENT AND OWNERSHIP ..................................................................................... 1512. VALUE ADDED OF BANK SUPPORT ..................................................................................................... i 5

BLOCK 3: SUMMARY PROJECT ASSESSMENTS ......................................................................................... 13

13. ECONOMIC ASSESSMENT ............. ........................................................................................ 1614. FINANCIAL ASSESSMENT ..................................... 1615. TECHNICAL ASSESSMENT ............. ........................................................................................ 1616. INSTITUTIONAL ASSESSMENT ..................................................................................................... 1617. SOCIAL ASSESSMENT ...................................................................................................... 1718. ENVIRONMENTAL ASSESSMENT ..................................................................................................... 1719. PARTICIPATORY APPROACH ..................................................................................................... 1720. SUSTAINABILITY ...................................................................................................... 1821. CRITICAL RISKS ...................................................................................................... 1922. POSSIBLE CONTROVERSIAL ASPECTS ..................................................................................................... 20

BLOCK 4: MAIN LOAN CONDITIONS ................................ 21

23. EFFECTIVENESS CONDITIONS ..................................................................................................... 2124. OTHER ................................................... ................................................. 21

BLOCK 5: COMPLIANCE WITH BANK POLICIES .......................................................................................... 21

ANNEX 1: PROJECT DESIGN SUMMARY ..................................................................................................... 22ANNEX 2: DETAILED PROJECT DESCRIPTION ..................................................................................................... 25ANNEX 3: ESTIMATED PROJECT COSTS ..................................................................................................... 34ANNEX 4: ECONOMIC PRINCIPLES THAT GUIDE PROJECT DESIGN ................................................. ..................................... 35ANNEX 5: FINANCIAL SUMMARY ..................................................................................................... 41ANNEX 6: PROCUREMENT AND DISBURSEMENT ARRANGEMENTS ...................................................................................... 47ANNEX 7: FINANCIAL MNAGEMENT ARRANGEMENTS .......................................................... ........................................... 51ANNEX 8: DESCRIPTION OF IMPACT AND PROCESS EVALUATION TORS ........................... ................................................. 55ANNEX 9: INSTITUTIONAL ASSESSMENT SUMMARY ..................................................................................................... 58ANNEX 10: PROJECT PROESSING BUDGET AND SCHEDULE ..................................................................................................... 59ANNEX 11: DOCUMENTS IN THE PROJECT FILES ..................................................................................................... 60ANNEX 12: STATEMENT OF LOANS AND CREDITS ..................................................................................................... 62ANNEX 13: COLOMBIA AT A GLANCE ................................... 63

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

Latin America and the Caribbean Regional OfficeLCSHD

Project Appraisal Document

COLOMBIA - DEPARTMENT OF ANTIOQUIABasic Education Project

Date: October 15, 1997 [ ] Draft [x ] FinalTask Manager: Joel Reyes, LCSHD CMU Director: Andres Solimano, LCC4CProject ID: CO-PA-6891 Sector: Education

Lending Instrument: Specific Investment Loan PTI: [x] Yes [ ] NoProject Financing Data [x] Loan [ Credit [] Guarantee [] Other [Specify]Amount: US$40.0 million

W .. W f .................................................................................................................... I...................... .............................................................................. I..................

Proposed Terms: [] Multicurrency [x] Single currencyGrace period (years): 6 [ Standard Variable [] Fixed [x] LIBOR-based

Years to maturity: 15*Commitment fee: 0.75%

Service charge: 0.0%* subject to partial waivers annually approved by the World Bank Board

Financing plan (US$m):Source Local Foreign Totsd

Departmental Government 5.4 0.6 6.0Municipal Governments 31.6 2.4 34.0IBRD/IDA 37.0 3.0 40.0..........................................................................................................................................................................................................................................................

Borrower: Government of the Department of Antioquia, ColombiaGuarantor: Government of Colombia, Ministry of FinanceResponsible agency(ies): Departmental and Municipal Secretariats of Education

Estimated disbursements (-Bank FY/US$M): 1998 1999 2000 2001 2002 2003*FYExtendsfromJuly(prioryear)toJune Annual 2.50 8.50 11.00 12.00 5.00 1.00

Cumulative 2.50 11.00 22.00 34.00 39.00 40.00For Guarantees: [ Partial Credit [ Partial riskProposed coverage:Project sponsor: National Government of ColombiaNature of underlying financing:Terms offinancing:

Principal amount (US$)Final maturityAmortization

profileFinancing available without guarantee?: [ Yes [X] NoIf yes, estimated cost or maturity:Estimated financing cost or maturity with guarantee:E.pecte.. effectiveness.date:.January.28,.1998.Closing.date:.June.30,.200............3........................................................I.............................................................

Expectd effctiveess dae auary 28 98Closing date: June 30, 2003

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Project Appraisal DocumehlANTIOQUIA, COLOMBIA Antioquia Basic Education Project

Block 1: Project Description

1. Project development objectives (see Annex 1 for key performance indicators):

The project development objectives are to: (i) contribute to the Department's goal of improving student learning, accessand school retention among the rural and urban poor and at-risk-of-violence communities; (ii) improve the capacity ofschools/communities, municipalities, and the department to effectively provide their respective education services; and(iii) provide lessons for a national strategy to support municipal and departmental education management andinvestments.

2. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown):

Cost Incl.Component Category Contin- % of

gencies Total(US$M)

SCHOOL (COLEGIO) AND COMMUNITY STRENGTHENING * Educational 49.0 61%COMPONENT would finance (through nonrefundable financial transfers) Inputsthe development and implementation of school improvement plans (SIPs). * InstitutionalSchool staff and community members prepare the SIP; the School- BuildingCommunity Board approves it. The Municipal Education Board approves * Other -

financing of SIP and evaluates the impact after its implementation, undergenerally established criteria. To address equity and institutional capacityconcerns, information and technical assistance efforts will support weakerschools and communities to develop and implement their own SIPs.Municipalities will provide counterpart funds for SIPs.MUNICIPAL EDUCATION MANAGEMENT AND INVESTMENTS * Physical 20.0 27%COMPONENT would finance municipal education plans to: (i) improve (access)education management capacity; (ii) increase education access; and (iii) * Technicalprovide educational resources within the municipality (for example, a town Assistancelibrary or a children museum). The Municipal Education Board (JUME) * Institutionalprepares investment proposals. The Departmental Secretariat of Education Building(SEDUCA) approves proposals, and evaluates impact after implementation, * Other (e.g.,under a generally established criteria. Information and technical assistance Contracts withefforts will develop institutional capacity as needed. The overall project will Nongovem-be studied through its implementation phases in order to gather information mental Organi-for later applications. zations)DEPARTMENTAL EDUCATION SERVICES COMPONENT will: (i) * Institutional 11.0 12%strengthen, through training and technical assistance, the nonmanagerial buildingfunctions of the Departmental Secretariat of Education (for example, * Projectconsulting, communications and ex post evaluation); (ii) consolidate and managementintegrate the existing computerized systems and tools for education * Other (e.g.,evaluation; (iii) provide a communication network between three levels -- Information,the Departmental, Municipal, and Jefes de Nu~cleo (local education Education andadministration offices) -- under the most appropriate technology for each Communica-municipality (e.g., electronic mail, faxes, telephone); and (iv) finance a tionDepartment-wide communication strategy to disseminate project objectives, Campaigns)as well as the lessons learned for implementation of a national strategy tostrengthen departmental and municipal management of education.

Total 80.0 100%..........................................................................................................................................................................................................................

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Project Appraisal DocumentANTIOQUIA, COLOMBIA Antioquia Basic Education Project

3. Benefits and target population:

The project is expected to produce social, economic and institutional benefits related to a specific targeted population.a) Social Benefits* Increased access to preschool and lower secondary education in the municipalities most in need in the Department;* Increased learning and achievement of 5-13 year olds in participating communities;* Motivated parents, teachers and students, who integrate in-school teaching and learning with community outreach

events; and* Reduced violent behavior and loss of children and youth to illicit activities.

b) Economic Benefits* Increased self-financing capacity of education investments at the municipal level;* Improved efficiency and effectiveness through participation of the private sector and NGOs in the provision of

educational services; and* Economic gains through the use of computer and telecommunication technology in those municipalities and schools

where a minimum of acceptable quality in educational services and available financial resources exists to sustaininvestrment.

c) Institutional Benefits. Improved effectiveness of delivery of educational services by transferring the daily management and supervision of

education from the departmental to the municipal level and by moving decisionmaking closer to the school andcommunity (parents, principals, teachers and students);

* Reduced budgetary constraints of centrally controlled financial mechanisms (e.g., disbursements) for municipal andschool level educational services and investments;

* Increased municipal and community commitment to improve the quality of education provided by their schools;* Integrated systems and tools for monitoring and evaluating the delivery and impact of educational services at the

school/community, municipal and departmental level; and. Effective and relevant educational policies and strategies at the municipal, departmental and national levels.

d) Target Population:School (Colegio)/Community Level* 1,200 schools (960 rural and 240 urban) and 219,520 direct beneficiaries: (i) 201,600 basic education students

(57,000 rural and 144,000 urban); (ii) 5,120 teachers (1,920 rural and 3,200 urban); and (iii) 12,800 parents (3,702rural and 9,088 urban).

Municipal Level* (i) 80 municipalities and 19,730 direct beneficiaries of which: (i) 2,000 staff from municipal Secretarias de

Educacion and Juntas Municipales de Educaci6n (JUME); (ii) 130 Jefes de Nzicleos. Educativos; (iii) 9,600 newstudents in the education system (through classroom construction and NGO contracts); and (iv) 8,000 new secondarystudents in rural areas (through tutorial rural strategies -- Sistema de Aprendizaje Tutorial, or SAT).

Departmental Level* 115 staff from the Departmental Secretariat of Education (Pedagogical and Technical Divisions).

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Project Appraisal DocumentAN7TIOUIA, COLOMBIA Antioquia Basic Education Project

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4. Institutional and implementation arrangements:

Implementation period:Five years (1998-2002).

Executing agencies:SEDUCA:Coordination and Administration. The Departmental Secretariat of Education (SEDUCA) will coordinate overall project administration, including the

promotion, appraisal, cofinancing and ex post evaluation of municipal investment subprojects.* SEDUCA Directors' Committee, headed by the Secretary of Education, will represent each of their respective

pedagogical and technical divisions and will be responsible for the project.* A small administrative team, the Technical, Administrative and Financial Directorate (Direcci6n Financiera FER),

will support the administrative processes (e.g., disbursements, procurement) between the World Bank and theDepartment. Direccion Financiera FER will report to the SEDUCA Directors' Committee.

Project Oversight* The Secretary of Education will liaise with the Governor of Antioquia, the Departmental Secretariats of Planning and

of Finance, and with municipal mayors to define any policy issues arising from, or related to, project implementation.* SEDUCA Directors' Committee and representatives of municipal and school govemments, with Bank concurrence,

will: (i) approve and adopt policies and procedures governing school/community and municipal subprojects; (ii)annually review the operations and impact of the project; and (iii) coordinate with the central government, and otherlocal governments, the dissemination of lessons learned arising from project implementation and subsequent policyimplications.

Municipal Secretariats of Education, Municipal Governments, and Schools* Municipalities, schools, and community organizations will manage the daily implementation of their own

subprojects.* Municipal Secretariats of Education, through an agreement with SEDUCA, will directly manage and monitor

municipal investments and will coordinate the promotion, appraisal, cofinancing, and ex post evaluation ofschool/community strengthening subprojects.

* As mandated by national education laws, existing school, community and municipal organizations that will play akey role in project execution include:

* Junta Municipal de Educacion (JUME), the Municipal Education Board, will play a key role with theMunicipal Secretariat of Education in coordinating the School and Community Strengthening Component;

* Consejo Directivo, the School-Community Board (with representation of teachers, parents and thecommunity), will be headed by the school principal and will have legal status to manage school funds(Fondos Docentes);

* Consejo Acadimico, a pedagogical school committee, will provide representation for teachers from variouscurriculum disciplines;

* Asociacion de Padres de Familia, Parents Associations, will plan, implement, and manage their ownsubprojects to support their respective schools; and

* Personeros Estudiantiles, the student rights committees and associations, will represent the interest ofstudents in the previously mentioned committees.

4


Implementation Guidelines and Procedures:SEDUCA designed flexible procedures that would guide subproject appraisal, implementation, and evaluation. Theoperational manuals and standard agreements (Convenio del Colegio y Convenio SEDUCA) will guide the respectivefunctions and responsibilities at the departmental, municipal, and school levels. The legal ratification of the operationalmanuals and the submission for Bank review of the standard agreements are conditions of project effectiveness.

The operational manuals provide a transparent guide for all executing agencies. The content of the manuals includes: (i)general information and promotion; (ii) subproject presentation and appraisal; (iii) technical, social, institutional, andfinancial feasibility criteria and tools; (iii) administrative, procurement, and financial management; and (iv) supervision,monitoring, and evaluation.

Finally, SEDUCA would distribute, upon request from participating municipalities, technical assistance documents andguides, including standards and quality criteria for the hiring of consultant services, technical standards for infrastructureinvestments, and guides for subcontracting education services with NGOs.

Accounting, financial reporting, and auditing arrangements (see Annex 7):SEDUCA will keep project accounts and provide financial reports to the Bank. Municipalities and schools participatingin the project will maintain their own respective accounting and financial files.

Administrative, procurement and technical audits, in addition to community oversights (veedurias), will providefeedback on implementation procedures of municipal and school/community subprojects, and on physical progress(including construction, services provided, and goods delivered). Communities will be informed of the objectives,activities, and financial resources provided by the project for their schools/communities and municipalities (e.g., throughperiodic newsletters, bulletins, and/or other publications). For overall project implementation, external audit reportsprepared by an independent auditor acceptable to the Bank would be submitted annually in accordance with Bankstandards.Project Implementation Cycle:The project will be executed through a learning cycle. The three learning phases are: experimentation, demonstration,and generalization. SEDUCA will be responsible for documenting the lessons learned during implementation andproviding appropriate adjustments and policy guidance. Although the project expects to intervene in approximately 80municipalities during its implementation life, participation will be gradual to support the learning cycle, as indicated inAnnex 2, Component 2.

Municipalities, within each socioeconomic level, will be selected competitively. The selection criteria will includeeducational needs, as well as regional representation. The first pilot municipalities will also be selected by theirinstitutional capacity to analyze the strengths and weaknesses of their subprojects, and to disseminate lessons to othermunicipalities.

Monitoring and evaluation arrangements (see Annex 8):The project includes a process evaluation and a summative evaluation (impact). The process evaluation will provideinformation for changes required between each project implementation phase. At the departmental level, SEDUCA willbe responsible for overall monitoring of project processes. The evaluation process will not imply micro-managing noroverseeing compliance with procedures. Project monitoring will focus on outputs/results and will attempt to learn fromthese and adjust project design accordingly. Municipalities and schools, in turn, will also monitor their own subprojects.

Impact indicators include student leaming and learning-related independent factors (such as school climate and changesin teaching and learning attitudes). To guarantee enough time to assess project impact, the impact evaluation in terms ofstudent learning will take place during the latter implementation phase of the project and within the ImplementationCompletion Report (ICR).

SEDUCA and the Bank would jointly conduct a Midterm Review of the project and subprojects by December 1999.

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Block 2: Project Rationale

5. . . CAS Report #P6070-CO 16/12/93 and New CAS, Report #41960-A beie)sprd ero CO 6/11/97 (Presented Concurrently with this Project to the

Board).Colombia's Country Appraisal Strategies (CASs) of 1993 and 1997 recognize that the country's still unequally low levelsof educational attainment and coverage, primarily in poor and rural communities, adversely affect development in thiscountry. The 1997 CAS puts a stronger emphasis on successfully implementing Colombia's decentralization andcommunity participation policies. In the education sector, the focus is on expanding access and improving qualitythrough education services provided at the municipal level, and with increased school autonomy and greater communityand private sector participation. By transferring education responsibilities to the departments and municipalities,decisionmaking at the local level can more accurately reflect the needs of the users, adequately attend to regionaldiversities, and also increase accountability. As one of the two pilots testing decentralization strategies at thedepartmental and municipal levels, the project provides decentralization design and implementation lessons from theground up as input for a national decentralization strengthening strategy. The project fully supports the CAS objectives.............................................................................................................................................................................................................................................................

6. Main sector issues and Government strategy:

National Policies: Local Government and Community Management of the Education Systema) National and local governments emphasize social programs, as reflected in the national development plan (Salto

Social), and the national education plan, (Salto Educativo). The Salto Social's objectives include social development,the competitiveness of the economy, the environment, and decentralization and institutional strengthening. The SaltoEducativo calls for the transferring of education management responsibilities to departments and municipalities Toenable regional governments to operate in the new decentralized environment, the national government fully supportsstrengthening the capacity of local education agencies as part of its strategy to improve access and quality ofeducation. By making education management local, the possibilities for resource mobilization, cost sharing, andgreater community and parental involvement are enhanced.

Decentralization Backgroundb) The decentralization process in Colombia was initiated in 1968 through an effort to deconcentrate the Ministry .f

Education (MOE) to local organization, though MOE maintained veto power over them. In 1971, an education taxallowance (the Situado Fiscal) earmarked national government expenditures and sales taxes for educational purposes.The Regional Education Funds (Fondos Educativos Regionales, FER) were institutions created as a hybrid systemintended basically to deconcentrate the payroll of national and nationalized teachers, with a highly centralized controlof how the funds could be used. Teacher qualification committees (Juntas de Escalafon Departamental) followed toguarantee minimum standards. Since the 1980s, the stated policy objective has been to give local governments thepower to manage their educational systems. Local fiscal autonomy however, was not supported until the late 1980swhen new measures began to increase local revenues (tax and nontax). The law requiring the election of mayors toincrease their accountability to the community facilitated fiscal decentralization. The Constitution of 1991 increasedlocal responsibility in the delivery of social services and distributed administrative functions at different levels.Municipal governments have experienced a sharp increase in local revenues -- from 2 percent of gross domesticproduct (GDP) in 1980 to 3.5 percent in 1994.

Original Decentralization Implementation Strategyc) While important decentralization advances took place, the central government had continued to control partially the

national education investment budget. The cofinancing system remained overly centralized and bureaucratic, citinglow local capacity to justify restraining funds and slowing disbursements. Also, large institutional developmentinvestments provided only centrally delivered training and sporadic technical assistance. Local processes ofleadership, autonomy, participation, and innovation went largely untapped. This incompletely implementeddecentralization strategy did not contribute to improving the quality indicators of the education system: an averageColombian student still takes seven years to complete the first five years of primary school. While 87 percent ofstudents complete all five grades, 19.5 percent do so only after repeating three or more grades. Only half of those

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Project Appraisal Document

ANTIOQUIA, COLOMBIA Antioquia Basic Education Project

students entering sixth grade reach the eleventh grade five years later, and most of them are from wealthier families.The results from the first national assessment of primary education indicates that most third and fifth graders are notachieving at grade-level in reading comprehension and mathematics.

New Decentralization Implementation Approachd) Attempting to find new alternatives to successfully achieve the objectives of local government and community

management of the education system, the central government initiated a process of transferring fiscal management toDepartments and large municipalities (populations over 100,000). This process is called "certification." In thiscontext, certified local governments are fully responsible for planning education investments, managing the situadofiscal (mostly funds for recurrent costs and teacher salaries), identifying additional sources of investment financing,and implementing and evaluating their own improvement projects.

e) Moreover, to strengthen local management and decisionmaking, the national government is supporting the provisionof multilateral funds directly to local governments. It is expected this strategy also would improve the efficiency ofinvestments supported by international development organizations. A municipality and a department were selectedto participate in a pilot program and the World Bank was approached to support this innovation. This pilot operation,directly designed and implemented by local governments, would provide lessons to a nationwide system of technicaland management capacity strengthening and decentralized financing of capital investments. The key criteria used forselection of the participating local governments included: financial indebtedness capacity, regional andsocioeconomic representation, and political commitment. Financial sustainability was weighted heavily, since thecentral Government seeks to encourage fiscal discipline at the local government levels. Socioeconomicrepresentation guaranteed equity considerations. Political will is key to any major sector reform and learningstrategy. The Department of Antioquia, in the central region of Colombia, and the Municipality of Pasto, in theAndean Highlands, were selected.

Main Sector Issues in the Department of AntioquiaGeneral Situationf) The Department of Antioquia and its capital city, Medellin, have been cultural and economic leaders in Colombia.

Antioquia has improved extensively its infrastructure, roads, and communication systems. For example, Medellin isthe only city in Colombia with a Metro system -- which is proving to be financially sustainable. At the same time, theDepartment is also one of the most afflicted by poverty and violence. Out of approximately 5 million, 27 percent ofthe population live under the poverty line and 5 percent more in extreme poverty. The extreme violence is reflectedin its high mortality rate due to homicide: 206 per 100,000 inhabitants. In 1993, homicides was the leading cause ofdeath with almost 10,000 killings.

Education Statisticsg) The deteriorating social fabric has affected the education system. Antioquia's public education graduates are

achieving under the national averages: 74 percent of its eleventh graders receive low scores in the secondary schoolexiting exam (ICFES) in comparison to a national average of 54 percent. Only 12 percent of eleventh graders achievehigh scores, while the national average is 17 percent. Of 100 children who enroll at the primary level, only 59 percentcomplete primary education. Only 35 percent of these children finish without repeating a grade. Dropouts andrepetitions have an impact in the efficient use of education resources. It requires 7.3 school years for each student tofinish 5 grades of primary education, and 17 years to complete the ninth grade. Other factors associated to lowachievement and high dropouts and repetitions include the status of teacher development, teaching content,educational materials, infrastructure, management, and participation.

Teaching Staffh) Almost 70 percent of teachers in Antioquia have completed preservice training (teacher preparation at the secondary

level and/or university). However, there is a deficit of teachers in certain teaching areas (e.g., science, mathematics,).In-service teacher training does not necessarily focus on classroom application. Nevertheless, isolated trainingcourses and irrelevant topics still provide teachers with escalaf6n credits (option for higher pay scale). As a result,the Escalaf6n system is being reformed to guarantee relevant training and classroom application. Additionally, the

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Project Appraisal DocumentANTIOQUIA, COLOMBIA Antioguia Basic Education Project

national and local government are piloting nonsalary incentives programs, which have yielded early results.

Curriculumi) School curriculum was designed and programmed centrally in Bogota, the nation's capital. The selection,

procurement and delivery of textbooks (and other instructional materials) was also centralized. The content of whatwas taught in the classroom was often unrelated to the realities and needs of the diverse communities in Colombia.The Department of Antioquia, itself, is very heterogeneous: the Afro-Colombian culture of the coasts, the coffeeproducers of the midlands, the isolated rural/peasant towns, and the violence prone communities of UrabA andMagdalena Medio. Thus, during the 1990s, decentralized decisionmaking on curriculum issues has been increasing.The national and local education policies aim to provide a margin of choice for curriculum content. The basiccurriculum areas will be maintained and strengthened, but local governments have the opportunity to add contentareas relevant to their socioeconomic and cultural backgrounds.

School Infrastructurej) School infrastructure is insufficient and deteriorating. Urban areas, especially in the Metropolitan Area formed by 10

adjacent municipalities, experience a high deficit of school slots for students. Over 500 primary and secondary urbanschools have double and triple usage (morning, afternoon, and nights). Low scores in ICFES exams can be correlatedwith students in the afternoon and night shifts. Students graduating at the primary level may not find a place at lowersecondary, and similarly between lower and upper secondary. School access is even lower in rural areas. While urbanpublic education coverage is 88 percent, it is only 53 percent in rural areas. Most critically, in 1994, rural preschoolcoverage was only 19 percent, lower secondary 23 percent, and upper secondary 7 percent; urban percentages were65 percent, 97 percent, and 59 percent, respectively.

Management of the Sectork) The Department of Antioquia and its municipalities seek to implement successfully their respective education

management responsibilities (identified in the Constitution of 1991 and the Laws 60/93 and 115/94). That is, (i) theNation formulates education policies and provides general financing, technical assistance, and national evaluations;(ii) the Department of Antioquia plans and cofinances education development objectives, manages nationallyprovided fiscal resources (the situado fiscal) for municipalities with low capacity, and assists municipalities inmanaging their own education services; (iii) the 125 Municipalities would execute and manage the educationalpolicies, cofinance local investments, and monitor and support their schools; and (iv) Antioquia's 6,700 schools andtheir communities are entitled to develop and implement their own development plans and construct complementarycourse contents specific to their communities. Additional education management subdivisions in Antioquia include 9subregions and 239 local administrative offices, or nicleos.

I) The execution of the respective education management roles described above is still incipient at each level inAntioquia, though some advances have been made. The Department has been certified to administer its situadofiscal. To further the decentralization process within the Department, Antioquia aims at increasing the educationmanagement capacity of all its municipalities. Three municipalities (Bello, Itagui, and Medellin) can be certified bythe Nation to autonomously manage their own situadofiscal. Antioquia would delegate the management ofteachers, curriculum and school infrastructure, and the respective financial resources, to most of its municipalifes.Although, teacher training has remained a departmental level responsibility, the Department will provide itsmunicipalities with the opportunity to identify their own training needs and interventions. Initially, 53 municipalitieshave been confirmed to initiate the delegation process. Finally, apart from the situado fiscal, the national governmentalso transfers complementary investment funds (Ingresos Corrientes Nacionales, or ICN), directly to allmunicipalities. Municipalities must invest at least 30 percent of the ICN in education.

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7. Sector issues to be addressed by the project and strategic choices:

A recent study of decentralization in Colombia (Decentralizaci6n de los Servicios de Educaci6n en Colombia, DNP1997) confirms the need to strengthen school autonomy and the role of municipalities in education management. Theproject would be instrumental in testing mechanisms to build the capacity of municipalities to manage the educationsector; provide schools with the autonomy and capacity to plan, implement, and evaluate their own educationdevelopment efforts; and improve the allocation of fiscal resources at the local levels.

In addition, the project will provide crucial investments in the Department of Antioquia to address its own issues ofeducation quality and efficiency (see section 6 above). This investment, thus, serves two major purposes: (i) a full-fledged education development intervention in Antioquia and a pilot operation to strengthen decentralization nationwide.The specific sector issues addressed are:

At the School Levela) (i) increasing community participation in school activities and vice versa (i.e., schools involved in community

events); (ii) improving the skills of administrative and teaching staff; (iii) complementing course contents with topicsrelated to the culture and socioeconomic needs of each community; (iv) providing financing for self-identifiedimprovements in school infrastructure and instructional materials; and (v) improving teachers' status, morale andeffectiveness in the classroom

At the Municipal Levelb) (i) strengthening the management capacity of municipal level education offices; and (iii) increasing coverage (mainly

at the preschool and lower-secondary level) through altemative strategies based on municipal needs (e.g., schoolcunstruction, contracts with NGOs and/or rural strategies).

At the Departmental levelc) Strengthening the new role of the Department's Secretariat of Education as strategic planner, advisor, and facilitator;

improving departmental collection and analysis of education statistics; and promoting education reforms and positivebehavioral and attitudinal change through a department wide information, education, and communication campaignin alliance with the media and pro bono recognized role models (actors, athletes, singers).

Strategic Choices:d) The project design process considered four key strategic choices: (i) national versus local responsibility for project

design, financing, and implementation; (ii) centralized (at the departmental level) versus decentralized(municipalities and schools/communities) decisionmaking; (iii) public (SEDUCA) versus private provision ofservices (NGOs, Universities and Firms); and (iv) low (information sharing and consultation) versus high (self-management and decision control) participatory approaches.

National versus Local Projectse) Projects to support local governments have been implemented by central institutions. However, centralized channels

were overly bureaucratic. Top-down mechanisms from a distant central government have diluted the expected impactof investments. The alternative choice considered was to finance and prepare projects directly with approveddecentralized local governments. This approach provided the opportunity to implement a strategy that aims atenhancing responsiveness, client orientation, and innovation.

Centralized versus Decentralized Decisionmakingf) The choices for decisionmaking vacillated between (i) local needs assessment by municipalities and schools, but

specific interventions defined at the departmental level (including procurement and contracting); and (ii) fullresponsibility at the municipal and school levels in managing their own specific project outputs and services and finalallocation of resources. In line with the decentralization policies and its own objective to strengthen municipal and

9

Project Appraisal DocumentANTIOQUIA, COLOMBIA Antiouia Basic Education Project

community management of schools, the project opted for the latter alternative.

Public versus Private Provision of Servicesg) Initial consideration was given to the provision of technical assistance, training, and other services by the

Departmental Secretariat of Education. However, the experience in Colombia and elsewhere recommended a widerchoice of service providers, including the private and NGO sectors. Antioquia's universities, foundations, NGOs, andconsulting firms have the experience and capacity to provide a full range of services at the school/community,municipal, and departmental levels. Moreover, in various instances, these institutional actors have formed public-private alliances to combine their own strengths effectively.

Low versus High Participatory Approachh) Participation has been key to project preparation and implementation. However, there were still choices as to the

level of participation expected of municipalities, schools, and communities. The choices included emphasis on (i)information sharing and consultation (surveys, focus groups, public notices, town meetings, and incorporation ofopinions) or (ii) collaboration and empowerment (self-management and decisionmaking). The latter choice wasselected.

i) Change management experiences within organizations and larger systems have shown that successful reforms arecorrelated to high participation of local stakeholders, managers, and staff in planning, decisiomnaking,implementation, and evaluation of their own initiatives and activities. Additionally, a successful management changeeffort must provide the-needed financial resources to promote innovation and team and knowledge building.Promotion and implementation of changes in management policies and procedures must be accompanied by directaccess to resources.

i~ .................................. :...............................................................................................................................................................................................

8. Project alternatives considered and reasons for rejection:

Identification of Municipal Level Educational Investments (Necesidades Educativas Bdsicas Inmediatas -- NEBIs)

Alternatives Rejected:Financing education investment needs in specific municipalities already identified by the Department(called NEBIs). NEBIs included: (i) investing in the creation of additional school places for poor preschoolchildren and sixth graders in high-quality, nonprofit and religious schools; (ii) constructing andrehabilitating school buildings in rural areas; (iii) piloting the national reform of teacher training secondaryschools and university programs; and (iv) laying the basic infrastructure for information systems betweenmunicipalities and the department.

This alternative was rejected because the department identified specific investments for its municipalities, thus,not allowing municipal capacity building in planning and implementing their own education investments.

Alternative Selected:Financing quality investment subprojects identified and prepared at the municipal level. The investments wouldstill focus on financing the above-mentioned NEBIs. However, the decisionmaking on the specific mix andamounts would remain in the municipality.

Increasing Student Access

Alternatives Rejected:

* Financing the construction of already identified schools in various municipalities in Antioquia.* Continuing to finance school vouchers already being provided by the Department.

These alternatives were rejected because they did not provide municipalities with the choice of the most10

Project Appraisal DocumentANTIOQUIA, COLOMBIA Antiogula Basic Education Project

compatible strategy to increase student access. For example, school vouchers could not be used in rural andisolated communities because of lack of private service providers; these municipalities could opt instead for ruralstrategies such as Escuela Nueva and the Sistema de Aprendizaje Tutorial (a secondary education rural tutorialprogram). Similarly, larger municipalities with budget constraints may opt to finance school places withnonprofit private schools rather than making large capital investments in school constructions and incurringmandatory recurrent costs.

Alternative Selected

Through the financing of Municipal Education Investment Plans provide choices and municipal decisionmakingas to the best strategy to increase school access. In addition, the Department will transfer technical know-how(e.g., criteria and manuals to subcontract student places with NGOs; mechanisms to assess the fiscalsustainability of school construction; and guidelines to establish rural education programs, such as EscuelaNueva and SAT).

Educational Technology

Alternatives Rejected

* Finance an education technology program through a single source contract with a local university; and* Prefinance SEDUCA-specified technology training, computer equipment and software for schools.

The alternatives were rejected because they did not take advantage of various high quality educationaltechnology programs in the country. Further, the type and amount of investments at the school and municipallevel was already identified at the Departmental level.

Alternative Selected:Offer a choice of a special education technology program that offers financing, technical assistance, minimumquality standards, selection criteria, and choice of different quality education technology programs alreadyoffered by NGOs, universities and the public sector, including SEDUCA's own program.

School-Level Educational Inputs

Alternatives Rejected:

* Finance predetermined training programs in curriculum and management of schools, and* Centrally contracting school refurbishments and assessment of school needs.

These two alternatives were rejected because they were not congruent with the capacity building objectives of theeducational policies and of the project. Also, experience with centrally provided services -- albeit with localparticipation in needs assessment and planning (but with central implementation -- e.g., contracting, managingresources) -- was unsatisfactory. Economies of scale by procuring centrally were not achieved: inef5icientdistribution; late use of inputs and even nondelivery implied higher costs. High unquantifiable costs were alsoincurred by loss of motivation of local actors and negative image of nondelivering projects. Communitypreinvestment in planing time and local inputs became unrecoverable (sunk) costs.

Alternative SelectedFinancing demand-based school and community subprojects. The demand-based School-CommunityStrengthening Program will provide a flexible mechanism to finance investments needs as they arise during thereform period. In addition, commitment and community responsibility will be created by empowering schoolsand communities to manage their own resources and implementing their own projects. Community-basedmonitoring and clear and transparent procedures will minimize risks of misuse of funds and inefficiencies.

11


Project Management and Implementation:Alternatives Rejected:

* Centrally managed project implementation (e.g., procurement, financing, monitoring).* Creation of a Project Implementation Unit to manage the project.

These two alternative were rejected because of Colombia's poor experience with large project implementationunits. These units become isolated and overcontrolling, and the project is hardly incorporated into the day-to-dayoperations of the executing agencies. Resistance and mistrust is felt by government staff who are notparticipating in project implementation and, thus, capacity-building in public agencies is not achieved. Moreover,the traditional rationale of economies of scale from centralized procurement management was not realizedbecause of cumbersome procurement and financing procedures, controlled and understood only by a very smalladministrative elite hired within the PIU.

Alternative Selected:Relying in the internal structure of SEDUCA and local municipalities to self-manage and coordinate the project.The project design introduces capacity-building investments not for large management reforms, but to strengthenthe staff and management systems necessary to manage the project. This strategy, in turn, will contribute toSEDUCA's overall management efficiency. With the respective division of SEDUCA, a small administrativeteam will be created to support the added administration needs of managing a World Bank-provided loan (e.g.,reporting, accounting, Bank procurement methods). All other management and technical assistance will beprovided by the respective division of SEDUCA and the Municipalities.

9. Major related projects financed by the Bank and/or other development agencies (completed, ongoing andplanned).

Sector issue Project LatestForm590

Ratings

Bank Financed IP DO

Completed* Establish diversified secondary schools * Education Project (Ln. 0552), closing date S

12/31/73.* Establish diversified secondary schools * Second Education Project (Ln. 0679), closing date

12/31/73. S

.Strengthen rural primary education and * Rural Primary Education Subsector Project (Ln.decentralize and integrate social services 2192), closing date 03/31/89. S

.Improvement and expansion of diversified * Third Education Project (Secondary) (Ln. 0920),secondary education closing date 03/31/82. S• Sstaind thedqucalityiof the child care program Community Child Care and Nutrition Project

* Sustain the quality of the child care program (3201-CO), US$24 million, closing date 3/31/97. Sby community mothers during its expansion.

Ongoing* Improve secondary education coverage and * Colombia Secondary Education Project (3683-CO), U U

strengthen the education management US$90 million, closing date 12/31/00.capacity of large urban municipalities andsecondary schools

* Improve quality, coverage and efficiency of * Primary Education Project (3010-CO), US$100 S Sprimary education nationwide million, closing date 06/30/97.

12

Project Appraisal DocumentANTIOQUIA, COLOMBIA Antioquia Basic Education Project* Improve the quality and decentralized * Municipal Health Project (3615-CO), US$50

management of health services million, closing date 06/30/01. S S

Planned* Expansion of quality and coverage of basic * Pasto Education Project (CO-PA 46112)

education and strengthening municipalmanagement and school autonomy (provideslessons at the municipal level for anationwide decentralization strengtheningstrategy)

* National investments to support rural * Rural Education Project (CO-PA)education institutions and innovativeprograms

* Support of youth at risk of or involved in * Youth Development Project II (CO-PA 35493)violence, illicit activities, health threatening * Targeting At-Risk Youth (CO-SR 39293)behaviors, and so forth, through educationalprograms and partnership with NGOs

10. Lessons learned and reflected in the project design:

Based on the Bank's experience in financing social sector projects in Colombia, Latin America and the Caribbean (LAC),and in other regions, critical success factors are:

i) decentralization projects should not provide solely technical assistance to strengthen the legislative an4structural frameworks of education systems;

ii) Decentralization investments should systematically address strengthening of (i) the organization andstructure of the education system, (ii) management change and human resources, and (iii) identification andsolution of conflict of interest across levels and key stakeholders;

iii) Centrally prepared and managed decentralization investments (maintaining political and fiscal controls) arenot conducive to flexibility, management capacity building and local decisionmaking;

iv) Strong local participation is critical for all stages of local govemment and school subprojects (e.g.,promotion, management of resources, implementation, monitoring, and evaluation);

v) Political support and commitment to the goals and the participatory process of the project should bepromoted at all levels of the Government (political leaders, technocrats, and administrators);

vi) Collaboration among public, private and volunteer sectors is critical to ensure complementary objectivesvii) School and community subproject designs should be technically simple and with well-defined appraisal

criteria and transparent allocation of resources;viii)There should be choice of suppliers for provision of goods, services, and technical assistance (e.g., public

agencies, NGOs, communities, pro bono support, voluntarism); andix) Regular and frequent financial and technical audits should complement evaluation of physical progress

(quantity and quality).

The Bank's operations in Colombia in the past reveal:

* Bank-financed education projects in Colombia, albeit emphasizing decentralization and capacity-building of localgovemments, have been fully designed and managed in the nation's capital. During project implementation, capacitybuilding programs, financing mechanisms, and monitoring procedures continued to emphasize central controls.

* Departmental and municipal governments have not been entrusted fully with financial resources and decision makingautonomy. As a result, local govemment capacity remained weak or untapped.

Unshared Vision of the Decentralization Process* A shared vision (i.e., no agreement on goals, roles, and functions; conflicts and power issues not resolved; and lack

13


of representation and voice of local stakeholders) of the decentralized system had not been consolidated.* At the central level, the MOE investments in technical assistance and training were used without a clear

understanding of the new role, objectives, and services to be provided by the MOE within a decentralized framework.At the regional level, capacity building interventions were carried out in isolation, with limited resources and powerto plan, manage, and implement educational programs. Traditional training and technical assistance programsprovided local government with fixed packages of services as preconditions and prerequisites for any financialassistance.

Lessons From Unsatisfactory IBRD-Financed Education Projects* Specifically, the IBRD-financed Secondary Education Project has experienced major implementation problems. The

key implementing agencies have been the MOE and other central institutions such as the Social Investment Funds(Fondos de Inversi6n Social, FIS). These institutions are distant from local governments but still guaranteedthemselves a major role in the provision of resources, training and technical assistance to the regions. Preparing aproject centrally implied a highly complex administrative system with decision power remaining in the capital. Forinstance, the National Cofinancing System, the financial instrument designed to transfer resources from the nationalbudget to local governments, has been ineffective in allocating and disbursing funds in a timely manner. The amountand type of financing was controlled centrally by yearly national allocations (usually released very late in theimplementing fiscal year) to each municipality without input from local governments.

Impact of Decentralized Pilots* Government and Bank agreement to work, on a pilot basis, with completely autonomous local governments was the

outcome of a year-long negotiation propelled by a seemingly frustrating dead end with centrally designed andimplemented projects. Even at the design stage, the decentralized projects are providing lessons for presentadjustments, in design and procedures, of the Bank's ongoing education portfolio. Consequently, the Governmentand the Bank are discussing the key elements necessary to restructure the Secondary Education Project. TheGovernment has also initiated discussions on dismantling the FIS.

* Direct operations and financing of local governments' projects provides an opportunity to assess the benefits ofremoving rigid budgetary procedures and central control layers. Concurrently, there have been important changes inthe policy and institutional framework: (i) higher priority by the Government of implementing successfully thedecentralization strategy, even if it implies loss of control and functions at the central level; (ii) emphasizing schoolautonomy as crucial to the decentralization strategy, and (ii) reducing budgetary controls of funding to municipalitiesand school, including block (as oppose to line item) financing. The Government has continued with its broad-basedparticipatory process for the development of School Education Projects (Proyectos Educativos Institucionales, PEIs),to foster autonomy and accountability in their execution. Moreover, school-based planning will be complementedwith a serious effort to transfer funds to schools to implement their plans (a missing element in the past).

Articulated Education Portfolio Strategy* Various studies in capacity building at the local level have shown that capacity is best achieved by doing and

learning, and by allowing local stakeholders to identify their own weak areas and strengths and, then, to define thetype of technical support, skill, and knowledge required Thus, the Government sees the three education operations(the restructured Secondary Education Project, Antioquia Department Education Project, and Pasto MunicipalityEducation Project) as an articulated learning strategy to support the decentralized management of educationinvestments and guarantee the highest impact.

* The restructured Secondary Education Project will provide learning on a nationwide investment programs stillcoordinated by the central Ministry of Education in the Capital, but with strengthened mechanisms to provide therequired decisionmaking and controls at the local levels. Antioquia Education Project will provide the sameinvestment coordination experience but from the Departmental level. Pasto Education Project will be a case study ofhow municipalities can plan, manage and implement their own investment operations. A proposed second phase ofthese three operations is expected to incorporate the wealth of knowledge to be generated into a more effective andefficient system of investment operations in the social sector, especially those financed with loans from multilateral

14


and development banks.

....... .......... .... ................................................................................. ............................................................................................ .........................................................

11. Indications of borrower commitment and ownership:

* Project preparation led locally with full consideration of quality at entry elements, including the early preparation ofimplementation arrangements (such as financial management, implementation manuals, and project administration)usually addressed much later in the preparation/project effectiveness cycle.

* The national Government requested Bank support for these operations in various forums including the discussion ofthe CAS in preparation. It also expedited loan guarantee procedures.

* Full central commitment and support to the decentralized project, although it may imply loss of decisionmaking andcontrol.

* Fully coordinated technical assistance between central institutions and the departmental government, in such criticalareas as process and impact evaluation and dissemination of lessons learned.

* Broad participation of stakeholders in project preparation and implementation design.* Initial departmental financing of project preparation, in lieu of national or loan advanced funds.* Financing a full local team (15 people) from project identification to appraisal to support and accelerate project

preparation.* Extensive media coverage of project objectives and educational investments.

12. Value added of Bank support:

. The Bank's new team approach contributed to a cohesive and integrated assistance strategy for Colombia. It hassupported a shared vision of the decentralization process by: (i) participatorily developing the CAS (which provideda forum where top stakeholders identified as high priority local government and school/community control ofeducation investments); (ii) conducting Economic Development Institute (EDI) workshops to facilitate theidentification of interinstitutional conflicts risen from decentralization and identification of tools/strategies to resolvethem; (ii) inviting Colombia and regional governments to participate in EDI's decentralization study tour to NewZealand and Australia; (iii) support of the Human Development Department (HDrJ) in the preparation of theeducation technology investments and collection of international experiences on information, education, andcommunication campaigns; and (iv) an committing to the ongoing documentation of project preparation experieniceat the local levels and of nationwide education reforms. In addition:

* The Bank assisted the Government of Colombia (GOC) in preparing a study of the status of decentralizationimplementation in Colombia (Local Government Capacity Building -- Beyond Technical Assistance), which servedas a critical input for the design of the project;

* The Bank participation has served as a catalyst in the country to test different strategies to implement successfullyColombia's decentralization and participation policies;

* The Bank has accumulated much experience in the recent pass on how to prepare and implement projects withextensive participation and local decisionmaking;

* The Bank's involvement in the project is expected to provide lessons for other national and internationaldevelopment agencies; and

* The decentralized projects would complement the other major activities in the social sector, including the SecondaryEducation Project, the Primary Education Project and the Magdalena Medio Project.

15

Project Appraisal DocumentANTIOQUIA. COLOMBIA Antioquia Basic Education Project

Block 3: Summary Project Assessments (Detailed assessments are in the project file. See Annex 9)

13. EconomicAssessment(se e Cost-Benefit [x] Cost Effectiveness [ Other [Specify]13. Economic Assessment (seeAnls:Aayi:Annex 4): Analysis: Analysis:

NPV=US$N/A;ERR= N/A

The justification for public investments is guided by the following considerations: (i) the social rates of return toeducation; (ii) the public and private partnership; (iii) the impact on the poor; and (iv) the effectiveness of inputs onlearning outcomes. These are all presented in Annex 4.

Also, the criteria used to guide the choice between different project designs in order to achieve the development objectivesare as follows: (i) least cost estimates; (ii) stakeholder consultations and participatory decisionmaking; (iii) lessons !earnedfrom previous designs; (iv) study tour to countries with effective decentralization reforms; and (v) institutional capacity.

Annex 4 presents two major alternatives for which the least cost estimate criteria was a decisive element (for other projectdesign choices see Block 2, section 8): (i) School construction versus contracting with private providers and (ii) centrallyprovided training and technical assistance versus block transfers (nonrefundable transfers) to enable beneficiaries to selectprivate or public services for its own institutional capacity building interventions.

14. Financial Assessment NPV=US$ N/A; FRR= N/A(see Annex 5)

All financial data and fiscal trends of the Department of Antioquia and its municipalities have been collected. Historicaland expected trends in Antioquia's GNP, education budget, and expenditures have been assessed. These figures have beencompared to expected fiscal needs of project investments and recurrent costs at both the departmental and municipa!levels. Findings show that project impact on departmental and municipal education budgets is sustainable.

Also, a full indebtedness study was done prior to project preparation and was updated prior to the national Governmentapproval of its guarantee to the loan.

................................................................................................................................................................................................................................................... .... ...

15. Technical Assessment:

Technical standards have been developed for each school, community and municipal subprojects. Existing norms andtechnical specifications are used for such investments as schools construction, contracting school places with NGOs,teacher training, and other technical assistance. Technical guides will be prepared by SEDUCA and will be incorporatedinto the appraisal criteria of school/community and municipal subprojects.

16. Institutional Assessment: (see Annex 9)

The level of existing institutional capacity is acceptable for project implementation. Nonetheless, technical assistance andclose supervision would further strengthen the existing capacity, especially during the initial phase of implementation. Anassessment of each of the executing institutions involved in the project and their roles is detailed in Annex 8.

a) Approach to Project Execution: The Antioquia Education Project differs from other Bank-financed operations inColombia as it will be implemented completely by a local government, a Departmento. The Departmento provides a closerproximity, than the central government, to the municipalities and schools. Municipalities and schools will manage theirown project investments. Thus, the project would provide specific interventions to increase management capacity at the

16

Project Appraisal DocumentANTiOQUIA, COLOMBIA Antioguia Basic Education Project

municipal and school level, and will support the development of the new advisory and technical assistance functions of thedepartment.

b) Project management: The capacity of all executing agencies (see block 1, section 4) has been assessed. Existing staffat the departmental level is qualified. Additional skills and competencies at the departmental, municipal, and school levelseither would be developed through training or contracted through additional staff or technical assistance. To decrease therisk of central controls, fast, efficient, and effective procurement and disbursement mechanism were designed..............................................................................................................................................................................................................................................................

17. Social Assessment:

Both the Local Government and the Bank assessed the social sustainability of the project. The process of consultation andinvolvement of key stakeholders reflects a significant departure from previous World Bank experience of lending foreducation in Colombia. A high participatory preparation and implementation add significantly to the project's socialviability. Two full reports, in the project files, describe the activities and results of the stakeholder analysis, theparticipation plan, the assessment of the project's social impact, and the social risks. Social risks referring to the teacher'sunion, competitive selection of municipalities (and nonselected ones), and weaker schools and communities are presentedbelow in section 21.

......................................................................................................................................................................................................................................................

18. Environmental Environmental E A E B 0 CAssessment: Category

Under the existing menu of eligible school subprojects and municipal education investments, none poses an enviromnentalrisk.

Additional school places will be provided mainly by expansion of existing schools; contracting of school places in private,nonprofit schools; and tutorial programs which would make use of any existing school/community buildings. In ruralareas, some school construction may be needed; however, noninhabited sites are available and the risk of relocation isunlikely. In urban areas, new school construction is minimum (the project targets mostly rural and semiurbanmunicipalities and excludes the Departmental capital, Medellin). Nevertheless, the criteria for approval of municipalinvestment plans would include guidelines for land selection and appropriate compensation and relocation in the unlikelycase this is needed. It is also expected that specific school or municipal subprojects will contribute positively to schoolenvironment (sanitation, protection and education programs, etc.).

Regarding indigenous populations, Antioquia does not have a specific native population. However, the demand-drivenproject design, in addition to equity criteria included in financing of subprojects, will guarantee that poor, rural, or anyother disadvantaged groups will be empowered to decide and finance their own projects and most pertinent educationalneeds.19. Participatory Approach: Identification/Preparation Implementation Operation

School Beneficiaries / IS, CON IS, CON, COL COL, EXEcommunity groups

(In all stages of school-community subproject cycle)

Intermediary NGOs / Academic IS, CON IS, CON, COL COLInstitutions

Municipal Govemments IS, CON, COL IS, CON, COL COL, EXE

Other Donors N/A N/A N/ANote: information sharing (IS); consultation (CON); collaboration (COL); full execution (EXE)

17

Project Appraisal DocumentANTIOOUIA, COLOMBIA Antioquia Basic Education Project

20. Sustainability:

Sustainability would be ensured through participation, counterpart contributions, appraisal criteria, and evaluations.

Commitment of the community and the municipality: Sustainability would be ensured by the high degree of involvement ofthe community, school, and municipality, through their participation in the process of identification, preparation,appraisal, contracting and supervision of subprojects. Counterpart contributions from municipal investment budgets wouldincrease ownership on both the community and municipal levels. Assessment of the degree of actual participation in theimplementation of subprojects by the beneficiaries would take place at the community level, with a social analysis of thisinvolvement at the municipal level. The overall results of these projects, and, by extension the use of funds (veedurias),would be evaluated by the community. Sustainability would thus be ensured by the commitment, both financial andparticipatory, of the counterparts and by the resultant subprojects which will follow a competitive-based appraisal criteriafocused on both municipal and community commitment and socioeconomic need.

Recommendations of the community based assessment to ensure sustainability and results:Project Activity: School/Community Subprojects.

a) High degree of municipal, school and community participation in subproject identification, preparation, appraisal,contracting, and supervision;

b) Community based evaluation of the results of the subprojects and use of funds (veedurias); andc) Process evaluations to assess the degree of actual participation by beneficiaries in project implementation.

Project Activity: Municipal Investment.a) Use of fiscal sustainability criteria during the preparation, appraisal and implementation of subprojects.b) High degree of participation of municipal level education stakeholders in subproject identification, preparation,

appraisal, contracting, and supervision;c) Ownership by municipal government, as evidenced through counterpart contributions from their investment

budgets;d) A competitive-based appraisal criteria which focus on both municipal and community commitment and

socioeconomic need;e) Community based evaluation of the results of the subprojects and use of funds, andf) Carrying out of a social analysis to assess the degree of participation by the beneficiaries in the preparation, of the

proposed municipal subprojects.

Project Activity: Departmental Education Services.a) High degree of participation of SEDUCA staff in the preparation and implementation of the project;b) Considerable support of the project by the national and municipal level governments;c) Implementation of an information, education and communication campaign design to encourage support for the

project and its objectives;d) Institutional strengthening interventions focus both on structural/procedural improvements and in team building

and change management;e) Community based evaluation of the results of the overall project through qualitative evaluations of beneficiary

satisfaction;...........................................................................................................................................................................................................................

1 8


21. Critical Risks (see fourth column ofAnnex 1):

Project outputs to development objectives

Risk Risk Risk Minimization MeasureRating

Teachers Union's criticism High Strong community support due to earlier successes of the coverage expansionof expansion of schooling with NGO participation will ameliorate negative consequences of Union'sthrough private and criticism. In addition, the strategy is flexible enough to allow for the increasednongovernmental education coverage to occur in communities most in need, especially rural and isolatedinstitutions areas.

Teacher strike Moderate Teacher strikes are common occurrences. The direct financing of subprojectsprepared by teachers and parents are expected to dissipate any teacherresistance to the project and promote greater parental support for uninterruptedschool time.

Extreme social violence Moderate Some communities in Antioquia are more prone to violence than others. This iscould affect community a risk beyond the direct control of the project. However, the flexible nature ofparticipation school and community subprojects may allow these communities to finance its

own educational strategies which motivate changes in attitude, promotepeaceful resolution of conflict, and improve interpersonal and communicationskills of children and youths.

Negative reaction of schools Low To minimize school and community negative reactions, training and technicaland communities to assistance at the department and municipal level will emphasize evaluationevaluation skills and strategies that promote a culture of mutual learning, and not one of

oversight and control.

Project components to outputs

Risk Risk Risk Minimization MeasureRating

Changes in municipal High The project will provide communities and beneficiaries with transparentadministration information on its objectives, activities and resources. Thus, local interest

groups (including schools, parents and communities) would sustain the demandfor the project, making deviation from project goals a political disadvantage.

Changes in school Moderate Target teachers, parents and communities to sustain support in spite ofadministration administration changes.

Discontent created by Moderate The project will: (i) consult and reach agreement on selection criteria andselection of some procedures for approval with a broad base of project stakeholders; (ii)municipalities and exclusion disseminate the criteria and procedures as widely as possible among projectof others constituencies; and (iii) assure a rigorous application and open dissemination

of results.

Stronger schools benefiting Low Include selection criteria that includes representation of disadvantaged schoolsmore than weaker/poorer and provide capacity building support.schools

19


Politicization of subprojects Low Adoption of transparent and efficient opet dting procedures and openand media campaigns dissemination of goals, activities, and use of resources.

Delays in disbursement and Low Early assessment of, and agreement on expediting, approval times and otherprocurement procedures procedures. Ongoing process evaluation for adjustments during

implementation.

Overall project risk rating Moderate

22. Possible Controversial Aspects:

* Demand by Other Municipalities and Departments Which Can not be Met Directly by the World Bank. As pilotoperations, the Antioquia and Pasto Education Projects will raise expectations of support in other municipalities anddepartments. The direct support by the World Bank in each municipality (about 1060 in total) and/or department (32in all) is not be feasible, given economic and time-resource constraints. Thus, a second phase from this investmentaims at establishing a national system to assist other municipalities and departments in preparing quality projectproposals, which may be eligible to access multilateral development loans. The two projects serve as pilot operations,which will provide ideas on ways to reduce overbureaucratization and enhance the efficiency of nationwide systems.From the lessons learned in the pilots, the second phase of the national strategy would develop Colombia's owninternal mechanisms for project preparation, technical assistance, and channeling multilateral financing for other localgovernments.

* Indebtedness Capacity: In line with the promotion of local fiscal discipline, a key criterion included for selection ofthe participating decentralized projects was financial indebtedness capacity. However, during the preparation period ofprojects to be financed by multilateral Banks, departments and municipalities may seek other credits and loans inprivate banks and financial markets. To reduce risk of a deteriorating financial status, the indebtedness study wasupdated prior to national approval for the guarantee of the loan and prior to project appraisal. Additionally, the centralgovernment requested a fiscal management plan to guarantee efficient use of revenues, lower operating costs, and/orreduced access to additional debt.

* Political Influence on Municipal and School-Community Operations: Under fiscal constraints, politicians may tendto see local investment subprojects as an alternative tool to please their constituencies and influence investment-,. Thesubproject procedures for allocation and use of resources are established in a very clear and transparent manner.Additionally, the multilevel communication and ex post evaluation (Department, municipal, and school) wouldprovide check points to assess the adequacy, effectiveness, and transparency of investments and would guaranteestakeholders' involvement.

20

Proed Appraisal DocumentANTIOQUIA, COLOMBIA Arnoquia Basic Education Project

Block 4: Main Loan Conditions

23. Effectiveness Conditions

a Legally Ratified Operational Manuals and Presentation of Model School and SEDUCA Agreements for Bank Review........................................................................................... . ........ . ...................................................... ........ ... _...........................

24. Other [classify according to covenant types used in the Legal Agreements database.]

* None.

Block 5: Compliance with Bank Policies

[x] This project complies with all applicable Bank policies.

fE~ ~ ~ ATask Man| ger: Joel R es, LCSHD CMI Di Andres Solimano, LCC4C

21

Annex I

Project Design Summary

Annex 1: Project Design S<ummary

Narrative Summary Key Performance Indicators' Monitoring and Critical Assumptions andSupervision Risks

CAS Objective (CAS Objective to BankMission)

Expand access and 2% increase in primary enrollment rates, Review of statistics Overall economic stabilityimprove quality of and 5% increments in rural education.education with (i) adecentralized framework, 1.5% annual average increases in secondary(ii) the responsibility of education enrollment rates.provision at themunicipal level, (iii) In schools participating in the projects,school autonomy, and academic achievement test results improve(iv) community and by 10%.private sectorparticipation. Particular In areas participating in the projects,attention to be paid to the increased number of municipalities manageneeds of rural education. their education system and increase the %

of investments (ICN) in education.

80% of schools participating in the projectshave a high level of communityinvolvement and manage their owneducation quality investment funds.

Project Developmental (Development ObjectivesObjective to CAS Objectives)I. Increased Access to * School access is improved at least by * Questionnaires * Change in NLtional

Basic Education 10% in preschool and by 5% in lower developed through Administration(especially preschool, Ist secondary under appropriate strategies active-participatory * Resources forand sixth grade) to each participating municipality research by level. analysis and national

(classroom construction, contracts with * Sector Statistics. dissemination ofNGOs and/or Rural Programs) * Management and lessons learned in

efficiency indicators. Antioquia and Pasto* Improvements of at least 10% in * Application of * Support of key

2. Improve student retention rates (repetition and dropouts) improvements tests national stakeholdersretention in Basic and polls of associated from the public,Education(primary and * Student test scores (as proxy of factors. private and civillower secondary) learning) increased by 5% in society sectors

Municipalities participating in the3. Improve student learning project.

in Basic Education.* 85% of participating schools and

4. Building and communities provide evidence of theStrengthening impact of their projects on the students,Educational and teachers and the community.Institutional * 50% of the 125 municipalities inManagement Capacity at Antioquia manage autonomously theall Levels (SEDUCA, implementation of their EducationMunicipal Secretariats of PlansEducation and Schools)

The Evaluation and Monitoring Manual specifies a complete set of indicators por monitoring, process and summative evaluations.22

(Output to DevelopmentA. PROJECT Objectives)

OUTPUTS

* School Investment * 201,600 students achieve sustained * Application of * Teachers strike.Proposals Addressing improved performances in the areas of improvements tests. * AdministrativeRetention and Learning language, mathematics, natural and Information System -- changes of teacherIssues. social sciences. SABE 50. who are part of the

* 1,200 schools present innovative * Polls. school staff.pedagogical proposals

* Schools and community * 1,200 school governments take * Questionnaires and * Extreme socialstrengthened and decisions autonomously on PEls and active violence that couldinnovated in school and resources. * Participative research. affect communityeducational management. * 1,200 school governments apply * SABE 5.0 participation.

participation processes and self- * Projects Bank bymanagement. Nucleo Educativo.

* 1,200 schools use the SABE 5.0 * Workshops, seminars,information system. and subsequent

* 1,200 schools identify and formulate recommendations.community projects and manage * Summative evaluationresources. of School

* 1,30 Nucleos Educativos support and Strengtheningguide the PEls. component.

* 1,200 schools implement innovationson human resources, physical andfinancial management.

* Increased Investment in * Increased number of contracts with * Municipal Statistics * Teachers UnionProvision of Access for quality private schools for the provision and Censuc OppositionBasic Education of education. * SABE 50 (MIS) * Change in municipalServices. * Increased number of students fiscal situation and its

participating in rural education ability to invest andstrategies, such as tutorial education to cofmance(SAT).

* Increased number of places in publicschools.

* Strengthened educational * 80 JUMEs function and take decisions. * Questionnaires * Changes in municipalmanagement units at the * 80 municipalities manage developed for active administration.municipal level. autonomously the education service. research. * Politicization of the

* 80 municipalities making use of tools * Basic statistics of Municipal Educationto manage the education service. municipal Board (Junta

management. Municipal deEducation).

* Education Secretariat of * The Education Secretariat of Antioquia * Polls and * Changes inthe Department implements team work and results- questionnaires. departmentalstrengthened to advice oriented management models. administration.and provide technical * Personnel at the Education Secretariat * Negative reaction ofassistance to the perform educational and technical schools andmunicipalities. research that is offered to the municipalities to

municipalities and the schools. evaluations* Communication among * The authorities and leaders of 124 * Opinion polls. * Lack of will from the

and dissemination of the municipalities are infortned about the * Participants registry. civil society.knowledge, the project and motivated. * Politicization of theexperiences, the work * 1,200 school establishments are media channelssystems, the programs selected and committed to the project. utilized.and the results. * The project experiences in the 1,200

schools, 80 municipalities and theDepartment are disseminated bySEDUCA.

* The population knows the project andis committed to its execution.

23

/

/

ANTIOQUIA, COLOMBIA

Components to OutputsB. Project

Component

* School and Community * 1,200 Basic Education (preschool, * Review of Appraisal * Stronger SchoolsStrengthening. primary and lower secondary) schools Format/questionnaire Benefiting More

in Antioquia and their communities (checklist) of the PEI. Than Poorer, Weaker(through formed school-community * Schools Self- Schools.goveming bodies) prepare and Evaluations * Changes in Schoolimplement their own improvement * PEI Bank. Administrationplans; * Disbursement and

Procurement Delays* Municipal Education * 80 PEMs with investments oriented * Review of Appraisal * Changes in municipal

Management toward improving the schools' quality Format/questionnaire administration.Strengthening and of education. (checklist) of the * Politicization of theInvestment Development. * 80 PEMs and POAs with Investments PEM. Municipal Education

to increased school coverage. Board (Junta* 80 PEMs and POAs with Investment Municipal de

for Local Educational Services Education).Centers. * Discontent from

NonselectedMunicipalities

* Disbursement and_______________________ Procurement Delays

* Departmental Services * SEDUCA modernizes its inter and * Statistics, interviews, * Changes inStrengthening intrainstitutional communications polls departmental

systems. * Process evaluations administration.* SEDUCA with an automated

information system for monitoring andevaluation of students, schools,municipalities and Department byresults and indicators.

* 124 departmental staff are trained inconsulting and management skills.

24

Annex 2

Detailed Project Description

The project has 3 components: The School And Community Strengthening Component would finance thedevelopment and implementation of school improvement plans (SIPs). The Municipal Education Managementand Investments Component would finance municipal education plans to improve education management;increase education access; and provide municipal educational resources. The Departmental Education ServicesComponent will strengthen the technical assistance, sector evaluation and information/communication functionsof the Departmental Education Secretariat. These three components are detailed below.

Project Component 1 - School and Community Strengthening Subprojects: US$49 million (total cost ofcomponent)

The project will provide financial transfers ( nonrefundable) for two kinds of subprojects: school improvementsubprojects and participatory management strengthening proposals. School Improvement subprojects areintended to address objectives related to the school environment, pedagogical innovations, instructionalmaterials, equipment, and education technology. Participatory Management proposals aim at improving school-based management and community/parental participation. In addition, the component will finance municipallevel teacher training and technical assistance.

In each of approximately 80 participating municipalities, the component will finance 15 school improvementsubprojects and 15 participatory management proposals (a total of 1200 schools/communities over the life of theproject). Municipalities would select approximately 75 percent of their schools from rural and very poorcommunities.

School Improvement subprojects presented by School Boards (Consejos Directivos) are each expected to cost anaverage of US$25,000 (larger under especial circumstances, but not exceeding US$50,000). The implementationperiod is limited to three years or less (execution would be no more than two years plus one year of training,capacity building and planning). Participatory management subprojects will include proposals to improveteacher-community partnerships, school-related community programs, and parental support of schools. Theseproposals will be prepared and presented by Parents Association and by school staff. Up to US$6,000 will beprovided per school: approximately US$3,000 for Parents Association proposals and US$3,000 for teachers'proposals. The actual amounts will be based on an allocation formula, including per student and need criteria.

Interventions US$ million Percentage

School-Based Subprojects:

School Improvement Subprojects 33.2 68%Participatory Management Proposals 8.1 17%(from schools and parents)

Municipal Training and Technical Assistance:

Pedagogy and Curriculum 4.5 9%Management and Planning -- School/Parents 3.2 6%

Total 49.0 100%

The following two tables present the summary of subproject cycles.

25

The table below illustrates the typology of subprojects, examples of eligible expenditures and quality criteria.

School/Community Projects | Appraisal and QualityCriteriaSCHOOL IMPROVEMENT SUBPROJECTS

i) School Environment: investments that Support is conditional on guarantee ofimprove school surroundings, infrastructure, municipal and community support to meetsafety, and comfort. recurrent costs and continued maintenance.

Infrastructure investments should not be morethan 50% of overall subproject expenditures.

ii) Pedagogical Innovations: Investments in Training and other investment should respondcurriculum development, teacher training and to locally appraised needs. The training designinstructional materials that seek to better use would be contracted to universities, NGOs, orand apply the basic curriculum in the local other institutions with legally agreed qualitysocioeconomic context. and efficient delivery commitments.iii) Instructional Materials and Equipment: Instructional materials and other investmentInvestments in basic instructional materials to should respond to locally appraised needs. Thesupport teaching and learning in the classroom. relationship between curriculum, training,

instructional materials and equipment shouldbe clearly specified.

iv) Education Technology: Investments in Criteria for participating schools willeducation technology will include resources to emphasize: (i) having already met basicparticipate in various technology education education needs; (ii) strong teacher andprograms existing in Colombia, including community participation and support forSEDUCA's own programs. technology education; and (iii) financial

feasibility to meet recurring costs of computermaintenance, upgrading and safety. EducationTechnology investments should not be morethan 30% of overall subproject expenditures.

P-ARTICIPATORY MANAGEMENT PROPOSALSi) School Proposals: Training, technical assistance and other

investment should respond to locally appraisedneeds. Services would be contracted touniversities, NGOs, or other institutions withlegally agreed quality and efficient deliverycommitments.

ii) Parent Association Proposals: Schools need to have been selected asrecipients of development transfers. ParentAssociation proposals should specify strategiesto assist their schools in their developmentprocess and promotion of communityparticipation.

MUNICIPAL LEVEL TRAINING AND TECHNICAL ASSISTANCEi) Pedagogy and Curriculum Training and technical assistance provided by

the municipality to all schools or a cluster ofschools in the municipality. Services would becontracted to universities, NGOs, or otherinstitutions with legally agreed quality andefficient delivery commitments.

ii) School-Based Management and Community Training and technical assistance provided byParticipation: the municipality to all schools or a cluster of

schools in the municipality. Services would becontracted to universities, NGOs, or otherinstitutions with legally agreed quality andefficient delivery commitments.

26

Project Component 2 - Municipal Education Management Strengthening and Investment Development:US$20 million (total cost of component)

The project will finance investment proposals from up to 80 municipalities. The key objective of the componentis to improve education management while guiding municipal investments in the education sector. Municipalinvestments supported by the component would increase school access and provide municipal education andcultural services in each municipality (the type of education center is demand-driven and may be, for example, alibrary, a teacher resource center, a children museum).

To build education planning, management and evaluation capacity, the component will finance themodernization of the Municipal Secretariats of Education and Municipal Education Boards (JUME), includinginfrastructure improvements, equipment, and technical assistance and training for management developmentprograms. Also, as an initial incentive for the selected municipalities, the component will finance refurbishmentand equipment for local education administration offices (Nzucleos Educativos).

Eighty out of 125 municipalities will participate in the project. Municipalities will be selected according to theirown socioeconomic level to guarantee representation of poor and isolated areas. Three socioeconomic levels willbe used, each based on socioeconomic and education rankings. Municipal proposals to participate in the projectwill be presented to SEDUCA, at the departmental level, which will make a competitive selection based onagreed weighted criteria. Although the project expects to intervene in 80 municipalities during itsimplementation, participation will be gradual: 16-25 municipalities will participate during the first year, 32 moreduring the second year, and the remaining will join during the third year of project implementation. Municipalinvestments will have a duration of 2-3 years per municipality. Within each participating municipality, 15schools/communities will also be selected to participate in the School and Community StrengtheningComponent.

GENERAL SELECTION CRITERIASocioeconomic criteria: (i) municipalities with large rural or poor communities, (ii) regionalrepresentation, and (iii) socioeconomic representation.Organizational criteria: (i) political commitment and community participation; (ii) existingeducational bodies (or willingness to create them) established by the education law (such asJUMEs, School Governments, Personeros Estudiantiles); and (iii) willingness to strengthenevaluation of outputs and impact in the education sector.Economic criteria: (i) financial sustainability, and (ii) prior investments in education.

Aggregated investments per municipality are expected to cost an average of US$300,000 (larger under specialcircumstances, but not exceeding US$600,000). The implementation period is limited to three years or less(execution would be no more than two years plus one year of training, capacity building and planning). Althoughthe mix of educational investments and management improvement interventions will be decided bymunicipalities, the table below presents an approximation of a possible breakdown of the percentages and overallcomponent costs.

Municipal Education Investments US$ million Percentage

Infrastructure Expansion 4.5 23Contracts w/NGOs -- Preschool 3.5 17Rural Education Access Strategies 2.0 10Municipal Education and Cultural Services 4.0 20

Management Improvements

Refurbishment of Local Education Offices 0.4 2Modernization of Municipal Education Secretariats 4.4 22Management Training and Technical Assistance 1.2 6

Total 20.0 10027

The table below illustrates the typology of subprojects, examples of eligible expenditures and quality criteria.

Type of Interventions Appraisal and Quality CriteriaMUNICIPAL INVESTMENTS

(i) Infrastructure Expansion: Investments either Access investment should respond to local needsin new schools or expansion of existing school appraised by the JUME and supported by a localbuildings. education census, school improvement plans, and

the municipal education plan (PEM).Available land (uninhabited) and guarantee financialsustainability for teaching staff and maintenance.

(ii) Contracts with NGOs: Contracting with Access investment should respond to local needsnonprofit private schools to provide quality appraised by the JUME and supported by the localeducation to children presently outside of the education census and PEI/PEM (educationschool system. Contracting and performance development plans). Priority would be given tocriteria is provided by SEDUCA based on an preschool and lower secondary. A two-yearongoing program. Emphasis is placed on enrollment trend will be presented. Private,improving school access in preschool. nonprofit schools will have to fulfill quality and

space criteria in order to qualify.iii) Rural Education Access Strategy: the Access investment should respond to local needscomponent will provide resources to participate appraised by the JUME and supported by the localin various rural education expansion strategies education census and PEI/PEM (educationexisting in Colombia. Special emphasis will be development plans). Priority, would be given toplaced in improving access to secondary lower secondary in rural, isolated areas andeducation (Grades 6-9) through a successful continuation of Escuela Nueva (primary educationtutorial program, El Sistema de Aprendizaje rural strategy) graduates into the secondary level.Tutorial (SAT). In Antioquia. SAT has beencoordinated with the primary rural educationprogram, Escuela Nueva, to provide its graduateswith access to secondary education.iv) Municipal Education and Cultural Services: Investment should respond to local needs appraisedThe component would finance those education by the JUME. Municipal cultural and educationalservices most efficiently delivered at the institutions that will administer the services willmunicipal level (e.g., libraries, teacher resource present a review of its accomplishments and needs.centers, children museums,). Location available and space required.

EDUCATION MANAGEMENT IMPROVEMENTS(i) Refurbishment and Equipment of Local Provided as an incentive in selected municipalitiesEducation Administration Offices (Jefes de and also to support the basic infrastructure neededNicleos): These offices are found in the JUME. by Jefes de Nzucleo.ii) Modernization of Education Secretariats: Investments should respond to documented needs.The component will finance the required Criteria for computer networks will emphasize: (i)equipment and infrastructure improvements of satisfied or has already met basic equipment needs;municipal secretariats of education, JUMEs and (ii) strong JUME and staff support for introductionNzicleos Educativos. Municipalities may also of technology and training commitment; (iii)participate in a program to connect SEDUCA and financial feasibility to meet recurrent costs ofmunicipal secretariats of education through the computer maintenance, upgrading and safety. ForInternet. Other more distant or rural municipalities not meeting the criteria for computermunicipalities will be connected through simpler and networking, telephone and faxes may betechnology such as telephones and faxes. substituted.iii) Management Training and Technical Training and technical assistance should respond toAssistance (TTA): Municipalities may request institutionally assessed needs. Services, includingTTA to upgrade skills in preparation, training design and delivery, would be contracted toimplementation and management of education universities, NGOs, or other institutions with legallyinvestments. agreed quality and efficient delivery commitments.

28

The following two matrixes summarize the proposed subprojects cycles and organizational structure for theimplementation of the municipal investments and school and community transfers.

Organization FunctionsDepartmental For Municipal Investments and School/Community Transfers:Secretariat of . Preparatory Work: Classifies and ranks municipalities according to socioeconomic, educationEducation - SEDUCA and representation criteria.

* Approves procedures detailed in the operational manuals.Key Executives: * Promotion: Initiates project infornation campaign in the Department.Secretary of Education * Approves municipalities to be involved in each of the 3 implementation cycles based onand Division Heads evaluation of submitted proposals and previously specified criteria.

* Technical Assistance: Offers technical assistance and training upon municipal requests.Members: Pedagogical * Legal Framework. Signs Agreements with Selected Municipalities and Schools.and Management * AppraisaL Coordinates appraisal of municipal investment proposals according to criteria specifieDivision of SEDUCA in the current municipal investment manual (Spanish).and representatives of * Implementation: Contributes and disburses loan proceedings for municipal investments andmunicipalities and school transfers.schools. * Evaluation. Makes necessary adjustments based on periodic evaluations and requests by the

beneficiaries.Junta Municipal de For Municipal Investments:Educaci6n (JUME) * Preparatory Work: submits proposal to participate in any of the three implementation cycles.

* Technical Assistance. If selected, requests TA and training for subproject preparation, if needed.Key Executives: Mayor * Subproject Preparation: Prepares municipal investment proposals.and Municipal Secretary * .Submits proposal, PEM (the municipal education plan) and POA (the annual investment plan).of Education * Implementation. Cofinances 50% of municipal investment and manages counterpart funds

account.Members: Jefes de * Manages procurement and implementation of investment proposals.Nuicleo, School * Maintains procurement and disbursement files for random ex post review.Principals, Teachers andCommunity For School/Community Transfers:Representatives (e.g., * Preparatory Work: Classifies and ranks schools according to educationally-at-risk, merit andStudents, Teachers, representation criteria.School Parents, NGOs, * Promotion: Initiates school transfer information campaign in the municipality.Private Sector) * TechnicalAssistance: Offers or contracts technical assistance and training upon school requests.

* Appraisal: Selects schools to participate in the school strengthening component according topreviously specified criteria.

. Coordinates appraisal of school subprojects according to criteria specified in the curren. schooloperational manual (Spanish).

* Maintains appraisal, selection, procurement and disbursement files for random ex post review.* Inplementation: Cofinances and disburses counterpart funds to school accounts.* Evaluation. Requests feedback from beneficiaries.* Provides guidance and project monitoring.

School Board For Municipal Investment:* Sends its school strategic plan (plan educativo institucional -- PEI) to municipality

Key Executive: School * Provides information on students not being served by the education system, as input to thePrincipal municipal school access strategy.Members: Teachers and * Monitors the implementation of municipal investments.Community For School/Community Transfers:Representatives (e.g., * TechnicalAssistance. Makes requests for subproject preparation, if neededStudents, School a Subproject Preparation: Prepares subprojects.Parents, NGOs and * Submits subproject, PEI (the school education project), and POA (the annual investment plan).Private Sector) * Implementation. Manages implementation of subprojects, procurement and school account.

* Maintains proper accounts of expenditure of transfers.* Manages school account.* Evaluation. Requests feedback from teachers, parents and students.* Evaluates accomplishments and learning.

29

The School/Community and Municipal components include the following cycle: (i) promotion; (ii) organization and technical assistance; (iii) projectpreparation, appraisal, and approval; (iv) implementation, supervision and monitoring; and (v) impact evaluation. At any stage, ongoing technical supportwould be available to increase implementation capacity of municipalities, communities and schools.Promotion The Department will initiate the general project promotion, infornation and dissemination. Selected municipalities will implement their

own promotion and information campaigns. Schools and communities will inform and consult local stakeholders on their respectivesubprojects.

Organization As a result of the promotional activities, a number of municipalities and schools will send proposals to the Department, via the Municipality,and Technical to participate in the project. Selected municipalities will evaluate their own need for technical assistance and training and will have access toAssistance (TA) resources to improve their management capacity. Supervision offices (Jefes de Nuicleo) will be refurbished. Selected municipalities will

choose competitively 15 schools (preferably 12 rural and 3 urban) to participate in the School and Community Strengthening Component.Selected schools and their communities will also receive support to strengthen their own organizational structure and human resources.

Subproject Municipalities will prepare subproposals for funding of municipal investments and improve education management Schools will preparePreparation, their own school improvement subprojects, as well as participatory management strengthening proposals by teachers and ParentsAppraisal and Associations. Subproject appraisal and approvals will be coordinated by SEDUCA, for municipal investment, and by the Municipality, forApproval school investments. As possible, the appraisal process will be conducted locally, although coordinated by the responsible institutions. The

appraisal and selection process should take less than 2 weeks from submission. Notices of subprojects not approved will include statedreasons and offer a list for additional technical assistance. Approved municipal subprojects are sent to SEDUCA who authorizes the signingof a standard agreement for accountability in the use of funds between SEDUCA and the Municipality, and between the Municipality and itsselected schools. For financial and disbursement procedures see Annex 7.

Implementa- Municipal education secretariats implement their investment plans and supervise and assist their schools. Likewise, school and communitiestion, will implement their own subprojects. Daily monitoring is the responsibility of each executing level. Monitoring by a higher level ofSupervision and govemment (e.g., department over municipalities, municipalities over schools, and schools over PTAs) will focus on subproject outputs andMonitoring performance and not on daily supervision of procedures and activities. The executive officers at each level (e.g., Secretary of Education,

School Principal, Head of the PTA) will be responsible for making sure that inputs are delivered, as planned, in terms of quantity, quality,time, costs, and that resources were and used as intended. The subproject proposals (stating expected outputs) and the standard legalagreements will serve as the key accountability instrument to measure actual versus expected outputs. The School Education Project (PEI),the Annual Investment Plan (POA) and extemal and self-evaluations of results will provide the basis for assessing the effectiveimplementation of school investments and their impact.

Impact At the end of each set of participating municipalities, SEDUCA will conduct an evaluation process to assess the appropriateness of theEvaluation components' design. Midterm impact evaluations will assess any early indicators of impact on behavior change and on the improvement of

the quality of teaching and leaming in the schoolsCapacity The Components will finance and arrange for the capacity building or training activities required by municipalities, schools andBuilding communities.Coverage Since 100% coverage of all 125 municipalities and their schools is not possible, the goal of the program is to assist approximately 80

municipalities representing the various regional and socioeconomic conditions of the department. In addition, by concentrating also in asample of schools (15 in each municipality), the project will better control the institutional leaming process and the quality of projectinterventions. As such, it is expected the project would be a catalyst to improve education investments in the rest of schools andmuni ipalities of Antioqu.ia.

30

Project Component 3 - Strengthening of Departmental Education Services: US$11 million(total cost of component)

This component would: (i) strengthen the capacity of SEDUCA to coordinate the project (seeorganizational chart in next section); (ii) promote the consolidation of an efficient communication andinformation systern across the department; (iii) strengthen SEDUCA's technical and advisory services toits municipalities; (iv) implement a participatory plan and social marketing campaign in support ofeducational reforms and promotion of positive values and attitudes toward education; (v) strengthen theprocess and impact evaluation capacity of departmental and municipal education organizations; and (vi)document and disseminate lessons learned in project preparation and implementation. Specificinstitutional strengthening investments are detailed below.

Change Management Interventions. Technical assistance and training directed at SEDUCA would focusin areas of organizational development, team-based management, interinstitutional partnership building,consulting skills, conflict resolution and community participation. The resources will build on theparticipatory approach used in project design involving various departments of SEDUCA and thedepartmental secretariats for finance and planning. Technical training in strategic planning, financialmanagement, decentralized procurement and service delivery, and system evaluation will complementthe change management interventions.

Communication and Information System Across the Department. SEDUCA will finance the initialinfrastructure to improve communication across education agencies in the Department. At the centrallevel, SEDUCA will establish its own network for computer connections and electronic mail. Withselected municipal secretariats of education, SEDUCA will establish the required connectivityequipment. In municipalities where computer technology is not the appropriate option, a simplertechnology will be used (e.g., phone and fax systems).

Development of Technical Information Services and Dissemination of Educational Innovations. Aspart of its technical support, as opposed to direct management responsibilities (which are transferred tothe municipalities), SEDUCA will systematize new departmental educational services including: (i) thedesign of technical guides in such areas as contracting with NGOs, education technology, schoolconstruction, and financial sustainability; (ii) description and information on SEDUCA's consultingservices for municipalities in such areas as curriculum development, educational planning, monitoringand evaluation; and (iii) a rationalization of SEDUCA's educational services vis-a-vis those offered mostcompetitively and efficiently by the private sector, NGOs, and universities.

Strategic Information, Education and Communication (IEC) Strategy. The project will finance projectpromotional activities, community participation programs, a social marketing campaign, participatorymonitoring, and dissemination of project outcomes. Through the use of media (television, radio, andnewspapers) and strategic alliances with the private sector, and recognized celebrities (pro bono), thesocial marketing program will promote positive attitudes towards education in Antioquia. Thecomponent will also finance the information and consultation events designed as part of the project'scommunity participation objectives.

Research andAnalysis of Lessons Learned To disseminate lessons learned within the project, as pilotfor nationwide decentralization and education development programs, SEDUCA will coordinate studies

31

and ongoing research to on successful pedagogical innovations and community participation,decentralized management and financial transfers, local innovations on curriculum development, teacherand staff development programs, and process and impact evaluation lessons.

Impact and Process Evaluation System. The project will finance the design, systems, collection of data,and analysis to evaluate project processes and education impact. This investment will provide thefoundation to establish a Department wide system to track processes, outputs and improvements in theeducation sector.

32

Departamental Organizational Structure for Management of theAntioquia Basic Education Project

SECRETARY OF El)UCATIONPROJE CTIDR IO

. ~~~~~lI'rticipalion GrouipO)parsilionts A-4!tdati'll

SEDUCA DIRECTORS' COMMITTEE TECHNICAL, ADMINISTRATIVE, ANDTECHNICAL h PEDAGOGICAL ADMINISTIRATION FINANCIAL DIRECTORATE

Offices: Educ. Devt., Planning, Culture, (Direccion Financiera FER)Decentralization, and Personnel & Teaching Staff Issues Financial Director

DEPARTAMENTAL MUNICIPAL EDUCATION SCHOOL & COMMUNITY Support GroupEDUCATION SERVICES MANAGEMT & INVESTMT STRENGTHENING GROUP Processes:

Educ. Dev., Culture, Planning Planning, Decentralization, Educational Devt, Culture, and Budget, AccountingDecent., Personnel & Teachers Issues Personnel & Teachers Issues Decentralization Financing, & Auditing

~~ Municipality ~~~School__SiSt~~~~~~~~~~~~~~~~~~~~~~~~. . ....g

Annex 3

ANTIOQUIA: Basic Education Project

Estimated Project Costs

Project Component Local Foreign Total------------------------------US $ million---------------------------

School/Comm. Strengthening 42.0 0.0 42.0Municipal Education Mgmt. 12.2 4.8 17.0Department Ed. Services 7.8 1.2 9.0Total 62.0 6.0 68.0

Total Baseline Cost 62.0 6.0 68.0Physical Contingencies 6.0 2.0 8.0Price Contingencies 3.38 0.62 4.0

Total Project Cost 71.38 8.62 80.00

34

Annex 4

ANTIOQUJIA: Basic Education Project

Economic Principles that Guide Project Design

JUSTIFICATION FOR PUBLIC INVESTMENT

The justification for public investments is guided by the following considerations (i) the social rates ofreturn to education; (ii) the public and private partnership; (iii) the impact on the poor; and (iv) theeffectiveness of inputs on learning outcomes.

Social Rates of Return to Education

Research consistently provides strong evidence that investments in all levels of education are profitable,and that the rates of return to society are highest in primary education. In Colombia, the social rates ofreturn to primary education were about 20 percent, that to secondary education, about 11.4 percent, andthat to university education, about 14 percent. These rates of return are higher than the cost of capital,thereby making investments in education justifiable on economic grounds. (See Table below on LatinAmerica for comparison.) Therefore, this project, which supports public investments in basic education,would yield benefits to Colombian society.

Social Returns to Education by Level of Education: Full Method (percent) and the latest yearCountry Primary Secondary UniversityColombia 20.04 11.36 14.03Argentina 8.44 7.06 7.55Bolivia 9.31 7.31 13.13Brazil 35.55 5.08 21.44Chile 8.05 11.10 13.96Costa Rica 11.16 14.43 9.03Ecuador 14.71 12.73 9.87El Salvador 16.38 13.33 8.00Jamaica 17.73 7.92 n.a.Mexico 19.04 9.57 12.91Source: Psacharopoulos and Ng (1992). Earnings in Education in Latin America: Assessing Priorities for SchoolingInvestments. World Bank.

The Public and Private Partnership

Given the significant role human capital plays in increasing productivity, and the market failures in thedemand of education, the government has an undeniable responsibility in the financing of education,particularly at the basic level. Government financing, however, does not preclude private provision andfinancing. In Antioquia, private sector participation is extensive. For example, between 1995 and 1997,

35

the Government of Antioquia financed 100,000 student places in high quality, nonprofit, privateinstitutions. The project supports the continuation of this partnership between the public and privatesectors. In urban areas in particular, where private providers are many, expanding school places andimproving quality should aim at fostering this partnership. In rural areas, particularly the remote part ofAntioquia, where private providers are few because there are not sufficient number of students to inducethem to operate, the government would have to assume the responsibilities of both the provision andfinancing of education.

Impact on the Poor

Studies from international experiences suggest that investment in basic education (primary and lowersecondary) is likely to be more efficient and equitable than investment in higher education.2 The WorldBank Country Study, Poverty in Colombia (1994) confirmed that in 1992 the poorest 20 percent ofhouseholds received 39 percent of total subsidies, an amount 9 times that received by the richest 20percent. At the secondary level, because the poorest quintile had low enrollment and resided mostly inrural areas, the second and third quintiles benefited the most. Nevertheless, the first 3 quintiles benefitedmore from public spending in secondary education than the last 2 quintiles. The situation is the reverse inhigher education, because enrollment in higher education is concentrated in the fourth and the fifthquintiles. (See Table below.)

Distribution of Subsidies to 3 levels of Public Education 1992

Enrollment (Student per Household) Distribution of Subsidies (percent)Quintiles Primary Secondary Higher Primary Secondary HigherI (poorest) 1.09 0.30 0.01 39.4 20.6 5.12 0.70 0.39 0.02 26.2 26.8 9.43 0.51 0.37 0.03 19.4 25.3 18.64 0.28 0.26 0.06 10.8 17.7 33.25 (richest) 0.11 0.14 0.06 4.3 9.6 33.8

The overall distribution impact shows that public education expenditures benefit low income householdsrelatively more than other income groups mainly because of the poor's high participation rates inprimary and lower secondary education (See the following Table). In 1992, households in the poorestquintile accounted for 23 percent of all subsidies. However, because the poor tends to have largerfamilies, the distribution of per capita subsidies is neutral. It is also evident that because enrollmentratios at different levels of education differed by quintile, poor students benefited less at the higher level.

2Jimenez (1987), Petrei (1977), World Bank (1986) as quoted in Jimenez (1993).

36

Total Education Subsidies, 1992

Subsidy ContributionShare Pesos per Pesos per Primary Secondary Higher

Quintile (percent) Household capita (percent) (percent) (percent)1 23.1 152,076 28,022 60 34 62 21.9 144,636 29,418 42 47 113 21.4 141,274 29,917 32 45 234 19.4 127,883 31,104 20 35 455 14.2 93,550 25,658 11 26 64Source: World Bank (1994, Poverty in Colombia, p. 62.

For the above mentioned reasons, the two decentralized projects in Pasto and Antioquia, Colombia, aretargeting poorer populations, as 90 percent of the poor attend public schools. Also, in Antioquia, theDepartment is targeting its support to small, less affluent municipalities. Larger municipalities (over100,000 inhabitants), such as Medellin, will manage their own education resources autonomously of theDepartment.

Effectiveness of Educational Inputs

Guided by a wealtltof research, this project emphasizes investments in educational inputs that are knownto be effective in promoting student learning. These investments include: (i) provision of libraries,textbooks, instructional materials and facilities; (ii) increasing the opportunity to learn throughincreasing instructional time and homework; and (iii) provision of teacher training. The following graphsummarizes the percentage of studies showing differential positive effects of various educationalinvestments on student learning.

37

Effectiveness of Inputs on Student Learning

90

70

60

50

40

30

o20

U~10 ~i.0I

Libraries Instructional Homework Textbooks Teacher Teacher Laboratories Teacher salary Class sizetime knowledge experience

School Input

CRITERIA FOR PROJECT DESIGN

The criteria used to guide the choice among different project designs to achieve the developmentobjectives are as follows: least cost estimates; (ii) stakeholder consultations and participatorydecisionmaking; (iii) lessons learned from previous designs; (iv) study tours to countries with effectivedecentralization reforms; and (v) institutional capacity. Here we present two major alternatives for whichthe least cost estimate criteria was a decisive element (for other project design choices see Block 2,section 8).

Least Cost Estimates

The least cost estimates will guide decisions on increasing the supply of school places and the methodsof building institutional capacity through training, The following paragraphs explain the methods:

School construction versus contracting with private providers. The least cost principle shall guide thedecision on whether additional school places shall be supplied by the government or by nongovernmentorganizations. For example, the government has two options in meeting the demand for additional placesat the secondary level in the urban areas. The government opts to build and operate a public school, orthe government contracts with a nongovernment or private school to provide education to the samenumber of students. The capital and operating costs can be drawn from a sample of public and privateschools with comparable inputs and learning outcomes. For the government schools, the capital costsinclude land, construction costs, furniture and equipment; and recurrent costs include personnel, training,textbooks and supplies, maintenance and repair, utilities and insurance. For the private schools, they tendto rent buildings, rather than to construct schools on their own land. Therefore, the rental cost should be

38

added to the recurrent cost, while the capital cost would exclude land and construction and the otherrecurrent costs remain the same. A comparison could be made as to which option is less costly after, say,20 years of operating the school. The net present value of the per student cost between private and publicschools can be estimated and compared. The following table provides the preliminary findings of asimulation, wherein private provision might be the slightly less expensive choice:

Net Present Value Per Student of the Two OptionsPublic Private

Capital CostsLand 61,590Construction 81,408Furniture and Equipment 43,654 74,598Recurrent CostsRent 56,180Personnel 287,875 321,524Training 6,596 2,841Text Materials and Supplies 35,805 35,805Maintenance and Repair 13,830 21,925Utilities and Insurance 19,149 26,642Total 549,907 539,515

The project design opted to combine both educational expansion approaches. Contracts with NGOswould be the preferred option in urban areas where construction of public schools is more expensive andsupply of private provider, is greater. In rural and isolated municipalities, construction of public schoolsis recommended because of the shortage of private providers.

Institutional Capacity Building: Centrally provided training and technical assistance versus blocktransfers to enable beneficiaries to choose training and assistance providers. A key developmentobjective of the project, proposed and agreed upon by a large representation of education stakeholders inAntioquia, is to "improve the capacity of schools/communities, municipalities and the department toprovide effectively their own respective education services." During project preparation, variousalternatives were tested to select the most appropriate and cost-effective design to achieve the statedobjective. Improving management capacity implied both skill development and behavioral changes at allinstitutional levels: (i) school/community, (ii) municipality and (iii) department.

The first proposed project design included a large training program, centrally managed, to develop skillsin participatory management, planning, administration, pedagogical decentralization, and restructuring.To complement the training program, officials and technical experts from the Departmental Secretariatof Education (SEDUCA), would provide direct technical assistance in site. The original rationale for thisdesign was (i) to have direct control in the design of training to ensure delivery and quality, and (ii) touse existing technical and human resources in SEDUCA.

A second alternative was to provide schools and municipalities with block transfers earmarked for keyactors and specifically for capacity building . These included transfers for pedagogical improvements,management and organizational development, and community involvement. The transfers would becomplemented with a quality review of private sector service providers (for both training and technical

39

assistance) and an ex post evaluation of results on the ground. In addition, skill development,accomplished by training interventions, would be complemented with increased decisionmaking at thelocal level and responsibility for managing of funds, which in itself can promote changes in managementbehaviors from passive recipients of inputs to active change agents.

Although both approaches could have been effective in developing skills (though the second oneincluded an increased participatory and empowerment component), a comparison of costs of bothinitiatives shows that block financial transfers provide the least cost. The summary table below comparesthe costs between centrally provided training and block transfers, in terms of the net present value (NPV)of the total cost, and cost per municipio, and cost per teacher.

Institutional Capacity Building: Municipalities and SchoolsNPV Total Cost NPV Cost Per NPV Cost Per

Alternative (Million of Pesos) Municipality TeacherCentrally Provided Trainingand Technical Assistance 14,094 881 3

(Public Sector)

Decentralized ProvidedTransfers for Training and 10,350 129 1.5

Technical Assistance(Private Sector Choice)

40

Annex 5


Financial Summary

Review of Public Expenditure on Education in Antioquia During FiscalDecentralization and Fiscal Sustainability of the Project

Review of Public Expenditure on Education in Antioquia

The fiscal sustainability of the project is closely linked to the fiscal decentralization process thathas accompanied political decentralization and reform. This process began with theestablishment of the electoral system for local officials and members of Congress (Law 11 of1986) and of the legal framework for fiscal transfer from the central level to the municipalities(Law 12 of 1986), paving the way for the election of mayors since 1988, and of governors since1991. The landmark 1991 Constitution affirms the decentralized structure by distributingadministrative functions at different levels of government and increasing local responsibility inthe delivery of social services. The Constitution also allows department and municipalgovernments to raise tax and nontax revenues, as well as to borrow to finance their investments.The FIS was formed in 1992 to enable the central and municipal governments to cofinanceinvestments in the social sector through a line of credit. Law 60 of 1993 and Law 115 of 1994spelled out in more specific terms the responsibilities of the departmental government toformulate social policies and the municipalities to provide services, as well as the details offiscal transfer to empower these provincial and local governments.

The new system is predicated on the estimate that the central government would draw about 30percent of its revenue from income taxes, 30 percent from value-added taxes, 30 percent fromcustoms and import taxes, and 10 percent from royalties and others. About 24.5 percent of thecentral government's revenue are earmarked for "Situado Fiscal", which will be transferred todepartmental governments to cover the salaries of service personnel in education (75 percent)and health (25 percent). Another 18 percent of the central government's revenue, known asNational Investment Transfer (Ingresos Corrientes de la Naci6n or ICN), are earmarked fortransfer to the municipalities. The municipalities are expected to spend about 27 percent of theICN on recurrent expenditures and 73 percent on investment, of which 30 percent are earmarkedfor education. (See diagram, next page).

Fiscal decentralization, in summary, enables department governments to draw from three sourcesof revenues: (i) their own taxes (mostly through levies on liquor and tobacco); (ii) their ownborrowing within the limits set by the central government; and (iii) Situado Fiscal which istransferred from the central government to pay for salaries. Municipalities also have threesources of revenue: (i) their own local taxes; (ii) FIS; and (iii) ICN, which constitutes the largest

41

source of social spending. Even when in the future, the FIS is to be integrated with other funds asa result of rationalization of expenditure, the municipalities still have the ICN with which toinvest in education. The counterpart funds from municipalities for the project are to come fromthe ICN transfer.

A review of public expenditures on education in Antioquia during the fiscal decentralizationprocess from 1991 to 1995 found that, in real terms, Situado Fiscal increased by 24 percent, FISby 94 percent, and municipal spending on education (through ICN transfer ) by 159 percent.When municipal education spending is broken down by type of expenditure, recurrentexpenditure grew by 21 percent, while investment by 3.15 percent. Department recurrentexpenditures on education was reduced by 11 percent in large part due to rationalization of theAntioquia government, but departmental investment in education grew by 98 percent. In total,public expenditure on education grew by 41 percent in real terms between 1991 and 1995. Aspublic spending increased more rapidly than the growth of enrollment, per student spending roseby 32 percent in real terms. (See the following table.)

Because the increase of education expenditures in the municipalities was greater than that ofSituado Fiscal or departmental expenditure, the relative proportion of these sources have shiftedduring the period. The share of Situado Fiscal fell from 60 percent of total in 1991 to 53 percentin 1995, and departmental expenditures on education also dropped from 21 percent to 15 percent,while municipal expenditures increased from 15 percent to 28 percent of total. These trends showthat the municipalities have the fiscal capacity to invest in education in the project.

42

Public Expenditure on Education in AntioquiaIn current prices ('000 Pesos) Percent of Total

Expenditures at Various Levels 1991 1992 1993 1994 199 1991 1992 1993 1994 1995

Tranfer from the Central Government

Situado Fiscal (Recurrent: salaries) 42,584 56,116 72,964 94,540 125,653 60.3% 61.6% 58.6% 50.7% 53.0%

FIS (investment) 2,255 2,860 3,579 4,387 9,548 3.2% 3.1% 2.9% 2.4% 4.0%

Subtotal 44,839 58,976 76,543 98,927 135,201 63.5% 64.7% 61.5% 53.0% 57.0%

Department Expenditures

Recurrent 13,642 14,707 17,831 ?52S,582 29,049 19.3% 16.1% 14.3% 13.7% 12.2%

Investment 1,258 1,498 1,998 5,804 5,939 1.8% 1.6% 1.6% 3.1% 2.5%

Subtotal 14,900 16,205 19,829 31,386 34,988 21.1% 17.8% 15.9% 16.8% 14.7%

Municipal Expenditures'

Recurrent 5,775 7,929 10,668 13,916 16,604 8.2% 8.7% 8.6% 7.5% 7.0%

Investment 5,100 8,035 17,474 42,273 50,499 7.2% 8.8% 14.0% 22.7% 21.3%

Subtotal 10,875 15,964 28,142 56,189 67,103 15.4% 17.5% 22.6% 30.1% 28.3%

Total 70,614 91,145 124,514 186,502 237,292 100.0% 100.0% 100.0% 100.0% 100.0%

In Constant 1995 Prices ('000 Pesos) Rates of Changes

Expenditures at Various Levels 1991 1992 1993 1994 1995 1991-92 1992-93 1993-94 1994-95 1991-95

Tranfer from the Central Government

Situado Fiscal (Recuffent: salaries) 101,566 105,535 109,661 115,897 125,653 3.9% 3.9% 5.7% 8.4% 23.7%

FIS (investment) 4,916 4,961 4,916 5,293 9,548 0.9% -0.9% 7.7% 80.4% 94.2%

Subtotal 106,482 110,496 114,577 121,190 135,201 3.8% 3.7% 5.8% 11.6% 27.0%

Department Expenditures

Recurrent 32,538 27,659 26,800 31,360 29,048 -15.0% -3.1% 17.0% -7.4% -10.7%

Investment 3,000 2,818 3,002 7,114 5,938 -6.1% 6.5% 137.0% -16.5% 97.9%

Subtotal 35,538 30,477 29,802 38,474 34,986 -14.2% -2.2% 29.1% -9.1% -1.6%

Municipal Expenditures

Recurrent 13,775 14,912 16,034 17,060 16,604 8.3% 7.5% 6.4% -2.7% 20.5%

Investment 12,164 15,112 26,263 51,822 50,499 24.2% 73.8% 97.3% -2.6% 315.2%

Subtotal 25,939 30,024 42,297 68,882 67,103 15.7% 40.9% 62.9% -2.6% 158.7%

Total 167,959 170,997 186,676 228,546 237,290 1.8% 9.2% 22.4% 3.8% 41.3%

Total Students in the Public System 792,353 828,708 812,909 837,137 846,490 4.6% -1.9% 3.0% 1.1% 6.8%

Spending Per Student 212 206 230 273 280 -2.7% 11.3% 18.9% 2.7% 32.2%

Source: SEDUCA

43

Fiscal Impact and Sustainability

Total project costs are US$83.3 million, including US$3.3 million in incremental recurrent costs over a5-year period (or an average of US$0.66 million/year). The project costs are divided betweendepartmental investments and municipal investments; the latter includes transfers transfer to schools. Ayearly average of capital investment counterpart funds during the life of the project amount toapproximately US$1.3 million for the departmental government and approximately US$6.87 million forthe municipalities (approximately 80).

The estimated financial impact of the project was calculated based on the following assumptions: For theDepartment, (i) the real departmental GDP growth rate was 5 percent in 1996 and it was estirfiated toremain at 4 percent growth rate during the life of the project, from 1998 to 2002; (ii) the share of theeducation budget was estimated to remain at about 2.2 percent of GDP over the 1998-2002 period; (iii)real increments to the education budget would be used to finance improvements in basic education(preschool, primary and lower secondary), while public expenditure on higher levels of education,including transfers to universities would be kept in constant terms. For the Municipalities, (i) ICN whichincreased by 6 percent in 1996, would remain at 4 percent growth rate during the life of the project; (ii)the share of ICN used in the education sector would remain at its mandatory minimum: 30 percent; and(iii) real increments to the education ICN would be used to finance school access and school-basedquality development in Basic Education.

At the departmental level, over the life of the project, real incremental recurrent costs are estimated togrow from US$0.2 million in the first project year, to US$0.5 million in the last year. Based on projectededucation budget increases of 4 percent per year, project recurrent costs as a percentage of educationexpenditures would be small, ranging from 1.5 to 5.5 percent. Recurrent costs plus counterpart fundswould decline from US$1.929 million in the first project year to US$0.40 million in the last year. Thesetotal costs as percent of education expenditure would decline from 5.55 percent in 1997 to 1.7 percent in2000 and 0.12 percent in 2001. 60 percent of the total departmental recurrent costs plus counterpart fundswould be covered by only the aggregate budget increase during the 1997-2002 period (see Table 1below).

At the municipal level, over the life of the project, real incremental recurrent costs are estimated to growfrom US$0.16 million in the first project year, to US$0.8 million in the last year. Based on projected ICNincreases of 4 percent per year, project recurrent costs as a percentage of the projected increases in ICNwould decrease from 47 percent in 1998 to 40 percent in 2002. Recurrent costs plus counterpart fundswould grow from US$2.17 million in 1998 to US$4.35 million in the last year, or 24 percent of the ICNfor the education sector in 1998 and 8.4 in 2002. After project completion, the yearly averageincremental recurrent costs at the municipal level generated by the project are estimated to be US$0.8million, which would account for about 1.5 percent of the annual ICN allocated to the education sector(see Table 2 below). In summary, it is estimated that the project is fiscally sustainable.

3This is a conservative average; the IMF and the Bank estimate that Colombia economy would grow between 5-6%by the end of the decade, and Antioquia has maintained higher growth rates than the national averages.

44

Table I

Financial Sustainability of the Project Departmental ComponentAntioquia Antioquia SEDUCA's Estimated Counterpart of SEDUCA Incremental Total Total Costs Total Costs

GDP Budget Budget growth of (% of Real Incremental Costs as a % of as a % of

(growth 4%/year) (2.2% of GDP) (12.1% of SEDUCA's Budget SEDUCA's Costs of the Project SEDUCA's SEDUCA's

Year (million pesos) . Department Budget) Estimated 3% Budget) (recurrent) (recurr.+counterp.) Budget growth Budget

1996 12,553,608 276,179 33,418

1997 13,055,752 287,227 34,754 1,003 1,909 5.5% 20 1,929 192.41% 5.55%

1998 13,577,982 298,716 36,145 1,043 1,854 5.1% 50 1,904 182.61% 5.27%

1999 14,121,102 310,664 37,590 1,084 1,298 3.5% 50 1,348 124.32% 3.59%

2000 14,685,946 323,091 39,094 1,128 603 1.5% 50 653 57.90% 1.67%

2001 15,273,384 336,014 40,658 1,173 50 50 4.26% 0.12%

2002 15,884,319 349,455 42,284 1,220 40 40 3.28% 0.09%

2003 16,519,692 363,433 43,975 1,269 15 15 1.18% 0.03%

2004 17,180,479 377,971 45,734 1,319 15 15 1.14% 0.03%

2005 17,867,699 393,089 47,564 1,372 15 15 1.09% 0.03%

2006 18,582,406 408,813 49,466 1,427 15 15 1.05% 0.03%

2007 19,325,703 425,165 51,445 1,484 15 15 1.01% 0.03%

2008 20,098,731 442,172 53,503 1,543 15 15 0.97% 0.03%

2009 20,902,680 459,859 55,643 1,605 15 15 0.93% 0.03%

2010 21,738,787 478,253 57,869 1,669 15 15 0.90% 0.03%

2011 22,608,339 497,383 60,183 1,736 15 15 0.86% 0.02%

Total 20,074 5,664 395 6,059

Notes:

Figures in million pesos

SEDUCA=Secretarla de Educaci6n y Cultura de Antioquia (Antioquia Secretary of Education and Culture)

Assumptions:

(1) Annual Inflation Rate of 20%

(2) Constant growth rate

45

Table 2

Financial Sustainability of the Project Municipal Component (Municipalities + Schools)ICN assigned to ICN Used in the Eantdgrowth Nvnberof Average Ave-sge Educadnal ICN Average Estinated Municipalities Coutespan | u Incrnntal Total Reurrent usMunicdpalides Edue dcao Sector of the Mussici Pssepatfng Educauiual ICN Esinstd (rost of the Gr of Educational Educatienal ICN as a % Recurenlt Costs ltcrsentnl % of Estissnted

(4% growsWyeur) in Munieipalities Edcuedoml ICN Musicipalitsi by Municipality of EdueintiualICN Pastscipsting ICNof Participadng of the Budget in the by Participating Project Costs G th of the El

Year (30/% of Total) by year (124 in Anoiquia) by Municipaliy Municipalities Municipalities Partic.Municipalities Municipalities recurr.+counterp.. ICN in Part.Munic.

1996 210,501 63,150 5091997 21S,921 65.676 2,526 530 20

1998 227,678 68,303 2.627 16 S51 21 a,813 339 2,00S 22.7S/. 160 2,168 47.20Y.

1999 236,785 71,035 2,732 48 573 22 27,498 1,058 7,899 2S.73% 4S0 8,379 45.39%/

2000 246,256 73.,77 2,S41 80 596 23 47,663 1,N33 11,959 25.09%. S00 12,759 43.64%

2001 256,107 76,832 2,955 620 24 49,569 1,907 S,91S 17.99%/. S00 9,718 41.96%

2002 266,351 79,905 3,073 644 25 51,552 1,983 3,551 689-/. S000 4,351 40.35%

2003 277,005 83,101 3,196 670 26 53,614 2,062 800 000 38.80%/

2004 288,085 86,426 3,324 697 27 55,758 2,145 S0o S00 37.30/

2005 299,609 89.8S3 3,457 725 28 57,989 2,230 S0o 000 35.07%/.

2006 311,593 93,478 3,595 754 29 60,308 2,320 800 S00 34.49%/.

2507 324,057 97,217 3,739 704 30 62,721 2,412 800 800 33.16%

2008 337,019 101,106 3,809 815 31 65,229 2,509 S00 800 31.89%/.

2009 350,500 105,150 4,044 S48 33 67,039 2,609 S00 800 30.66%

2010 364,520 109,356 4,206 882 34 70,552 2,714 S0 0 00 29.4S%

2011 379,100 113,730 4,374 917 35 73,374 2,022 S00 So 28.35%

Total 50,5S0 28,941 34,335 3,040 44,575

Notes:Figures in million pesosICN=% of the central govemment revenue transferred to the municipalitiesFrom year 2000, the 80 participating municipalities will have sustainability expenditures for the projectMedellin is not included in figures of the ICN

Assumptions:(1) Annual Inflation Rate of 20%(2) Constant growth rate

46

Annex 6


Procurement and Disbursement Arrangements

Procurement Arrangements

General. Goods and works shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurementunder IBRD Loans and IDA Credits" published by the Bank in January 1995 and revised in January and August 1996 (TheGuidelines) and the provisions stipulated in the Loan Agreement.

School Grants. Given the small size of contracts and the wide range and timing of individual school and communitysubprojects, packaging of works and items into large procurements groups is not feasible. The average cost of each individualsubproject is US$25,000 and will not exceed US$50,000. Thus, most contracts for minor works and goods would be awarded onthe basis of lump sum, fixed price contracts through quotations obtained from at least three eligible suppliers. Consequently, thevalue of contracts for such projects will not be taken into account when calculating the aggregate limits mentioned in thefollowing paragraphs. Participating schools will follow procurement procedures for small purchases detailed in the ProcurementManual which is satisfactory to the Bank. The Manual also details supervision, reporting and auditing requirements to ensurethe intended use of resources. The Bank will carry out procurement audits once a year to assure that procedures are consistentwith the Manual.

Civil Works. Works estimated to cost US$1.0 million or less but more than US$250,000 equivalent, will be awarded followingNational Competitive Bidding (NCB) procedures up to an aggregate amount not to exceed US$2.3 million. Internationalbidders will not be discriminated and the procedure should be acceptable to the Bank. Smaller works estimated to costUS$250,000 or less equivalent per contract, up to an aggregate amount not to exceed US$4.1 equivalent will be procured underlump-sum, fixed-price contracts awarded on the basis of quotations obtained from at least three qualified contractors accordingto guidelines detailed in the Procurement Manual.

Goods. Computers and communication equipment estimated to cost over US$250,000, would be procured using LimitedInternational Bidding (LIB), up to an aggregate amount of US$4.1 million. All other goods estimated to cost US$250,000 ormore would be procured using International Competitive Bidding (ICB). Goods estimated to cost less than US$250,000 but notless than US$50,000 would be procured in accordance with the NCB procedures up to an aggregate amount of US$1.2 million.For smaller purchases, National Shopping procedures may be used up to an aggregate amount of US$1.0 million for contractsvalued at less than US$50,000.

Employment of Consultants: Consultants' services shall be procured in accordance with the provisions of the "Guidelines:Selection and Employment of Consultants by World Bank Borrowers" published by the bank in January 1997 and theprovisions stipulated in the Loan Agreement.

Consultants' Services with firms will be contracted through Quality-Cost Based Selection (QCBS) except as indicated below.The short-list of consultants for these services, estimated to cost less than $100,000 equivalent per contract, may compriseentirely of national consultants Consultants' services provided by firm's for technical assistance, training and other services ofstandard or routine nature estimated to cost less than US$100,000 may be selected based on Least-Cost Selection procedures,up to an aggregate amount of US$8.7. Provision of services by Educational NGOs for special access and rural educationprograms, up to an aggregate amount of US$5.7 million will be contracted under Fixed Budget procedures. All otherconsulting services estimated to amount in the aggregate of US$6.5 million will be procured under contracts awarded toindividual consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the Guidelines: Selection andEmployment of Consultants by World Bank Borrowers, dated January 1997.

Prior Review. Prior Bank review would be required before all bidding procedures for the following procurement actions: (a)LIB and ICB procurement; (b) the first NCB procurement each year for both civil works and goods; (c) all consultants' servicesestimated to cost US$100,000 or more if provided by a firm including those contracted under QCBS irrespective of thctir value,

47

according to the stipulations of Appendix 1 of the Guidelines: Selection and Employment of Consultants by World BankBorrowers, dated January 1997; and all consultants' services estimated to cost US$50,000 or more if provided by an individual;(d) any amendment of contracts resulting in the increase of the contract value beyond the review limits set in (a) through (c)above; and (e) all TOR. Random ex post review of all other contracts will be carried out by Bank supervision missions.

A Procurement Plan satisfactory to the Bank, including sample LOIs and TORs for the first year of implementation waselaborated prior to project negotiations. A project launch workshop to familiarize the project coordination personnel withprocurement, disbursement, reporting and auditing requirements will be organized at an early stage in Project implementation.The General Publication Notice will be published together with the first invitation to express interest to consultant contracts.

Table A: Project Costs by Procurement Arrangements

(in US$ million equivalent)Expenditure Category Procurement Methods Total Cost

ICB NCB Other

I. WorksNew Classroom Const. 2.3 4.1 a/ 6.4& School Rehabilitation (1.15) (2.05) (3.2)

2. GoodsComputerand 2.8 1.2 5.1 a/b/ 9.1Communication (1.4) (0.6) (2.55) (2.55)Equipment, DidacticMaterials, Furniture

3. Consultants' ServicesTA, Training, PCU, 24.0 /e 24.0Agreements with NGOs (12.0) (12.0)

4 School Grants \d 41.3/a 41.3(20.65) (20.65)

Total 2.8 3.5 74.4 80.7(1.4) (1.75) (37.2) (40.35)

Notes: Figures in parenthesis are the amounts to be financed by the Bank loan.a. At least three quotationsb. LIB Computer and Communication Equipment US$4.1; Shopping US$1.0 million.c. Consultant Services: US$3.1 QCBS; US$ 8.7 million Least-Cost Selection; US$5.7 million (NGOs) Fixed

Budget; US$ 6.5 million Individual Consultants.d. School Grants funds will be allocated to 1200 schools in 80 municipalities. Procurement may include goods

(computer equipment, didactic materials, supplies, furniture), technical assistance (fellowships, workshops,teachers' investigations and training), and services (dissemination campaigns. transportation, rental of conferencerooms, meetings, etc.). Procurement will be carried out upon identification of needs by each school , up to anallocated amount per school assigned by category of municipality, on the basis of established ceilings andprocurement methods described in the Procurement Manual acceptable to the Bank, up to an approximate aggregateamount of US$41.3 million.

48

Table Bt: Thresholds for Procurement Methods and Prior ReviewWorks and Goods

(USS '000)

Expenditure Contract Value Procurement Contracts SubjectCategory (Threshold) Method to

Prior Review

1. Works>250 NCB Ist. each year<250 Three quotations None

2. Goods>250 ILB/CB All

<250-50 NCB Ist. Each year<50 Shopping None

3. School Grants (a) <50 Shopping None

(a) It is expected that all the procurement under this category will be under US$50,000 and be carried out through shopping.

Table B2. Thresholds of Prior Review by Procurement MethodsConsultants(US$ '000)

Expenditure Category and Selection Method Prior ReviewThreshold

A. Firms:

$100 or more QCBS All documentation$100 to $200 QCBSa or Least Cost Selection All documentationLess than $100 Least Cost Selection TOR I

NGOs (Regardless of their value, Fixed Budget TORbut less than $50)

B. Individuals:

$50 or more Consultant Guidelines: Section All documentationV.

Less than $50 Consultant Guidelines: Section TORV.

(a). Bank also reviews technical evaluation reports

49

Table C: Allocation of Loan Proceeds

Category Amount (US$million) Disbursement Percentage

1 Civil Works

(except those under Grants) 3.2 50%

2 Goods 4.5 50%(except those under Grants)

3 Training, Consultants 9.8 50%and Services(except those under Grants)

4. School Grants 20.0 100% Of portion provided by Department

5 Unallocated 2.5

Total 40.0

50

Annex 7ANTIOQUIA: Basic Education ProjectFinancial Management Arrangements

A Financial, Management, Reporting and Auditing manual (FMM) describing in details the financial managementrequirements for each level of implementation of the project was prepared by the SEDUCA and was discussed and agreed uponduring project appraisal. A first draft was placed in the project files.

Financial Reporting. Since most aggregated documentation both in the case of the Municipal Investments ard SchoolSubprojects will eventually be sent to the Departmental Secretariat of Education (SEDUCA, see below), overall projectfinancial reporting and auditing will be the ultimate responsibility of this agency. The project would be required to preparefinancial statements, which would be audited annually by independent auditors acceptable to the Bank. The audit report wouldbe submitted to the Bank for review and approval within six months of the end of each fiscal year.

Special Account. In order to facilitate disbursements, a Special Account in the amount of US$3 million will be established in$US in a commercial bank which is outside of Colombia but has branches in Medellin, Antioquia. This arrangement is currentlyin place on other Bank projects in Colombia, in which Special Accounts are held in U.S. branches of Colombian banks. Therationale for this procedure is that the country's central bank is not equipped to handle a large volume of small transactions anddoes not offer all required banking services (see Figure #1 of this annex).

Monitoring of the SA, including the preparation of withdrawal applications for reimbursement from the Loan Account, will bethe responsibility of SEDUCA's Technical, Administrative and Financial Directorate (Direcci6n Financiera FER). However,for internal control purposes and in order to operate within the existing financial management system, Secretaria de Hacienda(Hacienda), the Finance Secretariat, will manage the account under terms and conditions satisfactory to the Bank. The Bankwould make an initial deposit of US$lmillion in the Special Account. Once total withdrawals from the account have reachedUS$3 million, the authorized allocation for the Special Account would be increased to US$3 million. SEDUCA V'Il submitreplenishment applications for the Special Account on a monthly basis, or when 25 percent of the authorized allocation hasbeen used, whichever occurs first. Thie- replenishment applications will be supported by the necessary documentation: a bankstatement of the Special Account and a reconciliation of the Special Account against the Bank's records. Replenishment of theSpecial Account would follow Bank procedures. The Special Account would be audited in conjunction with the annu, I audit ofthe project (see above).

Counterpart Funds

A. Departmental level -- Activities to be financed under the Department Education Services Strengthening Component(see Figure #2 of this annex):

A Current Account (CA) in Pesos would be established for counterpart funds, possibly in the same local branch of thecommercial bank where the SA will be open. Through these funds the Department will cofinance all the various activities of theproject according to the disbursement categories described in Table C. As with the SA, the establishment of the CA wouldnecessitate an initial deposit by the Department, equivalent to 4-6 months of the Department's share of expected projectexpenditures. The account would be periodically reimbursed by Hacienda after submission by SEDUCA of an application forreimbursement -- with financial reports as agreed to between the SEDUCA and Hacienda

This system will provide assurance that counterpart funds will be readily available for project expenditures. In addition,accounting for expenditures which are financed by both parties (i.e. the Bank and the Department) will be transparent, sinceeach account will only be used to pay for that financier's portion of the expenditure.

B. Municipal level: The selected municipalities will provide the counterpart funds to finance the Municipal and Schoolinvestment subprojects. To this end they will open a Municipal CA similarly to what is described for the Departmenta' level.

Flow of Funds to Municipal Investments and Subprojects. A written contract (SEDUCA Agreement) between theDepartment and the Municipality will regulate the transfer and the use of funds to finance the municipal investments and schoolsubprojects.

51

A. Municipal Investments (see Figure #3 of this annex): Municipalities will be eligible to make an advanced payment of upto 20 percent on signed contracts of goods, services and civil works. This initial advance will be financed by both loan andcounterpart funds; the loan portion will be deposited only after the municipality has entered into a written contract with theDepartment and after the relative amount of counterpart financing has been deposited by the municipality.

After the transfer of the downpayment, subsequent transfers of funds to municipalities will be made only after the SEDUCA issatisfied as to the use of funds previously transferred. The municipalities will have to submit a financial report to the SEDUCA,with all expenditures fully supported by appropriate documentation. Then, SEDUCA, through Hacienda, will make available tothe Municipalities a reimbursement equivalent to the Bank financing share for each category described in Table C. The projectwill provide each municipality with a standard, concise chart of accounts, which will represent a subset of the overall projectaccount structure, and appropriate accounting software. Training on the use of this accounting system will be provided by theSEDUCA to each of the municipalities.

B. School Subprojects (see Figure #4 of this annex): To finance the subprojects developed by each of the selected schools ofthe participating Municipalities, the project will periodically transfer funds to each institution through a current account whichwill form part of the Fondos Servicios Docentes (school managed accounts established by Law 60) (FSD) according to theprocedures detailed in the Operational Manual. (Schools without resources to manage their budget and accounting procedurescan request to have payments made on their behalf by their local Education Secretariat.)

Upon signing the school agreements, the project will transfer funds equivalent to four to six months of implementation of thesubprojects. The Bank loan will finance these activities in block transfers. Direccion Financiera FER will deposit the transfersinto the FSD for each school upon request from-the-respective Municipality and only after the amount of municipal counterpartfinancing is deposited in the FSD. The schools, represented by their Principal, will have to submit a financial report to theMunicipality, with all expenditures fully supported by appropriate documentation. The project will provide each school with asimple format to track inflow/outflow of funds and a statement of expenditures. Training on simple accounting procedlures willbe provided to schools opting to self-manage their own transfers.

Each Municipality will transfer the appropriate documentation relative to the implementation of school subpiojects toSEDUCA. A new tranche of school subproject financing for an additional period of four to six months will be transferred bySEDUCA, through Hacienda, upon request from the Municipality only after satisfactory review of the use of funds during theprevious period and the municipal financing share for the following period be deposited into the FSD. School subprojects willbe part of annual audits and the Bank, during regular supervision missions, will also review a randomly selected sample ofschool subprojects.

52

#1 FLOW OF FUNDS

3Request Reimbursement

_Opims Lk ar- -i;:; . ~AcMcunt in .-

8 Finance S. Opens Finance S. Opens Finance Sec. Incorporatesent Special Account 4 Account for Counterpart Annual Project Budget

12 Requests ReimbursemensvteakFnds$ -_

for Municipality/Schools /1 7 \ ' ~ ~- I

-21Retroactive Payment Prior to Effect10 / ~~ _ Department 2-

16 Requests / Providers _ ,,,-12

Reimbursemens/_

School Subprojects 17

IIA A-oou-t D D F BlockGrants

Fuin nC a p Advaaces - _

14 r5 2 SchIools

L _ _rovidersdersC r

#2 - DEPARTMENT DISBURSEMENT, FINANCIAL AND ACCOUNTING

I E: ~~~~~~~~~~Finance Sec.

-- g MIF I M J ~~~~2 Open- Budget * 7 Departmental A ssmbF-_-I i I l Sl r ~~~~~~Code and Expeondi t e| Approval Opn *(D a iCpwfnt Accun

it | l | l kOH __~~~~~~~~~~~mm Counterpat Fundsi

to3 1,I o

1 | | If needed, moditilF t Includes Project Budgi Opens Speciat AcountPn Departmental in US Dollars in Forei

_ _ s 4 1 IIFw 6 | Budget gE | Bank

S

| snfr on Availalbility of |12 IFundst in Current Account andl

/ Spiecii Account

Budget Execution13

16

| ta Send Paunnent i

|AflerPayment, Doctuni, on

| F ares Reports fo|World Bnk and Auditon I,

53

#3 - MUNICIPAL BUDGET, FINANCIAL AND ACCOUNTING FLOW

2 3

Municipal Cciling Municipal Municipality Sii-Categorizan- A Bu B * SEDUCA Agmee I_

_ ~ ~B ______ _-

I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~4Dept. Resouresj Municipal 1_World Bank ds

9 7_ _ _

6

10 | 1 8~~~~~~~~~~~~~1

12

~~~~~~~~~~~~~~~~~~104_

#4- SCHOOL BUDGETARY, FINANCIAL AND ACCOUNTING

d5 5

Yes No

__~~~~~~~~~~~~~~~~~~~~~~~~~I t 1 24

~~~~~~~~~~_~~~~ Exct GrntReoueelrotimetnrg

12~~~~~~~~~

=1

I / -054

| Yes g \sa No~~~~~~~~~~~~~~~~~~~~~~1

2 6 u~~~~~~~~5

Annex 8Antioquia: Basic Education Project

Description of Impact and Process Evaluation TORs

Purpose

To ensure that the project has achieved its objectives at the school and municipal levels and thateducation stakeholders have a say in assessing project processes, strategies and use of resourcesduring the implementation of the project.

Impact Evaluation Goals* To measure the level of improved student learning at time of graduation, which would have

occurred during the implementation of the Antioquia Education Project.* To measure the level of access to schooling and changes in education efficiency (student

dropout and repetition), which would have occurred during the implementation of theproject.

* To measure the level of perceived improvements in student attitude and interpersonal skillswhich would have occurred during the implementation of the project.

- To measure changes (type, time and perceived satisfaction) of relations among municipalofficials, principals, teachers, student, parents and the community.

Process Evaluation Goals- To evaluate the processes, of provision of the respective educational services between the

department, municipalities and the schools as regards to equity, timeliness and satisfaction.- To assess the effectiveness and efficiency of project implementation procedures and

organizational functions. in order to make timely adjustments.

55

Evaluation Design

1. The impact evaluation design will focus on three levels of impact: (i) overall student learning, (ii) improvedaccess and education efficiency, and (iii) behavior and institutional changes at the school, municipal and departmentallevel. The process evaluation will assess the efficiency and effectiveness of delivery of services among the differentinstitutional levels, but especially to the school. The project interventions will be provided to a total of 80municipalities and up to 15 schools in each of the 80 municipalities, for a total of 1,200 schools.

2. No random experimental and control groups were selected. Instead, the evaluation is concerned only inspecifying if any significant changes took place in the 1,200 schools during the implementation of the project bycomparing the status of the three abovementioned levels of impact, prior and after project implementation.Antioquia's Secretariat of Education decided on a black box evaluation approach (i.e., no attempt will be made todesegregate the impact of the project from other educational interventions). The evaluation will not assure full directcausality but will assess the overall status prior to implementation and the changes perceived after projectinterventions.

The DesignPretest: Interventions Post-Test Triangulation

Baseline data * Training and TA Same Data * Focus Groups(beneficiary survey, * School Transfers -ollected In - with schoolsample SABER test for: 80 staff andscores, municipal * Instructional municipalitie communitieseducation Materials s and their and Schoolinvestment data) * Infrastructure schools in: Climatecompleted by * Participation 2000 and ObservationsSEDUCA in the 80 * Municipal 2003municipalities and Investment intheir respective School Accessschools selected to and Managementparticipate: 1998 Strengthening

DepartmentalAdvice,TechnicalAssistance, andCommunication

3. The process evaluation will assess the efficiency and effectiveness of project implementation procedures andother organizational and managerial elements of the project. The first evaluation of project processes and procedureswill take place after the initial phase of project implementation, consisting of only 16 municipalities. After the initialphase and any adjustments resulting from the first process evaluation results, the project will be expanded gradually toan additional 64 municipalities.

Outcome Measures

4. For each of the evaluation goals, the following objectives and measures are defined:

5. Measure Improved Student Learning. The objective is to differentiate the level of student learning in fourbasic curriculum subjects: language arts, mathematics, science and social studies. The learning measures would be theaverage SABER scores per school. SABER is a standardized series of tests administered to third and sixth graders, atthe end of the school year.

56

6. Measure Level of School Openness Toward the Community and Community Contributions to Schools.A community and school survey will try to determine what is the level of satisfaction/attitudes of principals, teachersand parents towards community involvement in school, and how satisfaction and attitude change over time. A secondindicator of comnnunity participation will be the level of community contributions (time, in-kind, financial) comparedbetween the beginning and the end of the project. It is expected that children will benefit from parental involvement inthe school (e.g., more homework emphasis, communication between parents and teachers); thus, it is expected thoseschools that implement community involvement plans will show higher SABER scores.

7. Measure the difference in access to education resources in participating Municipalities: The processevaluation indicators will track (i) the procedures used to deliver education inputs (e.g., civil works, instructionalmaterials, training), (ii) the level of resources channeled directly to schools, and (iii) the respective outputs produced(e.g., increased access, infrastructure improvements, instructional materials available, number of staff trained).

Data Collection Procedures.

8. Five tools for data collection will be used: (i) existing standardized test scores, SABER; (ii) a school surveydesigned to collect demographic information of each school, but also include questions designed to assess attitudesand behaviors at the school level; (iii) investment data from miunicipal education secretariats; (iv) yearly focus groupswith school staff, students and community representatives to triangulate the result of the surveys; (v) and randomschool climate observations.

Data Analysis.9. Selection, application and reporting of inferential statistics will be used for analysis of evaluation data. Case studiesof project implementation experiences will analyze further qualitative impact.

57

Annex 9Antioquia: Basic Education ProjectInstitutional Assessment Summary

Approach to Project Execution: The Antioquia Education Project differs from other Bank-financed operations in Colombiaas it will be implemented completely by a local government, a Departmento. The Departmento provides a closer proximity,than the central government, to the municipalities and schools. Municipalities and schools will manage their own projectinvestments. Thus, the project would provide specific interventions to increase management capacity at the municipal andschool level, and will support the development of the new advisory and technical assistance functions of the department. Todecrease the risk of central controls, fast, efficient and effective, procurement and disbursement procedures will support fulldecisionmaking at the municipal and school levels. An assessment per each institutions follows:

The SchooL The new Colombian Education Policy (Law 115) confer increased education management responsibilities toschools. Schools may design their own technical/pedagogical strategies and manage financial resources and investments inschool improvements. Schools may establish and manage their own financial accounts (Fondos de Servicios Docentes). TheDepartmento of Antioquia developed an institutional strengthening plan to support its school's new role. It will also strengtheninstitutional leaders (school principals, staff and teachers) and will encourage the participation of school parents in all aspectsregarding investment planning, financial management, as well as community monitoring and supervision.

The Community: Over the years, Antioquia has promoted community participation. For example, in the successful project"Quiero a mi Colegio" ("I Love My School"), community-managed initiatives included school infrastructure improvements,school safety, and community events to raise school funds. Such direct involvement guaranteed community ownership ofeducation services and greater civilian oversight of education investments. Undoubtedly, one of the characteristics of the"Antioquefio" culture and idiosyncrasy is their motivation and capacity to mobilize community resources.

Nongovernmental Organizations: Under the present administration, a key policy was to reduce the size of the state and tobecome partners with the civil society. The state government has promoted NGO participation as partners in implementingpublic investments, especially those with social development objectives. Presently, there is a need to guarantee the colriinuedsupply and quality of NGO services, especially for the least developed municipalities.

The Municipal Government: The 125 municipalities of Antioquia are diverse and at are at different stages of development. Theproject's technical assistance strategy would guarantee that the municipalities indeed become responsible for the managementof education. Given the difference in financial resources, a continuous analysis of the financial capacities of participatingmunicipalities would guarantee fiscal sustainability. Municipalities' organizational structure are appropriate to assume themanagement of the education sector: 60 percent of municipalities have JUMEs, and the percentage of national transfersassigned to education (ICN) fluctuates between 20 percent and 45 percent (the mandated average is 30 percent).

The Departmental Government: The Department of Antioquia has demonstrated high political will to design, finance andcoordinate project activities; it also is strengthening its human resources, emphasizing flexibility, decentralization, autonomyand participation. Its organizational structure is appropriate and its staff is qualified. The Secretariat of Education has fourspecific duties: (i) long-term planning of the educational sector; (ii) supporting organization and educational processes; (iii) andevaluating educational sector outputs. One remarkable weakness is still noted: the sector's evaluation and information systemsdo not allow for a timely and appropriate decisionmaking process. The project will support in developing an evaluation culture,capacity and required system and tools.

The National Government. The central government (including DNP, The Ministry of Finance and the Ministry of Education)has supported all along the provision of direct multilateral development loans in light of the decentralization policies and localmanagement and decisionmaking. It expects the nationwide credibility and capacity of the Departmento de Antioquia wouldpromote greater national commitments to local autonomy and would further define the support required from the national level.During project implementation, coordination between the center and the Departmento de Antioquia will guarantee mutuallearning and support/adoption

58

Annex 10Antioquia: Basic Education Project

Project Processing Budget and Schedule

Planned Actual

A. Project Budget (US$000) 250.0 108.5

B. Project ScheduleTime taken to prepare the project (months) 13 mo 16 moFirst Bank mission (identification) 05/15/96 05/15/96Appraisal mission departure 05/15/97 06/02/97Negotiations 06/15/97 09/22/97Planned Date of Effectiveness 01/28/98

Prepared by: Secretariat of Education, Department of Antioquia, Colombia

Preparation assistance: LCSHD, PHRD

Bank staff who worked on the project included:

Joel Reyes (TM), Marco Mantovanelli, Kin Bing Wu, Marta Ospina, Martha Laverde,Daniel Boyce, Jairo !-'Jboleda, Yael Duthilleul, Ernesto Cuadra, Lauritz Holm Nielsen,Harry Patrinos, Alberto Rodriguez, Alejandro Yepes, Karalee Rocker, and EvangelinaHolvino(consultant).

59

Annex 11ANTIOQUIA: Basic Education Project

Documents in the Project File

A. Project Designs (Government's Project Documents)Original Design (Department-Identified NEBIs)Second Design (All SEDUCA-Provided Technical Assistance and Training)Final Design: "Project for Quality Improvement of Basic Education in the Department of Antioquia"

B. ManualsSchool/Community ManualMunicipal Investments ManualProject Operations ManualProject Summary Questions and AnswersParticipation Plan

C. Bank Staff AssessmentsMunicipal Institutional Assessment Report ("Local Government Capacity in Colombia: Beyond Technical

Assistance ")

Participation and Social Feasibility Plan

D. ProcurementProcurement Manual.Procurement of Goods, Works and Services (Law 80, 1993).Procurement Manual for Law 80 (Annexes).Preparation Guide for Consultant's Terms of Reference.

E. EconomicProject Financial Sustainability.Financial Sustainability of the Project Municipal Component (Municipalities + Schools).Financial Sustainability of the Project Departmental Component.Antioquia Government Indebtedness Capacity Analysis (Original and Update).

F. EvaluationProcess and Impact Evaluation Design and IndicatorsTerms of Reference for Hiring a Consultant Firm to Design a System to Follow up and Evaluate the Project.

G. FinancialFinancial Management Manual.Resources Assignment and Cost Summary by Component, Subcomponent and Activity.Scenario of Quarterly Investments: 16-32-32 Municipalities and Their Respective Schools

H. InstitutionalExecutive Summary, Project Institutional Feasibility in the Department.Organizational Structure.

J. OtherBudget Report, Presupuesto General del Departamento, 1996 (Antioquia)Componentes en las Innovaciones Educativas de Prodebas en Colombia and Portafolio de Experiencias

Educativas Pedag6gicas."Descentralizaci6n de los Servicios de Educaci6n en Colombia." DNP, 1997.

60

El Salto Social, Balance 1995Education Policies, C6digo Educativo, 1995Formulaci6n y Elaboraci6n de los Planes de Desarrollo MunicipalGuides for the Elaboration of Municipal Development Plans, Instructivo para la National Development

Strategy, El Salto Social, 1994-1998Reports of Pedagogical Innovations in Colombia, Sistematizaci6n porSector Development Plan of Antioquia, Plan Sectorial del Desarrollo Educativo Departamental, 1995

61

Annex 12

ANTIOQUIA: Basic Education ProjectStatement of Loans and Credits

Amount in US$ million(less cancellations)

Loan/ Fiscal ClosingCredit Year Borrower Purpose Bank IDA Undisbursed Date

Credits ColombiaI Credit(s) 24.48ClosedTotal Number of Credits =0 0 0 °|0Loans150 Loans(s) 6,305.15 0.78Closed

30100 1989 Ed. Sector 100 11.8 12/31/9731130 1990 Small Scale Irrig. 50 9.15 12/31/9733360 1991 Munic. Dev. 60 7.78 12/31/9733210 1991 Ind. Restruct. 195.35 11.79 9/30/973449A 1992 IFI-Rest. & Div. 55.49 55.49 12/31/9734530 1992 Third Nat. Roads 266 9.06 12/31/9736150 1993 Munic. Health Serv. 50 41.1 6 '30/0136690 1994 _Publ. Financ. Mgmt. 30 17.13 6/30/0036920 1994 Nat. Resource Mgm. 39 28.85 12/31/9936830 1994 _ Secondary Educ. 90 71.57 12/31/0038710 1995 Agirc. Tech. 51 47.14 12/31/0138270 1995 Energy TA 11 6.89 12/31/9939530 1996 Santafe Water Sup. 87 78.72 6/30/033954A 1996 Power Mkt. Dev. 104.3 104.26 12/31/024021A 1996 Urban Transp. 59.59 59.18 12/31/0139520 1996 Santafe I Water Sup. 58 50.34 6/30/0339730 1996 Urban Envir. TA 20 18.35 7/31/0039550 1996 Power Mkt. Dev. 145 = 133.01 12/31/0241960 1997 Financ. Mkt. Dev. TA 15 15 2/28/0241380 1997 _ __Reg. Ref. TA 12.5 12.5 8/15/01

Total Number of Loans = 20 1,449.22 789.11Total*** 7,804.37 23.48of which 5,176.06 13.59repaidTotal held by Bank & 2,628.31 9.89IDAAmount sold 50.99of which 50.99repaidTotal Undisbursed 789.89

62

Annex 13

Colombia at a glanceLatin Lower-

POVERTY and SOCIAL America mhiddle-Colombia & Cafib. Jncome Development diamond*

popuwlstto mid-199 ("11fltons) 36.9 480 1,154GNP per capita 1995 ((18) 1,900 3,300 1 ,700ie xeccGNP 1995 (b#Nlons UU8) 70.3 1,584 1,962

Average anr,uatgrowth, 199045

Population (9) 1.8 1, 1.4 NPGrs

Labor foyce ~~~~~~~~~~~~per primaryMost recent esttmte llatestiyear avallable since 1989) capita enrollment

poverty: trapdcount index (% of population)urban population (%of total population) 73 74 56Life expectarncy at birth (years) 70 88 67Infant mnortality. (per 1,000 five births) 19 41 36 Access to safe waterChild malnutrition %fhfrnnr)10Accessto sate wate (% ofpop wat.on)~ 90 e1 78miteracy (% ,ofpulaffin: ag - - Cobon1Gross prhimgarenrollment (% orschool-apepopulatbo) 119 110 104.

Male its loS~~~~~~~~~~~11 Lower-mkAidI-lncome groupPamafe ~~~~~~~~~~~~~~~~10101

KEY ECONIOMIC RATIOS anid LONG-TERM TteNDS

:1975 1988: 1894 1906

,GDF (bfllIos UJS$) 13.1 34.9 87.3 EcnoI rt3sGross domestic. finvesmentfGDP 17.0 19.0 22.4: 22;6Exports of, goods and non-factor serviceaGDP 15.8a 13.8 16.7 18.7OpnesoecomGross domestic savings/GOP 18.8 20.3 18.1 19.1.

-Gso nstlanal savings/GOP 16.4 18.0 16.5 16.1

'Ctrrent ecc ount baancelODP -1.7: -4.6 -485 -5.4Interest paymentslGOP ~~~~~1.0 2.5 1.8 1.4 Savings Investment

Trotat debt/GOP 28.7 4.8 28.8 24.0TOWa delt servicelexporls 1 4.3 40,0 292 :23.7Presentvalue ofdebt/dOP,. . 27.8Presantvalue of debt%)wprts . .. 143.9 Idbens

1976-84 19645 1994 1995: 1991rrO4(avwt p aDuniqW Wil) - ColombiaGD~P 3.8 4.2 6.6 52 4.8~~NP per capita 1.8 2.5 5.2 2.8 37 ~~~~~Lower-mkkle-incomse groupExptts of6 goods iand nfs 2.8 11.3 .6.6 8.2 5.T W

STRUCTURE of the ECONOMY

(16 of GOP) ~ ~ ~ ~ ~ ~~97 lss 194 195 Growth rates of outPut and investment(%

Agricufture 23.9 17.0 17.9 18.6 soIndustry 29.2 34.6 29.7 28.4

Manufacturing 23.2 21.7 19.6 18.7 25Services 46.9 48.4 52.4 53.0 _________________

2 93 A4 ePrivate consumption 72.3 69.0 69.2 68.3 .251General government consumption 8.9 10.7 12.7 12.6GD GPImports of goods and non-factor services 14.0 12.5 20.0 20.2G0 -- GD

1976-84 1985-95 1994 1995(average annual growth) Growth rates of exports and Imports(%Agriculture 3.1 3.9 1.0 11.1 75 Industry 3.1 3.9 2.8 5.9

Manufacturing 2.5 . 3.8 1.6 1.0 2:1Service 4.7 4.1 9.1 2.3 2

Private consumption 3.7 3.6 6.5 6.0 __________________General government consumption 6.8 7.8 17.6 5.5 09 9 4 9

Gross domestic investment 6.4 8.0 18.7 9.8 Imports of goods and non-factor servces 7.4 13.1 252 13.0 EKtt Imos

Gross national product 3.8 4.4 7.2 4.4-Eprs -Imot

Note: 1995 darta are preliminary estimates.The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond WWIlbe incomplete.

63

Colombia

PRICES and GOVERNMENT FINANCE1975 1985 1994 1995

Domestic prices Inflation (%)(X change) 40Consumer prices 22.9 24.0 22.6 19.5 _ _Implicit GDP deflator 23.1 24.7 23.6 20.9 20

Government flnance(X of GDP)

Current revenue 20.3 29.4 30.3 N 91 92 93 94 95

Current budget balance 4.3 7.9 7.1 - GOP def. -- CPIOverall surplusldefcit 4.6 0.4 -0.5

TRADE1976 1985 1994 1995

(millions USS) Export and Import levels (mill. USS)Total exports (fob) 8,754 10,397 15,000

Coffee 1,702 1,990 1,978Gold 365 305 266Manufactures 2,752 3,185 10,ooo-

Total imports (cif) 11,040 12,922Food 2,048 2,366 s,o0o HFuel and energy 466 273 246Capital goods 1,165 4,509 4,777 0

Export price index (19871000) as N s 91 92 93 94 9s

Import price index (1987=100) , .. Exports Bm ImportsTerms of trade (1987=100)

BALANCE o PAYMENTS1975 1985 1994 1996

(millions US$) Current account balance to GDP rao (%)Exports of goods and non-factor services 2,105 4,642 11,966 13,775Imports of goods and non-factor services 2,007 4,989 14,170 16,365Resource balance 98 -347 -2,204 -2,591

Net factor income -318 -1,710 -1.707 -2,350Net current transfers 0 455 862 694 0 -1

Current account balance, 8 90 91 92 93 94 95before ofricial transfers -220 -1,602 -3,048 -4,247 |5

Financing items (net) 282 1,867 3,181 4,569Chaanges In net reserves -62 -265 -133 -322 -10-'

Memo: _

Reserves including gold (Wii. USS) 633 2,197 8,114 8,463Conversion rate (iocal.USS) 30.9 1423 844.8 912.8

EXTERNAL DEBT and RESOURCE FLOWS1975 1985 1994 1995

(Willbns USS) Composition of total debt, 1995 (mill. USS)Total debt outstanding and disbursed 3,758 14,245 19,416 19,784

IBRD 633 2,399 2,629 2,548 A

IDA 23 18 12 11 2548 B

Totaldebtservice 314 1,980 3,686 3,431 5332 11IBRD 78 318 1,054 604 D /IDA 1 1 1 1 / 6251

Composition of net resource flowsOfricial grants 18 20 45 50 EOfficial creditors 111 938 -387 -157 1959Prvate creditors 216 392 590 -97Foreign direct investment 37 1,023 950 1,200 F

Portflio equity 0 0 320 131 7283

World Bank programCommitments 88 489 159 207 A - IBRD E - BilateralDisbursements 106 590 310 238 B - IDA D - Other multilateral F - PrvatePrincipal repayments 34 165 837 415 C- IMF G - Short-termNet flws 71 424 -527 -177Interest payments 45 153 218 190Net transfers 27 271 -745 -367

Internatioal Economics Department 2t29/96

64

MAP SECTION

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k\ ,", 'edriinement or arueptonue on such boun dais -

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COLOMBIA '°1 U R E

ANTIOQUIA EDUCATION >-°,

PROJECT A RAZNA - - -0RA

Atttbq~u10 Do rtrment Project ts ,s

* Selected City i} J ; .(@ Nsoncl Copstol I Ct__st

- Rivers PD E R U | * , V,

-^ Deportment BoundaJries \-, =

_ . _lntnrnrotionolI Boundaries N,'j?=0 -- = ~ ~ 4

0 50 100 150 MILES -" ---

o 10o 20 KILOMETERS_78' 74°' 70'

OCTOBER 1997

IMAGING

Report No.: 713 COType: PAD