world bank document...project implementation period: start may 28,2009 end: august 3 1, 2014...

Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 46756-UG

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 66.9 MILLION (US$lOO MILLION EQUIVALENT)

TO THE

THE REPUBLIC OF UGANDA

FOR A

SECOND NORTHERN UGANDA SOCIAL ACTION FUND PROJECT (NUSAF 2)

April 30,2009

Human Development 1 Eastern Africa Country Cluster 1 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

CAO

CAP CBO CDA

Exchange Rate Effective April 06, 2009 Currency Unit = Uganda Shillings

USh.2155 = US$1 US$1.50 = SDR 1

Chief Administrative Officer HISP Household Income Support

Community Action Plans ICB International Competitive Bidding Community Based Organization IDP Internally Displaced Person Community Development IEC Information, Education and Assistant Communication

Program

FISCAL YEAR July 1 - June 30

CDD CDO CFAA

ABBREVIATIONS AND ACRONYMS

Community Driven Development IFR Interim Financial Report Community Development Officer IG Inspectorate o f Government Country Financial Accountability IRR Internal Rate o f Return

GPN MSNUR

General Procurement Notice REU Rapid Results Initiatives Minister of State for Northern SAC Social Accountability Committee Uganda Reconstruction

FOR OFFICIAL USE ONLY

Services NUSAF Project Management

I NAADS Society SCC Sub-county Chief /NUMU

Unit National Competitive Bidding National Household Survey N e t Present Value Northern Uganda Recovery and

lNCB SCEC Sub-county Executive Committee SMC School Management Committee SPIF Sub-proj ect Interest Form SPRING Stability, Peace and Reconciliation

pF NURD

E PLWA

PMC

I PPDA

1 PRDP

National Agricultural Advisory I SACCOS I Savings and Credit Co-Operative

Development Group Project Northern Uganda Rehabilitation STPC Sub-county Technical Planning

ilization and Reintegration

Vice President: Obiageli Katryn Ezekwesili Country Director: John McIntire Country Manager Kundhavi Kadiresan Sector Manager: Christopher J. Thomas

Task Team Leader: Suleiman Namara

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

UGANDA

Second Northern Uganda Social Action Fund Project (NUSAF 2)

CONTENTS Page

STRATEGIC CONTEXT AND RATIONALE .................................................................. 1 Country and sector issues .................................................................................................... 1

Rationale for Bank involvement .......................................................................................... 3 Higher level objectives to which the project contributes .................................................... 4

PROJECT DESCRIPTION .................................................................................................. 4

I . A . B . C .

I1 . A . B . C . D . E . F .

I11 . A . B . C . D . E . F .

I V . A . B . C . D . E . F . G .

Lending instrument .............................................................................................................. 4

Program objective and phases ............................................................................................. 4 Project development objective and key indicators .............................................................. 4 Project components .............................................................................................................. 5

Lessons learned from NUSAF 1 and reflected in the project design .................................. 9 Alternatives considered and reasons for rejection ............................................................. 10

IMPLEMENTATION ..................................................................................................... 10 Partnership arrangements .................................................................................................. 10

Institutional and implementation arrangements ................................................................ 11

Monitoring and evaluation o f outcomeshesults ................................................................ 1’4

Sustainability ..................................................................................................................... 15

Critical risks and possible controversial aspects ............................................................... 15 Credit conditions and covenants ........................................................................................ 16

APPRAISAL SUMMARY ............................................................................................. $18 Economic and financial analyses ....................................................................................... 18

Technical ........................................................................................................................... 20

Fiduciary.. .......................................................................................................................... 20

Social ................................................................................................................................. 21

Environment ...................................................................................................................... 22

Safeguard policies ........................ ; ..................................................................................... 23

Policy Exceptions and Readiness ...................................................................................... 23

. .

Annex 1: Country. Sector and Program Background .............................................................. 24

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies .................. 28

Annex 3: Results Framework and Monitoring ......................................................................... 29 Annex 4: Detailed Project Description ...................................................................................... 34 Annex 5: Project Costs ................................................................................................................ 47 Annex 6: Implementation Arrangements .................................................................................. 48 Annex 7: Financial Management and Disbursement Arrangements ..................................... 56 Annex 8: Procurement Arrangements ....................................................................................... 71

Annex 9: Economic and Financial Analysis .............................................................................. 81

Annex 10: Safeguard Policy Issues ............................................................................................. 88 Annex 11: Service Delivery: Education, Water and Sanitation and Agriculture ................. 91

Annex 12: District Resource Allocation ..................................................................................... 97

Annex 13: Transparency, Accountability and Anti-Corruption (TAAC) Program ........... 102

Annex 14: Monitoring and Evaluation ................................................................................... 109 Annex 15: Project Preparation and Supervision .................................................................... 114

Annex 16: Documents in the Project File ................................................................................ 116 Annex 17: Statement of Loans and Credits ............................................................................. 117

Annex 18: Country at a Glance ................................................................................................ 118

Annex 19: Map ........................................................................................................................... 120

List of Table and Figures

Table 1 . Poverty Headcount (%) in Northern Uganda (2004) ................................................ 25

Table 2 . Selected Quality of Life Indicators by Region ............................................................ 25 Table 3 . Public Works Program (PWP) Costing Figures and Number of Beneficiaries ...... 34 Table 4 . PWP Sub-project Menu .............................................................................................. 36

Table 5 . Household Income Support Program (HISP) Costing Figures and Number of Beneficiaries ................................................................................................................................. 38 Table 6 . Sub-project Menu under Household Income Support Subcomponent .................... 40 Table 7 . Sub-project Menu Under Community Infrastructure Rehabilitation Component42 Table 8 . Estimated Number of Beneficiaries Under CIR Component ................................... 42 Table 9 . Overall Resource Allocations and Number of Sub-projects ..................................... 46 Table 10 . Financial Management Risks and Mitigation Measures ......................................... 58 Table 11 . Allocation of Credit Proceeds .................................................................................... 67 Table 12 . Financial Management Action Plan .......................................................................... 70

Table 13 . Flow Chart for Community Procurement Activities ............................................... 74

Table 14 . Summary of Economic Rates of Return ................................................................... 82 Table 15 . I R R s of Selected NUSAF 2 Sub-projects .................................................................. 83 Table 16 . Sensitivity Analysis for the Favorable Scenario (15-Year Horizon) ...................... 84

Table 17 . Direct Costs of Infrastructure by Various DonorlNGO-Funded Projects in Northern Uganda ......................................................................................................................... 85 Table 18 . Safeguard Policies Triggered by the Project ............................................................ 88 Table 19 . Education Institutions in PRDP-NUSAF 2 Districts ............................................... 91 Table 20 . Computation of Weights for District Resource Allocation Formulae ................... 97

Table 21 . District Resource Allocation by Component ............................................................ 99

Figure 1: Uganda Poverty Levels by Region. 1993-2006 ......................................................... 24 Figure 2: Targeting of Beneficiaries under NUSAF 2 and NAADS ........................................ 96

UGANDA

Source BORROWERRECIPIENT (Community

SECOND NORTHERN UGANDA SOCIAL ACTION FUND PROJECT (NUSAF2)

Local Foreign Total 3.00 0.00 3.00

PROJECT APPRAISAL DOCUMENT

AFRICA

AFTHl

Contribution) International Development Association (IDA) Total:

Date: April 30, 2009 Country Director: John McIntire Sector Manager: Christopher J. Thomas Project ID: P111633

Lending Instrument: Specific Investment Loan

Team Leader: Suleiman Namara Sectors: Other social services (1 00%) Themes: Other human development (P) Environmental screening category: Partial Assessment

96.43 3.57 100.00

99.43 3.57 103.00

[ ] Loan [XI Credit [ ] Grant [ 3 Guarantee [XI Other: Community Contribution

For Loans/Credits/Others: Total Bank financing (US$m.): 100.00 ProDosed terms: Regular IDA terms

Borrower: The Republic o f Uganda

Responsible Agency: Office o f the Prime Minister P.O. Box 341 Kampala Uganda Tel: 256 414 342231/259498 Fax: 256 414 341139 ps@opm. go .ug

Project implementation period: Start May 28,2009 End: August 3 1, 2014 Expected effectiveness date: September 1,2009 Expected closing date: August 31, 2014 Does the project depart from the CAS in content or other significant respects? Ref: PAD I.C. Does the project require any exceptions from Bank policies? Ref: PAD IKG.

I s approval for any policy exception sought from the Board? Does the project include any critical risks rated “substantial” or “high”? Ref: PAD III. E.

[

[ ]Yes [XINO

[ ]Yes [XINO

[XIYes [ ] N o

No

Have these been approved by Bank management? [ ]Yes [ IN0

[XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Ref: PAD IKG. Project development objective Ref: PAD II.C., Technical Annex 3 The Project Development Objective (PDO) i s to improve access o f beneficiary households in Northern Uganda to income earning opportunities and better basic socio-economic services.

Project Description Ref: PAD II.D., Technical Annex 4 Livelihood Investment Support: This component wi l l support community based public works program (P WP), income generating activities, provision o f ski l ls for creation o f se l f employment and productive assets for targeted poor community households in Northern Uganda.

Community Infrastructure Rehabilitation: This component wi l l support rehabilitation o f community infrastructure to improve access to basic socio-economic services including: rehabilitation o f schools, community water points, community access roads, health centers, teachers houses, sanitation facilities and basic solar lighting systems through provision o f grants.

Institutional Development: The component wi l l finance activities at the national, district, sub- county and community levels to support project implementation and activities aimed at improving accountability and transparency in the use o f Project resources.

Which safeguard policies are triggered, if any? Ref: PAD IKF., Technical Annex 10 NUSAF 2 activities may have limited and localized adverse environmental and social impacts, and i s rated as EA category B. The proposed project triggers OP 4.01 on Environmental Assessment, OP 4.09 on Pest Management and OP 4.12 on Involuntary Resettlement.

Significant, non-standard conditions, if any, for: Ref: PAD III. F. Board presentation: No Board Conditions

Effectiveness Conditions:

(i). The recipient has established the Technical Support Team (TST) and made it operational in form and substance satisfactory to IDA; and has appointed to the Technical Support Team a coordinator, financial management specialist and a procurement specialist, al l with qualifications, experience and terms o f reference satisfactory to IDA.

(ii). The recipient has submitted to IDA the Operational Manual in form and substance satisfactory to IDA.

(iii). The recipient has updated and submitted to IDA the Financial Management and Community Procurement Handbooks, al l in form and substance satisfactory to IDA.

Conditions for Disbursement of Sub-project Grants to Local Governments

(i). Grant Agreements have been executed between the Office o f the Prime Minister and Chief Administrative Officers for at least twenty districts.

(ii). The recipient has prepared and submitted to IDA a community development handbook in form and substance satisfactory to IDA.

(iii). Community Development Officers (CDOs) have been appointed in at least twenty districts and have provided training to at least the first five beneficiary groups in each district.

Covenants Applicable to Project Implementation:

(i). The recipient shall, through the Public Procurement and Disposal o f Assets Authority (PPDA), not later than six months after the effective date, put in place procurement arrangements satisfactory to IDA, including the appointment o f independent procurement auditors acceptable to IDA for reviewing the procurement procedures for goods, works and consultants’ services financed under the project.

(ii). Commencing at the end o f the second fiscal year o f project implementation, or such later date as IDA may agree, the recipient shall, not later than six months after the end o f each fiscal year, furnish to IDA an audit report on the procurement o f goods, works and consultant services carried out under the project, prepared by the independent procurement auditors referred to above.

(iii). The recipient shall, not later than three months after the effectiveness date, submit to IDA, the TOR for independent auditors, in form and substance satisfactory to IDA; thereafter, and in any case not later than six months after the effectiveness date, appoint the independent auditors to undertake annual project audits.

(iv). The recipient shall, in accordance with the three-year road map detailed in the Operational Manual, appoint and maintain at the district and sub-county levels the key staff with

qualifications and terms o f reference satisfactory to IDA, including, inter alia: district chief finance officers, district internal auditors, community development officers, district environmental officers and sub-county community development officers.

(v). The recipient shall, not later than twelve months after the effectiveness date, appoint to the Office o f the Inspectorate o f Government two internal auditors with qualifications, experience and terms o f reference satisfactory to IDA, for the purpose o f auditing the accounts o f sub- component 3.2 o f the Project.

(vi). The recipient shall, not later than twelve months after the effectiveness date, fully computerize the accounting function o f the Office o f the Inspectorate o f Government, for the purpose o f managing the accounts and monitoring expenditure under sub-component 3.2 o f the Project.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

1. Northern Uganda has experienced economic stagnation arising out o f more than two decades o f instability. The insurgency in the region has taken a tremendous toll on the population and the economy o f the region. At the end o f 2005, an estimated 1.6 mill ion people had been forced to leave their homes in Northern and Eastern Uganda to live in internally displaced people (IDP) camps for fear o f being attacked and/or abducted by rebels. In financial terms, the cost o f the conflict to the national economy' has been estimated at over US$1.3 billion (for the period 1986-2002), more than 3 percent o f GDP. Moreover, parts o f the region have been affected by cattle rustling activities originating in Karamoja.

2. As a result, the North remains the poorest region in Uganda with some o f the lowest human development indicators in the country. The 2005/06 National Household Survey shows that the North has the largest proportion o f people living in poverty, estimated at 61 percent, almost twice the national poverty level o f 31 percent. The gap between the North and national poverty levels has widened from 17 percentage points in 1992 to 30 percentage points in 2003/06, with poverty in the North falling less than any other region since the early 1990s.

3. In response to these challenges, the Government o f Uganda (GoU) proposed in early 2002 a US$lOO mill ion Northern Uganda Social Action Fund Project (NUSAF l), as part o f the GoU's broader Northern Uganda Reconstruction Program. The project, with IDA support, became effective on February 5, 2003 and closed on March 31, 2009. I t s objective was to empower communities in the then 18 (by closing 3 1) districts o f Northern Uganda by enhancing their capacity to systematically identify, prioritize and plan for their needs within their own value systems and, ultimately, to improve economic livelihoods and social cohesion. This community- driven development (CDD) approach has allowed community groups to organize themselves, identify and prioritize their needs and develop funding proposals.

4. During the last six years, significant progress has been made in enhancing the capacities o f communities in Northern Uganda by making local governments more accountable to community demands and improving service delivery. NUSAF 1 has been instrumental in: (i) creating a harmonized platform within which communities can be active players in decentralized service delivery systems with the support o f local governments; (ii) strengthening transparency in the local government service delivery process; and (iii) promoting community reconciliation.

5. measurable development outcomes in a number o f areas:

Implemented in a challenging and changing environment, NUSAF 1 contributed to

Since 2002, Civil Society Organizations for Peace in Northern Uganda (2006) estimate the total cost to have risen to US$1.7 billion, which i s likely an under-estimate because o f data constraints and limited geographic coverage. The costs include estimates o f military expenditure, reduced economic activity, loss o f skilled labor, loss o f tax revenue, loss from environment and land degradation, and investments in IDP camps that wi l l no longer be o f use when the camps are disbanded.

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Over 3 million people - about 47% o f the population in Northern Uganda (against the target o f 30%) - have so far received improved access to social services. Over 62,160 households (3 10,800 people) have access to safe drinking water through 1,03 1 completed water sub-proj ects. Nearly 4,000 households (1 9,075 people) have access to improved sanitation facilities through 763 completed pit latrine stances. About 223,200 pupils have potential access to improved learning environment through 1,277 education sub-projects (2,693 classrooms, 40 dormitories, 7,650 desks, 63 science laboratories, 9 libraries, 20 nurseries, 19 vocational sk i l ls training centres and 1,22 1 teachers’ houses). Approximately 223,100 direct beneficiaries have been reached through the Vulnerable Groups Support (VGS) Component via 3,772 income generating activities, 159 vocational ski l ls training sub-projects, 372 family support sub-projects, and 53 counselling sub- projects. The 845 conflict management and community reconciliation sub-proj ects helped broadly increase social interaction, consensus building and social capital.

Although NUSAF 1 has made significant contributions, widespread poverty, vulnerability and service delivery challenges remain. NUSAF 2 will contribute to resolving some o f these challenges by building on the lessons learned in NUSAF 1. The project wi l l be: (i) simple in design, with only three main components; (ii) mainstreamed into government systems; (iii) scaled up to 40 districts2; and (iv) implemented within the framework o f the Poverty Eradication Action Plan (PEAP) and the Peace, Recovery and Development Plan (PRDP).

7. The PEAP, currently being replaced by a National Development Plan (under development), provides an overarching framework to guide public action to eradicate poverty in Uganda, and has five pillars: (i) economic management; (ii) increased production, competitiveness and income levels; (iii) security, conflict resolution and disaster management; (iv) good governance; and (v) human development. A stock-taking exercise to review the outcomes o f PEAP implementation since 1997 highlighted four core challenges that the GoU must address to improve welfare in all parts o f the country:

(a) Restoring security, dealing with the consequences o f conflict and improving regional equity, with particular focus on Northern Uganda.

(b) Restoring sustainable income growth. (c) Enhancing human development. (d) Using public resources transparently and efficiently to eradicate poverty.

8. In line with the PEAP, the PRDP for Northern Uganda was designed to provide an overarching framework for post-conflict reconstruction o f Northern Uganda in the wake o f significant security improvements in the region since mid-2006, deriving in part from the peace efforts between the GoU and the Lord’s Resistance Army (LRA). Launched in October 2007, the PRDP i s intended to consolidate peace and lay the foundations for recovery and development in Northern Uganda. The PRDP covers 40 districts in the north and east o f the country,

’ See Annex 12 for the l is t o f districts.

2

including those that were covered under NUSAF 1, and provides the GoU and its development partners a framework to reduce development gaps between the Nor th and the rest o f the country.

9. The PRDP identifies the following strategic objectives:

Consolidate state authority. Priority actions under this objective include: (i) ending armed hostilities; (ii) establishing law and order and enhancing citizen protection; (iii) enhancing the functionality o f judicial and legal services; and (iv) strengthening local government presence and effectiveness. Rebuild and empower communities. The PRDP seeks to contribute to community recovery and improved quality o f l i f e o f IDPs in camps, completing the return and reintegration o f displaced populations, initiating rehabilitation and development activities among other resident communities and ensuring that the vulnerable are protected and served. Revitalize the economy. The PRDP seeks to re-activate the productive sectors, with a focus on production, marketing, services and industry. This will require major rehabilitation o f critical infrastructure. Mechanisms for sound management o f natural resources will be reinforced to help ensure that growth i s environmentally sustainable. Peace building and reconciliation. The PRDP is working to reconcile various groups that have been in conflict in the region. The community reconciliation and conflict management processes require increased access to information by the population, enhanced counseling and referral services, mechanisms for intrdinter-communal and national conflict resolution, strengthened local governance and informal leadership structures, and more effective socioeconomic reintegration o f ex-combatants.

10. The PRDP provides a framework for mobilizing both government and development partner resources, both on-budget and off-budget. Sectors have been encouraged to increase their budget ceilings within the medium-term expenditure framework (MTEF) towards implementation o f the PRDP.

B. Rationale for Bank involvement

11. The Bank’s engagement with the G o U in Northern Uganda dates back to the Northern Uganda Reconstruction Project (NURP 1, 1992-98). While a number o f the project interventions were successful, fol low up recommendations stressed the need for more community involvement in design and implementation o f activities. The design o f N U S A F 1 therefore focused on community demand-driven interventions that combined direct community financing o f public assets and support to disadvantaged groups. In addition, the approach built capacity o f local authorities, c iv i l society organizations (CSO), and the private sector to provide technical support to community initiatives as well as to lead public works sub-projects.

12. The Bank’s long-term engagement in Uganda provides multi-sectoral capability, analytic and catalytic advantages and ability to support coordination between government, donor and CSO development actors, a l l o f which are necessary ingredients for the successful implementation o f programs in the fragile environment o f PRDP districts.

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13. The rationale for the follow-up project includes:

(a) Investing to mitigate the risk o f creating a dual society in Uganda, by helping reduce the development gap between the North and the South.

(b) Improving chances for peace and security by serving the immediate needs o f the large numbers o f IDPs returning to their homelands and seeking to rebuild their communities.

(c) Assisting in the critical period o f transition from predominantly humanitarian assistance towards a broader, more sustainable government-led development effort.

(d) Providing a platform for other development partners to support the GoU with substantial resources for the implementation o f the PRDP.

(e) Investing to support accelerated MTEF sector spending targets for Northern Uganda, as agreed in PRDP framework.

C. Higher level objectives to which the project contributes

14. The proposed project i s well-aligned with the current Bank CAS, the Uganda Joint Assistance Strategy (UJAS , 2005-2009, implemented with eleven other development partners) and the Government’s Poverty Eradication Action Plan (PEAP 2004-2009) and Northern Uganda Peace Recovery and Development Plan (PRDP 2007). The UJAS supports the PEAP‘s overarching strategic results, including promoting the resolution o f the conflict in the north and fostering social and economic development o f the region. The PRDP for Northern Uganda was designed to provide an overarching framework for post-conflict reconstruction in the wake o f significant security improvements in the region since mid-2006, deriving in part from the peace efforts between the Government and the Lord’s Resistance Army (LRA).

11.

A.

15.

B.

NIA

C.

16.

PROJECT DESCRIPTION

Lending instrument

The project wi l l be financed through a Specific Investment Loan.

Program objective and phases

Project development objective and key indicators

The project development objective i s to improve access o f beneficiary households in Northern Uganda to income-earning opportunities -and better basic socio-economic services. This wi l l be measured by the following indicators:

(a) Increase in income o f targeted beneficiary households (%). (b) Person-days provided in labor-intensive public works programs (number). (c) Gross enrollment in primary education (%). (d) Population with access to all-season roads (%). (e) Population with access to improved safe water sources (%).

4

( f ) Level o f satisfaction among targeted population with quality o f basic socio economic services (%).

17. The project builds on the experiences o f NUSAF 1 by scaling up the public works and vulnerable group support components. This will produce a broader livelihood response component that addresses household income enhancement mechanisms for the poor. I t also continues to provide support to improve public infrastructure and increase access and utilization o f basic services in under-served communities. Lastly, it pulls together the lessons o f NUSAF 1 on the promotion o f public and social accountability in the design o f a stronger service delivery mechanism mainstreamed in to existing government systems.

D. Project components

18. Community Infrastructure Rehabilitation (CIR); and (iii) Institutional Development (ID).

The project will have three components: (i) Livelihood Investment Support (LIS); (ii)

1. Livelihood Investment Support Component (US$60 Million)

19. This component will include two sub-components: (i) a Public Works Program (PWP): and (ii) a Household Income Support Program (HISP) targeted at able-bodied poor households and administered at the community level.

1.1 Public Works Program (US%20 million-20 percent o f total cost)

20. The objective o f the PWP is to enable the beneficiaries to access temporary employment and in the process increase community socio-economic assets. The PWP will support labor- intensive interventions that will provide poor households additional income to help respond to increasing food prices and smooth consumption. Currently, each district produces a district development plan based on community action plans, which are in turn generated by a participatory planning process. Sub-projects for this component will derive from the district development plans. The PWPs will be targeted at poor households during the dry season as an annual intervention to address basic needs and enable these households to begin to participate in other productive investment and savings activities.

21. A typical PWP sub-project will employ approximately 250 beneficiaries for one month (22 working days) and pay a wage not exceeding an equivalent o f a daily wage o f the lowest paid c iv i l servant in the relevant district.

22. The sub-projects under PWP will be funded up to a maximum o f US$20,000 per project (with close to 60 percent allocated toward paying unskilled labor wages). The planned 1,000 sub-projects will generate 8,400,000 person-employment days over the project l i fe. Sub-projects deemed absolutely necessary and with a budget o f more than US$20,000, but subject to an absolute cap o f US$35,000, will be appraised by the district, reviewed by the Technical Support Team (TST) and submitted through the PRDP Technical Working Group, to the Office o f the Prime Minister )(OPM) Permanent Secretary for funding approval. Each sub-project will ensure that a minimum o f 30 percent o f the total number o f jobs created are provided to women. Small structures on the sub-projects such as culverts, single span bridges, valley tanks (within the

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competences o f community artisans), drainage, splashes, spillways, specialized construction materials and tools will be funded from the PWP sub-project allocation. Once the sub-project i s completed, all tools wi l l remain the property o f the participating local councils, which will be responsible for operation and maintenance. Any structures which are too large to be funded from the sub-project grant w i l l be funded from other capital investment budgets in the district and sector ministries. I t i s assumed that most community roads funded under the PWP wi l l require small bridges, while larger bridges wi l l usually be for district and national roads which would be funded from other capital budgets.

1.2 Household Income Support Program (US$40 mil l ion40 percent o f total cost)

23. The specific objective o f the Household Income Support Program (HISP) i s to increase productive assets and in the process improve incomes o f targeted poor households in Northern Uganda. This sub-component wi l l be targeted at the poor and vulnerable groups such as female- headed households, people with disabilities, former LRA abductees and vulnerable youth, among others. The menu o f investments under this sub-component i s found in Annex 4. In addition, the sub-component wi l l aim to develop ski l ls for the creation o f opportunities for self-employment within communities. Building on community groups established under NUSAF 1 , the interested poor wi l l be encouraged to strengthen or constitute (where such groups may not exist) themselves into community interest groups (CIGs) to access income-generating o portunities. The assisted poor households wi l l be encouraged to look after extremely vulnerable individuals within existing social structures.

P

24. Each CIG wi l l be able to access a maximum grant o f US$5,000 for use on any viable productive assets andor income-generating activity. Support for income generation wi l l include direct linkages between producers and commodity processors, wholesalershetailers through sales contracts (in case o f non-agriculture sub-projects) or contract farmindout-grower schemes (in case o f agriculture sub-projects). Furthermore, to enhance investments and growth, CIGs will be encouraged to join existing community-level savings groups such as savings and credit cooperative societies (SACCOS). Business and capacity building w i l l be out-sourced to appropriate service providers, such as the Northern Uganda Commonwealth Youth Centre and other appropriate polytechnic institutes in the case o f youth activities. In some cases, service providers may need to be supported with basic infrastructure and facilities (accessible under Component 2).

25. In the light o f sustainability and accountability challenges confronted in the implementation o f the livelihoods component o f NUSAF 1 in Karamoja, an assessment will be made o f the feasibility o f activities that could be funded through the HISP component in Karamoja. Only activities that have proven to effectively serve agro-pastoral and pastoral communities would be allowed for funding under this component. The assessment wi l l be undertaken before or during project implementation o f this component in Karamoja.

For purposes of this project, the working definition o f extremely vulnerable groups shall mean the people with disabilities, widows/widowers, people living with HIV/AIDS (PLWAs) and orphans.

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2. Community Infrastructure Rehabilitation Component (US$30 million-30 percent of total cost)

26. The objective o f this component i s to improve access to basic socio-economic services through rehabilitation and improvement o f existing community infrastructure. With the return o f peace in Northern Uganda and communities moving from IDP camps to their respective villages, community infrastructure urgently need rehabilitation for improved access to socio-economic services. The funds from this component will therefore support communities to: (i) rehabilitate existing community infrastructure, such as schools, water points, access roads, sk i l ls training centers, health centers, etc.; and (ii) undertake complementary investments to maintain and improve existing education infrastructure such as teachers’ houses, classrooms, sanitation facilities, basic solar lighting systems, furniture, etc., based on sector norms and standards as guided by the sector ministries.

27. N e w infrastructure investments in existing public institutions will only be made in I D P return areas and with regard to small scale irrigation in the Karamoja sub-region, based on criteria and procedures to be detailed in the NUSAF 2 Operational Manual. To ensure the realization o f this objective, the relevant sector department at the respective local government will pay due attention to the appraisal o f sub-projects to be funded under this component. Amongst other things, the appraisal will ensure that implementation is completed within 12 months and that investments are put to use for the purpose for which they were intended. Emphasis will be placed on districts that have had a sustained negative impact o f LRA activities over the last twenty years. Accordingly an insecurity index will be developed to form part o f the already-prescribed local government allocation formula o f resources for this particular component, as will be detailed in the Operational Manual.

28. This component will not finance sub-projects above US$30,000, except when sub- projects have been approved by local authorities and endorsed by the PRDP Technical Working Group (TWG) (to ensure compliance with sector norms and standards) at the recommendation o f the TST, subject to an absolute cap o f US$50,000. Community contributions under the infrastructure sub-projects will be at least 10 percent (time, labor, materials, supervision or cash) o f sub-project costs and will be made before the relevant community receives the grant. Mechanisms for monitoring and supervising community contributions will be detailed in the N U S A F 2 Operational Manual.

3. Institutional Development Component (US$lO Million-1 0 percent of total cost)

29. This component will finance activities at the national, district, sub-county and community levels aimed at improving efficiency, effectiveness, accountability and transparency in the use o f project resources. It will have two sub-components: (i) project implementation support; and (ii) a transparency, accountability and anti-corruption program (TAAC).

3.1 Project Implementation Support (PIS) (US$9.0 Million-9.0 percent of total cost)

30. Project Coordination and Monitoring. Overall project coordination and accountability o f project resources i s the responsibility o f the O P M Permanent Secretary and staff. To ensure

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effective project implementation, the sub-component will support the OPM, relevant sector ministries and local government staff in coordination and routine monitoring o f the project activities.

31. Technical Support Team. In order to strengthen and complement capacities o f the OPM, l ine ministries and local authorities, this sub-component will support the staffing o f the TST to strengthen project-related operational requirements, procurement and financial management systems. The TST will be headed by a competitively-hired coordinator and supported by a team o f specialists, as will be detailed in the Operational Manual.

32. Consultations with project beneficiaries and training initiatives will be articulated through meetings and seminars as appropriate, and will focus on familiarizing the concerned stakeholders with the philosophy, principles and methodology o f the project and the broader PRDP framework. Technical capacity to implement the project would include basic bookkeeping and accounting skills, inclusive planning, management and administration o f participatory development at al l levels, as wel l as basic skills in assessing environmental and social effects o f sub-projects.

33. Development communication initiatives will seek to inform and educate concerned stakeholders on the objectives, processes and activities o f the project and the roles o f the different actors, as wel l as to obtain stakeholder views and responses to project needs. This initiative will also contribute to the formation o f sustainable partnerships between communities, CSOs, NGOs and government officials by clearly articulating the roles and responsibilities o f the different actors concerned. Development communication appropriate to Northern Uganda will be developed and disseminated through radio, drama, song and print media. Information needs assessments, message development and impact evaluations will also be financed. The initiative will foster community empowerment, transparency and accountability.

34. Effective community-based monitoring and evaluation (M&E) arrangements will be integral to project design and implementation. In addition, in some cases randomized experiments will be designed to complement national household surveys. M&E will require appropriate monitoring indicators and a management information system (MIS) will be designed and implemented to track the progress o f the project, including cumulative environmental, social and conflict potential effects, at district and national levels.

35. Poverty monitoring and analysis within the national systems, used by the Uganda Bureau o f Statistics (UBOS) through i t s frequent household surveys, will be undertaken. Some gaps (such as lack o f data at district and sub-county levels, and inadequate information on vulnerability and conflict) have been identified, which NUSAF 2 will continue to address within the existing UBOS survey instruments. Mid-term and end-of-project surveys and analysis will also be undertaken to assess the project's effectiveness in reaching the target communities and households (see Annex 14).

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3.2 Transparency, Accountability and Anti-Corruption Program (US$l.O Million-1.0 percent o f total cost)

36. The project will strengthen transparency, accountability and anti-corruption in the North, using the project as an entry to the development o f improved systems for use by communities, local authorities and others with a mandate to promote improved governance in development. Specific measures will include collaboration with anti-corruption agencies, instituting social accountabilities committees at the community level and strengthening o f information, education and communication (IEC) messages. In addition, the T A A C program will also promote gender mainstreaming in al l project activities to promote greater involvement o f women in sustainable and accountable development.

37. To ensure independence, this sub-component will be implemented by the Office o f Inspectorate o f Government (IG). As part o f this support, the Office o f the IG will use both enforcement and preventive/proactive measures. Enforcement measures will include investigation o f complaints against corruption, as well as enforcement o f the Leadership Code. The Office o f the IG will be one o f the first port o f call for the social accountability committees (SACS) in the communities. Funds for this activity will be disbursed directly to the Office o f the IG under a separate account. The Office o f the IG will also have a separate Implementation Manual.

E. Lessons learned from NUSAF 1 and reflected in the project design

38. Staff fluctuations. Following a long and intensive process to design N U S A F 1, the GoU’s design team was dissolved and an implementation team hired that had not had a role in the design o f the project. It took almost one year to establish a level o f understanding o f (and buy-in to) the project design. Remote locations and harsh conditions also contributed to staff attrition or posts not being filled. Given the current NUSAF 1 staffing skills, and the likelihood o f this staff to move o n to NUSAF 2, i t i s expected that these difficulties will not be repeated.

39. The overall C D D concept has proved successful. Based on the lessons from N U S A F 1, the GoU has mainstreamed C D D operations into decentralized service delivery mechanisms. NUSAF 2 will assist the G o U to further operationalize this arrangement.

Community Driven Development concept.

40. Bottom-up accountability in a fragile environment. Another significant contributing factor to success i s the “bottom-up” accountability incorporated into N U S A F 1. Public sharing o f expenditures on the local level and follow-up on misuse o f funds has resulted in improved accountability and transparency at the community and other levels o f project implementation. N U S A F 2 will further strengthen bottom-up accountability, among others through the T A A C sub-component.

4 1. International experience. NUSAF 1 , as similar operations in other countries have demonstrated, confirmed that communities are capable o f identifying their own needs and priorities, transforming them into plans and implementing them with some technical guidance

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where required. NUSAF 2 will document emerging international experiences to contribute to the wider lessons learned in these types o f interventions.

42. Local government leadership matters. The performance o f local governments under the NUSAF 1 project varied with some local governments performing far better than others. For example, data indicate that Soroti was probably the best-performing district and, more generally, districts in Teso and West-Nile sub-regions performed better than the rest. Kitgum district in Acholi sub-region and the districts in Karamoja sub-region did not perform as well. While many factors are responsible for these regional differences, the leadership o f local governments came out as one critical factor. NUSAF 2 will, as part o f the roll-out activities, orient local government leaders on their roles and responsibilities specific to the project.

F. Alternatives considered and reasons for rejection

43, The team considered the following alternatives during project design:

(a) Straight repeater-type project o f NUSAF 1. This was rejected in favor o f increasingly mainstreaming the project into government systems.

(b) Micro-finance component. This was rejected because many other initiatives are supporting micro-financing in Uganda.

(c) Conditional/unconditional cash transfer components. This was rejected because it would have gone against the national development strategy o f promoting market-based income generation by poor households. As well, many other projects are already transferring benefits to the most vulnerable groups in Northern Uganda.

111. IMPLEMENTATION

A. Partnership arrangements

44. As indicated above, the proposed project wi l l be implemented in support o f the PRDP, which will also provide the overall planning and coordination framework. The PRDP was launched in October 2007, but official GoU budget allocations were only included in the national budget for FY 2008/09. The GoU has committed i tse l f to fund 30 percent o f the total cost o f the PRDP, which i s estimated at US$606 million. Donor contributions for the PRDP have thus far been mostly off-budget, although in some sectors, such as justice, law and order, specific rehabilitation efforts have been supported through the sector budget. The World Bank-managed Multi-Donor Trust Fund for demobilization and reintegration o f ex-combatants supports one o f the PRDP priority programs, and the support provided to the Amnesty Commission will be closely linked to NUSAF 2 to support reintegration opportunities for former rebels and their collaborators.

45. The main off-budget PRDP activities supported by development partners are the Northern Uganda Rehabilitation Program (NUREP), funded by the European Commission (Euro 20 million for 2007-lo), the Northern Uganda Transition Initiative (NUTI), funded by USAID/OTI (2008-1 1 , with a cumulative budget through FY09 o f US$9.7 million), and the Stability, Peace and Reconciliation Project (SPRING), funded by USAID (US$3.6 million for

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2007- 10). To the extent that these programs provide direct support to community infrastructure, public works or livelihood investments, the district technical planning committee will be supported by NUSAF 2 to ensure that the resources o f the different programs will be utilized effectively and efficiently. The Northern Uganda Recovery and Development donor group (NURD) will ensure donor coordination and efficient use o f external resources in support o f the PRDP.

46. The need for strengthened collaboration with UN agencies wi l l be further explored and strengthened. Agencies such as UNHCR, UNICEF and WFP have played key roles in providing humanitarian assistance and protection in areas o f insecurity and IDP camps over the past two decades. Some emergency assistance wi l l remain required for some time during the return process o f IDPs. But the UN system and i t s donors acknowledge that sustainable services and investments in Northern Uganda wi l l have to be implemented through government systems. The project, including the TST, will make specific efforts to engage UN agencies with their institutional experience to transfer knowledge and strengthen local government structures.

47. The United Kingdom’s Department for International Development (DFID) worked with IDA in preparation o f this project. DFID has agreed to co-finance NUSAF 2. Details and amounts wi l l be communicated to IDA and GoU by July 3 1,2009.

48. The Bank funds several other activities directly in support o f the PRDP:

(a) Within the ongoing Local Government Management and Service Delivery Project (LGMSD-US$55 million), US$22 million has been earmarked to strengthen lower level local government infrastructure in PRDP districts.

(b) The Uganda Emergency Demobilization and Reintegration Project (UgDRP) i s funded through a special Multi-Donor Trust Fund (budgeted for US$8.2 million), with contributions so far from five bilateral donors, and i s the main funding source for one o f the 14 priority programs within the PRDP. The first grant to the Amnesty Commission (US$2.85 million) became effective in August 2008. The Project i s expected to close in June 2010.

(c) The Bank’s Post-Conflict Fund contributed a grant o f US$1.6 million for the PRDP Coordination and Monitoring Unit in the OPM, which closes in June 2010. This grant wi l l among other things be used to support OPM in developing a harmonized PRDP monitoring and reporting mechanism to be used by local governments.

B. Institutional and implementation arrangements

49. Under NUSAF 1, community sub-project proposals were appraised by the sub-county and district technical teams before approval by the district executive committees. The approved proposals were submitted to the semi-autonomous NUSAF Management Unit (regionally based, but with a small liaison office in Kampala), which processed the funding for community sub- projects and also supplemented the capacities o f the local authorities. The NUSAF 1 National Steering Committee chaired by the OPM permanent secretary, with representation from l ine ministries, CSOs and the donor community, provided oversight and policy guidance. Under

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NUSAF 2, the project wi l l be further mainstreamed into the government systems as detailed below.

National Level

50. The OPM Permanent Secretary, as accounting officer, will be responsible for the overall coordination, resources and implementation o f the project. Coordination with sectors and other stakeholders wi l l be ensured through the broader PRDP framework. The PRDP TWG, chaired by the OPM Undersecretary Pacification and Development, will provide the overall technical and operational guidance for project implementation. The PRDP TWG will comprise representatives o f key sector ministries, donor groups, local and urban authority representatives, local opinion leaders, CSOs, interfaith organizations, the private sector and the TST. The PRDP TWG chairperson wi l l report to the Public Sector Management Working Group (PSMWG); (chaired by the OPM Permanent Secretary), which in turn would report to the Ministry o f State for Northern Uganda Reconstruction and other relevant offices, bodies and institutions as per the laws o f Uganda.

51. The Secretary to the Inspectorate o f Government, as accounting officer, will be responsible for implementing the TAAC sub-component. A detailed sub-component Operational Manual has been prepared and will be updated from time to time in agreement with IDA. The manual wi l l set forth all operational and procedural steps regarding reviews and approvals o f specific activities, flow o f information, detailed description o f the functions o f sub-component management and implementing bodies, procurement and financial management arrangements, reporting requirements and manual amendments procedures.

District and Sub-county Level

52. A memorandum o f understanding (MoU) between the central government (represented by the OPM Permanent Secretaries) and each PRDP district (represented by the Chief Administrative Officer and the Local Council V Chairperson), wi l l detail the roles and responsibilities o f each o f the parties, as wi l l be outlined in the Operational Manual. All these MoUs wi l l be shared with the Permanent Secretaries o f the Ministry o f Local Government and Ministry o f Finance Planning and Economic Development (MoFPED).

53. A multi-sectoral Technical Planning Committee (TPC) exists both at the district (DTPC) and sub-county (STPC) levels. There i s also a Parish Development Committee (PDC) at the L C I1 level. In l ine with the existing mandates, these technical committees will provide support to ensure that NUSAF 2 activities are: appropriately appraised, approved and integrated into the budgets and work programs o f the respective local governments and l ine ministry technical agencies; and that the appropriate environmental checklists are used for each sub-project and mitigation measures are adequately implemented.

54. The Chief Administrative Officer (CAO), Sub-county Chief (SCC) and Parish Chief (PC) chair the committee meetings at the district, sub-county and parish levels respectively. They or their selected representatives wi l l facilitate the incorporation o f the NUSAF 2 funds into the budget; provide, where possible, local contributions to the community action plans; and forge

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effective linkages and ensure synergies between NUSAF 2 and existing programs, using existing institutional arrangements. The role o f CSOs will also be mediated through the DTPC, as reflected in the Local Government Act 2000. District staff will ensure that IEC materials are appropriate and relevant to the local audience.

55. District Environmental Officers wi l l ensure environmental assessment procedures detailed in the Environmental and Social Management Framework (ESMF) and Operational Manual are followed for all sub-projects, and wi l l determine any particular environmental problems to be aware o f in the district, as well as suggest suitable mitigation measures if not covered in the checklists in the Operational Manual and handbooks. They will also monitor cumulative effects on the environment and alert OPM if any safeguard issues are triggered. Capacity building would also be undertaken for local government staff in the use o f procedures, systems and criteria for supporting community-demand driven projects.

56. The DTPC wi l l technically approve the NUSAF 2 sub-projects, while the District Council, through the District Executive Committee (DEC), retains the authority to approve annual plans, and budgets. Accordingly, the DEC will endorse the technically approved sub- projects.

57. As will be detailed in the Operational Manual, where a participating district does not meet the minimum local government performance criteria, NUSAF 2 funds will not be disbursed to such a Local Government until those challenges have been addressed. The OPM wi l l work with the Ministry o f Local Government to address such challenges. In addition, if a local government does not meet the sub-project cycle benchmarks detailed in the Operational Manual, penalties including possible suspension o f disbursement by OPM wi l l apply.

Community Level

58. A community i s 'heed defined" and may include a number o f households, villages, a parish or a sub-county. The key principle i s that the 'heed" i s identified and prioritized in a participatory manner and the community must be willing to contribute 10 percent (for socio- economic infrastructure sub-projects) o f the total project costs in kind (time, labor, materials, etc.) or cash. The HISP will promote improved household practices in areas o f health, education, water and sanitation, and environment in the communities as part o f the community contributions to the sub-projects. These contributions will be made upfront and will be pre-requisites to access project support.

59. Initially, the communities are mobilized by the existing local government (parish, sub- county and district), councils/development committees, and social institutions (clan leaders, chiefs, etc.) with the support o f the Community Development Officer CDO. Definition and identification o f community beneficiaries will be a responsibility o f community members and facilitated through a participatory process by the CDO or any other community facilitator. Wealth ranking approaches will also be used, as w i l l be detailed in the Operational Manual.

60. At the project level, the critical institution will be a community project management committee (CPMC), which will be constituted from stakeholders and with a minimum o f 50

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percent women. The CPMC will have the leadership role during project design, appraisal, implementation, and monitoring. The CPMC will open sub-project accounts and receive, disburse and account for resources raised by communities and allocated by N U S A F 2 to the sub- project. The CPMC will also identify possible conflicts deriving f rom the resource allocation or project activity, and draw in the relevant government authorities to mediate or maintain law and order, if required.

6 1. All the procedures and processes necessary for the effective implementation o f NUSAF 2 will be articulated in the Operational Manual, supported by a number o f subject-specific handbooks. The Operational Manual will contain detailed checklists for local environmental assessment and mitigation measures. Manuals and handbooks developed under NUSAF 1 will be updated for use under NUSAF 2.

62. A M o U between the district (represented by the chief administrative officer) and the community (represented by the chairperson and the secretary o f the sub-project community management committee) will detail the roles and responsibilities o f each o f the parties,, as will be outlined in the Operational Manual.

C. Monitoring and evaluation of outcomeshesults

63. Overall, project success will be measured by the key performance indicators described in Section C o f the Project Description, above. The success o f each component will be measured by a series o f intermediate indicators, as follows:

1. Livelihoods Investment Support (a) PWP sub-projects completed according to design and within timeframe (%). (b) Sub-projects supported by lead local artisans (%) (c) Sub-projects funded that have operational business plans (number). (d) Completed income-generating activity sub-projects (number). (e) Youth trained in livelihood skills and utilizing the livelihood skills acquired (number). (f) Beneficiary households involved in income-generating business activities (number). (g) Membership in community savings associations or formal financial institutions (h) Savings per member in total saving schemes ( amount in USD)

2. Community Infrastructure Rehabilitation (a) Education facilities built and/or rehabilitated (number). (b) Health centers built and/or rehabilitated (number). (c) Kilometers o f community roads rehabilitated/or built (number). (d) Water points built and/or rehabilitated (number). (e) Water for production infrastructure (valley tanks and small valley dams) built and/or

rehabilitated (number). (f) Sub-projects to have permanent maintenance mechanisms in place (number).

3. Institutional Development (a) Lead local artisans trained to facilitate sub-project cycle management (number).

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(b) Community management committee members trained in sub-project implementation (number).

(c) Operations and maintenance committee members trained (number). (d) Sub-counties with operational community-level tracking system (%). (e) Unqualified audits (number).

D. Sustainability

64. The project will rehabilitate existing socio-economic infrastructure. New infrastructure (especially water) will only be financed in IDP return areas. This i s one measure to ensure continued f low o f operations and maintenance resources from local governments. For PWPs, communities will be encouraged to save their earnings in existing microfinance schemes. For the HISP, emphasis will be placed on the profitability o f the enterprises through sub-project appraisal mechanisms. In addition, community management committees will be trained in operation and maintenance o f sub-project assets for sustainability as part o f the Institutional Development component.

E. Critical risks and possible controversial aspects

65. The overall project risk rating i s moderate.

66. Resurgence o f insecurity in Northern Uganda remains a substantial risk. The major mitigating measure against resurgence o f conflict within the borders o f Uganda is economic and social development, to which NUSAF 2 will contribute.

67. Uneven performance o f local governments at a l l levels remains a moderate risk. Beyond the structural causes o f this risk (remoteness, post-conflict situation, dilapidated service delivery structures), N U S A F 2 will strengthen the role o f implementation partners by clarifying and publicizing its processes and demanding public accountability o f the use o f resource allocations. Underperforming districts will be subject to separate management arrangements, as indicated above in Section B.

68. Scaling up the project activities to 40 PRDP districts will likely create high operational risks in terms o f slow start-up o f project activities in the new districts, with increased administrative costs and a l o w project impact. Targeting the socio-economic infrastructure component to the core LRA-affected districts, which on the one hand exhibit huge service gaps but on the other have gained experience from implementation o f NUSAF 1, is one o f the mitigation measures. In addition, O P M will fast-track sensitization and mobilization o f the new districts on project implementation procedures and guidelines, prior to project effectiveness.

69. Inadequate staffing in local governments, which has resulted in l o w capacities and performance in the North, i s a substantial implementation risk. The prolonged insecurity in the North created hard-to-reach and hard-to-stay-in districts, incapable o f attracting and retaining qualified technical staff. This led to l o w technical support to communities during NUSAF 1. Rebuilding capacities o f existing institutions in terms o f structures, personnel and skills is thus critical for project implementation and sustainability. In order to mitigate the risk, the G o U has

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agreed to undertake pro-active steps to increase staffing levels in Northern Uganda districts. In addition, a road map for filling critical staff posts in local governments will be agreed upon between the GoU and the World Bank, and will constitute a project covenant.

70. A framework for promoting transparency and accountability, with built-in mechanisms for rewards and sanctions, i s in place (see Annex 13). Collaborative arrangements with anti-corruption agencies will be institutionalized.

Transparency and accountability in project implementation i s a substantial risk.

7 1. Political interference in project implementation, especially at district and lower levels, may result in deviation o f resources to activities not directly related to project objectives. As part o f the T A A C sub-component, a system i s in place to enforce project funding and procurement rules. Sanctions will be applied to local governments that violate the rules.

72. Poor coordination and collaborative arrangements with other development agencies in the North could lead to duplication o f activities by various development actors in the same communities. To mitigate this, key actors in the regions have been identified by the OPM, including their areas o f intervention, coverage, institutional arrangements, resources committed and duration o f activities. The DPTC will be strengthened to play their roles through the district planning and sub-project appraisal processes. In addition, collaborative protocols with other actors will be institutionalized and the coordination mechanisms within PRDP and between the development partners strengthened at national level through the Bank’s Post-Conflict Fund grant to the O P M and the NURD group.

73. Weak technical support to communities creates challenges in sensitization and mobilization, resulting in poor targeting o f beneficiaries. To mitigate this risk, district and sub- county CDOs, or any other officers identified by the CAOs, will provide overall coordination and ensure appropriate linkages with technical support from the local authorities and other stakeholders.

F. Credit conditions and covenants

Effectiveness Conditions:

(a) The recipient has established the TST and made it operational in form and substance satisfactory to IDA; and has appointed to the TST a coordinator, financial management specialist and a procurement specialist, a l l with qualifications, experience and terms of reference (TOR) satisfactory to IDA.

(b) The recipient has submitted to IDA the Operational Manual in form and substance satisfactory to IDA.

(c) The recipient has updated and submitted to IDA the Financial Management and Procurement Handbooks, al l in form and substance satisfactory to IDA.

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Conditions for Disbursement of Sub-project Grants to Local Governments:

(a) Grant Agreements have been executed between the Office o f the Prime Minister and Chief Administrative Officers for at least twenty districts.

(b) The recipient has prepared and submitted to IDA a community development handbook in form and substance satisfactory to IDA.

(c) CDOs have been appointed in at least twenty districts and have provided training to at least the first five beneficiary groups in each district.

Covenants Applicable to Project Implementation:

The recipient shall, through the Public Procurement and Disposal o f Assets Authority (PPDA), not later than six months after the effective date, put in place procurement arrangements satisfactory to IDA, including the appointment o f independent procurement auditors acceptable to IDA for reviewing the procurement procedures for goods, works and consultants’ services financed under the project.

Commencing at the end o f the second fiscal year o f project implementation, or such later date as IDA may agree, the recipient shall, not later than six months after the end o f each fiscal year, furnish to IDA an audit report on the procurement o f goods, works and consultant services carried out under the project, prepared by the independent procurement auditors referred to above.

The recipient shall, not later than three months after the effectiveness date, submit to IDA, the TOR for independent auditors, in form and substance satisfactory to IDA; thereafter, and in any case not later than six months after the effectiveness date, appoint the independent auditors to undertake annual project audits.

The recipient shall, in accordance with the three-year road map detailed in the Operational Manual, appoint and maintain at the district and sub-county levels the key staff with qualifications and terms o f reference satisfactory to IDA, including, inter alia: district chief finance officers, district internal auditors, community development officers, district environmental officers and sub-county community development officers.

The recipient shall, not later than twelve months after the effectiveness date, appoint to the Office o f the Inspectorate o f Government two internal auditors with qualifications, experience and terms o f reference satisfactory to IDA, for the purpose o f auditing the accounts o f sub-component 3.2 o f the Project. ’

The recipient shall, not later than twelve months after the effectiveness date, fully computerize the accounting function o f the Office o f the Inspectorate o f Government, for the purpose o f managing the accounts and monitoring expenditure under sub-component 3.2 o f the Project.

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IV. APPRAISAL SUMMARY

A. Economic and financial analyses

Economic

74. The proposed project is expected to complement other sectoral interventions in the delivery o f social services in Northern Uganda within the PRDP framework. Among other objectives, the NUSAF 2 has been designed to mitigate the possible risks o f a dual society in Uganda by reducing the North-South divide.

75. The main project benefits will be derived from: (i) diversified and increased incomes from a broad range o f livelihood sources; (ii) improved market integration; (iii) sustainable businesses owned by the rural poor; and (iv) increased opportunities for self-employment and skills transfer. Most o f these direct benefits are generated from the L I S component. However, other benefits related to social processes, reconciliation, institutional capacity building and human capital development are expected in the long te rm and are not easily quantifiable. These have not been included in the economic analysis.

76. The ex ante economic analysis o f the L I S component could serve as an indication o f the economic viability o f the project, given that this component represents 60 percent o f the overall project budget. The analysis was prepared using the data collected by a consultant commissioned by the G o U through the NUSAF Project Management Unit (NUMU). This ex ante analysis was thorough in terms o f both activity and geographic coverage (all regions in the North) and involved random sampling by major activities. The aggregated economic rate o f return for the project, including mostly activities under the LIS component, was estimated at 45 percent4 and the discounted net present value (NPV) i s US$28.9 million.

77. The estimated economic rate o f return for the project (considering the L I S component only) i s detailed in Annex 9. The estimation included two scenarios. The f i rs t includes food and cash crop enterprises, while the second includes crop and non-crop enterprises.’ The results find positive NPVs in both cases, implying that the economic and financial rates o f return for the project are higher than the economic cost o f capital (assumed at 12 percent). Furthermore, the results indicate that higher rates o f return are obtained if project activities implemented under the LIS component comprise both the crop and non-crop enterprises. These estimates are l ikely to understate the overall return because many o f the social benefits o f the project have not been accounted for in the analysis because o f valuation challenges. Moreover, other social benefits have not been included in the analysis, such as improved health, sanitation and education, which are likely to improve the social return o f the project. Furthermore, the cost-effectiveness ratios show that NUSAF 2 will rehabilitate community infrastructure in a more cost-effective way, given the experience gained from the implementation o f NUSAF 1. In order to reinforce the poverty reduction and targeting objectives o f the project, N U S A F 2 will use the local

Detailed assumptions are contained in the last section o f the Annex 9. ’ Crop enterprises included in the analysis are: maize, sorghum, beans, groundnuts, cassava, sweet potatoes, field peas, banana, sim-sim, cotton and coffee grown by smallholder farmers in the following regions o f Northern Uganda: Acholi, Bukedi, Bunyoro, Elgon, Karamoja and Lango.

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government allocation formula based on population (45 percent weight), poverty count (40 percent weight) and land area (1 5 percent weight) during project implementation.

78. As for the infrastructure rehabilitation component, a cost-effectiveness analysis (least- cost analysis) was undertaken by comparing the actual costs o f constructing community social infrastructure such as school blocks and community health clinicdwards under N U S A F 1. These costs were compared with those o f other similar projects implemented by donors and NGOs in Northern Uganda. The key measure o f cost-effectiveness i s the cost per beneficiary o f each piece o f infrastructure. Assuming same quality and durability o f assets constructedY6 projects with lower costs per beneficiary are considered to be more cost effective. Results from the analysis (shown in Annex 9) indicate that on average NUSAF i s cost-effective compared to other projects. On average, NUSAF constructed community infrastructure cost about US$lO per beneficiary per year, much lower than the per capita costs o f most other projects estimated in Annex 9. NUSAF’s cost-effectiveness could largely be due to the community capacity building and experiences gained during the past five years o f NUSAF’s implementation o f the first community sub-project in Uganda.

Finan cia1

79. The estimated financial discounted NPV calculated based on observed market prices and costs (private profitability) is US$26.1 mi l l ion with a financial rate o f return estimated at 43%. This estimate i s based o n the project activities that will be implemented under the HIS Program sub-component. As already indicated above, N U S A F 1 small scale infrastructure sub-proj ects were found to be cost effective.

Fiscal Impact

80. but they are l ikely to be positive in the following ways:

The fiscal impacts o f the project could not be determined exactly due to data challenges,

The impact o f an increase in rural production on national aggregate production, which enhances the overall growth o f the economy. A net positive impact on employment given that it will provide gainful employment to the beneficiaries. Assisting over 2 mi l l ion poor families (currently under subsistence level) will significantly reduce the drain on the economy, for example, in food hand-outs and health care. The potential economic consequence o f not doing the project, and not addressing the issues that cause increasing poverty and deprivation could potentially have negative socio-economic consequences on the affected population.

It i s assumed that community infrastructure i s constructed using the same sector norms and standards; as such there should not be wide differences in quality and durability.

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B. Technical

8 1. The choice o f socio-economic infrastructure sub-projects wi l l be guided by: (i) the need to rehabilitate existing infrastructure; (ii) relevant sector norms and standards; (iii) the ability o f the communities to contribute 10 percent (labor, material and other in kind contribution) o f sub- project cost; and (iv) the availability o f the operations and maintenance resources. Public infrastructure sub-projects wi l l be selected through community participatory processes, and wi l l have to be included in a sub-county development plan. Appraisal processes for household income support sub-projects will ensure that they are viable and profitable. In addition, community groups wi l l be encouraged to adopt good household practices as part o f their contribution. A few such household practices, such as immunization, sanitation, keeping children in school and undertaking tree planting, are to be undertaken by community groups as part o f the sub-projects.

C. Fiduciary

Financial management

82. The overall responsibility for project financial management, promotion, and monitoring and evaluation o f components 1, 2 and 3.1 will be vested in the OPM. The OPM and local governments will be supported by a TST including qualified and experienced financial management specialists. Overall financial management arrangements for the project have an overall risk rating o f substantial before mitigation measures, owing to the nature and geographic spread o f the project.

83. The overall responsibility for project financial management, promotion, and monitoring and evaluation o f sub-component 3.2 wi l l be vested in the Secretary, Inspectorate o f Government. A financial management specialist will be hired to support the operations o f the Office o f the IG.

84. The DTPC shall coordinate and integrate all the sectoral plans o f lower governments for presentation to the district executive committee. The DTPC i s chaired by the CAO and i s made up o f heads o f departments o f the district administration and other technical people co-opted by the CAO. The CAO wi l l serve as an accounting officer at the district level. The OPM-with support o f the TST-will monitor the disbursement o f funds as well as withdrawals and direct payment applications, as approved by the OPM Permanent Secretary and will keep NUSAF 2 project books o f account, prepare and produce quarterly interim unaudited financial reports (IFR). The Office o f the IG will monitor the disbursement o f funds as well as withdrawals and direct payments through SOE applications, as approved by the Secretary to the Inspectorate o f Government per the two designated accounts. The TST will support the OPM accounting staff to make operational their financial management and accounting systems, using the appropriate software to record, aggregate and report all project transactions on a timely manner, as well as an updated financial manual plus the chart o f accounts with the required reporting periodicity o f various statements. The design o f the project has envisaged a strong role o f the district internal audit to ensure compliance at district, sub-county and community levels.

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Procurement

85. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 revised October 2006; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004 revised October 2006, and the provisions stipulated in the Legal Agreement. Procurement wi l l be carried out at National level by OPM and Office o f the IG, at district level by local governments, and at community level by the communities. The CDO or other staff appointed by the CAO/sub-county chief wi l l coordinate project activities at the district level. Capacity gaps identified at national level wi l l be mitigated by the procurement specialist at OPWTST, with qualifications and TOR acceptable to IDA. At the local government level, risks arise out o f the lack o f experience in public procurement o f both the contracts committees and the PDUs. This will be mitigated by: (i) OPM updating NUSAF 1 simplified procurement manuals and distributing them to local government staff; and (ii) the TST procurement specialist providing capacity building and support to local government personnel.

86. Sub-project procurement will be carried out by the CPMCs using community procurement procedures, as detailed in the Procurement Handbook. The risks at community level wi l l be mitigated by: (i) training the communities prior to the disbursement o f funds; and (ii) wide advertising or bidding opportunities by the district as well as the CPMCs.

87. The Operational Manual will be continuously modified as new lessons are learned and incorporated for future use, subject to agreements between GoU and IDA. More details on how the components wi l l be implemented are described in handbooks such as the Procurement, Financial Management and Administration Handbooks. The details o f procurement under this project are described in Annex 8.

D. Social

88. NUSAF 2 will strengthen social development outcomes in Northern Uganda primarily by financing public infrastructure constructionhehabilitation o f important community facilities such as schools, access roads or water points. The communities themselves will have a critical role in choosing the projects, thereby not only ensuring the relevance o f project outputs, but also strengthening social bonds and participatory decision-making at the local level. The project will also support household income activities to help poor households build new income-generating opportunities, and also encourage the poor to mobilize themselves in livelihood-oriented groups and business organizations. In addition, NUSAF 2 wi l l finance activities aimed at improving accountability and transparency in the use o f project resources at national, district, sub-county and community levels, strengthening governance and accountability at all levels. The structures and processes to resolve local conflicts will also be enhanced. All the above aim at achieving the main development objective o f empowering communities in Northern Uganda to improve their livelihoods and access to basic socio-economic services, while at the same time improving social inclusion, cohesiveness and accountability.

21

89. NUSAF 2 wi l l promote greater inclusion o f vulnerable groups in development by mainstreaming project activities into central and local governing structures, which by law reserve representation for women, youth, and other special interests. For example, one-third o f the seats in local councils-which wi l l have an important role in this project-are reserved for women. NUSAF 2 will build on NUSAF 1 lessons regarding gender by further developing and tracking gender equity outcome indicators and monitoring o f exclusion in terms o f delivery o f project benefits. NUSAF 2 wil l: (i) be informed by gender analysis; (ii) identify pertinent gender poverty concerns and prepare gender equity plans; and (iii) engender outcome indicators. The NUSAF 2 gender strategy has been informed by the National Gender Policy (NGP 2007)’ and the related Community Mobilization and Empowerment Strategy Manual (2006). Details o f how this wi l l be done within the sub-project cycle are detailed in the Operational Manual.

90. Mainstreaming o f disability issues in project implementation will include: (i) paying special attention to people with disabilities as part o f the HISP component; (ii) using a universal design approach to the CIS component which ensures that people with disabilities access these buildings; and (iii) including a disability module as part o f the Northern Uganda Surveys. Details o f these guidelines will be elaborated in the Operational Manual.

91. People affected by potential land acquisition for infrastructure development will be addressed in a participatory and inclusive manner. A Resettlement Policy Framework (RPF), which sets out the guidelines for the resettlement action plans (RAPS) to be prepared for any sub- project that triggers the Involuntary Resettlement Policy, was prepared and disclosed both in country and at the World Bank Infoshop on December 16, 2008. Stakeholders were consulted extensively during the preparation and disclosure o f the RPF in the country. Consultation meetings involved national level institutions, representatives o f some communities, and local government agencies in addition to lessons learned by the NUSAF 1 team. Other social impacts resulting from construction activities will be addressed through the ESMF. Each sub-project progress report wi l l include monitoring o f the implementation o f the RAP and other social issues covered by the ESMF.

E. Environment

92. The project supports interventions designed to improve livelihoods and access to basic socio-economic services in the target areas. These interventions, e.g. infrastructure such as community schools, access roads, agricultural production processing, improved farming, irrigation, agro-forestry, apiaries, etc. are expected to have limited local adverse environmental impacts. The overall environmental impact o f the project i s expected to be positive through alleviating pressures on the poor that lead to unsustainable exploitation o f natural resources and environmental degradation. The menu o f sub-project activities and the experience from NUSAF 1 suggest that potential environmental issues can be adequately managed by integrating environmental due diligence into the sub-project cycle. For this purpose, an ESMF was prepared

’ The guidance i s consistent with Uganda’s commitment to international instruments providing guidance on women peace and security. On 3 1 October 2000 the United Nations Security Council unanimously adopted Security Council Resolution 1325 on Women, Peace and Security. The objectives o f the resolution are to protect women’s rights during armed conflicts, prevent impunity for gender-based crimes, mainstream gender aspects in peacekeeping operations and increase women’s participation in the various phases before, during and after armed conflicts.

22

and disclosed both in country and at the World Bank Infoshop on December 16, 2008 and necessary capacity building activities wi l l be implemented early in the project.

F. Safeguard policies

93. Project activities with safeguards relevance. Safeguard policy issues in NUSAF 2 are related to: (i) rehabilitation and development o f small community infrastructure such as access roads and drainage, irrigation works, reforestation and small-scale agribusiness under Component 1 ; and (ii) rehabilitation and expansion o f existing education, transport and health infrastructure under Component 2.

94. Safeguards policies triggered. NUSAF 2 activities may have limited and localized adverse environmental and social impacts, and the project is, therefore, rated as EA category B. I t triggers OP 4.01 on Environmental Assessment, OP 4.09 on Pest Management, and OP 4.12 on Involuntary Resettlement. Pest Management has been triggered because there i s likely to be small scale use o f pesticides that may be applied for veterinary care o f animals under the Household Investment Support component. To facilitate compliance with these safeguard policies in the context o f a CDD operation with yet-to-be determined multiple sub-projects, an ESMF and RPF were prepared and disclosed during project preparation, reflecting lessons from NUSAF 1 and input from stakeholders at different levels o f the government and communities. The ESMF includes pesticide management measures to facilitate compliance with OP 4.09.

Safeguard Policies Triggered by the Project Yes N O Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.1 1) Involuntary Resettlement (OP/BP 4.12) Indigenous Peoples (OP/BP 4.10) Forests (OP/BP 4.36) Safety o f Dams (OP/BP 4.37) Projects in Disputed Areas (OP/BP 7.60)* Projects on International Waterways (OP/BP 7.50) [ I [XI

* By supporting the proposed project, the Bank does not intend to prejudice the final determination o f the parties' claims on the disputed areas.

G. Policy Exceptions and Readiness

95. as designed.

There are no policy exceptions being sought. The GoU i s ready to implement the project

23

Annex 1: Country, Sector and Program Background


96. Northern Uganda has experienced economic stagnation arising out o f more than two decades o f rebel activities and rural criminality. The insurgency in the region has taken a tremendous tol l on the population and the economy o f the region. At the height o f the insurgency, an estimated 1.6 mi l l ion people had been forced to leave their homes in Northern and Eastern Uganda to l ive in I D P camps for fear o f being attacked and/or abducted by the rebels. In financial terms, the cost o f the conflict has been estimated at over US$l.3 bi l l ion (for the period 1986-2002) or over 3 percent o f annual GDP to the national economy.8

97. As a result of this insecurity and the complications to service delivery, the Nor th remains the poorest region in Uganda with some o f the lowest human development indicators in the country. Results o f the 2005/06 National Household Survey show that despite a small reduction in poverty, the North has the largest proportion o f people living in poverty, estimated at 61 percent, almost twice the national poverty level o f 31 percent (Figure 1). The gap between the North and the national poverty levels has widened from 17 percent in 1992 to 30 percent in 2005/06, with poverty in the Nor th falling by less than any other region since the early 1990s.

Figure 1 : Uganda Poverty Levels by Region, 1993-2006

92/93 96/97 99/00 02/03 05/06

--t Central -*c- East - - North West + National

Source: Uganda Household Survey Reports.

98. Evidence from the Northern Uganda Survey (UBOS 2005)9 and findings by Ssewanyana, Younger and Kasirye (2006) indicate that both access and utilization o f social services such as

Since 2002, Civil Society Organizations for Peace in Northern Uganda (2006) estimate the total cost to have risen to US$1.7 billion, which i s likely an under-estimate because o f data constraints and limited geographic coverage. The costs include estimates o f military expenditure, reduced economic activity, loss o f skilled labor, loss o f tax revenue, loss fi-om environment and land degradation, and investments in IDP camps that wi l l no longer be o f use when the camps are disbanded.

The Northern Uganda Survey was fmanced by the Northern Uganda Social Action Fund and conducted by the Uganda Bureau o f Statistics between July and December 2004 to provide baseline data on demographic and socio- economic characteristics o f the population (with a focus on vulnerable groups) in the North for monitoring development performance.

8

9

24

health, education and water in the region are lower than in the rest o f the country and, as a consequence, the level o f human capital development remains lower. The Northern Uganda Survey o f 2004 estimated the region’s poverty level at 70.2 percent, with large variations between sub-regions (Table 1).

District Acholi Lango West N i l e Teso Karamoja Wider North

Table 1. Povertv Headcount (YO) in Northern Uganda (2004) Percentage

73 Yo 69% 69% 66% 82% 70%

Income

Demography

99. In many ways, Northern Uganda characterizes the typical set o f problems o f a post- conflict environmerit. Local government capacities remain weak, with low staffing levels. The North has some o f the lowest non-income measures o f well-being, including demographics, underemployment, literacy, and access to education, health services and water (Table 2). At about 31 percent, the region has the highest incidence o f female-headed households in the country (World Bank, 2006). Between 1991 and 2002, the North had a much higher population growth rate (4.6 percent) compared to the national average (3.2 percent), as well as higher dependency and total fertility ratios. In 2006, infant mortality in Northern Uganda was 106/1000, compared to the national average o f 76/1000. lo

Indicator National Central East West North Poverty head count (%) 31.1 16.4 35.9 20.5 60.7

(Ushs, ‘000) Population growth (YO, 1991 - 3.2 2.6 3.5 2.8 4.6

Monthly household income 171 209 156 159 93

2002) Share o f population (YO) Contraceptive prevalence (%)* Female headed households (%) Growth of employment Wage earners as % of off-farm

Employment

100 29.2 25.2 25.9 19.7 23.7 35 20.1 20.6 10.9 26.9 29.3 24.1 23.5 30.8 4.1 4.8 1.4 7.4 2.9

46.7 44.8 45.5 45.7 41.7

Shocks

workers Underemployment (working less 12.1 15.7 8.9 8.2 19.1 than 40 hours a week) Household experienced shock in 65.7 53.3 63.6 65.4 88.7

Education

lo However, because many people have been living in IDP camps, service access surveys show a seemingly rosy picture o f indicators, particularly access to school and health facilities. For example, the National Service Delivery Survey (2004) finds the North to have more communities with the shortest distance to primary schools and government health facilities. Wh i le access may seem to be better, because o f the camp conditions, it does not put the North at any advantage in terms o f service delivery.

previous 5 years Literacy rate (age 18+, %) 69 80 61 66 59

25

Health

Water I drinking water (%)

Source: UBOS (2006), Uganda National Household Survey report, 2005/6.

Education attainment4id not 63.4 55.7 66.4 68.4 73.4 complete primary Distance to government health 6.7 7.8 6.2 9.2 4.2 unit (km) Infant mortality rate* * 76 67 70 76 106 Communities with access to safe 63 66 63 55 49

Uganda Demographic and Health Survey Report, 2006 (DHS 2006) Uganda Population and Housing Census (2002) report. Numbers refer to 2005/6, except where otherwise indicated. *Numbers are derived from the DHS 2006. **Refers to number o f children dying before attaining 1 year out o f every 1000 born alive.

100. In response to these challenges, the Government o f Uganda (GoU) proposed in early 2002 a US$lOO million Northern Uganda Social Action Fund (NUSAF) project, as part o f the broader Northern Reconstruction Program. The project, with IDA support, became effective on February 5, 2003 and closed on March 31, 2009 after a one-year extension. I t s objective i s to empower communities in the 18 (now 29) districts o f Northern Uganda by enhancing their capacity to systematically identify, prioritize and plan for their needs within their own value systems and, ultimately, to improve economic livelihoods and social cohesion. The community- driven development (CDD) approach allowed for community groups to organize themselves, identify and prioritize their needs and develop funding proposals. The community sub-proj ect proposals were subjected to appraisal by sub-county and district technical teams before approval by the district executive committees. Communities whose sub-projects were approved received direct funding paid through their bank accounts.

10 1. During the last six years, significant progress has been made in enhancing the capacities o f communities in Northern Uganda, making local governments more accountable to community demands, and improving service delivery. The NUSAF project has been instrumental in: a) facilitating interface between the lowest levels o f local government and communities; b) strengthening transparency in the local government service delivery process; c) promoting community reconciliation; and d) creating a harmonized platform within which communities can be active players in decentralized service delivery systems with the support o f local governments.

102. 1 contributed to measurable development outcomes in a number o f areas:

As a complex project implemented in a challenging and changing environment, NUSAF

(a) Over 3 mil l ion people - about 47% o f the population in Northern Uganda (against the target 30%) - have so far been supported to access improved social services.

(b) Over 62,160 households (310,800 people) have access to safe drinking water through 1,03 1 completed water sub-projects.

(c) Nearly 4,000 households (1 9,075 people) have access to improved sanitation facilities through 763 completed pit latrine stances.

(d) About 223,000 pupils have potential improved learning environment through 1,277 education sub-projects (2,693 classrooms, 40 dormitories, 7,650 desks, 63 science

26

laboratories, 9 libraries, 20 nurseries, 19 vocational ski l ls training centres and 1,22 1 teachers’ houses).

(e) Approximately 223,100 direct beneficiaries have been reached through the VGS Component via 3,772 income generating activities, 159 vocational ski l ls training, 372 family support sub-projects, and 53 counselling sub-projects.

( f ) The 845 Conflict Management and Community Reconciliation sub-projects have broadly increased social interaction and cohesion among beneficiaries, strengthening community interaction, consensus building and social capital.

27

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies


Small Towns Water Supply Project (Cr. 2583-UG) Second Economic and Financial Management Project (Cr. 2736-

Second Environment Management and Capacity Building Project (EMCBP 11) (Cr. 34770-UG)

Proiect (Cr. 2736-UG)

UG)

Institutional Capacity Building

I World Bank Financed Proiects I

U

S

S

S

L

HL

Latest Supervision ( Ongoing World Bank Financed Projects

Implementation

S

su

Northern Uganda Social Action Progress (IP) S

European Union Northern Uganda Rehabilitation Program

, Fund (Cr. 36970-UG) Local Government Management and Service Delivery Project (Cr.

Emergency Demobilization and Reintegration Project (TF05 1235) Other Development Agencies

3773-UG)

Ratings Sustainabilitv I ID Imnact

S

S

L I M UN I N L I H L

Development Objective (DO)

S

S

28

Annex 3: Results Framework and Monitoring Second Northern Uganda Social Action Fund Project (NUSAF 2)

Proiect Development Objective (PDO): To improve access o f beneficiary households in Northern Uganda to income earning opportunities and better basic socio-economic services

Improved access to real income earning opportunities

Improved access to better basic socio-economic services in targeted areas

ComDonent 1: Livelihood Investment Sumort

Strengthened communities and local authorities which can manage (prepare, implement and evaluate) a poverty-targeted PWP

Increased stock of community productive assets through Household Income Support Program

Increase in incomes o f targeted beneficiary households (%) Person days provided in labor intensive PWP (number) Gross enrollment in primary education (%) Population with access to a l l season roads (%) Population with access to improved safe water sources (%I Level of satisfaction among targeted population with quality o f basic socio-economic services (%)

Intermediate Outcome

1.1 Percentage of PWP sub-projects completed according to design and within timeframe

1.2 Percentage o f sub-projects supported by lead local artisans

1.3 Percentage o f sub-projects hnded that have operational business plans

1.4 Number of completed IGA sub- projects

1.5 Number of youth trained in various livelihood skills who are utilizing these skil ls as verified by the tracer study

1.6 Number o f beneficiary households involved in income generating business activities

1.7 Number o f memberships in community savings associations or formal finance institutions

1.8 Amount o f savings per member in total savings scheme (in USD)

Assess impact o f project on household incomes

Assess the extent to which beneficiaries get access to basic social services

Establish project performance and identify opportunities for system improvement

29

Component 2: Community Infrastructure Rehabilitation

Community socio-economic infrastructure rehabilitated

ComDonent 3: Institutional DeveloDment

Improved capacity in performing technical, administrative and managerial functions at community and LGA levels

Increased transparency and accountability for the use o f resources at community, district and national levels, including NGOs and CBOs

2.1 Number o f education facilities built and/or rehabilitated (IDA15)

2.2 Number o f health centers built or rehabilitated (IDA1 5)

2.3 Number o f k m s o f community roads built or rehabilitated

2.4 Number o f water points built or rehabilitated

2.5 Number o f water for production infrastructure built or rehabilitated

permanent maintenance mechanisms in place

2.6 Number o f sub-projects to have

3.1 Number o f lead local artisans trained to facilitate the LGAs and communities on sub-project cycle management

3.2 Number o f trained Community Management Committees members in sub-project implementation

3.3 Number o f operations and maintenance committee members trained

3.4 Percentage o f sub-counties with operational community-level tracking system

3.5 Number o f unqualified audits

Assess the infrastructures rehabilitated and maintained for improved functionality

Assure sustainability, functionality and governance systems o f the projects through bottom-up feedback

30

M&E Plan: Arrange lents for Results Monitoring Target Values Data Collection and Reporting

Responsibility for Data Collection

Data Collection Instruments

YR3

14% (new monthly earnings estimated at UGX 106,477)

3,300,000

YR4

22% new monthly wnings sbmated at JGX 113,949)

4,400,000

YRS Frequent y and

Reports

Once every two years

Quarterly

Baseline 2008

93,401 (national average = 1 70,89 1 )

0

59.6%

Project Outcome Indicators

YRI

3% [new wnthly sarnings Estimated at UGX 96,203)

550,000

60%

YR2

6% (new nmnthly earnings estimated at UGX 99,005)

1,100,oo

Jganda National iousehold Survey

1. Percentage increase in income of targeted benefciary households

2. Persondays provided in labor intensive work (number)

enrollment in primary education (%)

3. Gross

30% [new monthly sarnings Estimated at UGX 121,421)

5,500,000

Uganda Bureau of Statistics UBOS

CommunitieslLaslO PM

PPRs

61 YO Uganda Bureau of Statistics (UBOS) and MoES




63%

63.2%

63%

62.3%

62%

60.3% Uganda Bureau of Statistics (UBOS)

4. Population with access to all season roads (%)

48.6% 49.6% 54.5% National Household Surveys

53% 57% 60% 64% 68% Uganda Bureau of Statistics (UBOS) and DWD

National Household Surveys

5. Population with access to improved safe water sources

6. Levelof satisfaction among targeted population with quality of basic socio- economic services (%)

49 %"

73% 75% 80% 80% 85% 90% Every six months

Community Score Cards

CommunitieslOPM

Intermediate Outcome Indicators

Component 1: Livelihood Investment Support

Quarterly Project Progress Reports (PPRs)

1.1 Percentage of

projects completed according to design and within timeframe

PWP sub- CommunitieslOPM

~

" N a t i o n a l ave rage 67.6 pe rcen t .

31

Target Values Data Collection and Reporting

YR3 YR4 YR5 Responsibility for Data Collection

Frequenc Data Collection y and Instruments

Reports

ProjectOutcome I Baseline YRI 2008

YRZ

95%

95%

300

100% Quarterly PPRs

100% Quarterly PPRs

150 Quarterly PPRs

43,416 Quarterly PPRs 43,416 Quarterly PPRs

14 Quarterly PPRs

j* 30%

I

NIA CommunitieslOPM 1.2 Percentage of

sub projects supported by lead local

75%

60%

artisans 1.3 Percentage of

sub-projects funded that have business plans and are operational

1.4 Numberof completed IGA su b-projects

1.5 Number of youth trained in various livelihood building skills who are utilizing these skills

1.6 Numberof beneficiary households involved in income generating activities

1.7 Numberof memberships in community savings associationslfor mal finance

-r NIA CommunitieslOPM

NIA + 1,000 1,600

CommunitieslOPM 1,200

2,000 N /A CommunitieslOPM

NIA 10,854 43,416 -L 86,832

CommunitieslOPM

NIA 30,934 CommunitieslOPM 543 4,342 17,366

8

institutions 1.8 Amount of

11 14 CommunitieslOPM savings per member in total savings scheme (in USD)

NIA

Comonent 2 : Infrastructure and Rehabilitation S U D D O ~ ~ (Assuming 750 sub-projects: 40% education facilities; 10% health; 20% off-farm water facilities: 20% on-farm water investments; and 10% community .roads) 2.1 Number of education facilities built andlor

PPRs & MoES Reports

PPRs & MoH Reports

PPRs &MOW Reports

PPRs & DWD reports

Quarterly

Annually CommunitieslOPM NIA 30 120 240 285

Quarterly T CommunitieslOPM health centers built andlor rehabilitated (IDA1 5)

2.3 Number of kms of community roads that are rehabilitated /or

Annually

ComrnunitieslOPM Annually

built 2.4 Number of water

CommunitieslOPM NIA 1 30 I 80 1 130 I 150 points builtl or rehabilitated I Annually

32

Target Values

ProjectOutcome I Baseline I YRI I YR2

Data Collection and Reporting

Data Collection Instruments

YR3 YR4 YR5 Responslbllky for Data Collection

Frequenc y and

Reports

10% 30%

Y l NIA

I 50 110 140 I 150 I :uarterly CommunitieslOPM

2.5 Number of water for production infrastructure builffor

PPRs & DWD 5 reports

Annually

rehabilitated 2.6 Number of sub-

Quarterly & Annually

PPRs ComrnunitieslOPM projects to have permanent maintenance mechanisms in place

NIA 295 580 715 750 70

Component 3 : Institutional DeVelODment and Capacity Enhancement

3.lNumberof lead local artisans trained to facilitate the LGAs and communities on sub-project cycle management

NIA 1,335 (avg of 3 LSPr in eachofthe 445 slcoun9es)

NIL NIL NIL NIL PPRs Quarterly CommunitieslOPM

3.2Number of trained community management committee members in sub-Droiect 70 I 295

580 715 750 Quarterly PPRs CommunitieslOPM + 20%

715 750 Quarterly PPRs CommunitieslOPM operations and maintenance committees members trained

580

50% CornmunitieslOPM appraised C~mmunity

Action Plans reflected in District Annual

District Annual Investment Plans

District Annual Development Reports

90% NIA 100% Annually

NIA 60% 85% 100% Annually CommunitieslOPM counties with operational community-level tracking systems.

33

Annex 4: Detailed Project Description Second Northern Uganda Social Action Fund Project (NUSAF 2)

COST CENTRES AND TARGETS

103. The project will have three components: (i) Livelihood Investment Support; (ii) Community Infrastructure Rehabilitation; and (iii) Institutional Development.

COST BALANCE UNIT OUTPUTS (US%) (US$)

1. Livelihood Investment Support Component (US$60 Million)

104. This component will support two sub-components: (1) a Public Works Program (PWP) and (2) a Household Income Support Program (HISP) targeted at able-bodied poor households and administered at the community and sub-county levels respectively.

1.1 Public Works Program (US%20 million-20 percent o f total cost)

105. The objective o f the PWP i s to enable beneficiaries to access incomes and in the process increase community socio-economic assets. In order to meet the needs o f the poor in urban and rural areas in Northern Uganda, PWP will support labor-intensive interventions that will give poor households extra income to support their response to the growing global food crisis (coping as wel l as wel l taking advantage by increasing food production). The PWP wil l provide the GoU and various stakeholders an entry mechanism into communities that facilitates dialogue on poverty levels, causes, and sustainable response strategies. Currently, each district produces an annual investment plan based on community action plans that are derived by participatory planning processes. From the district investment plans, the project sub-component will finance labor-intensive community investments that create public assets while paying wages to labor- surplus poor households. The PWPs will be targeted at these households during the months o f January to March as an annual intervention to address the basic needs and enable these households to begin to participate in other productive investment and savings activities. The basic costing figures and number o f beneficiaries are summarized below (Table 3).

34

106. A typical PWP sub-project wi l l employ approximately 250 beneficiaries for one month (22 working days) and pay a PWP daily wage not exceeding the equivalent o f a daily wage for the lowest paid civil servant in the district, which will appropriately meet the household food basket, and provide some extra money for small savings and/or investments. This will forward linkages to the market and stimulate households to participate, with others, in the HISP sub- component. The average market wage within each district wi l l be determined annually in November through a market wage survey facilitated by an independent firm announced by the Permanent Secretary o f the OPM in consultation with the permanent secretary o f the Ministry o f Gender, Labor and Social Development. The first average wage rates w i l l be available before the first round o f projects which will be in November 2009.

107. The largest sub-projects under PWP will be around US$20,000 (with close to 60 percent set aside for paying unskilled labor wages) and this wi l l give rise to about 1,000 sub-projects over the five year period and generate 5,500,000 person-employment days (see p. 22) over the project l ife. Sub-projects with a budget o f more than US$20,000 with an absolute cap o f US$35,000 which are deemed absolutely necessary w i l l be appraised by the district, reviewed by the TST and submitted to the PRDP TWG for funding approval. Each sub-project will ensure that a minimum o f 30 percent o f the total number o f jobs created are taken by women. Small structures on the sub-projects such as culverts, single span bridges (within the competences o f community artisans), small valley tanks, drainage, splashes, spillways, specialized construction materials and tools, wi l l be funded from the PWP sub-project allocation. Once the sub-project i s completed, all tools wi l l remain the property o f the participating local councils, which wi l l be responsible for operation and maintenance. Any structures which are too large to be funded from the sub-project grant wi l l be funded from other capital investment budgets in the district. I t i s assumed that most community roads funded under the PWP wi l l require small bridges, while larger bridges will usually be for district roads which can be funded from other capital budgets.

108. involves five broad steps:

The planning process for the PWP will be based on the annual planning calendar that

Targeting: The district wi l l do geographical targeting o f the specific areas in the sub- counties and urban local councils where the sub-projects will be implemented. Facilitated by the CDO/assistant CDO, beneficiary selection will be carried out using community-based targeting, primarily through wealth ranking.

Sub-project development: Each district will carry out sub-project identification in a participatory manner with communities as will detail in the Operational Manual.

Sub-project implementation: Sub-project execution activities wi l l be combined with community institution support through IEC on savings and investments, HIV/AIDS , and other topics.

Sub-project management: The CPMC will be democratically elected from among the targeted beneficiaries, and wi l l include two to three non-beneficiaries chosen by the beneficiaries to assist in managing the project. The CPMC will be responsible for wage payment, procurement o f materials, tools and contracting the lead local artisans (LLA). .

35

Contracting L L A s for bridge structure o f more than two spans will be the responsibility o f the district.

(e) Tracer Studies: At the beneficiary selection stage, baseline data will be collected for each household participating in the PWP. Six months after sub-project completion, tracer studies will be undertaken to see the intermediate outcomes o f the intervention o n the households.

109. In NUSAF 2, elderly women and men will be encouraged to be engaged for lighter tasks. Elderly women could for example work as baby-sitters. Baby-sitters will be selected by the mothers to allow them have a say about their babies’ care. Provision for baby-sitters is a gender consideration as it facilitates mothers to work. Elderly men could for example make hoe handles; assist in moving tools from one place to another, etc. The elderly person will be paid the same wage as the rest o f the PWP participants. In this and other regards, the component will build on the lessons learned from N U S A F 1, where the Labor-Based Safety Nets Program (LBSNP) was implemented on pi lot basis in four districts. The strategy involved the implementation o f labor intensive public works over a three-month period where participants received a daily wage below the rural market wage for casual labor.

110. Geographic Targeting. The district will be responsible for using poverty and service indicators to select sub-counties where P WP activities will be implemented. Beneficiary targeting will be based on a wealth ranking process by the communities that will determine the poverty status o f households to be selected. The target beneficiaries will include: I D P returnees, IDPs in camps, widows, widowers, orphans (of age), ex-combatants, former abductees, female- headed households, unskilled and unemployed youth, disarmed Karamojong youth and in general the labor-surplus poor. Under the PWP, under-aged persons will not be eligible for employment. The PWP will give beneficiaries: (i) a chance to contribute to the creation o f assets that give whole communities greater access to markets and public services, and (ii) incomes at a time o f year when the households need cash to purchase food, farm inputs, and other basic needs.

111. Sub-project Menu. The PWP sub-project menu will include construction or rehabilitation o f several types o f small infrastructure (Table 4).

Drainage facilities, paving markets and car parks in urban areas Dykes in flood-prone areas Reforestation

Trunk roads Large bridges and culverts Private investments

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112. Sub-project cycle. Implementation will be undertaken by communities who will fol low the sub-project cycle detailed in the Operational Manual and the PWP sub-project implementation handbook. Each sub-project will have a CPMC to oversee attendance o f the beneficiaries and to work with the LLA. However, the locus o f the supervision o f sub-project activities will be at the sub-county level, led by the engineer. Since many PWP will require close technical supervision, each sub-project will have an LLA to provide day-to-day technical inputs (measuring, supervision o f builders, assistance with record keeping, etc.) and augment the capacity o f the districthub-county. Involvement o f the LLA will link the PWP to the private sector by coordinating the work o f various artisans to support specialized tasks (culverts, drainage, small bridges, etc.). The LLAs will be paid by the CPMCs for works commissioned by communities; and by the sub-county for any work contracted out by the sub-county. In order to maintain quality control o f culvert rings for dirt roads, districts will enter into ‘framework contracts’ with manufacturers for one year. The CPMCs wil l be informed o f these manufactures where culvert rings will be available.

113. Lessons from the N U S A F 1 Pilot LBSNP indicated that local service providers did not fully understand the primary objective o f the PWP and as a result, they were concerned more with completing tasks, and paid less attention to the people they worked with. In this regard, the LLAs will be targeted with special I E C messages to sensitize them about the PWP objective.

114. Flow o f Funds: After sub-project approval, funds will be released in two installments to the district local governments and municipalities that meet the Annual Assessment o f the Minimum Conditions and Performance Measures for Local Governments. The first release will be based on the sub-proj ect funding approval, while the subsequent installments will be released on production o f financial and technical reports providing progress towards completion. For districts and municipal councils that do not qualify, 92 percent o f their allocated funds will be released directly to the community sub-project bank account, with only 8 percent being sent to the local authorities for supervision costs.

1.2 Household Income Support Program (US$40 million40 percent o f total cost)

115. The specific objective o f the HISP i s to increase productive assets and in the process improve incomes o f the targeted poor households in Northern Uganda. This sub-component will be targeted at poor community households, especially those who participate in PWP. In addition, the sub-component will a im to develop ski l ls for the creation o f self-employment opportunities within communities. Building on NUSAF 1 community groups or any other existing community groups, the interested poor will be encouraged to strengthen or constitute (where such groups may not exists) themselves into CIGs to access income generating opportunities. The assisted poor households will be encouraged to look after the extremely vulnerable individuals within the existing social structures. Table 5 below shows the costing figures for household investment support and the expected number o f beneficiaries.

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116. Each CIG wi l l be able to access a maximum grant o f US$5,000 for use in any viable productive asset and or income-generating activity. Those who will have benefited from public works wi l l be mobilized and assisted to participate in the CIGs. For income generation, support wi l l include direct linkages between producers and commodity processors, wholesalers/retailers through sales contracts (in case o f non-agriculture sub-projects) or contract farming/out-grower schemes (in case o f agriculture sub-projects). Furthermore, to enhance investments and growth, the CIGs will be encouraged to join existing community-level savings groups such as SACCOS. Business and capacity building wi l l be out-sourced to appropriate service providers, such as the Northern Uganda Commonwealth Youth Centre and other appropriate polytechnic institutes in the case o f youth activities. In some cases, such service providers may need to be supported with basic infrastructure and facilities (accessible under Component 2) to aid them in the delivery o f the services.

1 17. In the case o f agricultural related sub-projects, coordination and collaboration with the National Agricultural Advisory Services (NAADS) and other stakeholders wi l l be needed, especially in the choice o f sub-projects, training o f beneficiaries, and the provision o f advisory services for enhanced productivity. These will be important in order to avoid unnecessary duplication o f effort and to maximize the synergy with other related projects implementing similar activities in northern Uganda.

1 18. While NAADS wi l l focus on providing support primarily for agricultural-related projects, NUSAF 2 will support the poorest able-bodied community members and those affected by the conflict, including those with HIV/AIDS , to engage in agricultural and non-agricultural activities to generate income, build assets and graduate out o f extreme poverty and vulnerability. The design o f NUSAF 2 in general and Component 1 in particular wi l l coordinate with other stakeholders, including those at the planning stage for potential engagement in Northern Uganda. Due to the comparative advantage o f NAADS in providing advice for agricultural activities and the planned expansion o f i ts network in rural areas, Component 1 will collaborate with NAADS (or rely on NAADS for providing extension advise to the CIGs) at the community level.

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1 19. Community Contribution. The Livelihood Investment Support component provides a good entry point to promote improved household practices in the areas o f health, education, water and sanitation, environment and housing. Community groups will be encouraged to adopt good household practices as part o f their contribution. A few o f these household practices (immunization, improved sanitation, keeping children in school, and tree planting) are to be undertaken by community groups as part o f the sub-projects. Details o f the menu o f practices will be promoted during the IEC stage, assessed during desk and field appraisal, and monitored during project implementation.

120. Size of CIG. The number o f members in a community group under NUSAF 1 was around 30. Experience showed that relatively smaller number o f 15 and 20 members worked better. Accordingly, NUSAF 2 will target community groups with up to 20 members; one f iom each household. Fifty percent o f the CIG membership should be women. Attention will also be given to people with disabilities as a special group. The CIGs will be encouraged to federate to enable a community to later form a sustainable community institution and also link to existing institutions like SACCOs.

121. A major objective o f the livelihood investment support component i s to assist CIGs in the implementation o f viable income-generating activities. This will require facilitators to have ski l ls in business planning in order to support CIGs with the implementation o f the various income-generating sub-projects, skil ls that unfortunately are not present among the public sector staff. Considering that this i s one o f the main project focus areas, the project will develop specific guidelines for use by facilitators and CIGs. These guidelines wi l l form annexes to the Operational Manual, and will be translated into local languages.

Strengthening business planning at community level.

122. Technical support to CIGs. At the sub-county level, the CIGs wi l l be supported by community development officers (CDOs) and others whose work i s associated with community income generation activities. Each CDO will coordinate the mobilization, formation and development o f CIGs under hisiher sub-county per year for the five years o f the project. The CDO will provide overall coordination at the sub-county level, and wi l l also work with other technical officials to ensure effective development and implementation o f sub-projects at the sub-county. The CDO wi l l be the key liaison officer and hehhe will ensure appropriate linkages with technical support from the district as well as other stakeholders from the center, local governments and OPM/TST.

123. Participation o f CIG members in the entire sub-project cycle process. A community i s need-defined and formation o f a CIG wi l l be a responsibility o f the community, with facilitation o f the CDO or any other hired community facilitator as wi l l be detailed in the Operational Manual. Interventions wi l l be initiated by members o f the community, traditional leaders, parish chairpersons, councilors and CSOs active in the area, using the information provided via IEC campaign and with the guidance o f the community development officers at sub-county level. Sub-projects will also be determined through a participatory process based on sector norms and standards.

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124. In the light o f sustainability and accountability challenges confronted in the implementation o f the livelihoods component o f NUSAF 1 in Karamoja, an assessment will be made o f the feasibility o f activities that could be funded through the HISP component in Karamoja. Only activities that have proven to effectively serve agro-pastoral and pastoral communities would be allowed for funding under this component. The assessment will be undertaken before or during project implementation o f this component in Karamoja.

Geographic targeting.

'125. Table 6 presents a non-exhaustive menu o f activities to be considered under this sub-component. The suggested l i s t i s based on the activities that communities have been implementing under the current phase o f NUSAF. As such, other activities not included in this l i s t will be accommodated as long as they are demanded by the communities and do not fall under the non-fundable list.

Table 6. Subproject Menu under Household Income Support Subcomponent

Sub-project menu.

Category

Fundable menu

Non-fundable l i s t

Productive Asset Creation and Employment Promotion Support

Agricultural productiodagribusiness and value-addition: Dairy production High value crops Poultry/egg production Pig-raising Improved goats Aquaculture/integrated farming Labor-saving technologies, e.g. animal traction Apiary honey production Agro-forestry/tree propagation Post-harvest handling Value addition and marketing

Non-agricultural activities: Carpentry and joinery Metal fabrication Hair dressing Catering and hotel management Tree propagation Large-scale equipment e.g. big tractors Hydraform brickhlock making machines Individual business loans/micro-finance Emergency assistance/relief (with the exception of the HIV/AIDS population, which i s considered risk-mitigation)

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2. of total cost)

Community Infrastructure Rehabilitation Component (US$30 million-30 percent

126. The objective o f the component i s to improve access to basic socio-economic services through rehabilitation and improvement o f the functionality o f existing community infrastructure. With the return o f peace in Northern Uganda and communities moving from IDP camps to their respective villages, community infrastructure for improved access to basic socio- economic services needs urgent rehabilitation. The funds from this component will therefore support communities to: (i) rehabilitate existing community infrastructure such as schools, community water points, community access roads, sk i l ls training centers, health centers, etc.;12 and (ii) undertake complementary investments to support and improve functionality o f existing education infrastructure-e.g. investment in teachers houses, increased number o f classrooms, sanitation facilities, basic solar system for lighting, furniture, etc.. N e w infrastructure investments will only be made in IDP return areas and small scale irrigation schemes in Karamoja sub-region, under procedures to be detailed in the Operational Manual. Universal design approach will be adopted to ensure that people with disabilities access these buildings. To ensure the realization o f these objectives, the relevant sector department at the respective local government will pay due attention to the appraisal o f sub-projects to be funded under this component. Amongst other things, the appraisal will ensure that sub-project implementation i s completed within one fiscal year and the investments put to use for the purpose for which they were intended.

127. Coverage and eligibility. To achieve the desired impact, this component will prioritize districts that had a greater concentration o f insecurity and destruction o f community assets. An insecurity index (using IDPs as a proxy) will be used as part o f the formula for allocating resources for this component. The districts and communities from these areas will be eligible to access the CIR fund, following an agreed project cycle detailed in the Operational Manual for this project.

128. Fund access by communities. Communities will receive funds directly f rom the project account at a local government once the sub-project has been approved. Sub-project funds will be disbursed in two installments. The first release will be on approval o f sub-project proposal, and the second and last installment will be based on submission o f a duly completed M&E form capturing progress o f sub-project implementation, including o f at least 70 percent o f the amount disbursed and highlighting any challenges which need to be addressed by the project team.

129. Investment menu. The menu o f investment (Table 7) will take into consideration the needs o f disabled people, and will be limited to rehabilitation o f existing infrastructure and complementary investment to support and improve functionality o f existing infrastructure.

l2 See Annex 11 for more information on the needs in education, water and sanitation.

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A: Education Sector (Primary) Staff houses Classrooms Photo-voltaic power units Furniture Latrines and water facilities in schools

SectorlSub- Sector Unit Y O Amount Unit Fundable Primary project Norm Alloc. (US%) cost Units Beneficia Category (UP.) (US%) ries

Boreholes

Protected

(a) Water

Pit Latrines (5-

Classrooms

Pupils desks

Teachers' houses 1 Hhs 60 7,200,000 17,949 401 40 1 (b)Education sector total 40 12,000,000 69,002 Health staff houses 1 Hhs 100 6,000,000 17,949 334 334

300 Persons 98 1 1,760,000 9,744 1,207 362,084

springs 200 Persons 2 240,000 2,05 1 117 23,400

sector total 40 12,000,000 385,484

stance VIP) 1 Hhs 5 600,000 3,846 156 156

70 Pupils 30 3,600,000 10,256 351 24,570

3 Pupils 5 600,000 41 14,625 43,875

B: Water Sector Spring protection Deep boreholes Shallow well protection Gravity f low schemes Rain water harvesting Small scale irrigation schemes

Potential Prop. of Beneficiaries Popn* o f

Northern Uganda Reached

362,084 3.1%

23,400 0.2%

385,484 3.3%

780 0.0%

24,570 0.2%

219,375 1.9%

2,006 0.0%

345,011 2.1%

1,67 1 0.0%

C: Health Staff houses Incinerators Latrinedtoilets

Stand-alone electrification schemes Individual investments (e.g. schools, boreholes, clinics on private land, etc.) New health centers Any other investments outside water, education and health sectors

130. Sub-project ceiling and number of beneficiaries, NUSAF2 will not finance sub- projects that are above US$30,000, except when sub-projects have been approved by the local authorities and endorsed by the PRDP TWG at the recommendation o f TST, subject to an absolute cap o f US$50,000. Communities will contribute at least 10 percent o f infrastructure sub-project costs, and this will be made and verified before the communities receive the grants. Mechanisms for monitoring and supervising community contributions will be detailed in the Operational Manual. Table 8 shows the number o f beneficiaries under this component.

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(c) Health sector total TOTAL

13 1. Procurement and sub-project implementation. Procurement o f goods, works and services will be through the community procurement method. Existing institutional community structures o f “users committees” such as school management committees, parent-teacher associations, training center management committees, etc. will prepare, implement and manage sub-projects with guidance from technical staff from the relevant technical departments in the districts. Thus, there will be no special community management committees under this component, and mainstreaming will be achieved by leaving management to existing community- level user management bodies as listed above.

20 6,000,000 334 1,671 0.0%

100 30,000,000 454,821 633,886 5.4%

132. Project cycle. The project cycle for the community infrastructure rehabilitation sub- projects will be detailed in the Operational Manual. This cycle will be followed and adhered to by the communities for the implementation o f their sub-projects.

133. Funds release. Funds will be released to communities directly through local governments for community implementation o f their sub-projects. Release from the project to local governments will be done against proposed investment plans and in two installments every year to ensure adequate working capital for sub-project implementation.

3. Institutional Development Component (US$lO million-10 percent of total cost)

134. This component will finance activities at the national, district, sub-county and community levels aimed at improving efficiency, effectiveness, accountability and transparency in the use o f project resources. I t will have two sub-components: (i) project implementation support; and (ii) a transparency, accountability and anti-corruption program (TAAC).

3.1 Project Implementation Support (PIS) (US$9.0 Million-9.0 percent of total cost)

135. Project Coordination and Monitoring. Overall project coordination and accountability o f project resources i s the responsibility o f the O P M Permanent Secretary and staff. T o ensure effective project implementation, the sub-component will support the OPM, relevant sector ministry and local government staff in coordination and routine monitoring o f the project activities.

136. Technical Support Team. The TST will headed by a coordinator, who will be selected competitively and supported by contracted technical staff responsible for operations, financial management, procurement, development communication, M&E, MIS, livelihoods, infrastructure development and public works. A designated person will also coordinate the framework for environmental assessment and safeguards issues, as outlined in the ESMF and the Operational Manual. The TST will work under the overall guidance o f the O P M Permanent Secretary.

137. Consultation with project beneficiaries will be articulated through workshops and seminars, as appropriate, and will focus on familiarizing stakeholders with the philosophy,

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principles, and methodology o f the project. Technical implementation capacity would include basic book-keeping and accountancy skills, inclusive planning, management and administration o f participatory development, and assessing local environmental effects o f sub-projects.

138. Development communication initiatives will seek to inform and educate concerned stakeholders on the objectives, processes and activities o f the project and the roles o f the different actors, as well as to obtain stakeholder views and responses to project needs. This initiative will also contribute to the formation o f sustainable partnerships between communities, CSOs, NGOs and government officials by clearly articulating the roles and responsibilities o f the different actors concerned. Development communication appropriate to Northern Uganda will be developed and disseminated through radio, drama, song and print media. Information needs assessments, message development and impact evaluations will also be financed. The initiative will foster community empowerment, transparency and accountability.

139. Effective community-based monitoring and evaluation (M&E) arrangements will be integral to project design and implementation. In addition, in some cases randomized experiments will be designed to complement national household surveys. M&E will require appropriate monitoring indicators and a management information system (MIS) will be designed and implemented to track the progress o f the project, including cumulative environmental, social and conflict potential effects, at district and national levels.

140. Poverty monitoring and analysis within the national systems, used by the Uganda Bureau o f Statistics (UBOS) through its frequent household surveys, will be undertaken. Some gaps (such as lack o f data at district and sub-county levels, and inadequate information on vulnerability and conflict) have been identified, which NUSAF 2 will continue to address within the existing UBOS survey instruments. Mid-term and end-of-project surveys and analysis will also be undertaken to assess the project's effectiveness in reaching the target communities and households (see Annex 14).

3.2 Transparency, Accountability and Anti-Corruption Program (US$l.O million-1.0 percent of total cost)

141. project implementation. It will be implemented independently by the Office o f the IG.

The T A A C program will promote good governance throughout the different levels o f

142. The GoU needs to ensure good governance and accountability for funds under N U S A F 2. Building on NUSAF 1 experiences, areas that require strengthening include: (i) community level transparency; (ii) systems o f immediate reporting o f grievances; (iii) collaboration with anti- corruption agencies; (iv) support o f audit, financial and procurement management systems at al l levels o f implementation; (v) built-in mechanisms o f rewards and sanctions; (vi) participatory monitoring tools; (vii) rapid results initiatives; (viii) development communication; and (ix) gender mainstreaming.

143. Transparency at Community Level. Measures will include: (i) institutionalizing a social accountability sub-committee o f the CPMC; and (ii) monthly reports f rom the audit sub-

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committee to the overall membership o f the C IG and submission o f these reports to the CDA. Social accountability reports will form part o f the M&E system o f the project.

144. Systems of Immediate Reporting o f Grievances. The project will work with anti- corruption agencies to establish hotlines where grievances will be reported so that investigations can be facilitated immediately. In addition, use o f electronic information transmission, such as the use o f S M S messages, will be promoted.

145. Under the project, there will be strengthened collaboration arrangements with the Office o f the IG, building on experiences under NUSAF1. Ensuring the independence o f the Office o f the IG will form part o f the guiding principles o f this collaborative arrangement. Prevention, transparency and accountability initiatives will be promoted and financed under the T A A C support program. Office o f the IG mandates, including investigations, will be facilitated. The project will fo l low guidelines as laid down under Leadership code Act, the Local Government Good Governance and Anti-Corruption Strategy, the National Anti-Corruption Strategy (2008-201 3) and other measures aimed at fighting corruption.

Collaboration with Anti-corruption Agencies.

146. The project will support the development o f a detailed T A A C monitoring tool. Key features o f the T A A C monitoring tool will include: (i) identification o f the main actors and objectives; (ii) requirements for transparency and accountability; (iii) mechanisms to ensure transparency and accountability and (iv) sanctions and rewards. This tool will form part o f the T A A C Operational Manual.

147. Financial Management and Procurement Support. An external financial management firm will be hired to support local governments and communities, at certain points in time, in financial management and procurement. The objective will be to provide back-up support through the various levels o f project implementation including fol lowing up on accountabilities. The firm will submit regular reports to both IDA and the government.

148. project implementation will be detailed in the Operational Manual.

Rewards and Sanctions. Mechanisms for rewards and sanctions at various levels o f

149. Use o f Participatory Monitoring Tools. This will ensure active involvement o f all stakeholders in monitoring project activities and outputs, secure commitment and build the capacity of communities to be able to analyze, reflect and take corrective action.

150. Use o f Rapid Results Initiatives. Rapid Results Initiative (RRI) will be used as a results- focused management tool to accelerate both process improvement and service delivery at moments where the normal operations are deemed not to be yielding the desired results as fast expected. It will help adapt and refine implementation strategies while creating the self determination to own the problems and find solutions to them. This will strengthen accountability and commitment for results.

15 1. Development Communication. The project will provide clear information to potential service providers, local government, communities and other stakeholders. Transparency and

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good communication is, also a key to the prevention o f conflicts. This will include detailed project guidelines, implementation structures and accountability requirements, and beneficiary details across al l components. In addition to IEC, staff will work with CSOs to facilitate f low o f information on implementation.

(a) PWP sub-project (b) HISP sub-project

2. Community Infrastructure

3. Institutional Development Rehabilitation”

(a) Project Implementation Support (b) TAAC

152. The project will finance a total o f at least 8,000 sub-projects, with a strengthened T A A C program mainstreamed into local governments, with a stronger fiduciary oversight from the center, and with a lower overhead cost structure compared with the current NUSAF project. The allocation o f resources i s summarized in Table 9.

20,000,000 20,000 1,000 40,000,000 5,000 8,000 33,000,000 30,000

1,000

9,000,000 1,000,000

Table 9. Overall Resource Allocations and Number of Sub-projects I Component I Budget I Unit cost 1 Sub-projects 1 I 1. Livelihoods Investment S U D D O ~ ~ I I I I

l3 The CIR allocation includes 10% community contfibution

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Annex 5: Project Costs Second Northern Uganda Social Action Fund Project (NUSAF 2)

Project Cost By Component and/or Activity Local US$ Foreign U S $ Tota l U S $ Mil l ion Mil l ion Mil l ion

Community Infrastructure Rehabilitation 29.04 29.04 Household Income Support 35.20 35.20 Public Works Program 17.60 17.60 Institutional Development 7.21 1.59 8.80

Tota l Baseline Cost 89.05 1.59 90.64

Physical Contingencies Price Contingencies

1.88 0.18 2.06 8.49 1.80 10.30

Tota l Project Costs* 99.43 3.57 103.00 Interest during construction Front-end Fee Tota l Financing R e w i r e d 99.43 3.57 103.00 *Identifiable taxes and duties are $9m and the total project cost, net o f taxes i s 94.00 (US$m). Therefore, IDA project cost sharing ratio i s 91.26% o f the total project cost net o f taxes. Community Contribution i s 2.91%, and IDA Contribution Inclusive o f Tax i s 97.09% Price Contingencies have been estimated at IO%, while Physical Contingencies are estimated at 2%. Community Contribution caters for 100% o f Physical Contingencies. IDA caters for 91%, while Community Contribution caters for 9% o f Price contingencies

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Annex 6: Implementation Arrangements Second Northern Uganda Social Action Fund Project (NUSAF 2)

153. from May 28,2009 to August 3 1 , 2014.

Implementation period. The project wi l l be executed over a period o f about five years,

154. The institutional arrangements for project implementation will be as per the government structures. At the central level, the OPM, MoLG, MoFPED, and the Office o f the Auditor General shall be responsible for ensuring that project resources are budgeted for and disbursed within the national medium-term expenditure framework, and the project accounts are audited.

155. The OPM wi l l have overall responsibility for implementing and accounting for project funds and coordinating activities under all project components, except the TAAC sub- component. A detailed draft Operational Manual has been prepared by the OPM and will be updated from time to time in agreement with IDA to guide execution o f each component and the implementation o f the project as a whole. The Operational Manual will set forth all operational and procedural steps regarding reviews and approvals o f specific activities, flow o f information, detailed description o f project management and implementing bodies, procurement and financial management arrangements, reporting requirements, and manual amendment procedures.

156. The Office o f the IG wi l l be responsible for implementing the TAAC sub-component. A detailed sub-component Operational Manual has been prepared and will be updated from time to time in agreement with IDA. The Operational Manual will set forth all operational and procedural steps regarding reviews and approvals o f specific activities, flow o f information, detailed description o f the functions o f sub-component management and implementing bodies, procurement and financial management arrangements, reporting requirements, and manual amendment procedures.

157. Implementation Support. In l ine with the efforts to mainstream project activities into central and local government structures, the OPM Permanent Secretary will be assisted by the TST on project related activities. This team will provide necessary technical support during implementation, monitoring and evaluation.

Sectoral Linkages

158. NUSAF 2 wi l l work with national level sector departments and ministries with respect to policy direction and enforcement o f norms and standards. Sub-project conformity to these sector guidelines at implementation i s ensured by the district sector specialists. Line ministries provide guidelines to ensure that the sub-projects contribute to attainment o f the sector objectives and the PEAP pillars and National Development Plan goals.

159. Existing government programs such as the Local Government Management and Service Delivery Project, the NAADS, the Plan for the Modernization o f Agriculture, Prosperity for all and others, complement rather than duplicate the activities under N U S A F 2.

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Institutional Linkages, Management, and Implementation Structure

160. Alongside a strong participatory mechanism i s the need for a smooth and equally strong coordination mechanism, managed by a correspondingly strong and strategically placed OPM. The implementation o f NUSAF 2 will be achieved through adherence to the sub-project cycle as wil l be detailed in the Operational Manual.

Coordination Mechanisms

16 1. NUSAF 2 has been designed as a multi-sector operation. Accordingly coordination will take place at the national, local, and community levels, as outlined below.

National level

At the national level, the project wi l l be coordinated through four distinct units, outlined below.

(a) PRDP Monitoring Committee

162. The PMC has been set up in the broader PRDP framework to be chaired by the Rt. Honorable Prime Minister and with representation o f all senior ministers and heads o f mission. The PMC will discuss all high level PRDP results/outcomes, including NUSAF 2.

@) Public Sector Management Group

163. The PSMG i s chaired by the OPM Permanent Secretary and i s made up o f Permanent Secretaries o f various line ministries and representatives o f the donor community. The PSMG wi l l report to the Minister for Northern Uganda rehabilitation, who reports to the prime minister, PMC, cabinet and Parliament on the project progress.

(c) PRDP Technical Working Group

164. The PRDP TWG will provide operational and technical oversight for all PRDP related investments. It wi l l report to the PSMG. The PRDP TWG will be chaired by the OPM’s Under Secretary for Pacification and Development, and will comprise o f representatives o f key sector ministries, donor groups, local authority representatives, CSOs, interfaith organizations, the private sector and the TST staff. The functions o f the PRDP TWG specific to this project, and consistent with other prescribed tasks prescribed in the OPM governance structure, include:

(a) Provide implementation technical and operational guidance to local governments in implementation o f NUSAF 2 in consultation with the Minister for Northern Uganda rehabilitation, and where necessary, the Minister wi l l liaise with other ministers or cabinet as appropriate.

(b) Approve appointments o f TST staff, based on recommendations from the contracted recruitment firm or body constituted to recruit personnel.

(c) Review progress reports compiled by districts and TST and where necessary provide technical guidance on issues raised in progress reports and M&E exercises.

(d) Approve annual work plans, reports and audits o f NUSAF 2.

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(e) Account to the PSMG and the Minister ,for Northern Uganda rehabilitation on whether the project funds have made the desired impact on beneficiary communities.

165. The OPM heads the PRDP TWG based on four important considerations:

(a) The OPM i s primarily responsible for the special development needs and interventions o f the North, notably through NUSAF 2.

(b) The fact that OPM operations are not sector-specific guarantees a large degree o f neutrality that may be required for N U S A F 2, given its multi-sectoral nature and inter- governmentauinter-district structure.

(c) Being a co-ordination office, the coordination o f NUSAF 2 activities easily f i t s in the OPM’s co-ordination functions and activities.

(d) Being a supra-ministry, speedy decision-making and implementation during NUSAF 2 implementation can be enforced.

(d) Technical Support Team

166. The TST wi l l support the OPM Permanent Secretary and his technical team in day to day running o f the operation, governed by the provisions o f the Operational Manual and other appropriate legal instruments agreed to between the GoU and the funding agency. TST i s headed by a project coordinator, assisted by specialists. The specialists wi l l include those responsible for operations, finance, procurement, monitoring and evaluation, management information systems, livelihoods, engineering, audit and safeguards, among others. Financial management and administration i s headed by the OPM Accountant and assisted by project-recruited specialists in finance and administration under the guidance o f the Permanent Secretary and the TST coordinator. The OPM Internal Audit Unit wi l l be supported by project hired audit specialists to ensure that policies and procedures o f NUSAF 2 are adhered to in order to uphold a strong internal control system. The OPM Procurement and Disposal o f Assets Unit will be supported by a hired procurement specialist. In addition, program specialists wi l l provide technical support to the OPM departments and districts in their areas o f specialization. The specialists will report to respective OPM department heads and the TST coordinator.

167. functions:

The TST wi l l provide technical support to OPM staff in performing the following

(a) Develop sub-project component documentation (management and accountability handbook, training manuals, contracting and reporting guidelines, etc.).

(b) Consolidate annual plans as submitted by the district councils. (c) Receive, review for compliance selectively, and finance proposals from the district

councils. (d) Overall monitoring and evaluation-including cummulative environmental effects. (e) Process T A appointments for specific assignments for ‘no objection.’ ( f ) Engage operational staff and supervise their work programmes. (g) Ensure that the safeguards framework i s used throughout the project and alert IDA o f

any potential safeguards violations.

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Manage IDA funds on behalf o f GoU by ensuring that the Special Account i s replenished regularly and that GoU counter-part funds are received in time. Work with districthub-county councils in the development and review o f delivery benchmarks and facilitate the decentralized management o f N U S A F 2 activities.

('j) Procurement o f goods and services for the unit. (k) Document lessons for mainstreaming in local authority systems. (1) Faciltate the O P M to provide necessary documentation.

Local government level

168. A M o U outlining the responsibilities o f the respective parties will govern the relationship between the central and local government levels under NUSAF 2. The M o U will be reviewed at the mid-term to take into consideration emerging lessons from project implementation. Local authorities will be responsible for receiving Sub-project Interest Forms (SPIFs) from communities, and the pre- to post sub-project phases. Any community desiring support from NUSAF 2 will fill a SPIF, with a unique number, in triplicate: one copy will be sent to district, one to the sub-county, and one to be retained by the community. A sub-project filing system will be designed and completed before project effectiveness.

169. The specific functions at the local government level shall include:

(a) Receive appraised and approved sub-project proposals. (b) Alert district/OPM o f any potential safeguards violations. (c) Incorporate community activities into the, district plans and budgetary framework. (d) Forward to OPM a l i s t o f approved proposals, duly signed by the CAO, for funding. (e) Reschedule activities not catered for by the funds allocated to the subsequent fiscal year. (0 Ensure and provide technical supervision, monitoring and reporting, including

cummulative environmental effects.

Chief Administrative OfJicer

170. The C A O supported by the District CDO or any other appointed by the C A O will be responsible for the proper execution o f the project's activities in the district in l ine with the requirements stated in the Operational Manual. Specifically the C A O will:

Promote NUSAF 2 activities throughout the district. Prepare and submit to the District Technical Planning Committee the annual work program and budget o f the fund for the district, and submit the same through the C A O to the district council for approval. This plan is then forwarded to OPM for their records and for future reference when the approvals are done and fimding requests made. Receive project proposals and co-ordinate appraisal o f sub-project proposals by the sector specialist under the auspices o f DTPC. Make arrangements for implementation, support supervision, monitoring, evaluation and hand over o f sub-projects to the beneficiaries. Alert OPM o f any potential safeguards violations.

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Facilitate the disbursement o f funds to sub-project accounts by ensuring that the justification for expenditures are prepared and submitted with complete documentation in time. Prepare and submit to the DTPC quarterly and annual physical implementation and fund performance reports. The CAO would then submit the reviewed reports to the district council for adoption and subsequent submission o f the same to TST. Provide technical advice to the district council, DTPC, NGOs/CBOs/CSOs, communities and other stakeholders on the implementation o f the project in the district. Ensure that the accounts assistant prepares quarterly and annual financial reports for timely submission to the district council and TST. Liaise with all stakeholders o f the fund in the district. Support communities, NGO/CSO, CBO and private sector recruit and administer short term consultants following TST’s basic principles o f consultant service procurement. Coordinate training needs and capacity-building activities o f the fund at district and community levels. Ensure that the DTPC assesses capacity o f CSOs/CBOs/NGOs to participate in implementation o f NUSAF 2 sub-projects at community level. Establish an effective MIS for the fund at the district level. Represent NUSAF 2 in all i t s dealings with third parties in the district.

District Chief Finance Officer

171. In order to ensure the smooth flow and full accountability for the fund’s resources at district level, the District Chief Finance Officer wi l l undertake accounting duties within prescribed GoU laws, policies and procedures and NUSAF 2 Operational Manual. His/her functions include:

Check documents submitted for payment for their validity, accuracy and completeness and detect and correct errors and irregularities. Prepare payment vouchers to facilitate prompt payment and fulfill contractual obligations, e.g. maintain purchase order, fue l coupons and do the banking. Maintain petty cash books on a daily basis, update the cash book after payment vouchers have been checked by the district internal auditor. Ensure that all justification reports tally with relevant installments before payments. Produce periodic financial reports on administrative expenses for the district to ensure cost control. Prepare cheques as authorized to facilitate prompt payment and fulfill contract . requirements. Ensure that all documents relating to financial transactions are properly filed in order to facilitate their retrieval and to safeguard district and NUSAF 2 interests. Assist in the preparation o f financial records for external audit. Prepare bank reconciliation and maintain accurate and reliable accounting records. Participate in the management o f computerized financial systems, preparation o f annual budgets and accounts, designing and implementation o f internal financial controls. Participate in audit o f community sub-projects. Provide support to communities in preparation o f sub-project accountabilities.

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District/Sub-County Executive Committee

172. The local authority executive council is responsible for policy formulation, overseeing the implementation and monitoring o f council programs, co-coordinating the work o f NGOs, addressing problems forwarded by lower councils (e.g. LC3), and annually evaluating the performance o f the council against the approved work plans and programs. The various procedures for implementing N U S A F 2 in the districts are outlined below, and these will be incorporated in a M o U entered into between each district council and the OPM.

173. In the implementation o f NUSAF 2, the executive committees o f the district, municipality and sub-county will perform the following functions on behalf o f district/municipal/sub-county councils:

(a) Ensure that the operations o f NUSAF 2 within the district are carried out in accordance with the Operational Manual and M o U entered into with the OPM.

(b) Approve draft annual work programmes and budget proposals o f the district for submission to O P M through the TST. Review and endorse funding for al l districtlmunicipal council sub-project proposals recommended by the district technical planning committee chaired by the CAO.

(c) Approve criteria for determining what sub-projects are implemeted by the CPMC, CSOs/CBOs/NGOs and private sector, and council departments.

(d) Decide on any other issues relating to the implementation and f low o f funds within the district.

(e) Review delivery benchmaks as specified in the sub-project cycle and inform TST on readiness o f local authorities to take over management o f TST funds for communities.

( f ) Approve annual reports prepared by the district technical officer before they are submitted to the O P M permanent secretary.

(g) Promote the fund in the district.

Distr ic t/Su b- Co unty Council

174. District council members will be involved in the incorporation o f approved community sub- projects into the sector plans and budgets and subsequently in the development plans and overall budgets. Since NUSAF 2 proposals are multi-sectoral, there will be need for various standing committees to actively participate in the integration o f NUSAF 2 activities into the district plan, especially at the appraisal stages. The DEC will notify the council on approved sub-projects for funding.

District Technical Planning Committee

175. For NUSAF 2, the DTPC will be responsible for appraisals and technical support during implementation and monitoring o f sub-projects from the district level. The C A O will recruit representatives from CSOs/NGOs/inter-faith groups and the private sector during its meetings to deliberate on N U S A F 2 matters. The functions o f the DTPC are:

(a) Advocate for N U S A F 2 and raise awareness among al l stakeholders.

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Facilitate the Paticipatory Rural Appraisal (PRA) processes to allow for participation o f communities in identification and planning for their sub-projects. Integrate community activities under NUSAF 2 into the district plan. Appraise sub-project proposals and approve them for endorsement by the district executive committee and notation by the district local councils. Plan mitigation measures, if needed, to counteract cumulative negative environmental effects. Supervise and monitor sub and multi-community project implementation. Participate in the evaluation o f impacts o f sub-projects. Provide linkages with other departments in the district. Target sub-project areas in support o f vulnerable groups and conflict affected areas and groups.

Sub-county Technical Planning Committee

176. following functions:

Where capacity exists, members o f the STPC will liaise with DTPC to execute the

(a) Ensure that community interest groups are formed in a participatory manner. (b) Appraise community sub-projects action plans to ensure technical compliance with

sector norms, standards, guidelines and procedures, and recommend approval. (c) Ensure conformity with CSO/sector mandates. (d) Ensure no breach o f the World Bank safeguards as represented in the safeguards matrix

in the ESMF and Operational Manual. (e) Receive community action plans and table them to the sub-county council for review. ( f ) Incorporate activities not eligible for funding under sub-components into the sub-

county/CSO plans and budgetary framework. (g) Return incomplete proposals to relevant communities and sectors for improvement. (h) Transmit activities that do not meet the sub-project component criteria to relevant sector

(i) Ensure monthly feedback to community groups through meetings and written organizations/departments/institutions and CSOs.

communication.

Community

177. At this level al l interventions will be initiated by members o f the community, traditional leaders, parish chairpersons/councilors, PDCs and NGO/CBOs active in the area, using information provided via the development communication campaign. Other functions to be performed at this level include:

(a) Def ine and identify communities in need (project beneficiaries). (b) Elect the CPMC, and select o f CSOs to assist with community mobilization and and

organization. (c) Undertake community needs assessment. (d) Determinehdentify power structures and social composition. (e) Identify project catalysts to start and accelerate the process and stakeholders.

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Agree on priorities and write Recommend to sub-county Community Action Plan.

proposals using a standard format. councils and integrate sub-project activities into parish

(h) Mobilize community contributions. (i) Undertake community-based procurement, contracting, accountability, monitoring and

reporting. c ) Operate and maintain community assets.

Community Facilitators

178. Community facilitation will be a responsibility o f the CDA at the sub-county level. In cases where the CDA requires technical support, he/she will work with the communities to identify a facilitator to support them in mobilization, priority-setting and development o f sub- projects proposals as wi l l be detailed in the Operational Manual.

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Annex 7: Financial Management and Disbursement Arrangements Second Northern Uganda Social Action Fund Project (NUSAF 2)

Summary of the Financial Management Assessment

179. A financial management capacity assessment o f the participating districts o f the NUSAF 2 and other participating institutions took place between November 2008 to February 2009, through a desk review and discussions with the staff o f the Prime Minister’s Office, the Accountant General, the Auditor General and the Ministry o f Local Government. Further, an assessment o f the Office o f the Inspectorate o f Government (1G)-a core project participant regarding transparency-was undertaken in January 2009. The assessments were conducted based on the Financial Management Practices Manual issued by the Financial Management Sector Board on November 3, 2005. The objective o f the assessment was to determine whether the respective participating institutions and districts have adequate financial management systems and related capacity in place to satisfy the Bank’s Operation Policy/Bank Procedure 10.02 with respect to financial management.

180. Under the policy, borrowers and project implementation entities are supposed to have and maintain adequate financial management systems-include budgeting, accounting, internal controls, funds flow, financial reporting and auditing arrangements-to ensure that they can readily provide accurate and timely information regarding project resources and expenditures. These arrangements are deemed acceptable if they are capable of: (i) correctly and completely recording all financial transactions and balances relating to the project resources; (ii) facilitating the preparation o f regular, timely and reliable financial statements; (iii) safeguarding the project’s assets; and (iv) being subject to auditing arrangements acceptable to IDA.

18 1. Overall, the assessment concluded that the proposed financial management arrangements put in place by the project at central, district, community level and Office o f the IG meet the Bank’s minimum requirements for project financial management, as per OP/BP 10.02.

182. Mitigation measures for financial management risks to project funds have been agreed with the GoU and are outlined in Risk Identification Worksheet. The measures address specific perceived risks. Anti-corruption, transparency and accountability measures built into the design o f the program-which include fiduciary measures-provide additional assurance that key risks, including financial management risks, are properly addressed. The inclusion o f the Office o f the IG as a key participant in the project i s another serious mitigation measure against some key risks, such as corruption and collusion. The anti-corruption measures outlined will be part o f the key legal agreements to be entered into with the GoU.

183. deemed moderate.

The overall financial management risk rating for the project after mitigation measures i s

Country Issues

184. The Public Expenditure and Financial Accountability Report o f November 2005,and the Country Financial Accountability Assessment (CFAA) undertaken in 2004 and 2008 show that

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the GoU has made substantial progress in improving i t s public financial management (PFM) systems since the previous CFAA o f 2001. Most notable were improvements in i t s annual public accounts o f government, which have been produced within the statutory period o f four months after the end o f the fiscal year. The fiduciary risks associated with poor budget formulation and budget preparation processes have been reduced. Appropriate legislation has been passed to clarify rules and regulations in a number o f areas pertaining to PFM. Also, more useful information i s currently being provided in the Annual Audit Report and Opinion issued by the Auditor General to Parliament on annual government accounts.

185. Despite the remarkable improvements, key risks remain in terms of: (i) quality and timeliness o f in-year budget reports, since such reports only include information on budget releases and not actual expenditures; (ii) financial accounting and auditing systems both at the center and in districts; (iii) stock and monitoring o f payment arrears; (iv) internal auditing, especially at district level; (v) oversight o f aggregate fiscal risk from other public entities; and (vi) legislative scrutiny o f external audit reports.

186. With the support o f a number o f donors, the GoU i s undertaking a number o f PFM reform programs to address the weaknesses noted above. For example, the Second Economic and Financial Management Project, the Local Government Development Project I1 and the Financial Management and Accountability Project all support deepened PFM reform.

Financial Management in Local Governments

187. The Local Governments Financial and Accounting Regulations 2007, under section 88, sets out the requirement for local governments to maintain proper books o f accounts and to produce financial statements within three months o f the end o f the financial year, in accordance with the Public Finance and Accountability Act, 2003. The regulations also stipulate that these accounts shall be audited by the Auditor General or someone appointed by him or her in accordance with the Local Government Act, CAP 243. The Auditor General reports to Parliament and informs the l ine ministries, the Ministry o f Finance, the relevant local government, the local government public accounts committee, the local government finance commission, the Office o f the IG and the resident district commissioner.

188. The successful implementation o f NUSAF 2 will require proper PFM arrangements at district, sub-county and community levels that hold each party accountable for any funds disbursed. The CAO will become a key player for compliant districts in managing and disbursing funds to communities and ensuring their appropriate accountability. NUSAF 2 will use appropriate and existing local government financial management systems where the districts qualify, as per the assessment annotated above. The existing accountability mechanisms for project resources in every participating district will be supplemented by Local Government Financial and Accounting Regulations 2007.

189. The local government public accounts committee i s responsible for examining reports o f the Auditor General, Internal Auditor and any other reports o f commissions o f inquiry in accordance with section 88 o f the Local Government Act. The committee summarizes the findings and submits such findings to Ministry o f Local Government, which brings the report to

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Parliament’s Local Government Accounts Committee. The creation o f this committee has strengthened the evaluation process o f the audit reports. Findings from annual audits o f districts participating in the NUSAF 2 will form part o f the documentation to be shared with the Local Government Accounts Committee for the members’ information and where possible for their action.

Risk analysis

190. Key perceived financial management risks to the project are identified in Table 10.

Table 10. Financial Risk

Country Enforcement o f procurement and payroll rules and procedures i s s t i l l weak. The country has weak accounting capacity. Transparency International 2007 ranks Uganda at 11 1, down from 105 in the previous survey.

Entity level The districts and communities have weak capacity. The sub-projects will be scattered al l over Northern Uganda and therefore difficult to monitor by the OPM. Most districts have poor filing systems and have at times used project funds inappropriately.

4anagemenl Risk Rating

Substantial

Substantial

t isks and Mitigation Measures Risk Mitigation measures incorporated into project design

~

To address the high level o f country risk, a government-led P F M reform program is under implementation which addresses issues o f procurement and its related enforcement. A number o f projects are building accounting capacity in the country as wel l as tackling corruption at various levels.

An agreement has been obtained to recruit staff where gaps are observed. An M o U between O P M and a participating district will be signed to prevent misuse o f funds and also articulate responsibilities o f each party involved. The M o U will clearly stipulate what happens to a community or people who misuse project funds. Simple filing or method for retaining receipts and payment vouchers will be imparted to communities and its importance emphasized.

Risk after Mitigation

Moderate

Moderate

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Project level The project involves a large number o f parties and transactions, small value and

contracts, and scattered location o f sub-projects. Funds may be used inefficiently and for purposes not intended.

multiplicity o f

Budgeting Some sub-projects may be under- costed because o f freauent movement

Accountability Capacity i s weak to properly account for advances, fue l and allowances.

Substantial

Risk Rating

Substantial

Substantial

~~~~ ~

Risk Mitigation measures incorporated into project design

A firm o f accountants wi l l be recruited to go around in communities, sub-counties, counties and districts to spot check and ensure that each participant level o f implementation i s following the accountability aspects o f the project. Fiduciary aspects o f the project wi l l be embedded with monitoring and evaluation so that there i s a linkage between outputs that contribute to indicators and resources. Further, there shall be enhanced accounting and reporting system. Independent external auditors shall be engaged to conduct annual audits. A detailed and comprehensive annual work plan and budget will be developed and shall be strictly followed to help monitor the project activities o f each component through community monitoring and accountability.

The project shall utilize the existing community organization mechanism to ensure adequate accountability. The CDO and officials at sub-county level will work with communities to ensure good accountability o f fund usage. Qualifying districts have been given a budget for operational costs, which should be followed by the CAO. Sporadic checks on proper usage o f such funds wi l l be done by the accounting firm and the auditors

I


Moderate

Moderate

Moderate Overall inherent risk

Control risk I

Annual budget plans wi l l be prepared in sufficient detail, and will be used as a management tool and will be done in Uganda shillinns/dollar terms to meserve

Moderate

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Risk

in prices.

Elite capture Community representation may not be truly representative of community.

Bank accounts Capacity may be lacking for the communities to manage project bank accounts, which will slow down project activities.

Allowances Inconsistency may arise in allowances paid to government staff at district level attending training, workshops and study tours. Further, claims o f allowances may be submitted for activities not undertaken.

Staffing

Risk Rating

High

Substan ial

Substantial

High

Risk Mitigation measures incorporated into project design their real value. The IFRs will be used to monitor variance analysis with budget.

The project will have a system where no individual i s able to initiate, authorize, execute, or record a transaction without the active involvement o f someone else. For example al l withdrawals and transactions for a community bank account should be witnessed and countersigned. There will also be clear transparency rules. The usage o f IEC will help sensitize communities on what i s expected so that they can check against elite capture.

The funds from IDA will not be disbursed to districts that lack the minimum conditions as assessed by the MoLG until capacities have been built by MoLG and OPM as will be detailed in the Operational Manual. For those districts that qualify, the CAO at district level will assign staff at sub-county level to work with communities to better manage funds and ensure proper usage, especially for new districts.

Al l training and workshops will have a plan. After completion, participants will report on and share their experiences for the benefit o f the project. Cost guidelines based on government rules will be established for al l training and workshop activities.


Substantial

Moderate

Moderate.

Substantial

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Risk

Staffing at district level and even at community level may be too weak to implement the requisite control procedures as intended.

Fund release Funds at district level to communities may be delayed

Fund usage Funds, especially those for community sub- projects, may not be used in an efficient way or exclusively for purposes intended. In addition some district officials may claim funds for no work done.

Conflict o f Interest Internal control could be compromised by district officials taking up contracts and management positions at sub- project level.

Risk Rating

Substantial

High

High

Risk Mitigation measures incorporated into project design Government will undertake to fill al l critical vacant posts at the district level. A strong IEC campaign will run in the first 18 months to inform the population on basics o f running the fund at community level.

Communities will be required to report periodically on amounts and timings o f receipts o f funds so that the information can be reconciled at district level. After the first 15 months o f implementation, experience will determine the service standard for releasing community funds by the district.

Communities will be encouraged to strictly adhere to the approved budget o f the sub- project. Districts that misuse funds will be dealt with according to existing national laws. Payments will be made for work done and where such payments have been made for no work done, appropriate measures will be taken for refund.

The Office o f the IG and other law enforcement offices will be facilitated to fol low up on this. Internal Audit will take a leading role in this aspect.


Moderate

Substantial

Substantial

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Risk

Knowledge

Knowledge o f project financial management procedures at the district level may be insufficient,

Reporting and Monitoring

Financial information may be unreliable and submitted late for consolidation.

External Audit

Overall control risk

Risk Rating

Substantial

Moderate

Moderate

Risk Mitigation measures incorporated into project design

The planned IEC i s supposed to run and disseminate all project rules through various forms o f media.

The CAO in each district wi l l provide technical backstopping by hiring appropriate staff to work with communities in producing simple reporting formats that capture information correctly.

The Auditor General o f Uganda i s primarily responsible for auditing o f all government projects and independently audits or can engaged CPA f i rms to conduct the audit o f the project financial statements annually in accordance with the TOR satisfactory to IDA.

Overall Project Risk Rating


Moderate

Low

Low

Moderate

Moderate

Financial Management Arrangements

Planning and Budgeting

191. The OPM wi l l have the final responsibility for ensuring that the plans and budgets o f project activities are realistic and based on valid assumptions. The DPTC shall coordinate and integrate all the sectoral plans o f lower governments for presentation to the district executive committee, which i s the ultimate planning and approving authority in the district. The DPTC i s chaired by the CAO and i s made up o f heads o f department o f the district administration and other technical people recruited by the CAO. The budgets and work plans wi l l lay down physical and financial targets and wi l l be used to monitor actual subsequent performance o f the sub projects.

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192. Sub-project plans wi l l be generated by the communities with the help o f a CDO. Where capacity for generating such plans i s weak, the task will be undertaken by designated CSO/CBOs. Proposals for funding sub-projects wi l l be forwarded to the DPTC for appraisal aided by officials from sub-county to which the households belong for endorsement. Once approved, the proposals wi l l be forwarded to OPM for funding. Thresholds will be established for various layers o f approval before financing can be approved and released for sub-projects. The fiduciary team within OPM will ensure conformity o f all budgetdwork plans with project policies, guidelines and legal agreements. OPM will communicate planning and budget policy inclusive o f the allocation formula for the project resources to the participating districts, enforce timely delivery o f budget proposals, review submitted budgets for adequacy and consolidate all district budgets into a master for inclusion into the national budget. This approved budget will be subject for financing from IDA.

193. The Office o f the IG follows the government budgeting system. All departments within the Office o f the IG prepare their resource requirements for the following fiscal year, and a budget officer i s appointed to coordinate the budget process and consolidate at department level. These inputs are then consolidated into one by the Secretary to the Inspectorate o f Government together with the accounts department before forwarding it to the MoFPED.

Organization and Staffing

194. The project wi l l use existing accounting staff in all participating local governments. Where staffing gaps exist, efforts shall be made to hire accounting staff within 15 months after project effectiveness. Written job descriptions are already in place at each district level, though devoid o f the NUSAF project responsibilities. Addenda shall be written to the existing accounting job descriptions at district level to clearly define duties, responsibilities, lines o f supervision, and limitations o f authority for all officers and managers. The duties and responsibilities o f the accounting staff which encompass NUSAF will be written. An appropriate training program for accounting staff from the districts wi l l be run to ensure thorough understanding o f procedures. An appropriate allocation o f accounting functions at district level should help create an appropriate segregation o f duties and ensure proper accountability.

195. In the Office o f the IG, the Department o f Finance i s headed by a senior accountant who reports to the Secretary Inspectorate o f Government. The department i s staffed with a dedicated accountant and accounts assistant at head office. The Office o f the IG has 13 regional offices through out the country, and each office has an accounts assistant’ to handle finance matters. These account assistants report to the senior accountants, who in turn report to the Secretary Inspectorate o f Government.

Accounting Policies, System and Procedures

196. A computerized accounting system wi l l be established at national and district level to track transactions at both national and district levels. A paper-based system will be used to track the inflows and outflows in communities and other implementing agencies. The aim o f these

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financial management systems i s to allow for timely recording o f project transactions and safeguard project assets.

197. The project’s accounting policies wi l l specify the accounting treatment for the project’s financial transactions and wi l l constitute basic principles designed to ensure that the accounting records at district, community and OPM level are complete, relevant and reliable, and that accounting practices are followed consistently. It i s expected that the Local Government Financial Management manuals will be updated to accommodate the project. Thus, proper guidelines wi l l be put in place to ensure that only authorized persons can alter or establish a new accounting principle, policy, or procedure to be used in the project.

198. The accounts o f the project will be prepared on a cash basis in accordance with International Financial Reporting Standards. A dedicated unit within OPM wi l l have an accounting system for consolidating all financial reports o f the project that allows for the proper recording o f project financial transactions, including the allocation o f expenditures in accordance with the respective components, disbursement categories, and sources o f funds. Controls over the preparation and approval o f transactions should be put in place at both community and district levels to ensure that all transactions are correctly made, recorded and reported. Within the district chart o f accounts, there will be need to integrate project costs related to specific work activities and outputs o f the project.

199. Systems o f internal control at the district level will be tightened to ensure that every transaction that should have been entered into the accounting system i s recorded and unauthorized transactions are prevented.

200. Financial management and accountability under the project will include national, district, sub-county and community levels. At national level, the Principal Accountant at OPM wi l l ensure that well-defined and transparent financial management and reporting procedures are followed by districts and communities. The details wi l l be contained in a Financial Management Handbook. Quarterly and annual financial statements or reports reflecting all district NUSAF transactions will be prepared and distributed to all stakeholders for review.

20 1. At the district and sub-county level, suitable procedures for disbursing and accounting for community funds wi l l be employed. Sub-counties w i l l be responsible for maintaining proper records for funds received and utilized for supervising community sub-projects within their ambit. Records o f funds utilized shall be maintained in accordance with sound accounting policies and practices. Local government staff designated to coordinate project activities at the district level wi l l provide the necessary support to facilitate speedy justification o f expenditures and tranching, as well as submit periodic reports to the CAO.

202. At the community level, the CBOs/CSO or CPMC financial management and administration needs will be identified and members o f the community shall be trained in the maintenance o f accurate accounts for the funds utilized. This wi l l be done partly during the sub- project launch. The training materials for the community level shall contain information on simple accounting approved by IDA accounting specialists.

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203. The Office o f the IG uses GoU financial management procedures and regulations, which include the Public Finance and Accountability Regulations 2003 and the Treasury Accounting Instructions 2003. The financial statements will be prepared in accordance with the International Financial Reporting Standards. The Office o f the IG uses a manual accounting system, but it i s expected to migrate to Integrated Financial Management Systems - when rolled out in 2009.

Funds Flow and Disbursement Arrangements

204. The project shall have two Designated Accounts denominated in United States dollars opened at the Bank o f Uganda. One account in the names o f OPM where all disbursements from IDA will be maintained. Funds from the first Designated Account managed by OPM wi l l be transferred into GoU Consolidated Fund Account (in shillings) before they are disbursed into the district consolidated account, where funds wi l l be disbursed into the district operations account and the district sub-project account. Districts wi l l have their accounts opened with commercial banks o f the project’s choice.

205. The second Designated Account in the name o f Office o f the IG denominated in United States dollars will also be opened at Bank o f Uganda. An operations account denominated in Ugandan shillings will also be opened for the Office o f the IG in the same bank to handle all payments in local currency. Most o f the payments to be made from the project under the Office o f the IG component will be made centrally from the Office o f the IG, except for the funds advancedtransferred to the regional offices. The regional offices wi l l make their payments and submit monthly accountabilities to the head office. A communication about opening these bank accounts and the account signatories should be sent to IDA before disbursements are made.

206. Community sub-project funds wi l l be disbursed directly into a community sub-project account in cases where the district does not qualify as performing well using Ministry o f Local Government performance criteria. The district wi l l only receive operational funds for supervising sub-counties and communities. Thus community sub-project funds wi l l be disbursed from GoU Consolidated Fund through the Government Grants Account to the District Project Accounts, from where it will be transferred directly to the respective sub-project bank accounts for qualifying districts. The initial disbursements wi l l be made upon receipt by OPM o f a request for finds from the districts, based on the approval l i s t o f sub-projects indicating the mode o f execution.

207. Where a participating district qualifies as performing well, it will receive funds for communities into i t s consolidated account before transferring such funds to communities. It wi l l also receive operational funds into a separate operational account.

208. The disbursement o f the IDA credit into the OPM designated account will be done quarterly based on unaudited IFRs. These IFRs wi l l include project financial reports, a progress report and a procurement management report.

209. An initial six-month forecast o f project expenditures will be made by the OPM using data collected from sub-projects submitted to that point, projected operational expenditures and other expenditures. Following this agreement, an advance relating to aggregate disbursement requests

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not exceeding the forecast amount will be payable by the Bank upon demand. After the first and each subsequent quarter, the project through O P M will submit to IDA their separate IFRs and relevant supporting documentation where necessary relating to each disbursement. IDA will be responsible for reviewing the documentation relating to each disbursement to confirm eligibility o f expenditures during the period covered by the respective IFRs. Through the review, IDA will also ensure that internal controls as documented in the Financial Management Manual have reasonably been applied by al l levels o f project implementation in their disbursement o f funds to the implementing agencies. The IFRs will also contain a new forecast for the next IFR periods. The cash request relating to the IFR will be the amount indicated in the approved cash f low forecasts for the following six months less the balance in the Designated Account at the end o f IFR reporting period. Subsequent disbursements o f the IDA credit will therefore be made in respect o f similar cash requests.

210. The Office o f the IG will disburse through the SOE method due to component funding requirements. An initial forecast o f project expenditures will be made by the Office o f the IG office using reliable data upon which an initial deposit will be made to the DA. Subsequent replenishments will be made upon furnishing the Bank with appropriate supporting documents.

2 1 1. Note that the continued use o f the report based disbursement for the O P M Designated Account will depend on having satisfactoryAow risk financial management system assessed during each Bank supervision mission, ensuring that IFRs are received within 45 days after the end o f the three month period and audited financial statements are submitted to the Bank within six months after the end o f the fiscal year.

212. If ineligible expenditures are found to have been made from any o f the two Designated Accounts and/or operating bank accounts, the G o U will be obligated to refund the same. If any o f the Designated Accounts remains inactive for more than six months, the G o U may be requested to refund to IDA amounts advanced to the Designated Account. IDA will have the right, as reflected in the credit agreement, to suspend disbursements o f the funds if reporting requirements are not complied with.

213. Past experience o f projects that have tried to channel funds to communities through local government have identified several bottlenecks: (i) delivering resources to communities i s slow; (ii) the proportion o f resources taken up by structures meant to promote delivery is unsustainably high; (iii) the services delivered are not always relevant to the needs o f the poor; and (iv) the mechanism used to identify community needs are poorly developed and communities are left out o f many decision-making process. The design o f the project has taken on board al l these factors and provided safeguards to overcome these bottlenecks.

214. The GoU has established criteria for assessing al l local governments in various areas, including financial management. The criteria pertaining to financial management include following functional capacity in financial management and internal audit. I t is obvious that some districts will meet these annual criteria and others will not. The actual f low o f funds to communities will therefore be determined by whether a participating district meets the set criteria or not.

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21 5. The allocation o f credit proceeds i s detailed in Table 11.

able 11. Allocation Category

(a) Goods, Consultants’ services, Training and Operating Costs under Part C. 1 o f the Project (OPM)

(b) Goods, Consultants’ services, Training and Operating Costs under Part C.2 of the Project (Office of the IG)

(c) Grants for Subprojects under Parts A and B of the Project

(d) Unallocated

of Credit Proceeds Amount of the Financing

Allocated (expressed in SDR) Percentage of Expenditures to

be Financed

6,000,000 100%

700,000 100%

54,000,000 100% of the amount disbursed

6,200,000

TOTAL AMOUNT

66,900,000

I I

Counterpart Funds

216.

Community Contribution

The project will be financed 100 percent by IDA.

217. The details will be outlined in Project Operational Manual.

Communities will be expected to give a certain percentage towards their sub-projects.

Internal Controls

2 1 8. Internal controls system described in the Financial Management Handbook will provide guidance to the project financial and district staff, and also help in monitoring the system o f internal controls. The district internal auditors will provide an independent assessment o f the

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adequacy o f and compliance with established controls, policies and procedures. At the district level, the internal audit department will be staffed with competent, well-trained individuals who have a clear understanding o f their role and responsibilities. Similarly, i t i s expected that O P M will hire and retain qualified and experienced internal audit staff to carry out independent review o f the systems at community and district level. The frequency and extent o f internal audit review and testing o f the internal controls will be consistent with the nature, complexity and risk envisaged. A system shall be established for following up on al l weaknesses.

219. Internal audit services at local government level and communities will be executed as provided for in the Local Government Financial and Accounting Regulations. Reliance shall be placed on the district internal auditor with respect to funds provided by the project for activities implemented in the district. A Local Government Internal Audit Manual was issued in January 2000 and includes guidance to local government internal auditors on the objectives and procedures o f internal audits. The OPM will work with local governments to supplement internal audit requirements where necessary.

220. The Office o f the IG will use government internal control systems. These have been assessed as adequate for use by this project to ensure that funds are utilized for purposes intended. The government internal auditor will ensure that government internal control guidelines are complied with. Given the spread o f the activities o f the office, there i s need to recruit two additional internal auditors to effectively perform the oversight function.

Retroactive Financing

221. Since government did not submit i t s request in time for a Project Preparation Facility o f NUSAF 2, it ended up financing the bulk o f the costs necessary for preparing the project in readiness for appraisal. The bulk o f such costs pertained to s ta f f salaries and consultancy fees. It was agreed that the project would retroactively finance up to 20 percent o f project preparation costs for NUSAF 2, provided the costs were eligible. Thus the project proceeds may be used to refund government expenditures made prior to the date o f the credit o n al l eligible expenditures incurred within the last 12 months, up to the percentage stipulated.

Fin an cia1 Reporting

222. NUSAF’s accounting software system, which will be adopted by the OPM, would be used to generate quarterly un-audited IFR in form and content satisfactory to the Bank, which will be submitted to the Bank within 45 days after the end o f the quarter to which they relate. The quarterly IFRs will be used as a basis for the disbursement. NUSAF has demonstrated its ability to prepare and use IFRs under the report-based FMR method o f disbursement. All the FMRs up to and including that for the December 3 1 , 2008 calendar quarter have been prepared and submitted to the Bank within the stipulated deadline and were deemed to be o f good quality.

223. The IFR will consist o f a statement o f sources and uses o f funds (by main expenditure classifications), opening and closing balances o f the funds from the Bank, and actual and budgeted expenditures by component and/or activity within component (and explanations o f any

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variances) for the quarter and cumulatively for the project. I t will also contain forecasts for the next six months. The IFR formats were agreed upon during negotiations.

224. At the community and district level, reporting formats wi l l be designed to give adequate information to higher levels for monitoring. Frequency o f such reports will be outlined in the projects financial management manual.

225. progress o f the project. The IFRs wi l l be sent to IDA within 45 days after the end o f the quarter.

Unaudited IFRs wi l l be produced by the OPM quarterly such that IDA can monitor the

226. Public information regarding: (1) activities funded under the project; (2) periodic resource appropriation and accountability; (3) project implementation progress and operational results; and (4) sharing o f best practices amongst communities and beneficiary communities should be disclosed publicly in school boards and posted on trees along the roads. These are expected to also be prominently disclosed through the media.

227. Anti-comption hotlines at in the internal audit unit o f the OPM should be established to promote free communication. Other complaint-handling mechanisms should be established with explicit arrangements for coalition o f information, follow up action and public reporting.

228. The project will adopt some form o f social accountability which requires adequate community participation and monitoring for it to be effective. This should be enhanced by establishing mechanisms for public reporting i d complaints handling.

Auditing

229. The Auditor General o f Uganda i s primarily responsible for auditing o f all government projects. The project managed by the OPM and the Office o f the IG wi l l be audited by the Auditor General, or may be subcontracted to a private firm appointed by the Auditor General and approved by the Bank.

230. The annual financial statements and designated accounts for the project will be audited by independent auditors acceptable to IDA, working to TOR acceptable to IDA. The audit TORS will cover both the annual audit o f the project financial statements, including their consistency with the quarterly IFRs, and a review o f internal controls and compliance with the project agreement. The auditor will be required to issue a management letter providing an assessment o f the financial management system, including the adequacy o f internal controls. The audit report and the management letter must be submitted to the Bank within six months after the end o f each fiscal year. The cost o f audit i s provided in the project budget and will be paid out o f project funds as authorized expenditures.

Financial Management Action Plan

23 1. The agreed upon action plan i s described in Table 12,

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Table 12. Financial Management Action Plan

Office o f the IG

Actions Recruit additional accountants in districts

project effectiveness Within one year after moiect effectiveness

Updating o f the financial management handbook

Formulating reporting formats (IFR) for the project Development o f terms o f reference for the project audit Appointment o f two internal auditors

Computerization o f the accounting function o f the Office o f the IG

Fulfilled

effectiveness

Supervision Plan

232. While the financial management risk rating after mitigation measures i s assessed as moderate, supervision will be undertaken twice a year by members o f the Bank financial management team. The justification for two supervisions i s based on the geographic spread o f the project and multiplicity o f actors. The supervision will review the project’s financial management systems and capacity, in accordance with the Financial Management Manual, including but not limited to the operation o f Designated Account, evaluating quality o f budgets, financial reports, assessing relevance o f Financial Management Manual, statement o f expenditures, internal controls, reporting and follow up o f audit and mission findings. Special attention wi l l be taken to review soft expenditures to check whether they are spent on authentic activities. Intensity o f supervision wi l l be reassessed after the first year o f implementation.

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Annex 8: Procurement Arrangements


Background

233. Procurement for the proposed project will be implemented at the central government level (OPM and Office o f the IG), at the local government level (districts), and at the community level.

A. Applicable Guidelines

234. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" (May 2004 and revised October 2006), "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" (May 2004 and revised October 2006), and the provisions stipulated in the Legal Agreement. Based on these guidelines, simple procurement procedures for application at the community level will be updated from NUSAF 1 and adopted, in accordance with Section 3.15 Community Participation in Procurement, as part o f the Operational Manual and supporting Procurement Handbook For each contract financed by the credit, the different procurement or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame will be agreed upon between the borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually, or as required to reflect the actual project implementation needs and improvements in institutional capacity.

B. Applicable Procedures

Advertising at National Level

235. A general procurement notice (GPN) shall be published in the UN Development Business and in a national newspaper, as provided under World Bank guidelines, immediately after negotiations. The GPN would be updated on a yearly basis and would show all outstanding international competitive bidding (ICB) for goods and works contracts and all international consulting services. Specific procurement notices for goods to be procured under ICB and expressions o f interest for consultant services estimated to cost US$200,000 and above will also be published in the UN Development Business.

Publication of Opportunities at Community level

236. Before community sub-projects have been approved, the district authorities will send a general advertisement (equivalent to the GPN in ICB) to local radios and newspapers, or the actual locality where potential contractors and suppliers are likely to visit, to notify potential bidders o f the available business opportunities. Such places are the district, sub-county, parish and village notice boards.

23 7. Local advertising wi l l help improve transparency and increase competition. Potential candidates would be encouraged to express their interest either directly to the communities, to

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NGO/CBOs or to the district project authorities, which will keep a l i s t o f potential bidders (contractors and suppliers) who have the experience and track record to participate in bidding. The l i s t o f contractors and suppliers would help the community to identify qualified bidders.

Use of National Procurement System

23 8. All contracts fol lowing national competitive bidding (NCB) will fo l low the national public procurement law (the PPDA Act o f 2003 and attendant regulations). These procedures have been reviewed by the Bank and found to be acceptable, except for the following provisions which will not be applicable under this project:

Negotiations with the best evaluated bidder. This practice i s not appropriate, except for consulting services contracts and goods and works under exceptional circumstances. l4

The merit point system for bid evaluation. This shall not be applied for goods and works contracts procured on basis o f competition (ICB, N C B or restricted tender).

Direct contracting as the default procurement method for contracts estimated to cost the equivalent of US$l, 100 or less (deJined in the PPDA Act as micro-procurement). There will be no use o f the micro-procurement method as a default procurement method for each contract estimated to cost the equivalent o f US$ 1 ,100 or less.

Application of domestic preference under NCB. Domestic preference shall only be applied under ICB.

Charging of fees for dealing with bidder complaints at procuring entity level. The procuring entities shall not be allowed to charge fees for dealing with complaints.

Section 42 of the Local Government Procurement Regulations on Community Procurement, which requires procurement to be done by the lowest administrative local government unit. This provision shall not apply. Procurement under the C D D grant shall be conducted fully by the community and clearances shall be by the community procurement management committees, as detailed in the Community Procurement Manual.

Selection o f Consultants shall strictly fol low the World Bank Guidelines. For avoidance o f doubt, the PPDA Act and attendant procedures including bidding documents, evaluation forms, etc, shall not apply for selection o f Consultants for this project.

240. Under the proposed project, procurement under I C B shall, in addition to the World Bank guidelines, comply with the national system, except where the two conflict. Specifically, the contract committees shall perform their oversight functions at each o f the key procurement stages and contracts shall, as required, be subjected to the solicitor general’s clearance.

241. Shopping shall fo l low the procedures as defined in the PPDA Act and attendant regulations, with the exception o f the rotation o f pre-qualified bidders and negotiation o f contracts.

l4 Negotiations here involves seeking changes to the conditions o f contract, including the price and scope, but excludes technical discussions to seek clarifications and agree on work programs with an awarded bidder.

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Local Government Bidding Procedures

242. Procurement will be conducted in accordance to the Local Government Amendment Act, CAP 243 and i t s Regulations, provided they are consistent with IDA rules. Selection o f consultant services wi l l be done in accordance with Bank’s Guidelines for Selection and Employment o f Consultants by the World Bank Borrowers (May 2004 and revised October 2006), and using the appropriate standard forms o f contract. The local government contract committees wi l l oversee the procurement process.

243. The Bank’s standard bidding documents w i l l be used for ICB procurement, and for NCB procurement with appropriate modifications. Alternatively, the standard tender documents for procurements o f supplies, works and non-consultancy services prepared and issued by the Public Procurement and Disposal o f Assets Authority (PPDA) may be used for NCB. Where the PPDA documents are used, only the “Technical Compliance” selection methodology as defined in the act shall be adopted. The rest o f the methodologies shall not be used, even for NCB, for the procurement o f goods, works and non-consulting services.

Goods and Works.

244. Consulting Services. The Bank’s Standard Request for Proposal document will be used in the selection o f consulting firms. Short l i s ts o f consultants for contracts estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. The PPDA Standard Bidding Document for the Procurement o f Consultancy Services shall not be used.

245. Framework Contracts: Framework contracts should be used for frequently used items such as stationery, vehicle maintenance and equipment maintenance, following the appropriate procurement methods.

246. Community Procurement. Simplified bidding documents, procurement planning forms and other documents for use by the community in NUSAF 1 will be updated and used for NUSAF 2.

Community Bidding Procedures

247. Once the sub-project has been approved, the community shall adopt local bidding or local shopping and direct contracting on exceptional basis. These bidding options will be described in the Project Operational Manual and wi l l be explained in detail in the Community Procurement Handbook to be given to the community as part o f the training, prior to the disbursement o f funds. An overview o f community procurement activities i s found in Table 13.

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Table 13. Flow Chart for 1

STEP I ACTIVITY

2

3

4

1

Advertising

Issue bidding documentdrequest for quotations to interested bidders

Bid opening and

Prepare procurement plan

6 Award contract

Sign contract v Issue local

Receive goods

L Pay supplier

ommunity Procurement Activities DESCRIPTION 0 Consult community members and

identify requirements, quantities, prices, procurement methods, and package contracts

0 Prepare procurement schedule 0 Advertise community procurement

using local notice boards, radios, religious and other gatherings. Advert should be in writing.

0 To at least three qualified bidders for shopping

0 To single supplier for direct contract shopping

0 Complicated purchases forwarded to the district

0

0 Record prices, bidders names 0 Analyze quotations 0 Select lowest evaluated bidder 0 Recommend contract award to

0

0

0

0

0 Sign contract (three copies) 0

Bid opening at the announced time and place

CPMC Prepare bid evaluation report for ex- post financial review Announce the award to all bidders Send a copyheport o f the decision to award to the sub-county chief Receive letter o f acceptance from the successful contractortsupplier

Send copy of contract to the sub- county chief, one copy to contractor and one copy in the CPMC f i le

0 Issue purchase order for goods/services/works

0 Check quantity and quality 0 Obtain delivery note, invoice, or

suppliers memo 0 Fill stock card 0 Witness delivery 0 Pay a supplier and keep records

WHO CPC

CPC

CPC

CPC

CPC

CPMC

Chairperson o f the CPMC

Chairperson CPMC CPC Witnessed by treasurer o f CPMC

CPMC

TIMING Before submission o f project proposal

Soon after notification o f sub-project amroval. Within five days after CPMS/CPC training

On deadline for receipt o f bids Within five days from the date of closure of the receipt o f bids or opening o f the bids

Within 14 days o f bid opening

Within five working days o f announcing the award

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C. Record Keeping and Monitoring

Record Keeping

248. At the O P M and local government level, the Head o f the Procurement and Disposal Unit will be responsible for record keeping and shall open a f i le for each contract that they enter into. The f i l e should contain al l documents on the procurement process in accordance with requirements and as described in the PPDA Act. At community level, the community procurement committee shall be responsible for record keeping as specified in the Simplified Operations Manual.

Monitoring

249. Monitoring and evaluation o f procurement performance will be carried out through annual ex post procurement and technical audits by: (i) procurement consultants with TOR and qualifications acceptable to IDA; and (ii) Bank supervision and post-review missions. At the national level (i) and (ii) will apply, while at the local government level only (i) will apply.

250. At community level, monitoring and evaluation o f procurement performance will be carried out through regular ad-hoc reviews by the sub-county C D O and annual procurement audits by procurement consultants with TOR and qualifications acceptable to IDA.

25 1. Such audits would: (a) Verify compliance with procurement and contracting procedures and processes specified

in the Simplified Procurement Handbook. (b) Verify technical compliance, physical completion for works or the physical existence of

goods.

D. Scope o f Procurement under the Project

Central Government

252. The O P M PDU will be responsible for procurement o f goods, non-consulting and consulting services that will be used at the O P M and/or distributed to the district offices. Two procurement specialists with TOR and qualifications acceptable to the Bank will be appointed at O P M to support the P D U by project effectiveness.

253. services.

The P D U Office o f the IG wil l carry out procurement o f goods and non-consulting

254. Non-consulting services. Non-consulting services under this project will include security services, airing o f IEC messages, rent o f office space, cleaning services, and internet services. The procurement o f non-consulting services shall be as per provisions specified for the procurement o f goods and equipment below.

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255. Goods and Equipment. Goods and equipment to be procured would include vehicles, office equipment, computers and software for O P M and NUSAF district offices under the CAO. The total estimated cost o f goods and equipment i s U S $1.5 million.

256. Consultancy Services. The project will finance consultancy services for local government capacity assessment reviews, information technology for M&E, M I S and IEC, financial and procurement audits, preparation o f community procurement guidelines, capacity building required by the various stakeholders, M&E studies/surveys, project impact evaluation and performance evaluations, and any other services that may be identified during the project implementation and agreed with IDA.

257. be submitted to the Bank for i t s prior review and approval.

Trainingplan. The project will formulate an annual training plan and budget which wil l

258. Operating Costs. These will be procured using the borrower's administrative procedures and or the administrative procedures o f the component implementing agency's administrative procedures, which were reviewed and found acceptable to the Bank.

Local Government

259. Procurement will be done at the district level. The sub-county level as a user department may procure within the thresholds specified in the Local Government Amendment Act, CAP 243 and i t s regulations.

260. Procurement at the local government level will include stationery, fuel, vehicle maintenance and related operational expenses. Selection o f consultants may also arise if the need i s established during project implementation.

Community

261, At the community level, the procurement function will be undertaken by the beneficiary communities who will participate in procurement by: (i) identifying sub-project requirements and procuring these from sources within the community; (ii) engaging CSOs/NGOs to procure sub-project requirements that they implement and manage o n behalf o f the communities; and (iii) employing labor-based intensive technology in sub-proj ect implementation.

262. For purposes o f this project, a community can be described as group o f people brought together by a common need. For example, households sending children to the same school is considered a community, as well as people fetching water from the same well or using the same community road. For effective community participation, the communities constitute CPMC and CPC, as described below.

263. The CPMC consists o f nine members elected by the community during the participatory rural appraisal process to manage the implementation o f their sub-projects. The CPMC is responsible for defining what needs to be procured for implementation o f the sub-projects and start the procurement process by forwarding request to the CPC. The CPMC will be responsible

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for making a decision on the contract award, and the contract will be signed by the CPMC chairman and secretary.

264. The CPC i s comprised o f five members elected by the community. Three of these members will be drawn from the non-executive members o f the CPMC. The other two members are selected from the rest o f the benefiting community. The members o f the CPC, which should be gender balanced, shall be named in the sub-project financing agreement signed by the chairperson o f the CPMC on behalf o f the community. The CPC i s responsible for the procurement o f all goods and services required for the implementation o f the sub-project.

265. The CPC shall follow the tender procedures for community procurement when procuring goods and hiring labor. After approval o f a sub-project, the CDO or another person appointed by the CAO will provide the necessary training to CPMC and CPC members in project, procurement, disbursement and financial management, as well as record keeping and accountability reporting, to enable them carry out the procurement function in a manner acceptable to the GoU and the World Bank. During the training, the CPMC and CPC members will receive the Community procurement handbook and other simplified documents as described in the Operational Manual. Funds shall be disbursed to a sub-project after this training.

266. The CDOs will be provided with Project Management Handbooks, which will act as a teaching guide. The Handbook will include sections on Financial Management, Procurement, M&E, and IEC. The preparation, printing and distribution to CDOs o f this handbook i s a condition o f disbursement o f grants to Local Governments.

267. Sub-projects implemented by more than one implementing agency (Le. the CPMC and CSO) shall form a procurement committee composed o f both CPMC and CSO representatives (with the majority being from the CPMC), and the members o f which must be named in the sub- project agreement.

268. Two components fall under community procurement: (i) Livelihood Investment Support , and (ii) the Community Infrastructure Rehabilitation. LIS has two subcomponents: (i) Public Works Program and (ii) Household Support Program. The activities under these components are described in detail in Annex 4.

E. Assessment of the Capacity to Implement Procurement

Central Government

269. OPM has a PDU and contracts committee in place. The PDU i s headed by a principal procurement officer who i s supported by a procurement officer. The PDU conducts approximately 15 billion shillings (US$7.5 million) worth o f procurement annually using the national system, and therefore has sufficient experience. However, both procurement officers have very limited experience in IDA procurement, limited to a single contract for consultancy services on a separate trust fund, the selection process o f which i s s t i l l on-going. The capacity assessment reviewed some o f the OPM’s contract records and observed that the procedures followed in the preparation o f documents, management o f bidding process, bid evaluation,

77

contract award and record-keeping are carried out in compliance to the PPDA Act, and are therefore acceptable to the Bank. In light o f the limited IDA experience o f the procurement officers under the project, and the l ow amount o f procurement to be done under the project, the risk to procurement management by the O P M i s moderate.

270. The Office o f the IG similarly has a P D U and contracts committee in place. The P D U has two procurement staff. An additional officer i s under recruitment. However, the staff has l imited experience in processing procurement, with experience l imited mainly to contracts procured through shopping. Additionally, records were found to be incomplete, but improvements were noted for the recently processed contracts. 'Despite this inexperience, Office o f the IG will be doing very little procurement. In light o f this, procurement risk i s moderate.

271. To mitigate the overall risk for O P M a Procurement Specialist with TOR and qualifications acceptable to the Bank will be appointed at O P M to support the P D U in procurement and monitoring o f procurement at the Local Government and Community level. In addition, the procurement officers at both O P M and the Office o f Office o f the IG shall attend relevant procurement training courses in the region with either E S A M I or G IMPA

272. The overall project risk for procurement is moderate

Local Government

273. Local government contracts committees and PDUs, most o f which have were established and staffed in late 2008, have l imited experience in public procurement, and thus pose a risk for project procurement. .

274. This risk will be mitigated in several ways: (i) O P M should prepare simplified procurement manuals for local government staff similar to those prepared for communities under NUSAF 1; (ii) the O P M procurement specialist shall support local government personnel to ensure that al l procurements are done in accordance with the World Bank and PPDA procedures as appropriate; and (iii) local government procurement staff are to be trained under a separate IDA-supported Local Government Management Program.

275. In light o f the l imited procurement experience o f the PDUs and the amount o f procurement to be done under the project, the risk to procurement management at the local government level i s substantial.

Community

276. The following procurement risks were identified as impediments for NUSAF 1 at community level: (i) limited number o f suppliers for certain goods; (ii) limited training for the communities on how to conduct procurement, leading to elite capture o f the sub-projects and lack o f collective decision-making by the procurement committee; and (iii) limited publication o f opportunities.

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277. These risks wi l l be mitigated through the following actions: (i) publication of available bidding opportunities by districts upon approval o f the sub-project; (ii) training the community on community-based procurement procedures upon approval o f the sub-project and as a condition for disbursement; (iii) the CPMC will be required to advertise opportunities using procedures described in the procurement manual; (iv) the local government PDU with support from the CDO and OPWTST wi l l monitor communities on a sample basis to ensure that the communities are sufficiently trained to handle procurements and the CPMCs are adequately selected in adherence to procurement guidelines; and (v) the project wi l l engage a consultant of qualification acceptance to World Bank to carry out an annual audit o f community procurement and verify progress and existence o f goods and works procured.

Expenditure Category

278. management at the community level for this project i s expected to be moderate.

In light o f the above proposed mitigation measures, the residual risk to procurement

Contract Value (Threshold) USD

Overall Project Procurement Risk

Procurement Method . '

279. To mitigate the overall project risk: (i) procurement officers shall attend relevant procurement training courses in the region with either the East and Southern Africa Management Institute or the Ghana Institute o f Management and Public Administration in project procurement within nine months from project effectiveness, and (ii) a procurement specialist with TOR and qualifications acceptable to the Bank wi l l be appointed at OPM before project effectiveness to support the PDU in procurement and monitoring o f procurement at the local government and community level,

Contracts Subject to Prior Review

280. The overall project risk for procurement i s moderate.

I (a). Works

F. Frequency of Procurement Supervision

>=5,000,000 >=100,000<5,000,000

281. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the implementing agency has recommended at least semi-annual supervision missions to visit the field to carry out post-review o f procurement actions.

ICB NCB

Shopping

Prior Review Thresholds:

I. Procurement of Goods and Works

All contracts Selected contracts as indicated in procurement plan None I I <100,000

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II. Selection of Consultants

Expenditure Category .

All contracts Selected contracts as indicated in procurement plan None

Contract Value (Threshold) SeZection Method USD

(a) Firms >=200,000 QCBS, QBS <200,000 CQS, LCS, QBS, i": >=50,000

I Individual I I sss

All contracts None All contracts

All contracts All contracts

(a) Consultancy services estimated to cost above US$200,000 per contract and all single source selection o f consultants ( f i rms and individuals) will be subject to prior review by the Bank.

(b) Short l is ts o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.

G. Procurement Plan

282. Central government procurement plans were prepared by OPM and Office o f the IG and reviewed by IDA at appraisal. The plans are available in the respective entities, in the project's database and in the Bank's external website. The Procurement Plan wi l l be updated in agreement with the project team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. N o contracts involving international competition are envisaged for the first 18 months:

283. At the local government level, the PDU wi l l prepare a procurement plan on the condition that the planned procurement i s in l ine with local government plans. The procurement plan will be cleared by the local government contracts committee. At the community level, procurement plans wi l l be prepared using a simple format indicated in the Community Procurement Handbook. These plans will be submitted as part o f the documentation for the sub-project proposal, and updated by the CPC upon approval o f the sub-project prior to the disbursement o f funds.

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Annex 9: Economic and Financial Analysis


A. Introduction

284. The proposed multi-sectoral NUSAF 2 project intends to build on the lessons learned during the implementation o f NUSAF 1 and other rehabilitatiorddevelopment programs and projects in Northern Uganda. The proposed design focuses on convergence/collaboration with selected post-conflict reconstruction programs in Northern Uganda. The primary emphasis i s on investments at the community and local government levels. The project will have three components: (i) Livelihood Investment Support, which will comprise the Public Works Program and a Household Income Support Program; (ii) Community Infrastructure Rehabilitation; and (iii) Institutional Development. Actions envisioned under the project are described in detail in Annex 4, while implementation arrangements are described in Annex 6.

285. Economic and financial analyses were carried out to determine the viability o f the proposed project. The financial analysis is based on representative benefits and cost budgets for the various productive activities that are likely to be undertaken by project beneficiaries. Market prices are used to estimate financial (private) profitability, whereas shadow prices are used to estimate economic (social) profitability. Economic prices have been derived from shadow prices (import parity prices) o f key crop and non-crop enterprises used in the production models. The approach uses the incremental benefits and costs, attributable to the project interventions. The activities in the production models are mainly expected to occur as part o f the Livelihood Investment Support component, and are l ikely to relate to farm production, local agro- processing, small-scale businesses, youth employment ventures and community assets. The analysis examines the incremental benefits and costs attributable to the project interventions. The economic analysis aggregates from the individual budgets to the overall number o f beneficiaries covered by the project, and applies relevant conversion factors to derive economic/shadow prices that are used to transform financial into economic returns.

B. Summary of Project Costs and Benefits

286. The main project benefits will be derived from: (i) increased agricultural productivity (both crop and non-crop enterprises); (ii) diversification and increased incomes from a broad range o f livelihood sources; (iii) improved market integration; (iv) sustainable business institutions owned by the rural poor; and (v) increased opportunities for self-employment and skills transfer. Most o f these benefits are generated from the Livelihoods Investment Support component. Other benefits related to social, institutional, capacity building and human resource development are also expected in the long term, but they are not easily quantifiable and hence have not been included in the analysis.

287. The ex ante economic analysis o f the Livelihood Investment Support component could serve as an indication o f the economic viability o f the project, given that it takes 60 percent o f the overall project budget. The analysis was prepared using the data collected by a consultant commissioned by the G o U through the NUMU. This ex ante analysis was thorough in terms o f

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both activity and geographic coverage (all regions in the North), and involved random sampling by major activities. The aggregated economic rate o f return for the project, including mostly activities under the Livelihood Investment Support component, was estimated at 45 percent,' and the discounted net present value (NPV) i s US$28.9 mill ion (Table 14).

C. Methodology

ERR (Yo)

45

45

288. An ex ante identification o f project activities i s challenging given the demand-driven nature o f project selection and design. However, based on random stakeholder consultations, a conventional cost-benefit analysis o f a number o f activities under Components I and I1 was undertaken to derive the net benefit streams, from which the economic and financial returns have been computed. During the pre-appraisal mission, beneficiaries and stakeholders indicated that they will implement these types o f activities with support from the project.

289. Three approaches that are commonly used in economic analysis o f social investment fund projects. In cases where the objective o f the project i s to invest in community and institutional capacity or promote rural livelihoods and employment, it i s plausible to use the conventional benefit-cost analysis. In this case, the key indicators o f project viability are NPV and the internal rate o f return (IRR).16 Secondly, in cases where i t i s difficult to accurately measure project outputs and outcomes in monetary terms, the economic analysis consists o f calculating cost- effectiveness ratios. This entails comparing the costs o f project outputs with costs o f other similar projects and/or sector standards as a basis for selecting the most effective way to achieve the desired output. Thirdly, if the project has several outcomes, the economic analysis may be conducted through weighted cost-effectiveness or cost-utility analysis, in which subjective weights may be assigned to each o f the different outcome indicators.

290. This analysis uses the f i rs t and second approaches. The first approach i s used to estimate the financial and economic return on agricultural and/or small-scale business activities that

l5 Detailed assumptions are contained in the last section o f the annex. l6 This i s normally plausible where it i s assumed that correct utilization o f project inputs wi l l result in pre- determined outputs that wi l l generate measurable impacts (or outcomes) on the target beneficiaries.

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communities are likely to undertake under the project. The second approach i s employed for the economic evaluation o f the community capacity building and asset formation activities, such as the building o f schools, clinics, access roads and others. The proposed activities likely to undertake within the project, including number o f beneficiaries and project costs, are described in Annex 4.

Category of sub project Number of IRR range Average Sub-projects across districts IRR (Yo)

( Y O )

(a) Crop production 1000 5-14 9

D. Detailed Analysis o f Economic Returns to NUSAF 2

291. Approximately 60 per cent o f NUSAF 2 funds will finance the Livelihood Investment Support component, which will comprise a Public Works Program and a Household Income Support Program targeted at able-bodied poor households and administered at the community and county levels. As this i s the largest component o f the project, the analysis o f the economic returns o f the project i s based on the activities implemented under this component.

292. The analysis o f the economic rate o f return uses crop, non-crop and non-agricultural enterprise data. Crop enterprises include the main smallholder crops such as maize, sorghum, beans, groundnuts, cassava, sweet potatoes, field peas, banana, sim-sim, cotton, coffee and tree seedlings. Non-crop enterprises included poultry, dairy production, fish farming, bee-keeping and piggery. Non-agricultural enterprises include beauty salons, metal fabrication and welding, carpentry and joinery, tailoring and motor vehicle mechanics. All the enterprise data used for estimating the rates o f return are from the following regions o f Northern Uganda: Acholi, Bukedi, Bunyoro, Elgon, Karamoja and Lango. The detailed data are contained in the consultancy report commissioned by the NAMU.

293. The overall estimated economic rate for the project i s 45 percent, with an estimated NPV o f US$28.9 million. If the analysis only considers crop enterprises, the estimated NPV drops to US$5.3 million with an economic rate o f return o f about 9 percent (Table 15). This suggests that non-crop and non-agricultural enterprises are important to raise the economic rate o f return o f the Livelihood Investment Support component. These estimates are likely to understate the overall return, because many o f the social benefits o f the project-such as employment and skills, access to school and high enrollment levels as well as access to other social amenities-have not been accounted for in the analysis because o f valuation challenges.

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I (k) I Motor vehicle mechanics I 500 I 18-34 1 23 I

Scenarios ERR

("/.I

Note: Actual number o f sub-projects by category wil l depend on community demand and this list i s only indicative.

NPV(US$ million)

294. Other returns to N U S A F 2 investments will be in the form o f enhanced social capital and sustainability o f community assets as a result o f peace-building efforts and targeted interventions. NUSAF 2 will pursue cost-effectiveness measures and simple screening procedures:

Cost increased by 5% Benefit increased by 5%

Cost increased by 10%

Combined effect o f cost increment by 20% and benefit reduction by 20%

Cost-effectiveness o f sub-projects will be facilitated by provision o f project menus, costed design options, a cost data bank and encouragement o f local competition in procurement o f goods and services. Checklists and guidelines for appraisal o f sub-projects proposals will be defined in the Operational Manual, and will include cost-effectiveness criteria. District and community participants will be trained in the use o f these guidelines. Sub-projects will be appraised by DTPC in conjunction with relevant sectoral technical staff in order to ensure that the technical specifications o f the sub-projects are consistent with sector technical standards and that subsequent operating costs can be met. Under the Livelihood Investment Support component, the 10 percent community contribution o f sub-project cost will promote community ownership and commitment to maintain the productive l i fe o f the assets. Beneficiary assessments and household surveys will assess project impact on communities and other beneficiary stakeholders.

40.1 28.0

47.3 29.2

33.9 26.4

11 8.5

Sensitivity Analysis

295. The economic and financial performance indicators for the project have been calculated using fairly conservative assumptions, coupled with actual data collected from the field assessments through a consultancy commissioned under NUSAF 1. However, the robustness o f these results has to be tested to assess how sensitive they are to some o f the key variables that define the magnitude and direction o f the results. Economic performance indicators for the base case and four different scenarios are presented in Table 16.

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296. The sensitivity analysis shows that the rates o f return remain robust even when the costs are increased and benefits are reduced by up to 10 percent. All the rates o f return remain above the opportunity cost o f capital, assumed at 12 percent. The economic rate o f return only goes below 12 percent when both the cost increases and the benefits are reduced by more than 20 percent.

Sector

Water

F. Cost-effectiveness Analysis

Primary Total Indicative Cost/person Funded beneficiaries costs (US!§) ( U S 8

Project Type SPs/units (per year)

Number o f boreholes 1,074 322,200 8,766,555.72 27.21

297. Limited cost-effectiveness and efficiency analysis was undertaken by comparing the actual costs o f constructing community social infrastructure such as school blocks, community health clinicdwards under NUSAF 1. These costs were compared with those o f other similar projects implemented by donors and NGOs in Northern Uganda. The key measure o f cost- effectiveness i s the cost per beneficiary o f each infrastructure constructed. Assuming same quality and durability o f assets con~tructed,’~ projects with lower costs per beneficiary are said to be more cost effective.

Sanitation I Pit latrines

298. Results f rom the analysis indicate that on average N U S A F 1 i s cost-effective compared to other projects (Table 17). O n average, NUSAF 1 community infrastructure projects cost about US$10 per beneficiary per year, benefiting over 2 mi l l ion households in total. This is much lower than the per capita costs for most other projects. NUSAF’s cost-effectiveness could largely be due to the community capacity building and experiences gained during the past five years o f NUSAF’s implementation o f the first social investment fund project in Uganda. Literary sources indicate positive rates o f return associated with community assets that are being proposed for this project, especially under components 1 and 2.

763 I 3,815 I 1,440,503.84 I 377.59

Table 17. Direct Costs of Infrastructure by Various Donor/NGO-Funded Projects in Northern Uganda

Community Infrastructure

Number o f toilet stances 32 960 302,072.42 3 14.66 Number o f teachers’ houses 1221 6,105 17,574,983.97 2,878.79

Number o f laboratories 63 3,780 1,798,475.32 475.79 Number o f maternity facilities 15 300,000 351,857.37 1.17 Number o f community roads 57 285,000 860,035.74 3.02

Education I Number o f classrooms I 2693 I 188,510 I 61,616,496.95 I 326.86

” It i s assumed that community infrastructure i s constructed using the same sector norms and standards, as such there should not be wide differences in quality and durability.

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Storage warehouses

G. Fiscal Impact

299. The fiscal impacts o f the project could not be determined exactly due to data challenges,

Number o f community centers 59 295,000 1,63 1,252.77 5.53 Number of produce stores 5 25,000 164,370.99 6.57

they are l ikely to be positive in the following ways:

The project would increase rural production and in turn national aggregate production, which enhances economic growth. The project should have a net positive impact on the rate o f employment, given that i t will provide gainful employment to over 1.5 mi l l ion beneficiaries. The Livelihood Investment Support component will transfer nearly US$50 mi l l ion to beneficiary communities over a five-year period. Assisting over 2 mi l l ion poor families (currently under subsistence level) clearly has national-level significance in reducing the drain on the economy, for example, in food hand- outs and health care. The potential economic consequence o f not doing the project and not addressing the issues that cause increasing social tension arising f rom poverty and deprivation could have potentially negative economic consequences in a fragile socio-economic environment.

Conclusions

300. O n the basis o f the economic rate o f return and the cost-effectiveness analyses, i t i s quite clear that the project i s viable. The analysis is l imited to components for which objective data is available. As such, it is likely that the social return for the project i s much higher than can be empirically demonstrable. The sensitivity o f the project returns to key variables used for the analysis also shows that the economic rate o f return i s s t i l l achievable within a given range o f these selected variables.

I. Key Assumptions in the Analysis

301. The major assumptions include:

(a) A 15-year time horizon i s considered for the full project build-up o f costs and benefits, based on individual activity or activity groups assuming a 1 0-year horizon.

(b) Current income levels (and assumed “without project’’ incomes) are assumed to be the equivalent o f what beneficiaries will receive under Component 1 o f the project.

(c) The value o f beneficiaries’ output for a l l activities i s expected to increase by 2 percent per year as productivity performance and technology adoption increase, or 1 percent per year for non-crop enterprises.

(d) Input costs include fertilizer, seeds, establishment costs and farm implements and other capital requirements. Output prices assume l o w quality, rural level prices.

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(e) Family labor is valued at the rural labor rate (informal labor) o f 3,000 Uganda shillingdday, as the opportunity cost in the remote rural areas where alternative gainful employment i s scarce.

(f) A discount rate o f 12 percent i s used, in line with the figure recommended by the Central Bank o f Uganda.

(g) Significant distortions in the economy in input costs (e.g. fertilizer) and output prices are assumed to be minimal. Therefore, financial and economic costs and prices are assumed to be virtually the same (except for a minor taxable proportion o f input costs).

(h) The non-farm multiplier from the linkage effect o f a change in farm production and cash on the local economy i s assumed to be 1.5.

(i) Overall project costs include the component costs as estimated at project identification as given in Annex 4.

(i) Some benefits have not been included in the analysis because they are either difficult to value, or due to lack o f reliable data. These include human capital improvements related to health, nutrition, sanitation and education.

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Annex 10: Safeguard Policy Issues


302. Project activities with safeguards relevance. Safeguard policy issues in NUSAF 2 are related to: (i) rehabilitation and development o f small community infrastructure such as access roads and drainage, irrigation works, reforestation and small-scale agribusiness under Component 1 ; and (ii) rehabilitation and expansion o f existing education, transport and health infrastructure under Component 2.

303. Safeguards policies triggered. NUSAF 2 activities may have limited and localized adverse environmental and social impacts, and i s rated as EA category B. I t triggers OP 4.01 on Environmental Assessment, OP 4.09 on Pest Management and OP 4.12 on Involuntary Resettlement (Table 18). To facilitate compliance with these safeguard policies in the context o f a CDD operation with yet-to-be determined multiple sub-projects, an Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) were prepared and disclosed during project preparation, reflecting lessons from NUSAF 1 and input from stakeholders at different levels o f the government and communities. Although the project may support agri-business, improved agricultural production at household level, and pesticide use for animal health care, i t will not finance large-scale pesticide use. The ESMF includes pesticide management measures to facilitate compliance with OP 4.09.

Table 18. Safeguard Policies Triggered by the Project Safeguard Policies Yes No Environmental Assessment (OP/BP 4.0 1) [XI [I Natural Habitats (OP/BP 4.04) [I [ XI Pest Management (OP 4.09) [XI [I Physical Cultural Resources (OP/BP 4.1 1) [I [ XI Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OP/BP 4.10) [I [ XI Forests (OP/BP 4.36) [I [ XI Safety o f Dams (OP/BP 4.37) [I [ XI Projects in Disputed Areas (OP/BP 7.60) El [ XI Projects on International Waterways (OP/BP 7.50) [I [ XI

Environmental Assessment (OP 4.01)

304. ESMF. ESMF provides guidance for screening proposed sub-projects, prescribes mitigation measures for typical sub-project activities, and specifies institutional responsibilities for environmental and social due diligence in the context o f the sub-project cycle. ESMF also outlines in detail the capacity building measures deemed necessary for adequate implementation o f environmental due diligence in the project. Application o f ESMF will lead to incorporation o f good construction industry practices and other suitable mitigation measures in sub-project implementation. ESMF further spells out measures to be followed for the use o f pesticides that may be applied for veterinary care o f animals procured under the project or similar small scale pesticide use.

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305. Implementation and supervision arrangements. The implementation o f the ESMF relies largely on the existing central and local government structures, particularly the offices o f the district environment officer and CDO. These will be supported by sector-specific input from the staff o f the sub-county technical resource teams (e.g. agricultural extension officer, forest officer, etc.) For activities that may require a partial environmental assessment, the National Environmental Management Authority will provide review and clearance function. The Bank will supervise ESMF implementation through the annual evaluation stipulated in the ESMF, and desk and f ield review o f sub-projects as necessary. The ESMF may be revised should N U S A F 2 implementation experience identify areas for improvement.

Involuntary Resettlement (OP 4.12)

306. The potential social impacts resulting from possible land acquisition for the community sub-projects are addressed by the Resettlement Policy Framework (RPF). RPF will guide preparation o f Resettlement Action Plans (RAP) Abbreviated Resettlement Action Plans or equivalent instruments for sub-projects that trigger this policy. The resettlement action plans will be prepared in consultation with the project affected individuals and communities, who will be supported by the CDOs. The World Bank will supervise the RPF implementation through annual evaluation o f the indicators outlined in the RPF. Other social issues are addressed by the ESMF and in the participatory approach to project design and implementation.

Safeguards Consultations and Participatory Approach

307. Safeguards instruments were designed based o n the feedback and experience from N U S A F 1, and reflect input from both implementers and beneficiaries at various levels. The design o f N U S A F 2 i s based on active community participation, and benefits f rom lessons learned regarding participation o f various stakeholder groups, and key investment areas in NUSAF 1 and similar operations. Project identification and preparation will be done by communities and households themselves in a participatory and transparent manner with technical support from the local authorities. The process will be facilitated by a CDO, C D A or competent development agency in the community, including CSOs. Community sub-project selection criteria will emphasize active community involvement, contribution and management in design, implementation and operation, gender sensitivity, inclusion o f vulnerable groups, and use o f socially and environmentally sustainable technologies.

Public Disclosure o f Safeguards Documents

308. The ESMF and RPF were publicly disclosed on December 16,2008 during the pre-appraisal mission. Disclosure in Uganda consisted in making the documents available at public information outlets and newspaper advertisement o f the disclosure. Disclosure in Washington, D.C. consisted in making the documents available through the Info Shop. The ESMF was revised and re-disclosed in March 23, 2009 following finalization o f implementation arrangements and investment menus during appraisal. The re-disclosed ESMF contains pesticide management measures which were added following the appraisal process, and were not yet identified at pre-appraisal.

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Safeguards References in Legal Documents

309. included as a specific covenant in the project legal document (financing agreement).

The borrower commits to fully implement the provisions o f ESMF and RPF, and this will be

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Annex 11: Service Delivery: Education, Water and Sanitation and Agriculture


Education

310. PRDP districts contribute 43 percent and 30 percent o f the total national enrolment in primary and secondary schools, respectively (Table 19). Three out o f every 10 primary school pupils are in the core LRA affected districts o f Amuru, Gulu, Kitgum, Pader, Lira, Oyam, Dokolo, Amolator, and Apac, which currently constitute about 65 percent o f the IDP return streams. An estimated 40 percent o f children aged 6-12 not in school in Uganda are in the northern region. Secondary education enrolments are also lowest in the same region, compounded by high rates o f youth unemployment. Education quality indicators for primary education in the PRDP districts are below the national averages and partly contribute to the overall low completion rates.

Table 19. Education Institutions in PRDP-NUSAF 2 Districts

3 11. To address these serious challenges, NUSAF 2 through the CIF component wi l l support: (i) rehabilitative and complementary investments in existing primary schools to enable quality resumption o f schooling; and (ii) ski l ls provision to out o f school youth for livelihood enhancement.

3 12. Rehabilitation o f school infrastructure. Based on the education needs asse~sment'~ for Northern Uganda, review o f sector statistics and stakeholder discussions, infrastructure rehabilitation in education will be limited to primary schools in the IDP return areas o f the Acholi and Lango sub-regions, to enable resumption o f schooling. For efficient resource use, district-s ecific rehabilitation plans for primary schools should indicate other development partners" operating in respective schools by type o f support and funds provided. Consistent with sector priorities, the rehabilitation package includes classrooms and furniture, water and sanitation facilities, school stores and administrative blocks.

Including farm schools, community polytechnics, technical schools, colleges and institutes. l 9 In 2008, MoES conducted an education needs assessment embracing the existing stock o f school infiastructural and what i s required (the gap) to provide quality education in these districts. The study covered Adjumani, Amolator, Amuru, Apac, Dokolo, Gulu, Gulu MC, Kitgum, Lira, Lira MC, Oyam and Pader. 2o A number o f development partners support school rehabilitation programs in the core conflict areas of Kitgum, Pader, Gulu, Amuru, Lira and Apac, also known as the IDP return districts o f Acholi and Lango sub-regions o f northern Uganda. The need to avoid duplication should be emphasized to the district and lower local governments in the community mobilization phase o f the program. Existing coordination structures have to devise monitoring and reporting mechanisms to reduce the probability o f duplication.

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3 13. The project will also support construction o f complementary infrastructure at existing primary schools for holistic improvement o f learning environments. This will include projects to: (i) fill infrastructure gaps o f primary schools that were supported under NUSAF 1 to consolidate gains, but mindful o f equity;21 (ii) provide additional classrooms, targeting schools with a pupil-to-classroom ratios above the district average; (iii) complete school structures with sound foundations; (iv) build teachers’ houses in hard to serveheach schools within a district, based on designs approved by the Ministry o f Education and Sport (MoES). Classrooms have to be furnished, while teachers’ houses have to be supported with requisite sanitation facilities consistent with MoES-approved designs.

Complementary investments in existing schools.

3 14. Appraisal of infrastructure sub-projects for schools. In addition to the mandatory NUSAF sub-project appraisal, the desk appraisal should check whether: (i) the school has submitted an SFG application form for funding under the district allocation f rom the MoES, to avoid double-funding; (ii) other partners supporting construction works in the school have been indicated in the sub-project proposal, including the elements being supported, respective amounts and contractors; and (iii) the submitted budget i s certified by the school finance committee. During the field appraisal stage, the technical team needs to: (i) validate the baseline indicators; (ii) confirm the presence/absence o f other partners; and (iii) authenticate the infrastructure needs for which support i s required, based on operational standards set by the MoES as highlighted below. Schools where the available funding could have a meaningful impact should be prioritized. If the school needs are greater than funds available, specific components should be prioritized.

3 15. Highlights of Education Sector Norms and Standards

Minimum standards that could guide selection of school community sub-projects

Pupil - classroom ratio o f 55: 1 for primary and 60: 1 for secondary schools. Pupil - stance ratio o f 40: 1. Pupil - teacher ratio o f 40: 1 for primary. Furniture requirements based on approved designs and specifications: 30 two-seater desks for primary classrooms, one teacher’s table and chair for each classroom constructedhehabilitated. School access to safe water sources based on context-specific technologies. Presence o f a functional school management committee (SMC) that convenes once a quarter to oversee and steer implementation o f school based supported programs.

Decisions on whether or not to support complementary infrastructure in NUSAF I-supported schools i s justifiable if the school’s quality indicators are below the district average by at least five points.

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Regulation of construction works and institutional set up in schools (a) All construction in schools has to be consistent with MoES approved designs and

specifications in the SFG handbook and guidelines. (b) All schools have a three-year construction plan developed by the SMCs for the primary

schools and BOG for the secondary schools, with a budget formulated and certified by the school finance committee.

(c) Starting with FY 09/10, operation and maintenance costs o f school infrastructure will be catered for through capitation fund allocations to schools.

(d) Community contribution to construction activities in schools i s voluntary, depending on their socio-economic status (see SFG guidelines for recommended activities).

(e) Roles o f other players are stipulated in the SFG guidelines, and will apply to NUSAF 2 supported activities.

( f ) Technical oversight o f the ongoing works in schools i s the responsibility o f the district engineering

(g) Department supported by the engineering assistants. The district inspection division wi l l undertake monitoring visits to education sites to assess progress and other aspects, as established by their mandates.

(h) All construction activities should be captured in the Education Management Information System through the annual school census.

(i) Schools must publicly display all allocations to schools on the notice boards for easy access to parents and community members.

3 16. Skills provision for livelihood enhancement. Integration o f youth into the labor market through sk i l ls development, training in specific trades, and on-the-job experience will also be supported under NUSAF 2, targeting returnees, demobilized soldiers and other out-of-school youth. Innovative sk i l ls improvement programs to promote young people’s economic rehabilitation will be supported based on participatory mapping o f target groups. Delivery modes wi l l need to be sensitive to the differentiated nature o f youth due to demographics, vulnerabilities (poverty and/or other risk factors) and strategic needs. Likely options include:

(a) Short-term, organized events for the promotion o f business development and entrepreneurship skil ls. Methodologies that promote production o f specific outputs by the end o f the training based on either what they are currently engaged or new types o f production should be considered during the appraisal stages.

(b) Community-based apprenticeship/on-job skills development programs focusing on a mix o f lucrative trades in the community and beyond. Identification o f the trades could be undertaken by youth with guidance o f CDO/CDAs to avoid stereotyping, especially for girls. Appraisals o f the sub-project proposals need to ensure that needy youth are not excluded; that time lines are not so long rendering trainees vulnerable to exploitation by the entrepreneurs; and that the suggested providers are technically credible with capacity to impart the requisite skil ls.

3 17. Quality delivery o f these programs will necessitate issuing guidelines to districts and communities on how to: (i) source training providers; (ii) identify, cost and procure basic application tools/equipment needed; and (iii) integrate follow up mechanisms in the sub-project proposals for improved livelihoods and trainee tracking.

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Water and Sanitation

3 18. The water supply and sanitation o f Component 2 i s designed to support the improvement o f access to basic socio-economic services for the people o f Northern Uganda. Funding wi l l be provided to:

Ensure that well-functioning water supply facilities are in place in participating communities. Increase the capacity o f participating communities to effectively manage their water supply and sanitation facilities.

As the IDPs return to their original areas o f abode or transitional camps, their access to potable water will be adversely affected. With the IDPs returning home, the rural water coverage in the Acholi region i s estimated to have dropped to 49 percent compared to the regional average o f 60 percent and a national average o f 63 percent.22 Therefore, water infrastructure will target communities returning to their homes. The project will rehabilitate existing water facilities in those districts, and new supply systems will only be constructed for vulnerable communities returning to their original areas o f abode. In addition, water supply systems will be constructed in Karamoja region, which has the lowest water supply coverage (28 percent) in the country.

320. Key outputs will include:

(a) Water user committees established and able to promote hygiene and sanitation and to manage and maintain their water facilities.

(b) Improved water supply and sanitation facilities at the community level. (c) Water supply systems (rainwater harvesting tanks or boreholes) and appropriate

sanitation and hygiene facilities at institutions rehabilitated or constructed. (d) Water for production systems-cattle dips, valley tankddams and community irrigation

schemes.

Technical Design Criteria

321. The available technologies for water supply to rural areas include springs, gravity flow schemes, shallow and deep wells, as well as piped schemes. The success rate o f borehole drilling in water-stressed areas i s less than 60 percent, and in these areas more innovative technologies are needed. A water sub-project based on a borehole should plan for at least one dry hole. Any replacement borehole should be made after review o f the geophysics analysis and on recommendation o f the Ministry o f Water and Environment (Technical Support Unit staff).

322. The basic service level i s 20 liters per capita per day. A hand pump i s required to serve not more that 300 users, a spring can serve 150 users, while a tap serves a maximum o f 150 users. Diesel, electric and wind pumps can be utilized can be used for piped water, although solar pumps are recommended to minimize operation and maintenance costs.

22 Annual Water and Sanitation Sector Performance Report, 2008.

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323. The Water and Sanitation District Implementation Manual sets out the mechanisms to ensure sustainable operation o f water and sanitation facilities. The manual presents critical requirements to be fulfilled by different stakeholders, and provide a basis for prior activities to be carried out to prepare the recipient communities before construction o f a new water source.

Operation and Maintenance

324. The model o f the operation and maintenance o f rural water facilities i s presented in the “The National Framework for O&M o f Rural Water Facilities (DWD 2004). The operation and maintenance o f rural facilities i s based on a community-based maintenance system, under which community members are responsible for their water facilities. In order to ensure sustainability, communities require adequate sensitization, training and follow-up.

Sanitation and Hygiene

325. All recipient households are required to construct and use a sanitary latrine. Households will be responsible for financing and provision o f their own onsite sanitatiodlatrine. A hand washing facility should be constructed at the latrine. All water user committees should be trained to continually educate households on hygiene and sanitation, and how to preserve the safe water chain from water source to use.

Karamoja Sub-region

326. Karamoja, a pastoral region with water needs for animals, irrigation and domestic use, has districts with some o f the lowest access to water in Uganda, with Kaabong district having an access o f 12 percent. The Ministry o f Water and Environment has embarked on the development o f water for production facilities in Uganda, including the Karamoja region. This project wi l l contribute to the development o f water for production facilities in the sub-region.

327. consideration. These include:

In developing a program for Karamoja, a number o f constraints will have to be taken into

(a) The pastoral character o f the recipient communities may affect the continuity o f the management committees and have potential consequences for sustainability.

(b) The insecurity in the region may make it hard to attract high quality contractors and hinder proper supervision and follow-up.

(c) Conflict between tribes may lead to vandalism o f facilities.

Monitoring

328. All water supply systems should be numbered according to Ministry o f Water and Environment numbering system and included in the district quarterly and annual reports. This wi l l ease future sector planning and reconciliation with other district grants and projects.

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Agriculture

NAADS

329. Agricultural related sub-projects wi l l need to be coordinated with the NAADS and other stakeholders, especially in the choice o f sub-projects, training o f beneficiaries, and the provision o f advisory services. This wi l l be important to avoid unnecessary duplication and to maximize the synergy with related projects in Northern Uganda.

NUSAF 2

330. While NAADS will focus on providing support for primarily progressive farmers to engage in agricultural-related projects, NUSAF 2 wi l l support the poorest able-bodied community members and those affected by the conflict, including those living with HIV/AIDS, to engage in agricultural and non-agricultural activities to generate income, build assets and be able to graduate out o f extreme poverty and vulnerability (Figure 2). The design o f NUSAF 2 in general and Component 1 in particular, wi l l consider coordination with other operating stakeholders, including those at the planning stage for potential engagement in Northern Uganda. Due to the comparative advantage o f NAADS in providing advice for agricultural activities and the planned expansion o f i ts network in rural areas, Component 1 w i l l collaborate with NAADS at the community level.

I POVERTY LEVELS National

Average Poverty Level 31%

North Average Poverty Level 61 %

Ex-combatants Former abductees Female headed households Unskilled and unemployed youth Disarmed Karimojong youth

Source: NUSAF 2 design team.

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Annex 13: Transparency, Accountability and Anti-Corruption (TAAC) Program Second Northern Uganda Social Action Fund Project (NUSAF 2)

Governance and Anti-Corruption in Uganda

33 1. The emergence o f a culture o f corruption in Uganda i s linked to the decades o f economic and political collapse in the 1970s and 1980s when there was a high dependency on the state to provide all basic necessities. As shown by the findings o f the third National Integrity Survey23 the most prevalent form o f corruption in Uganda i s bribery (66%) and this i s largely attributed to greed (69.4%). The increases levels o f greed were found to largely as a result to accumulate wealth in the quickest time possible, irrespective o f measures used.

332. A number o f large-scale corruptions which have led to significant losses o f public funds have been through mishandled procurements and outright embezzlement. Other forms o f corruption have been through bribes, nepotism, as well as situations o f insecurity that provide opportunity for profiteering. The capacity o f the GoU to deal with poor governance and corruption has been limited due to legal complexities (burden o f proof) and sanctions, coupled with under-resourced institutions for public accountability.

Corruption in Uganda i s manifested in different forms.

333. As a result o f these challenges, Uganda continues to perform poorly according to both local and international survey ratings. Uganda continues to score below 3.0 on the Transparency International’s Corruption Perception Index (2.6 in 2008 and 2.7 in 2007) which puts it among the weakest performers. Results from the National Integrity Survey (NIS 111-2008) show that government efforts have not yielded significant impact. Many public institutions which hitherto were not reported to be corrupt are now considered as highly corrupt. Half the respondents in the N I S I11 were not aware o f the systems and procedures they can use to report corrupt practices and in public institutions where knowledge o f where to report i s high cases are not reported for fear o f retribution.

Governance and Anti-Corruption Reforms

334. In order to improve governance and fight corruption, the GoU has implemented major reforms at the central and local government levels. These include i) strengthening existing oversight institutions and setting up o f the Anti Corruption Division o f the High Court to expedite dealing with corruption cases and raise the risk levels for corruption, ii) enhancing the legislative framework through review o f key laws like the Anti Corruption Bill and Whistle Blowers Protection Bill; iii) improving financial management and procurement and engaging civic society organizations. The Office o f the Inspectorate o f Government (IG) mandated to fight corruption by the Constitution o f 1995 and the Inspectorate o f Government .Act 2002 was further strengthened by the Constitutional Amendment o f 2005. Following the recommendations from the third National Integrity Survey, the Government i s going ahead to conduct system

23 NIS 111 i s the most comprehensive survey that done in Uganda to look at governance and anti-conuption in service delivery. It i s led by the Office o f the Inspector General o f Government’s office.

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studies in selected sectors to assist in identification o f solutions for institutions consistently ranked high on corruption. The National Anti-Corruption Strategy (NACS) 2008-201 3 has been completed, as has the development o f the Accountability Sector Investment Plan (ASIP) 2008- 2013. The ASIP wi l l provide coherence and direction to development partner’s to support the fight against corruption and improving governance.

335. Further, the mandate o f the Office o f the Auditor General has been strengthened with full autonomy under the new National Audit Act 2008. The Police Criminal Investigation Directorate, the Directorate o f Public Prosecutions and other key anti-corruption institutions have benefited from intense capacity building interventions with additional training over the last year through support from the Millennium Challenge Corporation. Policy reforms in financial management, procurement and civil society engagement are discussed below.

Financial and Public Service Management reform

336. Overall, the GoU has supported comprehensive, cross-cutting reforms in public financial management both at the central government and local governments, including oversight institutions. These include improvements in key management systems such as:

(a) Budget management. (b) Human resources information and payroll management through the introduction o f

integrated personnel and payroll system and payroll audits. (c) Results-oriented management and output oriented budgeting, as an integrated performance

management system to strengthen accountability for results. (d) Integrated financial management system to fight fraud by ensuring timely production o f

final accounts for audit. (e) The development and use o f client charters to enhance citizen’s demand for accountability. ( f ) The Public accounts committees to follow up the reports from the auditor general and take

appropriate punitive actions in case o f law violations.

Procurement reform

337. In order to ensure that public procurement and disposal i s conducted in a fair, transparent and non-discriminatory manner, the GoU in 1997 embarked on far-reaching procurement reforms. The reforms involved the following measures: i) disbanding the Central Tender Board; ii) decentralization o f the public procurement and disposal function to procuring and disposing entities (PDEs); iii) creation o f contracts committees and procurement and disposal units (PDUs) to service PDEs; and iv) liberalization o f third-party procurement providers. These reforms were aimed at professionalizing and depoliticizing procurement in public entities.

338. In 2003, the Public Procurement and Disposal o f the Public Assets regulations were promulgated and the Public Procurement and Disposal Authority (PPDA) was established. The regulations provided guidelines for public entities (both central and local). The PPDA does not approve procurement or disposals (this i s done by PDEs) and has no involvement in individual tenders or contracts, except in reviewing appeals/administrative reviews o f procurements. In 2007 the GoU embarked on revision o f the PPDA Act to strengthen enforcement and ensure

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procurement i s less discretionary. The PPDA reports to the Minister o f Finance, Planning and Economic Development, and it has the following functions:

(a) Oversee policy and regulations on public procurement and disposal. (b) Regulate the sector and provide standards, guidelines/advice as well as audit

procurement and disposals. (c) Monitor compliance o f all government entities with established standards, guidelines o f

procurement and disposals.

339. The PDE accounting officer has overall responsibility for procurement and disposal. He/she communicates award decisions, investigates complaints by providers, signs contracts and i s the link between the PPDA and the procurement process. The contracts committee controls the contract award recommendations by the procurement and disposal unit; ensures compliance with the regulations; approvedrejects documents and recommendations at key stages o f the process and recommends contract awards.

340. The PDU implements the decisions o f the contract committee, prepares bid documents, issues contracts, manages the process (except adjudication and award) and acts as the secretary o f the contracts committee. The PDU also nominates the evaluation committee (which i s approved by the contracts committee) and evaluates bids according to criteria set by user departments. The user department initiates the procurement, provides specifications and TOR, participates in evaluation and manages the contract. Under the framework, the providers are obligated to prepare complete and accurate bids based on the specifications in the bid documents and to meet all requirements in the bid documents. They are also required to adhere to the procurement law and code o f ethics.

341. The procurement reforms have led to a number o f improvements in procurement management in Uganda, including: i) providing a clear set o f rules to guide procurement and disposal actions; ii) separating duties and powers to ensure checks and balances and ensure that contacts between government officials and service users are free from improper influence; iii) ensuring that procurement and disposal guidelines are adhered to, thus promoting transparency, accountability, competition and value for money; iv) establishing mechanisms for channelling complaints and requests for administrative reviews o f procurement and disposals; and v) providing code o f ethical conduct for both Procuring and Disposal Entities(PDEs) and providers.

Civil Society Engagement

342. Civi l society engagement in anti-corruption i s growing. National and regional civil society organizations (CS,O) are increasingly participating in the anti-corruption discourse. Organizations such as the Uganda Debt Network, the Anti-Corruption Coalition in Uganda and Advocates Coalition for Development and Environment are examples. The GoU i s defining ways to guide these collaboration efforts. Through the Access to Information Act (2005) the GoU aims to facilitate CSO access to key information that can be shared with communities to raise awareness and ensure better accountability from leaders.

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The Transparency, Accountability and Anti-Corruption Support Program

343. The efficiency o f public expenditure depends highly on the governance environment and practices, therefore any effort to improve resource allocation must be accompanied by an enabling governance framework that facilitates efficiency and transparency and inhibits corrupt practices. This sets in motion a positive feedback loop o f increased credibility, consolidation and appreciation for state authority. I t i s for these reasons that NUSAF 2 includes a dedicated transparency, accountability and anti-comption (TAAC) component.

344. The NUSAF 2 TAAC framework builds on standard fiduciary accountability measures discussed in detail in Annexes 7 and 8. The TAAC support program will ensure that the transparency, fiduciary, regulatory, gender and social accountability measures o f the project’s implementation and governance process are operationalized for NUSAF 2 in l ine with the PRDP guiding principles as highlighted below and are compliant with overall government development priorities and World Bank standards and policies. The TAAC support program i s aligned with GoU anti-corruption frameworks and institutions. The project will provide funding to strengthen measures to ensure transparency, accountability and anti-comption in the project area, using the project as an entry to the development and implementation o f improved systems for use by communities, local authorities, the IG, and others with a mandate to promote improved governance in development.

PRDP Guiding Principles

Coherence: in strategy and program within GoU and all stakeholders within the framework. Conflict analysis: a conflict analysis framework defines the form and resourcing o f security, humanitarian, and recovery interventions. Promotion o f equity. Needs-based programming that promotes participation: service delivery i s based upon population needs and targets, and not administrative areas. Government responsibility: GoU i s responsible for creating an enabling environment for protection, return and resettlement o f the displaced population. Mainstreaming: crosscutting issues such as HIV/AIDs, gender, environment, and human rights wi l l be mainstreamed in all interventions. Decentralization: the focus will be on local and district governance structures. Transparency and flexibility in approach. Upward and downward accountability.

Social Accountability in NUSAF 2

346. The TAAC support program breaks new ground by having an additional focus on gendered social accountability that responds to the project’s core pro-poor community-driven approach and gender equity strategy.

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347. To link in communities to the national anti-corruption institutions, TAAC wi l l include a grievance-handling arrangement. Grievance handling wi l l at grassroots level be anchored in social accountability committees (SAC), and ultimately link to the IG and other anti corruption agencies at national level. The NUSAF 2 Technical Support Team responsibilities exclude investigations but are focused on responsibilities that are not already covered by applicable fiduciary and regulatory oversight and control functions.

348. The TAAC support program will have the following elements:

Transparency at community level. Systems o f immediate reporting o f grievances. Collaboration with anti-corruption agencies. Rewards and sanctions. Use o f participatory monitoring tools. Use o f Rapid Results Initiatives (RRI). Development communication. A TAAC monitoring matrix.

Transparency at Community Level

349. Measures wi l l include institutionalizing a social accountability committee (SAC), receiving monthly SAC reports to the overall membership o f the CIG, and submission o f these reports to the CDO. The SAC reports wi l l form part o f the project’s M&E system. SACs will be key to the NUSAF 2 institutional set-up at community level. The composition, roles and responsibilities o f the SAC shall be further elaborated in the Operational Manual. The SAC mechanism wi l l act as the first point o f call for any project grievance, and wi l l also regulate and respond to problems in project processes, regulations and outcomes. The SACs will focus on cases o f

(a) Collusion (secret or illegal cooperation to divert or pervert project resources, including manipulation o f reaching priority target groups).

(b) Corruption (dishonest and fraudulent conduct o f power and office holders, typically involving soliciting andor accepting bribes).

(c) Nepotism and el i te capture (misuse o f station, power and influence to benefit relatives and friends).

(d) Gender exclusion and deliberate or ignorant obstruction o f achieving the project’s gender equity process and output targets.

Systems of Immediate Reporting of Grievances

350. The communities using various social accountability mechanisms wi l l hold each other as well as government officials and bureaucrats accountable. The grievance-handling system will,

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depending on the severity and potential criminal liability o f transgressions, invoke referrals by the NUSAF 2 to:

(a) The disciplinary regulatory system o f the Ministry o f Local Government (for local government employees at district level and below).

(b) The IG for all levels o f civil servants and elected government officials in accordance with the constitutional roles.

(c) The police, the Directorate o f Public Prosecution, and the judiciary as ultimately i s the case for all Ugandan citizens in cases o f criminal liability for cases for collusion and corruption.

351. The project wi l l work with anti-corruption agencies to establish hotlines where grievances wi l l be reported so that investigations can be facilitated immediately. In addition, use o f electronic information transmission, such as the use o f SMS messages, will be promoted.

Collaboration with Anti-corruption Agencies

352. Building on experiences under NUSAF 1, the existing collaboration arrangement with the IG wi l l be strengthened. Ensuring the independence o f the office o f the IG will form part o f the guiding principles o f this collaborative arrangement. The office o f the IG will conduct NUSAF 2-specific IEC , oversight, grievance response and, where necessary, investigations. Under this arrangement the office o f the IG would submit quarterly reports to Parliament and the World Bank. To maintain the independence o f the Office the IG, there will be under the TAAC support program an arrangement under which the office o f the IG would receive financial support directly from MoFPED. Modalities for this arrangement will be similar to those in use for the IG’s involvement in monitoring o f the Poverty Alleviation Fund, and would include a dedicated NUSAF 2 account at the IG. The project will follow guidelines as laid down under the Government’s anti corruption legislation, Local Government Good Governance and Anti- corruption Strategy, the National Anti-corruption Strategy (2008-201 3) and other measures aimed at fighting corruption.

Rewards and Sanctions

353. Mechanisms for rewards and sanctions at various levels o f project implementation will be detailed in the Operational Manual. Sanctions will be applied as per Government Standing Orders for civil servants and in l ine with nationally-accepted corrective practices in case o f proven corrupt practices. To this end, specific investigative arms o f government will be supported to carry out investigations o f reported cases o f corruption, poor accountability or abuse o f office during project implementation, including violation o f project rules and procedures. Sanctions will include suspension o f disbursement to local governments and communities that violate project rules and guidelines.

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Use of Participatory Monitoring Tools

3 54. Participatory monitoring will ensure active involvement o f al l stakeholders in monitoring project activities and outputs, secure commitment and build the capacity o f communities to be able to analyze, reflect and take corrective action (see Annex 3 o n M&E for more details).

Use of Rapid Results Initiatives

355. Rapid Results Initiative (RRI) will be used as a results-focused management tool to accelerate both process improvement and service delivery at moments where the normal operations are not yielding the desired results as fast i s expected. It will help implementers adapt and refine implementation strategies while creating the self-determination to own the problems and find solutions to them. This will strengthen accountability and commitment for results.

Development Communications

356. Using a development communications strategy, the project will ensure provision o f clear information to potential service providers, local government, communities and other stakeholders. This will include detailed project guidelines, implementation structures and accountability requirements, and beneficiary details across al l components. In addition the I E C will work with CSOs to facilitate f low o f information on implementation.

357. The T A A C Monitoring Matr ix tool will be the Office o f the IG’s project monitoring system and will bring together program performance indicators to provide an overview o f financial, procurement, regulatory and reporting compliance, social and gender accountability, and the number o f grievances handled. Details o f the T A A C monitoring tool will include: a) identification o f potential governance weaknesses and transparency challenges that the communities and overall project may encounter; b) identification o f the main actors and objectives; c) mechanisms and requirements to ensure transparency and accountability and d) sanctions and rewards. This tool will form part o f the Operational Manual and brings to the fore a concise system-wide overview o f program performance and complements the OPM’s output results monitoring. Taken together, these senior-level information tools will enable O P M to document the contribution o f NUSAF 2 to the wider PRDP framework. As such it will ensure that GoU will be in a position to meet World Bank transparency and accountability standards.

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Annex 14: Monitoring and Evaluation


Key Objectives

358. The overall objective o f the monitoring and evaluation (M&E) function i s to ensure better planning, targeting, and feedback to relevant stakeholders and timely decision making in order to improve livelihoods and local governance. It will help to: (a) improve management o f programs and supporting activities; (b) ensure optimum use o f funds and other resources; (c) draw lessons from experience so as to improve the relevance, methods and outcomes o f cooperative programs; (d) strengthen the capacity o f local assemblies and community institutions to plan, implement, monitor and evaluate; and (e) improve information systems and enhance advocacy for policies, programs and resources that affect the project performance. A copy o f the project’s result framework i s found in Annex 3.

Methodology

359. using the following methods and tools:

The project wi l l have a results-based M&E system that will monitor project processes

(a) A well-defined results framework with clear objectives, outputs and activities with corresponding indicators, means o f verification and key assumptions.

(b) A well-defined M&E strategy for project processes, information requirements, tools and methodologies for data collection, analysis and reporting.

(c) A comprehensive M&E plan with clear roles and responsibilities for data gathering and reporting.

(d) A district-based management information system (MIS) which will be a computerized information system that caters to the district level information needs.

(e) Internal and external periodic evaluations which would include annual tracking studies, baseline studies, gendered community score cards, mid-term evaluations, ex post evaluations and impact evaluations.

(9 Participatory community monitoring and accountability systems using citizen report cards and community score cards.

Implementing Arrangements

360. The district Planner/Statistician will be the main implementing agent for this function, and reports to the OPM. Data at the district i s normally collected by the Ministry o f Finance, Planning and Economic Development (MoFPED) at the district level and reported upwards to the national level. Some project-related data may not be currently included in the normal district data collection process. OPM will work with the districts to ensure that this data collection i s mainstreamed as much as possible into the district data collection processes. Technical backstopping for M&E data collection i s expected to be provided by the OPM/TST.

361. The M&E system developed under this project will be cognizant o f the National Integrated Monitoring and Evaluation System and w i l l try to work within the existing M&E

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framework, as specified in the Uganda Growth and Development Strategy (MGDS). MoFPED wi l l provide necessary technical assistance in the design o f specific studies, surveys and evaluations. It wi l l also play an active role in ensuring that the project M&E i s i n l i n e with the national M&E framework and efforts.

Sub-Components

362. The following sub-components wi l l form part o f the project M&E effort:

(a) A simple computerized district-based local government MIS i s needed to ensure the timely availability o f information to aid decision-making and reporting. The proposed local government MIS would cater to the information needs of: (a) district-level development planning; (b) community-level investments (c) project management and administrative functions; and (d) other district-level information needs.

(b) Studies and surveys constitute a large part o f the M&E component and are expected to be undertaken periodically. This includes the annual tracking studies, an initial baseline study, periodic beneficiary assessments and a final impact assessment at the end o f the project. In addition, the project may undertake a number o f thematiddiagnostic studies during the course o f implementation to supplement data gathered from the regular monitoring.

(c) A participatory M&E approach with qualitative indicators to identify service gaps and promote accountability o f service providers will be useful. This approach promotes a working partnership between the government and community-level institutions in undertaking the monitoring and evaluation efforts. To do so, the project will use citizen report cards and gendered community score cards.

Computerized Local Government Management Information System (LOGICS-I.

363. MoLG currently has a district-level MIS called LOGICS-I1 which could potentially access information collected and maintained by the different line ministries at the district level. The capabilities o f LOGICS-I1 should be studied and appropriately modified to address the business requirements o f the project. The key feature o f the modified LOGICS-I1 wi l l be to facilitate information-sharing with all relevant stakeholders, thus creating ownership o f data and information as well as to assist district level planning, implementation and monitoring.

364. A project tracker was developed under NUSAF 1 with the ability to track physical and financial information pertaining to community level investments. Simple modifications to make it more generic and to allow community level investments have already been incorporated into it. However, there i s a need to assess district-level MIS requirements and review the current LOGICS-I1 system to decide on a way forward on this issue. An Information System Strategy Plan i s expected to be undertaken in PFYl to spell out the overall information systems architecture and strategy, address the business requirements o f the system, and build an implementation plan that specifies standards, equipment, activities, timelines and associated costs. Another project (LGMSP) i s working on supporting local government systems and i s expected to take the lead in the design and modification o f LOGICS-11. NUSAF 2 will work with the LGMSP project team to ensure that the NUSAF 2 project requirements are addressed. However, experience indicates that comprehensive local government MIS systems rarely deliver

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on time. Therefore, the project i s expected to use .its M I S system as the primary system at the district level while it continues to harmonize i t s operations at the district level. In this regard, the project M I S i s expected to be ready at project effectiveness.

Studies, Surveys and Evaluation

365. Studies and surveys constitute an important element o f the M&E strategy and complement the information gathered from the district MIS. The activities planned are outlined below.

366. Annual Tracking Studies: Annual tracking studies will be undertaken on a sample o f 10- 15 percent o f the public works cash transfers. These tracking studies will establish baseline data and other information needed to measure the progress and impact o f this project component. These tracking studies will be used to deliver information on baselines, targeting and utilization o f cash payments. These will be operational in the first year o f the project (PFYl).

367. Baseline Study: Baseline data will be collected to measure the progress and impact made by the project. Information will be collected for the project indicators specified in the M&E plan during the f i rs t year o f the project (PFY 1).

368. Beneficiary Assessment Studies: Beneficiary assessment studies will be carried out periodically (once in two years) on selected local assemblies, using focus group interviews and other types o f participatory qualitative techniques.

369. Special Surveys and Studies: There may be a need for special studies during the course o f implementation to supplement the information collected from regular M&E sources, provide additional data for the mid-term review, and offer a flexible monitoring tool to aid implementation.

370. Mid-Term Evaluation: A mid-term evaluation o f the project should be undertaken after 24 months o f operation. The main purpose o f the evaluation will be to: (a) determine whether satisfactory progress i s being made towards meeting the original project objectives; (b) evaluate the initial outcomes o f the project on the beneficiaries; (c) assess whether the agreed implementation arrangements are being honoured; and (d) draw lessons from the experience, enabling the government to adapt i t s methodology for the future. The mid-term evaluation wil l include detailed analysis o f M I S information as wel l as the results o f qualitative and quantitative surveys by external consultants.

371. Impact Evaluation: An impact evaluation will be undertaken to assess the impact o f NUSAF 2 activities based on the agreed indicators. The tool for evaluation will include special studies, surveys and a final impact assessment study that will be carried out at the end o f the project.

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Participatory Monitoring and Evaluation

372. Given the results-based nature o f the overall M&E strategy, a participatory approach with qualitative indicators will be useful to promote accountability o f service providers. The approach promotes a working partnership between the government and community institutions in the M&E efforts. The main participatory tools to be used are citizen report cards and gendered community score cards.

373. Citizen report cards are an aggregate o f public ratings on different aspects o f service quality, built on scientific random sample surveys o f users o f different public services. The specific aspects addressed in the survey include availability o f service, usage, satisfaction, service standards, major problems with service, effectiveness o f grievance redress systems, corruption encountered and other hidden costs experienced by citizens on account o f poor service. In other countries (such as India), it has succeeded in creating greater awareness among both the citizens and the government agencies. Dialogues with service providers for reform have been an important outcome o f these exercises. This technique will be used in Uganda to monitor service quality in areas such as education, health, and water.

374. A community score card i s a qualitative tool used for local-level monitoring and performance evaluation o f services, projects and even government administrative units by the communities themselves. It provides information on: (a) how inputs or expenditures match with entitlements/allocations at the local/facility level; (b) criteria used by the community and by providers themselves to assess their own performance; (c) how both the community and providers score themselves on these criteria; (d) anecdotal evidence on which these scores are based; and (e) how the assessments by the community and providers can be used to develop an action plan for improvements in the projecthervice.

375. The community score card i s an instrument for empowerment and accountability, as it includes an interface meeting between service providers and the community that allows for immediate feedback. Gendered community score cards add value by identifying and developing a database on the impact o f proposed activities on both genders. The insights derived from these cards are useful in understanding the degree to which the services are reaching the target groups, the extent o f leakages and also factors that contribute to the misdirection o f resources and services. They help identify physical availability, quality and cost factors that constrain the access to and the use o f services by the poor, as wel l as possible means to rectify the situation.

376. Information for scorecards will be gathered through household interviews with sample populations within each district, implemented by a team with representation from relevant stakeholders. The interviews would be carried out every year o n a random sample o f households within randomly selected local assemblies. The interview checklist will include a few indicators on each service delivery against which individual ratings will be made.

377. The responsible agency and the methodology for implementing the citizen report cards and the community score cards i s to be further discussed, detailed and finalized in collaboration

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within the monitoring and evaluation (M&E) strategy o f the whole program. The information from the scorecards will feed into the overall M&E o f the project.

Key Performance Indicators

378. NUSAF 2 will assess the relevance, effectiveness, efficiency and impact o f i t s project management systems and procedures at the district level and community and national levels. The key performance indicators will be:

(a) Increase in income o f targeted beneficiary households (%). (b) Person-days provided in labor intensive PWP (number). (c) Gross enrollment in primary education (YO). (d) Population with access to al l season roads (%), (e) Population with access to improved safe water sources (YO), (f) Level o f satisfaction among targeted population with quality o f basic socio-economic

services (YO).

379. In addition to the key performance indicators defined above, a set o f secondary indicators will be used to track inputs, processes, outputs, outcomes and impact for each o f the project components.

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Annex 15: Project Preparation and Supervision Second Northern Uganda Social Action Fund Project (NUSAF 2)

Planned Actual PCN review 06/16/2008 06/24/200 8 Initial PID to PIC 11/26/2008 04/17/2009 Initial ISDS to PIC 11/26/2008 12/24/2008 Appraisal 02/16/2009 02/23/2009 Negotiations 02/3 1/2009 04/06/2009 BoardRVP approval 05/2 8/2009 Planned date o f effectiveness 09/0 1/2009 Planned date o f mid-term review 09/0 1 /20 1 1 Planned closing date 08/28/2014 08/3 1/2014

Key institutions responsible for preparation o f the project:

Office o f the Prime Minister Ministry o f Finance, Planning and Economic Development

Bank staff and consultants who worked on the project included: Name Title Unit Suleiman Namara Senior Social Protection Specialist AFTH 1 Norbert Mugwagwa Operations Advisor AFTHD Edith Ruguru Mwenda Senior Counsel LEGAF Luis M. Schwarz Senior Finance Officer LOAFC Ida Manjolo Social Protection Specialist AFTHl Mary Bitekerezo Sr. Social Development Specialist AFTCS Harriet Nattabi Water and Sanitation Specialist EWDAF Martin Fodor Sr. Environmental Specialist AFTEN Martin Onyach Olaa Urban Specialist AFTU 1 Willie Odwongo Rural Development Specialist AFTAR Peter Okwero Health Development Specialist AFTH 1 Victor Ocaya Highway Engineer AFTTR Mbuba Mbungu Sr. Procurement Specialist AFTPC Gladys Alupo Team Assistant AFMUG Kees Kingma Sr. Social Development Specialist AFTCS Grace Nakuya Procurement Specialist AFTPC Paul Baringanire Power Engineer AFTEG Innocent Mulindwa Education Specialist AFTHl Paul Kamuchwezi Financial Management Specialist AFTFM Barbara Magezi Public Sector Specialist AFTPR Reinhard Woytek Sr. Operations Officer AFTRL Lori Geurts Sr. Program Assistant AFTHl Nginya Mungai Lenneiye Sr. Social Protection Specialist AFTHl Donald Mphande Sr. Financial Management Specialist AFTFM Hardwick Tchale Agricultural Economist AFTAR

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Krishna Pidatala Sr. Operations Officer CITPO Vildan Verbeek-Demiraydin Sr. Economist AFTRL Joanne Bosworth Social Development Advisor DFID Steve Ainsworth Humanitarian and Conflict Advisor DFID Anton Baare Consultant DFID Steven Shalita Sr. Communications Officer AFREX Hege Hope Wade Operations Officer AFMUG

Bank funds expended to date on project preparation: 1. Bank resources: $2 12,60 1 2. Trust funds: 0 3. Total: $2 12,601

Estimated Approval and Supervision costs: 1. Remaining costs to approval: $ 20,000 2. Estimated annual supervision cost: $100,000

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Annex 16: Documents in the Project Fi le Second Northern Uganda Social Action Fund Project (NUSAF 2)

Section I : Project Implementation Plan

The Project Implementation Plan i s incorporated into the Institutional Development Handbook and the Project Operational Manual and Annexes.

Section 11: Bank Staff Assessment 1. PCN June 24,2008 2. 3. 4. 5. 6. 7. 8. 9.

Identification Mission Aide Memoire and Back to Office Report May 5,2008 Pre-Appraisal Mission Aide Memoire and Back to Office Report September 17, 2008 Technical Mission Aide Memoire and Back to Office Report November 30,2008 Appraisal Mission Aide memoire and Back to Office to Report March 6,2009 Integrated Safeguards Data Sheet and Project Information Document November 30,2008 ESMF (draft) sent to Infoshop on December 16,2008 ESMF (Final) sent to Infoshop on March 23,2009 RPF sent to Infoshop on December 16,2009

Section 111: Other Documents

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

14.

15.

16.

17. 18.

19.

Poverty Eradication Action Plan (PEAP), summary report, 2006/7 The Republic o f Uganda: Average Poverty Levels Northern Uganda Peace Recovery and Development Plan 2007 Country Assistance Strategy, (2005-2009) Uganda Poverty Status Report, (2005) Uganda Poverty Assessment, Government o f Uganda, (2005) Uganda Participatory Assessment Reports, Ministry o f Finance, 2005 National Service Delivery Survey, (2007) National Service Delivery Survey (UBOS, 2008) Annual Statistics, Uganda Bureau o f Statistics (2005/6) Uganda National Household Survey 111, Uganda Bureau o f Statistics, 2005/6 Uganda National Human Development Report, UNDP (2007) United Nations Office for the Coordination o f Humanitarian Affairs (UNOCHA), Humanitarian Update (2007) Co-financing between the Netherlands and the World Bank, 1975-1996, (Evaluation Report 1999), Ministry o f Foreign Affairs The Republic o f Uganda: Ministry o f Local Government - Annual Assessment o f Minimum conditions and performance measures for Local governments, 2006 Strengthening the understanding o f the dynamics o f poverty in Northern Uganda - EPRC 2006 (Sarah N. Ssewanyana, Stephen D. Younger and Ibrahim Kasirye) From Emergency to Recovery, Rescuing Northern Uganda Transition - Report by Oxfam Final report on the evaluation o f the integrated Fish Farming project in the West N i l e sub-region and mid-term review in Teso and Lango sub-regions - F A 0 ,23 April to 9 May 2007 NUSAF-LGDP Analysis

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Annex 17: Statement of Loans and Credits


Difference between expected and actual

disbursements Original Amount in US$ Millions

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

PO78382

PO90867 P101231 P110207 PO69208 PO86513 PO50440 PO74079 PO83809 PO79925

. PO65437 PO02952 PO69996 PO44695 PO50439 PO70627 PO73089 PO59127

2008

2008 2008 2008 2007 2006 2006 2005 2005 2004 2003 2003 2002 2001 2001 2001 2001 1999

UG-Kampala Inst & Infrast Dev Prj (FY08) UG-Local Govt Mgt Svc Del Pjt (FY08) UG-PRSC 7 (FY08) UG:Program for Control of Avian Influ UG - Power Sector Dev. Project (FY07) UG-Millennium Science Init (FY06) UG-Pub Serv Perform Enhance (FY06) UG-Road Dev APL 3 (FY05) UG-Priv Sec Competitiveness 2 UG-Natl Re Dev TAL (FY04) UG-PAMSU SIL (FY03) UG-N Uganda Soc Action Fund (FY03) UG-Energy for Rural Transform (FY02) UG-Nat Agr Advisory Srvcs SIL (FYOI) UG-Priv &Utility Sec Reform (FYOl) Regional Trade Fac. - Uganda UG-EMCBP SIL 2 (FYOl) UG-Agr Rsrch & Training SIL 2 (FY99)

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

33.60

55.00 200.00

10.00 300.00 30.00 70.00

107.60 70.00 30.00 27.00

100.00 49.15 45.00 48.50 20.00 37.00 38.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

12.14 0.00 0.00 0.00

32.59

52.00 201.38

9.50 192.70 26.59 71.92 66.52 60.97 16.89 6.65 0.00

12.47 21.65

8.58 8.78

15.45 5.53

9.66

10.21 200.00

1.25 77.01 0.38

31.59 41.41 53.71 9.81 3.21 0.00 4.03

13.64 17.22 5.62

-1.74 -7.36

0.00

0.00 0.00 0.00 0.00 0.00 0.00

49.80 0.00 6.75 0.00 0.00

-14.03 0.00

11.72 0.00

-1 .51 1.85

Total: 0.00 1,270.85 0.00 0.00 12.14 811.95 451.27 36.20

IFC’s Held and Disbursed Portfolio

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

1996 AEF Agro Mgmt 0.26 0.00 0.00 0.00 0.26 0.00 0.00 0.00 1992 AEF Clovergem 0.84 0.00 0.00 0.00 0.84 0.00 0.00 0.00 1999 AEF Gomba 0.45 0.00 0.00 0.00 0.45 0.00 0.00 0.00 1998 AEF White Nile 0.10 0.00 0.00 0.00 0.10 0.00 0.00 0.00 2005 DFCU 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1998 Tilda Rice 0.48 0.00 0.00 0.00 0.48 0.00 0.00 0.00 2005 UMU 1 .oo 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total portfolio: 13.13 0.00 0.00 0.00 12.13 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

2002 Buj agali 0.07 0.00 0.00 0.04

Total pending commitment: 0.07 0.00 0.00 0.04

117

Annex 18: Country at a Glance Second Northern Uganda Social Action Fund Project (NUSAF 2) -

POVERTY and SOCIAL

2007 Population, mid-year (millions) GNIpercapita (Atlas method, US%) GNI(At1as method, US% billions)

Uganda

30.9 340 0.5

Average annual growth, 2001-07

Population (%) Laborforce (%I M o s t recent es t ima te ( l a tes t year avai lable, 2001-07)

Poverty (%of population below nationalpovertylinej Urban population (%of totalpopulation) Life expectancy at birth (pars) infant mortality (per 1000 live births) Childmalnutrition (%ofchildmnunder5) Access to an improved watersource (%ofpopulationJ Literscy (%ofpopulationage ?5y Gross primary enrollment (%of school-age populafion)

f ale Female

3.2 3.1

38 0 51 78 B e4 87 W tB W

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1987 1997

GDP (US% blllionsj 6.3 8.3

E w r t s of goods and services1GDP 8.2 0 . 4 Gross capital formationJGDP 9.7 8 .2

Gross domestic savings/GDP -0.1 a .7 Gross national savings1GDP 2.6 0.8

Current account baiancelGDP Interest payments/GDP Total debVGDP Total debt servicelexporls Present value of debtlGDP Present value of debtlexports

-2.2 -7.4 0.4 0.6

30.9 62.3 39.4 8.4

1987-97 1997-07 2006 (average annuelgrowth) GDP 6.9 5.8 5.1 GDP per capita 3.2 2.5 17 E v r t s of goods and services ne 6.5 4.0

Sub- Saharan Low-

A f r l ca Income

800 952 762

2.5 2.6

36 51 94 27 58 59 94 99 88

2006

9.5 23.4

8 1 t? .9

-8.5 0.3 13.3 5.4 4.8

215

14.8

1296 578 749

2.2 2.7

32 57 85 29 88 61 94 730 89

2007

112 24.5 0.3 5.8 117

-7.8

2007 2007-11

6.5 7.0 2.9 4.7 4.4 28.3

Development diamond'

Life expectancy

GNI Gross

capita enrollment per primary

1 Access to improvedwatersource

-Uganda Lo w-tncome group

Eco no m lc ra t lo s*

Trade

Domestic Capital savings formation

indebtedness

-Uganda Low-income gmup

STRUCTURE o f the ECONOMY

(%of GDP) Agnculture Industry

Services

Household final consumption expenditure General gov't final consumption expenditure Imports of goods and services

M anufactunng

(average annual gm wth) Agriculture Industry

Services

Household final consumption expenditure General gov't final consumption expenditure Gross capital formation Imports of goods and services

Manufacturing

1987 1997

568 420 0 1 176

332 405

921 760 8 0 0 3 8 0 208

5 9 a 6

1987.97 1997-07

4 1 4 5 0 8 7 6 9 5 6 3 7 9 7 7

6 3 5 6 6 1 5 4 6 9 6 3 9 9

2006

311 8 1 8 8

50 7

77 2

30 1 147

2006

5 0 5 7 -0 1 9 1

4 2 3 5

8 9

2007

29 0 8 2 8 8

52 8

80 1

32 0 ni

2007

4 9 8 0 5 0 9 0

115 7 3

27 7

Growth o f cap i ta l and GDP (Oh) 1 "p""" 0

02 03 04 05 oa 01

-GCF &GDP

Growth o f expor ts and Impor t s (%)

O7 I j -Exports -Inports 02 03 04 05 OB

Note 2007 data are preliminaryestimates This table was producedfrom the Development Economics LDB database 'Thediamonds showfourkeyindicators inthecountry(in boId)comparedwthits income-groupaverage If dataaremissing thediamondwll

be incomplete I

118

Unanda

PRICES and GOVERNMENT F INANCE

Domestic prices (%change) Consumer prices Implicit GDP deflator

1987

27.9 $310

Government finance (%olGDP. includes cumnt grants) Current revenue 4 7 Current budget balance -0 9 Overall surplusldeficit 4 2

T R A D E

(US$ millions) Totaleqorts (fob)

Coffee Cotton Manufactures

Total imports (cif) Food Fuel and energy Capital goods

Export pnce index (2000=WO) Import price index(2000=WO) Terms of trade (2000=00)

BALANCE o f P A Y M E N T S

(US$ millions) Evorts of goods and services

Resource balance

Net income Net current transfers

Imports Of goods and SeNiCeS

1987

384 365

514

63

239 77

3x1

1987

406 600 - 8 4

-47 DO

Current account balance -141

Financing items (net) Changes in net reserves

7 6 -35

M e m o : Reserves including gold (US$ miilions) 53 Conversion rate (DEC, local/US$) 8 8

EXTERNAL DEBT and RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

1987

1936 IBRD 50 IDA 534

Totaldebt service IBRD IDA

6 0 6 5

Composition o f net resource flows Official grants B6 Official creditors 238 Private creditors 0 0 Foreign direct investment (net inflows) Portfolio equity(net inflows) 0

Wand Bank program Commitments Disbursements Principal repayments Net flows Interest payments Net transfers

18 it?

3 0 9

8 D 1

1997

7 8 3 1

110 10

-5 8

1997

671 366 26

1246

92

127

115 m

1997

838 1304 -466

-7 B

-464

597 - a 2

622 1058 1

1997

3,908 0

1954

6 1 0

22

342 232

-1 7 5

0

P 5 2 6

9 208

14 8 4

2006

3 5 8 6

a 1 0 2

-58

2006

890 I73 0

1991

290

t26 a 0 97

2006

1524 2,791

-1267

-238 695

-811

1032 -222

1398 1825 1

2006

1,264 0

436

t15 0

40

4,326 7 6

-1 392 8

224 156 24 131 15 t6

2007

3 5 8 2

a 4 11

-7 4

2007

1% 227

29

2.436

381

n 9 0 6 ID

2007

1998 3 528 -1530

-223 864

-870

1552 482

2 080 1780 0

2007

0 840

0 5

425 374

0 374

5 368

Inflation (%) I

-GDPdBflator -CPI 1 I

Export and import levels (US$ mill.)

/3,000 I 2,000

1,000

0

I I 01 02 03 04 05 06 07

.Exports OlITQOrtS

Current account balance to G D P (%)

Composlt lon o f 2006 debt (US$ mill.)

I G: ne

I D: 423

A . iBRD E-Bilrta-3 B . IDA D. Other mlt i l l ta-al F - Private C.IMF G - Short4erl

Note:This tablewas producedfrom the Development Economics LDB database. 9/24/08

119

Annex 19: Map Second Northern Uganda Social Action Fund Project (NUSAF 2)

120

BundibugyoBundibugyo

BushenyiBushenyi

IbandaIbanda

KiruhuraKiruhura

NtungamoNtungamo

HoimaHoima

IgangaIgangaBusiaBusia

SironkoSironko

BugiriBugiri

KabaleKabale

KamuliKamuliKaliroKaliro

ButalejaButaleja

BudakaBudaka

KayungaKayungaKyenjojoKyenjojo

KapchorwaKapchorwa

BukwoBukwo

KaseseKasese

KisoroKisoro

KitgumKitgum

KumiKumi

KaberamaidoKaberamaido

LiraLira

LuweroLuwero

NakasekeNakaseke

NakasongolaNakasongola

MasakaMasaka

KamwengeKamwenge

KalangalaKalangala

MasindiMasindi

MbararaMbarara

KanunguKanungu

MorotoMoroto

NakapiripiritNakapiripiritKatakwiKatakwiAmuriaAmuria

MoyoMoyo

KibaleKibale

PallisaPallisa

SorotiSoroti

FortFortPortalPortal

AruaArua

JinjaJinja

BubuloBubulo

MbaleMbale

TororoTororo

GuluGulu

NebbiNebbi

ApacApac

AmolatarAmolatar

MubendeMubende

RukungiriRukungiri

IsingiroIsingiro RakaiRakai

SembabuleSembabule

MpigiMpigi

MukonoMukonoMityanaMityanaWakisoWakiso

KibogaKiboga

KotidoKotido

KaabongKaabongAdjumaniAdjumani

YumbeYumbeKobokoKoboko

KilakKilak

MarachaMaracha

OyamOyam

DokoloDokolo

BusikiBusiki

BulisaBulisa

AbimAbim

KAMPALAKAMPALA

MO

YO

ADJU

MANI

SIRONKOSIRONKO

KA

YUN

GAA

KABA

ROLE

SEMBABULE

KISOROKISORO

KANUNGUKANUNGU

RUKUUNG

IRRI

KAPCHORWAKAPCHORWA

BUKWOBUKWO

MASINDIMASINDI

HOIMAHOIMA

KASESEKASESE

KABALEKABALE

KIBOGAKIBOGA

MITYANAMITYANA

KIBAALEKIBAALE

MUBENDEMUBENDE

MPIGIMPIGI

MBARARAMBARARA

IBANDAIBANDAKIRUHURAKIRUHURA

ISINGIROISINGIRORAKAIRAKAI

MASAKAMASAKA

NTUNGAMONTUNGAMO

BUSHENYIBUSHENYI

APACAPAC

AMOLATARAMOLATAR KABERA-KABERA-MAIDOMAIDO

KAMULIKAMULI

GULUGULU

NEBBINEBBI

LUWEROLUWERO

NAKASEKENAKASEKE

IGANGAIGANGA

KALIROKALIRO

KALANGALAKALANGALA

MUKONOMUKONO

JINJAJINJA

KUMIKUMI

KATAKWIKATAKWIAMURIAAMURIA

MOROTOMOROTO

SOROTISOROTI

PALLISAPALLISA

MBALEMBALEBUDAKABUDAKA

MANAPWAMANAPWA

LIRALIRA

K I T G U MK I T G U M

ARUAARUA

KOTIDOKOTIDO

KAABONGKAABONG

TOROROTORORO

KAMPALAKAMPALA

YUMBEYUMBEKOBOKOKOBOKO

PADERPADER

MAYU

GE

MAYU

GE

BUG

IRIBU

GIRI

WAKISOWAKISO

KAMWENGEKAMWENGE

KYENJOJOKYENJOJO

NAKAPIRIPIRITNAKAPIRIPIRIT

NAKASONGOLA

BUNDIBUGYOBUNDIBUGYO

BUSIABUSIA

MARACHAMARACHA

AMURUAMURU

OYAMOYAM

DOKOLODOKOLO

ABIMABIM

BULISABULISA

NAMU-NAMU-TUMBATUMBA

BUTALEJABUTALEJA

Ora

Alb

ert

Nile

Achwa

Victoria Nile

Oko

k

Locho

man

Siti

Nkusi

Kafu

Katonga

To To FaradjeFaradje

To To JubaJuba

To To LodwarLodwar

To To BeniBeni

To To BuniaBunia

To To BeniBeni

To To NyakanaziNyakanazi

To To KisumuKisumu

To To NakuruNakuru

To To KigaliKigali

To G

oma

To G

oma

Margherita PeakMargherita Peak(5110 m)(5110 m)

Mt. Elgon (4321 m)Mt. Elgon (4321 m)

DEM. REP. DEM. REP. OF CONGO OF CONGO

S U D A N S U D A N

K E N Y A K E N Y A

K E N Y A K E N Y A

TANZANIA TANZANIA TANZANIA TANZANIA

RWANDA RWANDA

To To Faradje Faradje

To To Juba Juba

To To Lodwar Lodwar

To To Beni Beni

To To Bunia Bunia

To To Beni Beni

To To Nyakanazi Nyakanazi

To To Kisumu Kisumu

To To Nakuru Nakuru

To To Kigali Kigali

To G

oma

To G

oma

Margherita Peak Margherita Peak (5110 m) (5110 m)

Bundibugyo

Bushenyi

Ibanda

Kiruhura

Ntungamo

Hoima

IgangaBusia

Sironko

Bugiri

Kabale

KamuliKaliro

Butaleja

Budaka

KayungaKyenjojo

Kapchorwa

Bukwo

Kasese

Kisoro

Kitgum

Kumi

Kaberamaido

Lira

Luwero

Nakaseke

Nakasongola

Masaka

Kamwenge

Kalangala

Masindi

Mbarara

Kanungu

Moroto

NakapiripiritKatakwiAmuria

Moyo

Kibale

Pallisa

Soroti

FortPortal

Arua

Jinja

Bubulo

Mbale

Tororo

Gulu

Nebbi

Apac

Amolatar

Mubende

Rukungiri

Isingiro Rakai

Sembabule

Mpigi

MukonoMityanaWakiso

Kiboga

Kotido

KaabongAdjumani

YumbeKoboko

Kilak

Maracha

Oyam

Dokolo

Busiki

Bulisa

Abim

KAMPALA

MO

YO

ADJU

MANI

SIRONKO

KA

YUN

GA

KABA

ROLE

SEMBABULE

KISORO

KANUNGU

RUKUN

GIRI

KAPCHORWA

BUKWO

MASINDI

HOIMA

KASESE

KABALE

KIBOGA

MITYANA

KIBAALE

MUBENDE

MPIGI

MBARARA

IBANDAKIRUHURA

ISINGIRORAKAI

MASAKA

NTUNGAMO

BUSHENYI

APAC

AMOLATAR KABERA-MAIDO

KAMULI

GULU

NEBBI

LUWERO

NAKASEKE

IGANGA

KALIRO

KALANGALA

MUKONO

JINJA

KUMI

KATAKWIAMURIA

MOROTO

SOROTI

PALLISA

MBALEBUDAKA

MANAPWA

LIRA

K I T G U M

ARUA

KOTIDO

KAABONG

TORORO

KAMPALA

YUMBEKOBOKO

PADER

MAYU

GE

BUG

IRI

WAKISO

KAMWENGE

KYENJOJO

NAKAPIRIPIRIT

NAKASONGOLA

BUNDIBUGYO

BUSIA

MARACHA

AMURU

OYAM

DOKOLO

ABIM

BULISA

NAMU-TUMBA

BUTALEJA

DEM. REP.OF CONGO

S U D A N

K E N Y A

K E N Y A

TANZANIATANZANIA

RWANDA

Ora

Alb

ert

Nile

Achwa

Victoria Nile

Oko

k

Locho

man

Siti

Nkusi

Kafu

Katonga

Lake Vic tor ia

LakeEdward

LakeGeorge

LakeKwania

Lake Kyoga

LakeSalisbury Lake

Opeta

Lake

Albe

rt

To Faradje

To Juba

To Lodwar

To Beni

To Bunia

To Beni

To Nyakanazi

To Kisumu

To Nakuru

To Kigali

To G

oma

Margherita Peak (5110 m)

Mt. Elgon (4321 m)

30°E

4°N

2°N

0°

4°N

2°N

0°

32°E 34°E

32°E 34°E

UGANDA

0 25 50 75

0 25 50 75 Miles

100 Kilometers

IBRD 33504R3

AUGUST 2008

UGANDA

DISTRICT CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

DISTRICT BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.