Completion Report

Project Number: 33396 Loan Number: 1864/1865 June 2009

Kingdom of Cambodia: Education Sector Development Program

CURRENCY EQUIVALENTS

Currency Unit – riel (KR)

At Appraisal At Program Completion (31 October 2001) (24 September 2008)

KR1.00 = $0.00026 $0.00024 $1.00 = KR3,835 KR4,124

ABBREVIATIONS

ADB – Asian Development Bank AAfC – American Assistance for Cambodia BMC – budget management center CAR – Council on Administration Reform CESSP – Cambodia Education Strategic Support Project CMC – cash management committee DGE – Directorate General for Education DMPF – Department of Materials and State Property DOE District Officer of the Ministry of Education, Youth, and Sport EA – executing agency EEQP – Enhancing Education Quality Project EFA – education for all EFMC – education financial management committee EMIS – education management information system ESDP – Education Sector Development Program ESP – education strategic plan ESSP – Education Sector Support Program FOP – Faculty of Pedagogy FY – fiscal year HRMIS – cash management committee ICT – information and communication technology IEC – information, education, and communication IT – information technology JFPR – Japan Fund for Poverty Reduction MEF – Ministry of Economy and Finance MIS – management information system MOE – municipal office of education MOEYS – Ministry of Education, Youth, and Sport MOWVA – Ministry of Women’s and Veterans’ Affairs MTR – midterm review NGO – nongovernment organization PAP – priority action program PCR – project completion report PEFC – provincial education facilities committee POE provincial office of education PPMC – provincial personnel management committee PRD – Pedagogical Research Department PTC – provincial training center SARS – severe acute respiratory syndrome

SDR – special drawing right SIDA – Swedish International Development Cooperation Agency SSC – school support committee SWAp – sector-wide approach SY – school year TA – technical assistance TTC – teacher training center TTD – Teacher Training Department TVET – technical and vocational education and training UNICEF – United Nations Children’s Fund

NOTES

(i) The fiscal year (FY) of the Government ends on 31 December. (ii) In this report, "$" refers to US dollars.

Vice President C. Lawrence Greenwood Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department Director S. Lateef, Social Sectors Division, Southeast Asia Department Team leader N. LaRocque, Education Specialist, Southeast Asia Department Team member N. Calma, Project Officer, Southeast Asia Department

M. Camara-Crespo, Assistant Project Analyst, Southeast Asia Department

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA i MAP vi

I. PROGRAM DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 1

A. Relevance of Design and Formulation 1 B. Program Outputs 2 C. Program Costs 6 D. Disbursements 6 E. Program Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 8 H. Consultant Recruitment and Procurement 8 I. Performance of Consultants, Contractors, and Suppliers 9 J. Performance of the Borrower and the Executing Agency 9 K. Performance of the Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 10

A. Relevance 10 B. Effectiveness in Achieving Outcome 11 C. Efficiency in Achieving Outcome and Outputs 12 D. Preliminary Assessment of Sustainability 12 E. Impact 13

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13 B. Lessons 13 C. Recommendations 15 APPENDIXES

1. An Assessment of Progress of the Policy Matrix 17 2. Program Framework 35 3. Comparison of Appraisal and Actual Project Cost 44 4. Yearly Disbursement 45 5. Project Implementation Schedule 46 6. Organizational Chart 48 7. Status of Compliance with Loan Covenants 49 8. Summary of Consulting Services 67 9. Updated Procurement Packages and School Facilities Built By Province 68

BASIC DATA

A. Loan Identification 1. Country 2. Loan Number 3. Program/Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Program/Project Completion Report Number

Cambodia 1864/1865 Education Sector Development Program Cambodia Ministry of Education, Youth, and Sport SDR15,656,000 (Program Loan: $20 million equivalent at appraisal) SDR14,090,000 (Project Loan): $18 million equivalent at appraisal) PCR:CAM-1076

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions

6. Closing Date

a. Program Loan – In Loan Agreement – Actual – Number of Extensions

b. Project Loan – In Loan Agreement – Actual – Number of Extensions

7. Terms of Loan

a. Program Loan – Interest Rate

4 June 2001 26 June 2001 22 October 2001 24 October 2001 4 December 2001 27 February 2002 90 days from 27 February 2002 12 April 2002 0 31 August 2004 29 November 2004 1 30 June 2007 18 September 2008 1 1% per annum during the grace period,

ii

– Maturity (number of years) – Grace Period (number of years)

b. Project Loan – Interest Rate – Maturity (number of years)

– Grace Period (number of years)

1.5% per annum thereafter 24 years 8 years 1% per annum during the grace period, 1.5% per annum thereafter 32 years 8 years

8. Disbursements a. Dates (i) Program Loan Initial Disbursement

9 May 2002

Final Disbursement

29 November 2004

Time Interval

30 months

Effective Date

12 April 2002

Original Closing Date

31 August 2004

Time Interval

28 months

(ii) Project Loan Initial Disbursement

20 June 2002

Final Disbursement

13 June 2008

Time Interval

72 months

Effective Date

12 April 2002

Original Closing Date

30 June 2007

Time Interval

62 months

b. Amount ($ million) (i) Program Loan

Amount Disbursed Tranche No. Date Disbursed SDR Equivalent First Tranche 9 May 2002 7.828 9.923 Second Tranche 10 November 2003 3.914 5.603 Third Tranche 29 November 2004 3.914 5.898

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(ii) Project Loan

SDR million Category or Subloan Original

Allocation Last Revised

Allocation Amount

Canceled Amount

Disbursed Undisbursed

Balance Civil Works 10.912 10.925 10.760 0.165 Project Operation and Supervision

0.235 0.274 0.312 (0.038)

Consulting Services 0.250 0.054 0.058 (0.004) Consulting Services (Institutional Strengthening)

0.673 1.134 1.134 0.000

Workshops and Seminars

0.039 0.078 0.065 0.013

Equipment and Vehicles 0.337 1.035 0.872 0.162 Service Charge 0.391 0.391 0.391 0.000 Unallocated 1.253 0.200 0.000 0.200 TOTAL 14.090 14.090 13.592 0.498

$ million Category or Subloan Original

Allocation Last Revised

Allocation Amount

Canceled Amount

Disbursed Undisbursed

Balance Civil Works 13.940 15.784 15.529 0.255 Project Operation and Supervision

0.300 0.387 0.446 (0.059)

Consulting Services 0.319 0.075 0.081 (0.006) Consulting Services (Institutional Strengthening)

0.860 1.609 1.609 0.000

Workshops and Seminars

0.050 0.110 0.090 0.020

Equipment and Vehicles 0.431 1.521 1.270 0.251 Service Charge 0.500 0.584 0.584 0.000 Unallocated 1.601 0.310 0.000 0.310 TOTAL 18.000 20.380 19.609 0.771

9. Local Costs (Financed) - Amount ($ million) 9.976 - Percent of Local Cost 74.57 - Percent of Total Cost 43.35 C. Program Data 1. Program Cost ($ million) Cost Appraisal Estimate Actual

Foreign Exchange Cost 20.000 21.426 Total 20.000 21.426

iv

Project Cost ($ million) Cost Appraisal Estimate Actual

Foreign Exchange Cost 8.000 9.633 Local Currency Cost 14.500 13.374 Total 22.500 23.007

2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 4.500 3.398 ADB Financed 17.500 19.025 Other External Financing Total 22.000 22.423 IDC Costs Borrower Financed 0.000 0.000 ADB Financed 0.500 0.584 Other External Financing Total 0.500 0.584 ADB = Asian Development Bank, IDC = interest during construction. 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual A. Equitable Access: Education Facilities

Facilities Civil Works, Furniture, and Equipmenta 16.70 18.49 Project Operation and Supervision 0.58 0.88 Equipment and Vehicles to MOEYS/Provinces 0.43 1.27 Consultants 0.40 0.08

B. Institutional Strengthening

Consultants 0.98 1.61 Workshops and Seminars 0.05 0.09 Equipment and Vehicles 0.10 0.00

C. Contingencies

Physical Contingencyb 1.87 Price Contingencyc 0.89

D. Service Charge 0.50 0.58 Total 22.50 23.00 MOEYS = Ministry of Education, Youth, and Sport. a Classroom costs include classroom furniture, one administration room per 6 classrooms, 1 toilet per classroom,

and 1 water tank or bore hole per school. b 10% of base cost of civil works. c 2.4% of the foreign exchange costs and 5% of local currency costs. 4. Project Schedule (Quarter Year) Item Appraisal Estimate Actual Date of Contract with Consultants I 2002 III 2002 Completion of Engineering Designs II 2002 I 2003 Civil Works Contract Date of Award I 2003 I 2003 Completion of Work IV 2006 II 2007

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Equipment and Supplies First Procurement II 2002 III 2002 Last Procurement III 2006 IV 2007

5. Project Performance Report Ratings

Ratings Implementation Period Development

Objectives Implementation

Progress Program Loan From 4 December 2001 to 30 November 2004 Satisfactory Satisfactory

Project Loan

From 4 December 2001 to 31 December 2003 Satisfactory Satisfactory From 1 January 2004 to 31 August 2004 Satisfactory Highly Satisfactory From 1 September 2004 to 31 August 2005 Satisfactory Satisfactory From 1 September 2005 to 31 October 2005 Satisfactory Highly Satisfactory From 1 November 2005 to 30 November 2005 Satisfactory Satisfactory From 1 December 2005 to 28 February 2006 Satisfactory Highly Satisfactory From 1 March 2006 to 30 September 2008 Satisfactory Satisfactory

D. Data on Asian Development Bank Missions

Name of Mission Date No. of Persons

No. of Person-Days

Specialization of Membersa

Fact-Finding 15 Feb–9 Mar 2001 7 161 a Appraisal 4–26 Jun 2001 7 161 a, b Inception 11–15 Feb 2002 5 25 a, b, e Review Mission 1 9–13 Sep 2002 2 10 a Review Mission 2 17–21 Mar 2003 2 10 a, e Review Mission 3 30 Sep–10 Oct 2003 2 a, e Midterm 29 Mar–6 Apr 2004 2 a, e Review Mission 4 10–23 Nov 2004 2 28 a Disbursement Mission 13–17 Dec 2004 3 15 c, e Review Mission 5 6–16 Jun 2005 1 11 a Review Mission 6 21–28 Oct 2005 1 8 a Review Mission 7 20 Mar–4 Apr 2006 2 10 a, d Review Mission 8 7–18 May 2007 2 24 a, e Review Mission 9 5–11 Nov 2007 3 15 a, d, e Program/Project Completion Reviewb 2–14 Oct 2008 3 31 a, d, e

a a – education specialist, b – counsel, c – control officer, d – national officer, e - project analyst. b The project completion review was prepared by Sukhdeep Brar, principal education specialist; Nida Calma, project

officer; and Mylene Camara-Crespo, assistant project analyst.

I. PROGRAM DESCRIPTION

1. The Asian Development Bank (ADB) has played a significant role in developing the education sector in Cambodia. ADB has assisted the Government of Cambodia (the Government) with policy development since 1994, when it supported the preparation of an education sector strategy. This was followed by technical assistance (TA) in 1999 to develop a secondary education investment plan that helped the Ministry of Education, Youth, and Sport (MOEYS) to formulate a pro-poor education policy and strategy for more equitable access to education. In 2000, ADB provided further TA to help the Government prepare a detailed analysis of the education sector. This was followed by project preparatory TA that helped MOEYS finalize an Education Strategic Plan (ESP), identify and cost priority programs through the Education Sector Support Program (ESSP) and design the Education Sector Development Program (ESDP) to be financed by ADB. Following a series of detailed discussions with all stakeholders, MOEYS formally approved the ESP and ESSP in September 2001. The TA has actively fostered strong ownership of education reform policies and strategies through extensive MOEYS and stakeholder participation. 2. The ESDP, approved in December 2001, comprised two loans: (i) a program loan of $20 million equivalent to support a reform program for the education sector and (ii) an investment loan of $18 million equivalent to provide increased access to basic education, particularly for the poor and disadvantaged. The policy loan was to be implemented over approximately 26 months. The investment loan was to be implemented over 5 years. MOEYS was the executing agency (EA) for the program and investment loans. 3. The objective of the ESDP was to contribute to poverty reduction in Cambodia by helping the Government to raise the educational attainment of new entrants to the workforce. The ESDP was designed to support the Government’s reform and strengthening of the education sector within the framework of the ESP 2001–2005 and the ESSP. It provided for policy reforms to the entire sector and specific investments mostly in primary schools but also in lower secondary schools and for vocational education and skills development. 4. The policy reform agenda promoted (i) increased resource allocation to education, (ii) more equitable access to education, (iii) improved sector quality and efficiency, (iv) enhanced managerial capacity at all levels, and (v) devolved service delivery. 5. The investments supplemented the policy initiatives by supporting (i) increased access and equity, mainly for basic education; (ii) devolved planning, management, and monitoring; and (iii) selective quality and efficiency improvement in budget planning, accounting, and auditing, as well as technical and vocational education and training (TVET). Funds were provided for constructing facilities in remote and underserved areas, devolving the planning of facility programs to provincial authorities and institutions, and piloting the budget management of facility development in three provinces.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation 6. The ESDP was fully consistent with the Government’s education policies and strategies for education sector development. Decades of civil conflict and a traumatic political history had wrought havoc on the country, including its schools, which faced a severe shortage of qualified personnel. When the ESDP was designed in 2000, Cambodia was beginning to enjoy some

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political stability after the formation of a coalition government in 1998. The Government had just launched a comprehensive reform program and accorded poverty reduction the highest priority. Its reform program had begun to yield results, with the national economy experiencing gross domestic product growth of 6.9% in 1999 and 5% in 2000. Expenditure on social sectors had increased significantly, with the allocation to education increasing by 22% from 2000 to 2001 and to health increasing by 17% over the same period. The education share of recurrent expenditure showed a significant increase from 11.5% in 1999 to 15.7% in 2001. 7. With ADB support, the Government had prepared a strategy for education reform and development. Thus, the ESDP was very timely. Its design as a sector development program was highly relevant as it supported the Government’s strategy to alleviate poverty by improving access for the poor to health and education services through increased resource allocation. The ESDP’s support for increased resource allocation for education conformed with the Government’s commitment to use the education budget to implement education reforms. In particular, it aimed to ensure pro-poor policies and strategies to address the issues of equitable access to education and its quality and efficiency. The ESDP addressed two key challenges the Government faced: rebuilding the basic infrastructure of education and strengthening government capacity to plan, manage, and deliver high-quality education. 8. The ESDP was fully consistent with ADB’s operational strategy for Cambodia (2000)1, which emphasized support for poverty reduction through interventions in three priority areas: (i) support for economic development in rural areas, (ii) human and social development, and (iii) private sector development. The policy prescriptions of the program component, underpinned by the investments in project component, were realistic, appropriate and sustainable. B. Program Outputs 9. The policy loan provided funds to the Government in three tranches to be released upon fulfillment of prescribed policy conditions. The reforms supported by the ESDP were important both to ensure increased pro-poor budgetary allocations and to establish reformed and sustainable financial and technical planning procedures and management structures. The investment loan supported the policy reforms. Physical facilities were expanded to improve access to primary education, financial management was strengthened, and education quality and efficiency were improved. 10. The planned outputs under the program were

(i) a joint Ministry of Economy and Finance and MOEYS financial management mechanism operational and sustained through late 2006;

(ii) a 17.5% sector share of the recurrent national budget in 2002, 18.5% in 2003, and 19.5% in 2004;

(iii) school and institutional operating budgets increased and sustained; (iv) the allocation of MOEYS personnel to instructional positions increased from 78%

in 2000 to 85% by 2006; (v) the definition of the community's role in financing, governing, and monitoring

performance to improve quality; (vi) an enhanced system of monitoring sector performance; (vii) an enhanced performance audit system; (viii) all budget management centers fully operational by 2005;

1 ADB (2000) Cambodia: Enabling a Socioeconomic Renaissance, Manila.

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(ix) MOEYS and funding agencies annual reviews in 2002–2006; (x) incentive programs for basic education introduced for poor children, especially for

poor girls and children from disadvantaged areas, from 2002; (xi) private sector participation expanded at all levels of education; (xii) incentives provided to ensure adequate teacher supply to disadvantaged areas

from 2002; (xiii) policies to target facility investments developed to ensure improved service

provision to poor and disadvantaged areas from 2002; (xiv) the construction, expansion, and upgrading of educational infrastructure; (xv) an integrated plan for reforming primary and secondary education and teacher

education curricula and publishing new instructional materials, including modifications for ethnic minority areas, by 2002;

(xvi) 33 new editions of textbooks published by 2006, and 10 new editions of teacher training textbooks published by end-2003;

(xvii) an action plan for minimal standards of student performance approved for grades 2, 4, and 6 and piloted for grades 2 and 4 by 2004;

(xviii) the availability of core instructional materials at agreed ratios sustained through the recurrent budget;

(xix) a strategic framework for devolving education service delivery and monitoring established by 2002;

(xx) provincial and district education services restructured to provide effective priority action program (PAP) disbursement by end 2002; and

(xxi) a program of capacity building for devolved planning and management in progress in all provinces and districts in 2002.

1. Output 1: Improved Allocation to the Education Sector

11. A key ESDP output was the formation of an interministerial education financial management committee chaired jointly by the Ministry of Economy and Finance and MOEYS. This was later replaced by the interministerial cash management committee for budget allocations to four priority ministries: education, health, agriculture, and rural development. The cash management committee, chaired by the secretary of state of the Ministry of Economy and Finance and with MOEYS representation, leads the process of budgetary allocation to the priority action programs of the four ministries. Several changes were introduced to enhance the sector performance monitoring system, including strengthening the functions of the Internal Audit Department and increasing its budget. 12. The ESDP brought an increase in the education sector share of the recurrent national budget, which rose from 15.0% in 2001 to 18.7% in 2004. It contributed to an increased allocation of MOEYS personnel in instructional positions, with MOEYS beginning a process of rationalizing staff deployment to improve the balance between administrative and teaching staff. This contributed to reducing the non-teaching staff share of the total education workforce from 18% in 2000-2001 to 15% in 2005-2006. It helped to lift the education budget outturn—i.e., the proportion of the education budget that was disbursed—from 90% in 2000 to 95% in 2006 and successfully increased the proportion of the education budget going to school operating budgets, with the PAP share of total education budget rising from 5.5% in 2000-2001 to 27.9% in 2004-2005. In all of these cases, the indicators met their ESDP targets. 13. The ESDP heightened the operational autonomy of educational organizations in Cambodia. MOEYS introduced a decentralized system of operational budgets to over 8,628 schools and 24 teacher-training colleges. By 2005-2006, 194 budget management centers had

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been created, delegating authority to managers closest to students, parents, teachers, and communities. While these were moves toward meeting ESDP objectives, they fell short of the objective of 100% of teacher training centers (TTCs), institutions, and higher education institutions having their own operating budgets by 2004. In addition, the National Training Board has not received increased autonomy. At the same time, the monitoring of sector performance was improved. The ESDP supported annual reviews of the ESP and the ESSP, which involve a number of development partners but are approved by MOEYS. These now serve as the key strategy documents for education sector planning, development, and budget formulation. 14. The ESDP provided support for strengthening internal audit capacity in MOEYS. An internal audit exercise was initiated in 2003-2004, and the Internal Audit Department was established in 2005. The ESDP also provided modest support to TVET. Internal audit procedures were formulated and piloted in four provinces. The ESDP supported the Department of Technical and Vocational Education and Training. A number of workshops were conducted for TVET and National Training Board staff to strengthen capacity for budget planning and resource allocation, and a framework for skills standards and quality assurance was formulated. TVET staff were trained to implement this framework. In 2004, while the ESDP was still under implementation, the Department of TVET was moved from MOEYS and became a part of the new Ministry for Labor and Vocational Training. The change in administrative arrangements did not unduly affect project activities, as their scope was limited.

2. Output 2: Improved Access 15. More equitable access to education services was a key output of the ESDP. To make access more equitable, the ESDP supported merit-based assistance that targeted poor students in grades 4–12. MOEYS provided merit- and need-based targeted assistance to 25,872 girls in 2007-2008 in lower secondary education and is in the process of approving similar assistance for students in upper secondary. The ESDP aimed to support piloting strategies to encourage private-public partnerships to expand access to secondary education and TVET. The limited participation of the private sector in education has meant weak progress in this area. 16. To better target facility development, the ESDP supported part of MOEYS’s priority facility development plan, which estimated need at $18 million, with policy targeting and program prioritization criteria for each component of facility development. The project was designed to support part of the priority facility development plan with particular emphasis on providing access to basic education in poor, remote areas to benefit the poorest children. This was required as MOEYS’s Education Facilities Development Plan for 2001-2005 had estimated the total investment needs for education facilities at $118 million but recognized that this much funding was unlikely to be available. 17. It was agreed at appraisal that the ESDP would provide

(i) 110 primary schools to deliver 6 years of schooling in unserved remote villages, including ethnic minority areas, by 2006;

(ii) 120 selected incomplete schools in rural, remote, and ethnic minority areas with expanded facilities by 2006;

(iii) 1,400 additional classrooms with priority given to grades 1-6 in underserved areas by 2006;

(iv) 100 units of teacher-incentive housing in remote and ethnic minority areas by 2006;

(v) the improvement of the science and technology learning and teaching environment and dormitories in selected TTCs; and

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(vi) improved facilities and equipment in eight existing and two new provincial training centers (PTCs).

18. The ESDP successfully provided (i) 70 new primary schools in villages previously without them, which was below the target of 110 agreed at appraisal; (ii) 616 classrooms in 150 incomplete primary, lower secondary, and secondary schools, which was above the target of 120 schools at appraisal; (iii) 1,457 additional classrooms in primary, lower secondary, and secondary schools, which was above the target of 1,400 at appraisal; (iv) 101 units of teacher quarters in rural and remote areas, against a target of 100 units at appraisal; and (v) resource blocks comprising science laboratories, computer laboratories, meeting rooms, and office space in 14 PTCs (no target was specified at appraisal); and (vi) buildings and equipment in four existing PTCs and four new PTCs, against a target of eight existing and two new PTCs.

3. Output 3: Improved Quality and Internal Efficiency 19. MOEYS piloted student assessment standards for grades 3 and 6 in 2003-2004 with support from the World Bank. Subsequently, these were introduced nationwide with public dissemination of the results since 2006-2007. Multigrade teaching methodologies were incorporated in the teacher-training curriculum upon adoption of the new curriculum policy in 2005. The supply of core instructional materials has improved with consistent increases in budgetary allocations for this purpose. The allocation of funds for instructional materials was 100% of projected demand for 2005. In subsequent years, allocations were 96.97% in 2006 and 99.95% in 2007. Disbursements in the first 4 months of 2008 were 43.91% of the projected annual demand. 20. A report was prepared that included a review of the official curricula, instructional material, and teachers’ manuals for grades 10–12. Standards were defined for all subjects except foreign languages, sports, and earth sciences for lower and upper secondary, and a curriculum framework was prepared focusing on the progression from grade 9 to 10. ESDP support for curriculum development resulted in the formulation and adoption of a national curriculum policy in 2006. The new curriculum framework for secondary education has yet to be implemented because of resource and capacity constraints.2 21. The ESDP's targets for publishing and procuring textbooks were not achieved due to unresolved issues related to copyright, which is vested in the publishing and distribution house, as well as to pricing and centralized textbook procurement. However, training was provided to build MOEYS staff capacity in procurement. Training was provided to strengthen capacity in computer-assisted budget planning and resource allocation. However, the target of a 25% increase in TTC graduates was not achieved, as admission into TTCs is regulated by the number of teachers to be recruited into the teaching profession. The output of TTCs is directly linked to admissions, and this policy was not changed.

4. Output 4: Enhanced Management and Deconcentration of Services 22. The ESDP supported community participation and capacity building toward the devolution of educational facility development by delegating authority for implementing school construction in selected provinces to provincial education facility committees (PEFCs) of provincial officials representing different ministries. School support committees (SSCs)

2 This will be implemented under the ADB-supported Enhancing Education Quality Project, approved in December

2007.

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comprising school management, parents, and members of the community played a key role in executing civil works. This community participation modality of implementing civil works developed a strong sense of community ownership. 23. A number of steps were taken to devolve responsibility for delivering and monitoring selected education services. The Education Law was promulgated by the Royal Kram on 8 December 2007. MOEYS is now preparing action plans to improve other legislative instruments and reviewing its draft strategic plan for decentralizing education to ensure its consistency with the Organic Law, which was promulgated in May 2008. C. Program Costs 24. The program loan of SDR15.656 million ($20.0 million equivalent at appraisal) was to be disbursed in three tranches subject to the fulfillment of conditionalities for each tranche. The US dollar equivalent of the program loan increased to $21.426 million, or 7% more than the appraised amount, with the appreciation of the special drawing right (SDR). 25. At appraisal, the total investment project cost was estimated at $22.50 million equivalent, of which an estimated $8.00 million (36%) was foreign exchange cost and $14.50 million (64%) was local currency cost. The foreign exchange cost included $0.50 million equivalent for interest during construction. ADB provided a loan of $18.00 million equivalent (SDR14.09 million) from its special fund to finance 100% of the foreign exchange cost and 69% of local currency cost. The Government was to provide $4.50 million equivalent (31% of local currency costs) to finance taxes and duties, incremental recurrent costs during implementation, and a portion of civil works. 26. At project completion, the actual project cost was $23.00 million, or 2% higher than the estimated cost, of which $19.60 million was ADB funding and $3.40 million was contributed by the Government. The foreign exchange cost amounted to $9.63 million (42%) and the local currency cost $13.37 million (58%). There were no significant cost overruns or under expenditure. There were, however, minor reallocations for civil works, consulting services for institutional strengthening and equipment and vehicles, all of which exceeded estimated costs at appraisal. Both components of consulting services were covered under one contract, so the actual cost of consulting services for equitable access was 80% lower than the estimated budget. However, consulting costs were 64% higher than estimated for institutional strengthening. SDR appreciation meant the dollar equivalent of SDR14.09 million increased to $20.38 million, compared to $18.00 million at appraisal. 27. Total investment project costs, including government counterpart funding, at completion included (i) $18.49 million for civil works, or 80% of total project costs, (ii) $0.88 million for project operation and supervision, or 4%; (iii) $1.69 million for consulting services for both components, or 7%; (iv) $90,000 for workshops and seminars, or 0.4%; (v) $1.27 million for equipment and vehicles, or 6%; and (vi) $0.58 for interest, or 2.6%. The total investment costs by component and by financier are shown in Appendix 3. D. Disbursements 28. At completion, loan disbursements under the investment project loan amounted to $19.60 million (SDR13.59 million equivalent, or 96% of net loan amount). The breakdown of ADB disbursements is as follows: (i) $15.53 million for civil works, furniture, and equipment for subprojects, or 79.2% of total disbursements; (ii) $0.45 million for project operation and

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supervision, 2.3%; (iii) $80,000 for consulting services for equitable access, or 0.4%; (iv) $1.61 million for consulting services for institutional strengthening, or 8.2%; (v) $90,000 for workshops and seminars, or 0.46%; (vi) $1,27 million for equipment and vehicles, or 6.5%; and (vii) $0.58 million for interest charges, or 3.0%. The amount of $0.77 million equivalent (SDR0.50 million) was cancelled upon loan closing. 29. No disbursement schedule was prepared at appraisal, but disbursement projections were prepared prior to the start of each fiscal year. Projections were generally realistic except in 2005 and 2007. The investment project was able to achieve its targets. Disbursements started to peak in the second year of implementation. No major disbursement problems were encountered except during the initial years, when the cost of the unexpectedly large volume of civil works exceeded the imprest fund. Yearly disbursements are presented in Appendix 4. 30. ADB provided the investment project with an initial advance of $0.6 million in June 2002 to defray various small expenditures. Because of the large volume of civil works and time lag in replenishment, ADB provided an additional imprest advance of $1 million in 2003. The imprest account was utilized efficiently, as shown by the satisfactory imprest account turnover ratio in 2003 to 2005. The imprest account turnover ratio dropped in 2006 and stayed low until investment project completion, as major civil works slowed and the procurement of equipment was delayed. The ESDP refunded to ADB the unutilized imprest account balance of $83,328.19 prior to loan closing. The use of imprest account procedures had a positive impact on implementation. It supported the investment project’s cash flow requirements since no funds were available to pre-finance investment project activities. Out of the total disbursement of $19.6 million, $17.42 million, or 88.8%, was paid through the imprest account, and only a small portion equivalent to $1.6 million, or 8.2%, was by direct payment, mostly to consultants. The remaining amount of $0.6 million was the capitalization of service charges. E. Program Schedule 31. The ESDP became effective on 12 April 2002. Though there was delay in starting, once the ESDP became effective activities were accomplished within the estimated timeframe. The policy loan of SDR15.656 million ($21.426 million equivalent at the time of loan closing) was disbursed in three tranches broadly within schedule. The first tranche of SDR7.828 million ($9.924 million equivalent) was released on 9 May 2002, one month after loan effectiveness. The second tranche of SDR3.914 million ($5.604 million equivalent) was released on 10 November 2003, 18 months after the first tranche, and the third tranche of SDR3.914 million ($5.898 million equivalent) was released on 29 November 2004, 12 months after the second tranche. 32. The investment project loan was to close by 30 June 2007, but by mid-2006 all envisaged project activities had been completed. The appreciation of SDR against the dollar and the reallocation of the unallocated funds made funds available for additional civil works. The additional civil works and delays in the procurement of the TVET and science equipment required an extension of 6 months to 31 December 2007. The number of facilities provided under the investment project exceeded the targets: 2,473 classrooms versus 1,929 estimated at appraisal, 13 TVET facilities versus 10 estimated at appraisal, and 101 teacher quarters versus 100 estimated at appraisal—but only 15 TTC facilities versus 21 estimated at appraisal. F. Implementation Arrangements 33. As the EA, MOEYS was responsible for implementing all the policy measures and

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coordinating project implementation. An interministerial steering committee was established to oversee implementation progress and compliance with policy conditionalities and procedures. In addition to the steering committee, a task force was constituted on February 2002 for coordinating investment activities. The task force was headed by a project director and had 18 staff. A team of six international consultants and seven national consultants was recruited to help the task force implement project activities. To assist with the planning and site selection for civil works, PEFCs were established under 21 provincial governments. 34. The construction of schools was undertaken with community participation in two implementation arrangements: centralized and delegated. In the centralized system, the task force was in charge of all stages of school construction, including technical oversight, monitoring, and quality control. Contracts under the centralized system were signed by the task force and the SSCs. Payments to contractors and builders were made by the SSCs on receipt of funds from the task force against the completion of agreed stages of construction. Under the delegated system, oversight, monitoring, and quality control were primarily the responsibility of the PEFCs, with the task force conducting periodic random checks. Contracts under the delegated system were signed by the PEFCs and the SSCs. Payments to the contractors and builders were made by the SSCs on receipt of funds from the PEFCs, which received the funds from the task force against the completion of agreed stages of construction. Community participation contracting was adopted to encourage greater ownership by the SSCs during construction and thereby achieve better quality and ensure sustainability and better maintenance after completion. 35. An international nongovernment organization, American Assistance for Cambodia (AAfC), contributed $11,000 per school for 65 schools in accordance with a memorandum of understanding between AAfC and MOEYS. Though this contribution made it possible to construct additional schools, it imposed additional responsibilities on the task force and occasionally caused misunderstandings. The accounting requirements for funds contributed by AAfC were also a cause of concern. G. Conditions and Covenants 36. Twenty-six policy actions were required under the program loan. Nine policy actions were required before the release of the first tranche. These were complied with broadly within the time period envisaged. The second tranche was released 18 months later against the projected period of 15 months, with full compliance with 9 of the 10 stipulated conditions. The sole policy action that was only partly complied with involved the education service rationalization plan, as MOEYS did not meet its target for the number of teachers redeployed. This did not occur because MOEYS did not change its policy on recruiting teachers. The third tranche was released 12 months after the release of the second tranche, with full compliance of six conditions. This was a laudable achievement, given the challenging nature of the policy conditionalities related to difficult education reforms. 37. The investment project was in full compliance with all covenants. The loan covenants and their final status are described in Appendix 7. H. Consultant Recruitment and Procurement 38. Six international consultants and nine domestic consultants were recruited through a single firm. Consultants were engaged for a total of 287 person-months (82 international and 205 national), or nearly double the 150 person-months (54 international and 96 national)

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planned at appraisal. The increase was the additional of two international consultants, for 21 person-months, and two national consultants, for 24 person-months, to improve MOEYS quality and efficiency and its capacity to procure textbooks and assure their quality. Two more national consultants were hired for 50 person-months to assist MOEYS in monitoring the quality of civil works and administrative matters of the ESDP. The terms of reference of the consultants covered (i) facility development; (ii) budget planning, accounting, and auditing; (iii) curriculum development; (iv) textbook development; (v) TVET institutional development; and (vi) TVET skills standards and quality assurance. The consultants were recruited and contracted in accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time). A summary of consulting services inputs is in Appendix 8. 39. Goods and Services were procured in accordance with ADB’s Guidelines for Procurement of Goods and Services (2007, as amended from time to time). Civil works were procured using local competitive bidding and community contracting, while furniture and other goods were procured using sealed quotations, sealed quotations with advertisement, national shopping, and national competitive bidding. The procurement of equipment for TVET and science laboratories was delayed by the specialized nature of the equipment and the lack of adequate suppliers. The major contract packages are listed in Appendix 9. I. Performance of Consultants, Contractors, and Suppliers 40. The performance of the consultants was satisfactory. The performance of those responsible for facility development was highly satisfactory. However, in some areas such as budget planning, curriculum development, and textbook procurement, additional time was required due to the complex nature of the issues. 41. The performance of the civil works contractors was generally satisfactory. Some instances where the performance was unsatisfactory were primarily due to weak oversight by the school communities, low bids submitted by the contractors, and, in a number of cases, deliberate noncompliance with specifications and written instructions. The delinquent contractors were penalized, and, where warranted, their contracts were terminated and they were barred from bidding for future civil works. Most of the contractors performed well, producing high-quality work and completing their contracts with slight time overruns. With so many small, disparate civil works implemented all over the country, this was a commendable feat. 42. Overall, the performance of the suppliers of equipment and goods was satisfactory. Some delays were experienced in the procurement of TVET and science equipment due to limited local suppliers and availability. J. Performance of the Borrower and the Executing Agency 43. The performance of MOEYS in complying with conditions for the release of the three tranches of the policy loan was highly satisfactory. As noted earlier, it performed well in terms of compliance with the conditions for the second and third tranche releases and the timeliness of tranche releases. 44. Similarly, MOEYS performed satisfactorily in the execution of the investment project, particularly considering that it included a very large civil works component. The civil works were completed ahead of time and were delivered at a lower cost per classroom than was estimated at appraisal: $6,402 per classroom at closing versus $7,823 at appraisal for primary schools and

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$6,185 at closing versus $8,053 at appraisal for secondary schools. These savings and the additional funds made available by favorable exchange rate movements were used to provide additional classrooms and other physical facilities. As noted earlier, the investment project was extended by 6 months, in part because of these additional civil works, as well as because of delays in procuring some equipment. MOEYS’s project task force managed a large number of subprojects in varied, scattered rural and remote locations and completed the originally targeted civil works well within the project timeframe and at a lower cost per classroom than initially envisaged. 45. MOEYS's performance was unsatisfactory in the execution of project monitoring and evaluation. As is evident from the large number of indicators that were not monitored (see Appendix 2), it failed to put in place an effective monitoring and evaluation system or undertake surveys to assess employer satisfaction with TVET and higher-education graduates. An effective monitoring and evaluation framework would have allowed better assessment of project outcomes. K. Performance of the Asian Development Bank 46. The performance of ADB was satisfactory. ADB provided timely and strong oversight of the ESDP and support to MOEYS in its implementation. ADB undertook 10 missions to oversee the implementation of the ESDP, including the Inception Mission. Regular review missions allowed close supervision and prompt attention to, and resolution of, emerging issues. ADB review missions often included field visits, which allowed tight supervision of civil works and improvements in quality. The missions helped to improve implementation progress and disbursement rates. ADB’s prompt response to most implementation issues and problems enabled the task force to perform creditably throughout the project. The ADB team maintained an excellent working relationship with MOEYS, the task force responsible for implementing the project component, and project consultants. However, closer attention to the design and monitoring framework would have helped to ensure that data were available to measure and evaluate ESDP results.

III. EVALUATION OF PERFORMANCE

A. Relevance 47. The ESDP was highly relevant to the needs of the education sector. It was and is within the framework of the Government’s strategies for education sector development. The education sector faced myriad challenges, including low public spending on education as a proportion of gross domestic product, significant inequity in enrollment, low net enrollment ratios in lower and upper secondary school, low quality of education, weak institutional capacity, and a severe shortage of suitably qualified teachers and learning materials. At the same time, the environment for reform was favorable, featuring political stability and strong political support for education reforms. The ESDP was consistent with ADB’s country operational strategy. As a sector development program, it provided crucial support to the Government in key policy areas and provided urgently needed facilities for expanding equitable access to education. The reforms initiated by the ESDP were carried forward by other development partners, as well as through ADB’s follow up Second Education Sector Development Program and advisory technical assistance for Education Regulatory Reform and Governance for Decentralization.3 3 ADB. 2004. Technical Assistance to the Kingdom of Cambodia for the Second Education Sector Development

Program. Manila. (Piggy-backed to Loan Nos. 2121 & 2122).

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B. Effectiveness in Achieving Outcome 48. The ESDP is rated less effective. It brought improvements in a number of fiscal and education indicators, and, in some cases, they were sufficient to meet ESDP targets. In other cases, they were not. In many instances, it is difficult to determine the extent to which the ESDP met its objectives because a number of indicators were never measured. Even where data are available, the weak monitoring and evaluation framework means that it is difficult to disentangle the impact of the ESDP from other factors. Appendix 2 summarizes the achievements against ESDP targets. 49. The outcome of the ESDP was to improve access to educational services of higher quality. The indicators for the ESDP are divided into four groups: increased allocation to education, improved access, improved quality and efficiency, and enhanced management and devolution of educational services.

1. Increased Allocation to the Education Sector 50. The ESDP brought increased fiscal allocation to education. First, it helped to achieve a substantial increase in the proportion of the Government budget devoted to education. The share of the Government’s recurrent budget allocated to education increased from 15.0% in 2001 to 18.7% in 2004. Second, it helped to lift the education budget outturn—i.e., the proportion of the education budget that was disbursed—from 90.0% in 2000 to 95.0% in 2006.

2. Improved Access 51. The ESDP assisted in lifting enrolments among girls in lower secondary school. Between 2000 and 2006-2007, the female share of total enrolment grew from 30.0% to 45.6%—higher than the target of 40.0%. In addition, the Government introduced incentive programs to improve access to education for poor children, particularly girls. This included the PAP 12 scholarship program, which was funded from 2003-2004. The number of students in lower secondary education receiving PAP 12 and Japan Fund for Poverty Reduction scholarships rose from 13,938 in 2003-2004 to 25,872 in 2007-2008. In 2006-2007, the gross enrolment ratio in primary schools in remote areas was 121.9% and in lower secondary schools in remote areas 24.6%. It is not possible to assess whether other access targets were met, as the relevant indicators—representation in grades 1-9 of the poorest quintile, access to post-secondary education from non-urban areas, and private sector participation in education—were not measured.

3. Improved Quality and Internal Efficiency 52. The ESDP contributed to improvements in a number of indicators relating to the quality and internal efficiency of education. However, despite improvements in a number of indicators, gains were insufficient to meet ESDP targets. The survival rate for students in grades 1–6 improved from 45.0% in 1999 to 52.5% in 2006-2007, which was a significant increase but well short of the improvement required to meet the target of 75%. The repetition rate for students in grades 1-3 fell from 30.0% in 1999 to 17.7% in 2005-2006, a significant improvement in performance but short of the ESDP target repetition rate of 15.0% by 2005. 53. In other cases, ESDP indicators actually deteriorated. For example, the number of graduates annually from TTCs fell from 4,000 in 2000 to under 3,000 in 2006, much less than the ESDP target of 5,500 per annum in 2006. In addition, the ratio of textbooks per 100 students

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in grades 1–6 (the unweighted average for grades 1-6 across four subjects) fell from 108.5 in 2000-2001 to 72.3 in 2005-2006. In still other cases, quality and internal efficiency performance against targets cannot be determined for lack of monitoring of the relevant indicators: the textbook-access ratio for lower secondary students, students' daily attendance, republishing of core editions of textbooks, and employers’ satisfaction rates with graduates from TVET and higher-education institutions.

4. Enhanced Management and Devolution of Education Services 54. MOEYS has introduced a decentralized system of operational budgets to over 8,628 schools and 24 teacher-training colleges. By 2005-2006, 194 budget management centers had been created, delegating authority to managers closest to students, parents, teachers, and communities. While these were moves toward meeting ESDP objectives, they fell short of the objective of 100% of TTCs, TVET institutions, and institutions of higher education having their own operating budgets by 2004. In addition, the National Training Board has not been granted increased autonomy. C. Efficiency in Achieving Outcome and Outputs 55. The investment project is rated efficient. The additional classrooms built under the project numbered 2,346, more than the 1,798 foreseen at appraisal. While much of this was made possible by favorable currency movements and the reallocation of unallocated funds (see Table A9.1 in Appendix 9), another factor was a lower cost per classroom (see paragraph 45). Procurement was well managed. MOEYS has considerable experience in managing projects involving the procurement of classrooms and new schools. The investment loan was to close by 30 June 2007, but by mid-2006, all envisaged civil works had been completed. To accommodate additional civil works made possible by currency movements and delays in procuring the TVET and science equipment, the project was extended by 6 months to 31 December 2007. D. Preliminary Assessment of Sustainability 56. The ESDP is rated as likely sustainable. The policy reforms initiated by the program are being carried forward. The ESP and the ESSP now serve as the key strategy documents for education sector planning, development, and budget formulation. ADB has continued to support policy reforms through its follow-up interventions, including the Second ESDP and Enhancing Educational Quality Project (EEQP). Policy reforms increased the share of education in recurrent expenditures in the overall budget to 18.7% in 2004. While this declined somewhat to 18.3% in 2006, it remains well above the 13.6% that prevailed in 2000. While there have been some reversals in trends for indicators such as transition rates and repetition rates, these indicators also remain above their baseline levels. 57. Recent trends indicate a need to place greater emphasis on quality in education delivery to ensure the sustainability of the program benefits. The expansion of physical facilities has not been matched by the availability of suitably trained and qualified teachers or by the improved quality and quantity of textbooks and other instructional materials. There is a need to strengthen institutional capacity for improving the quality of education. EEQP will provide critical support to address these issues and facilitate the sustainability of inputs provided under the ESDP and the Second ESDP.

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E. Impact 58. Achievement Against the Intended Impact. The ESDP has contributed to achieving the intended impact of raising the educational attainment of new entrants to the workforce. It introduced a number of measures to improve the quality and accessibility of education. By the end of the ESDP:

(i) the net enrolment ratio in primary schools was 93.3% and in lower secondary schools 34.8% in 2007-2008, meaning that the target of universal basic education by 2010 had almost been achieved for the primary level;

(ii) the adult literacy rate was 75.6% in 2006, an increase of 11.5% over 2000, and the adult literacy rate for females was 64.1% in 2005, an increase of 11.0% over 2000, against the target of a 50.0% increase overall (and greater for females) by 2015;

(iii) the net admission rate was 89.5% in 2007-2008, very nearly meeting the target of 90.0% in 2010; and

(iv) the transition rate of students to lower secondary education increased from 77.3% in 2000-2001 to 81.9% in 2004-2005 and declined to 78.7% in 2006-2007, against a target of 90.0% by 2006.

59. The ESDP gave impetus to the Government’s education reform agenda by supporting policy reforms for sector-wide development. It strengthened MOEYS capacity for education planning and budget preparation. It laid the foundation for an internal audit system in MOEYS, measurable student assessment at grades 3 and 6, and a curriculum framework that resulted in the national curriculum policy. The policy program supported measures for targeted assistance to poor girls and incentives to teachers to teach in remote and rural areas. Community involvement in the provision of civil works empowered communities and increased ownership.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment 60. The ESDP is rated successful, based on its ratings as highly relevant, less effective, efficient, and likely sustainable. Its focus on expanding access and increasing enrollment while putting in place measures to improve quality was highly relevant to the needs of the country. The ESDP was successful in rationalizing allocations for the recurrent budget, achieving improvements in some educational outcomes relating to access and quality, and initiating policy reforms necessary for long-term sector development. The one less effective rating reflects its failure to meet output and outcome targets for a number of indicators. A higher number of classrooms was built under the ESDP because of favorable currency movements, funding reallocations, and lower costs per classroom. The progress is likely sustainable, particularly given the increased budgetary allocations for education that were realized under the ESDP, the Government's educational planning framework, and follow-on ADB-supported initiatives such as EEQP. B. Lessons 61. Deficient Monitoring of Indicators. A key weakness in the ESDP was that too little emphasis was placed on establishing baselines for output and outcome indicators at project start-up and ensuring that output and outcome data were available. There was no effective monitoring of progress of output and outcome indicators, and the achievement of a number of

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output and outcome targets could not be assessed for the project completion report. 62. Sharper Prioritization of Reform Program. Though the policy reform program had significant achievements, it was ambitious and not aligned with Government’s capacity to fully undertake the reforms. The policy matrix covered too many areas and would have benefited from sharper prioritization. In addition, the ESDP would have benefited from better selection of performance indicators in that a significant number of those selected required specific data collection that was never undertaken. 63. Comprehensive and Coordinated Technical Assistance in Support of Policy Reforms. No TA was provided to support policy reforms. The Government received support from other development partners, but it was neither comprehensive nor well coordinated, placing a burden on the Government that was in some instances beyond its capacity. 64. Inadequate Technical Assistance for Budget Planning, Curriculum Development, and Textbook Procurement. The TA provided under the project for curriculum development, textbook procurement, and distribution and budget planning was insufficient for the intended results, with the consultants leaving before the recommendations could be implemented and outstanding issues could be resolved. 65. Communities to Be Adequately Trained for Community Contracting. Contracting small, scattered civil works in remote, rural areas through local communities is the most effective procurement method. It empowers communities, raises awareness and ownership, and allows better quality through closer supervision. It enhances the capacity of the local builders. However, adequate time and resources need to be allocated for community orientation and periodic training during implementation. While communities are very keen to participate and take responsibility, they often lack simple technical and procedural knowledge. Making community contracting effective requires more intensive training in the beginning and midway through construction. 66. Efficient Planning and Implementation Required for Timely Completion. Efficient planning, a well-executed work plan, and strong oversight by MOEYS senior management and the team of consultants resulted in the timely completion of civil works, which avoided cost overruns. However, the ESDP underestimated the need for consulting services for the facility component, so they needed to be extended during the latter part of project implementation. 67. Stricter Supervision and Monitoring for Better Quality. To improve the quality of the civil works, implementation arrangements should be explored that allow closer supervision and monitoring at all levels, including basing engineers fulltime in the provinces. Penalties for delinquent contractors and negligence in supervision should be strictly enforced to ensure both quality and timely completion and as a deterrent visible to other contractors. These issues are being addressed in the Second ESDP. 68. Training and Funds for Maintaining School Facilities. Before handing over completed school facilities, communities and school authorities need to be trained in preventive and recurrent maintenance, and resources need to be allocated in the school budget so that school buildings are adequately maintained. 69. Adequate Consultation with User Groups Prior to Implementing Civil Works. Most of the facilities provided under the project are being used as planned. However, the teacher training and resource centers provided in 14 provinces are not being fully used. The lack of

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clear direction and responsibility regarding their use and maintenance, and especially of the science laboratory equipment and computer laboratories, has resulted in the very limited use of only the general spaces. Because they are rarely used, buildings are not properly maintained. Since the learning resource centers will be integrated with other similar facilities to be provided to schools and the remaining teacher training centers, it is important that guidelines for their use be immediately prepared and implemented. C. Recommendations

1. Project Related

70. Ensure Effective Monitoring. Project officers should ensure that output and outcome indicators are established at the outset, credible data sources are available for output and outcome indicators, and progress against the design and monitoring framework is regularly assessed by review missions. 71. Establish Simple Conditionalities for Loan Effectiveness. Conditionalities for effectiveness should be simpler, focusing on only those areas that must be resolved for the effective implementation of the program. Elaborate conditionalities related to wide-ranging systemic reforms that have no direct link to the project can cause unnecessary delays in loan effectiveness and start-up. It may be better to address and resolve important and critical conditionalities prior to loan negotiations so that the period between loan negotiations and loan effectiveness is minimized. 72. Prioritize Conditionalities for Tranche Release. Tranche release triggers should be sharply focused on prioritized systemic reforms, which can be addressed comprehensively and realistically achieved within the estimated timeframe, based on the capacity of the executing and implementing agencies. There should be supporting TA in critical areas where existing capacity is inadequate to comply with tranche conditionalities. 73. Streamline Implementation Arrangements. Implementation could have been more streamlined and effective, with greater PEFC and SSC involvement in supervising civil works and accountability. For more effective implementation, dedicated project implementation and management units must be optimally staffed with fulltime staff. The tendency to overstaff must be curtailed for efficient management and implementation. 74. Balance Hardware and Software Components. The project was focused primarily on its heavy civil works component. The qualitative issues related to equitable access, budget planning, curriculum development, and textbook procurement were not given the priority they deserved. The provision of civil works should be adequately complemented by personnel, curriculum, and management inputs to enable optimum benefits to be derived from physical facilities. There should be conceptual clarity regarding the management and use of the facilities prior to the implementation of the civil works. Agencies that will bear responsibility for the use and management of these facilities should be actively involved from an early stage. For example, central and provincial teacher training and personnel departments, provincial education authorities, and staff and management of the provincial primary teacher training centers should have been involved in the provision of the teacher training resource centers. 75. Avoid Overlapping of Implementation Responsibilities. Toward the end of the ESDP, the task force overlapped with the Second ESDP, which delayed activities and slowed disbursements for both projects. Members of project task forces that have fulltime project-

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related responsibilities should not be assigned overlapping duties. 76. Channel Contributions to Projects Through a Cofinancing Agreement. To avoid confusion and provide greater transparency and accountability, financial contributions to MOEYS for civil works that are channeled through ADB-supported projects should be subject to cofinancing agreements. 77. Further Action or Follow-up. The revised curriculum has been approved by MOEYS and should be implemented as soon as possible.

2. General 78. A comprehensive facility management information system should be set up and include a detailed inventory of all schools, including their locations, site plans, floor plans, built-up areas, open areas, and building usage and condition. This responsibility could be entrusted to the Department of Materials and State Property.

Appendix 1 17

AN ASSESSMENT OF PROGRESS OF THE POLICY MATRIX

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS I. CONDITION FOR FIRST TRANCHE 1. Improved allocation to the education sector 1a. Establish national policy and institutional framework for the education sector i) The MOEYS will approve the finalized ESP and the ESSP as the framework for the overall education sector. ii) MOEYS and MEF will establish, by 31 October 2001, the EFMC between MOEYS and MEF and other relevant ministries. The EFMC will be co-chaired by the secretaries of state of MEF and MOEYS.

- The ESP/ESSP 2001-2005 was finalized. - The ESP/ESSP has become an essential framework for the planning and implementation of key education strategies. - The EFMC was established. The EFMC was co-chaired by the secretaries of state of MEF and MOEYS. This committee was successful in promoting financial responsibilities and a more transparent approach to funding.

- The MTR of ESP and ESSP 2006–2010 was done. - CMC was established on 28 June 2006 and chaired by the secretary of state of MEF. MOEYS is a member of this committee and a member of the CMC Secretariat. - CMC's role is to lead and revise the PAP and allocate budget to the priority ministries, replacing EFMC.

1b. Increase education sector allocation iii) MEF will provide the ADB with written confirmation that the sector recurrent-total recurrent budget expenditure ratio for FY2002 budget presented to the National Assembly, represents not less than 17.5% of the total recurrent budget expenditures.

- The confirmation was made during the program implementation. - MOEYS prepared the education budget for 2003, based on overall sector allocations, and PAP shares, as agreed with MEF and consistent with ESSP priorities.

- The share of the Government budget allocated to MOEYS during the period of the program was 13.9% in 2000, 15.7% in 2001, 18.2% in 2002, 18.3% in 2003, and 19.5% in 2004, for an increase of 5.6 percentage points. - However, education expenditure was 13.6% in 2000, 15.0% in 2001, 18.4% in 2002, 17.1% in 2003, and 18.7% in 2004.

2. Equitable access to education services 2a. Reduce cost of basic education to parents iv) MOEYS will issue Prakas to abolish nationwide start-of-year parental contribution for enrollment in grades 1 to 9, for year 2001 through 2004.

- The Prakas on Abolishing Informal Payment from students was drafted and widely consulted.

- MOEYS issued Prakas No. 513, dated 12 April 2005, on abolishing informal payments from students of public primary and secondary schools. - The Prakas has been disseminated and re-enforced since then.

18 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 3. Improved quality and internal efficiency of education 3c. Maintain sustainable supply of instructional materials v) MOEYS will approve an implementation plan and budget for FY2002, satisfactory to ADB, which will sustain the supply of core instructional materials at agreed student-book rates of 1:1 for grades 1 to 9 and 1:2 for grades 10 to 12. MOEYS will, notwithstanding the amount of the education budget, allocate at least $3.5 million to assure the sustainable supply of core instructional materials for FY2002

- MEF approved the education budget for FY2003, based on overall sector allocations and PAP volumes, as agreed with MOEYS. The PAP concept has become embedded in the way schools are financed and supported and has formed a strong foundation for the move towards program budgeting. - In his letter dated 31 January 2003, the Minister of MOEYS submitted the approved budget for the Government’s program with an allocation of KR15 billion for core instructional materials. This is consistent with the approved implementation plan for FY2003 set out in the joint review of the Government’s program in September 2002. - Implementation report included in sector performance reports 2003 as part of PAP 7 instructional materials progress report. Plan modified in early 2004 to promote decentralization of textbook financial management

- The implementation of the budget for instructional materials was 100% in 2004, 93.12% in 2005, 96.97% in 2006 and 99.97% in 2007. In 2008, the expenditure for the first 4 months was 43.91%.1 - The proposed policy to supply textbooks through market competition was not endorsed because of copyright issues and the lack of support from public and private enterprises. It is being addressed under the Enhancing Education Quality Project approved by ADB in December 2007. - The Government’s Program Budget B is insufficient to assure the supply of core instructional materials at the agreed student-book ratio of 1:1. - The roles of PRD, PDH, and other agencies need to be revised in Sub-decree 21.

4. Enhanced management and deconcentration of education services 4a. Strengthen the financial planning and budgeting process at central and provincial levels vi) MOEYS will approve a medium-term expenditure plan for education, satisfactory to ADB, as a basis for setting priority program financing targets.

- A Five Year Action Plan and budget allocation approved as part ESSP 2002–06. - Implementation difficulties due to delays in cash release.

- The ESP and ESSP 2006-2010 were designed as planning and budgeting tools for education.

- MOEYS and MEF have set up group to resolve issues in 2004.

- The MTR of the ESP and ESSP 2006–

1 Department of Finance.

Appendix 1 19

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 2010 was done in mid-2008 to revise the

framework and strategies for planning, budgeting, and implementing education.

4b. Improve sector performance monitoring system vii) MEF, through EFMC, will approve sector performance indicators and targets for FY2002, satisfactory to ADB.

- On 31 January 2003 MOEYS sent a progress report on the achievement of the sector performance targets in FY2002 and sector performance indicators and targets for FY2003. The Government has experienced short-term difficulties in the release of cash at both provincial and central levels due in part to the need to finalize an improved regulatory framework for PAP spending within MOEYS and unforeseen revenue shortfalls and fiscal shocks (e.g., avian flu, SARS). Since the issue of the necessary Prakas and sub-decrees, PAP disbursements have accelerated significantly with current rates at 68% of the first tranche. The strengthened regulatory framework will continue to facilitate improved financial management for future years, including FY2003. - A progress report on the achievement of the sector performance targets in FY2003 and sector performance indicators and targets for FY2004. The Senior Minister also presented a companion report on sector financial performance, indicating that PAP 2003 budget execution had reached 100% by July 2004.

- Sector performance indicators were designed and included in the ESP and ESSP 2006-2010. - The MTR of the ESP and ESSP 2006-2010 in 2008 revised and proposed new indicators and targets for the next ESP and ESSP.

- The PAP disbursement for FY2003 has reached over KR 90 billion for operational programs, compared to only KR 10 billion in FY2001

4d. Establish coordinating mechanisms for improving financial management

- The EFMC was established. The EFMC was co-chaired by the secretaries of state of MEF and MOEYS.

- Same as section 1.a (i). condition for first tranche. CMC was established in 2006 to replace EFMC.

20 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS viii) MOEYS and MEF will approve the terms of reference of EFMC, satisfactory to ADB.

II. CONDITION FOR SECOND TRANCHE 1. Increased resource allocation to the education sector

1b. Increase education sector allocation i) The Government will ensure that sector recurrent-total recurrent budget expenditure ratio for FY2003 budget presented to the National Assembly, representing not less than 18.5% of the total recurrent budget expenditures.

Complied. The Bank received a letter dated 20 January 2003 from the Senior Minister, MEF, indicating the share of budget allocation for the MOEYS for FY2003 at 18.2% of the total Government expenditure. The Senior Minister further confirmed in his letter that the Government was committed to increase the allocation to the education budget from reserve funds so that the education budget reaches 18.5% of the national budget.

- The share of the Government budget allocated to MOEYS during the program was 13.9% in 2000, 15.7% in 2001, 18.2% in 2002, 18.3% in 2003, and 19.5% in 2004. - Between 2005 and 2008, the share fluctuated at 18.5%, 18.3%, 19.2%, and 18.1%.

2. Increased equitable access to education services 2b. Remove access barriers to basic education for all, especially females and ethnic minorities ii) MOEYS, in consultation with the MOWVA, will prepare an implementation plan for FY2003-2005, and budget for FY2003, satisfactory to ADB, consistent with the strategies and targets of the approved the ESSP for increased participation of females and ethnic minorities in schooling and at all levels in the education sector.

Complied. In his letter dated 31 January 2003, the Minister of MOEYS, stated that the preparation for the implementation plan covering FY2003 to 2005 had been completed. The plan was prepared by MOEYS assisted by ADB and UNICEF consultants, and in consultation with MOWVA and the inter-ministerial gender mainstreaming group. In a letter dated 5 February 2003, the Minister of MOWVA endorsed the plan, which is consistent with the revised Government’s ESSP 2002–2006, and took account of the findings from the joint review of the program by the Government, funding agencies, and NGOs. Implementation of scholarship programs planned for the

- MOEYS has developed several policy instruments to support gender parity in education by increasing the number of females in the workforce. They are as follows: - the Five-Year Gender-Mainstreaming Strategies of MOEYS, from Commitment to Action, July 2002-2006; - The Gender-Mainstreaming Strategic Plan in MOEYS 2006-2010, October 2006; - Gender Education, May 2006; - Draft 2 of Girl Supporting Program, August 2008;

next three years (SY2003-04 to SY2005-06) has started in the current SY2003-04, funded by Government’s PAP, ADB

- Midterm Assessment on Gender, early 2008 (disseminated nationwide); and

Appendix 1 21

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS JFPR 9028, and Belgian Technical

Assistance. - Policy on Gender Education, approved in 2006.

iii) MOEYS will approve the school participation of females and ethnic minorities implementation plan and budget for FY2003.

- Policy on Gender Education, drafted in 2003 Complied. In his letter dated 31 January 2003, the Minister of MOEYS submitted the approved implementation plan and FY 2003 budget.

Same as section 2.b above

3. Improved quality and internal efficiency of education 3c. Maintain sustainable supply of instructional materials iv) The Government will ensure that the budget allocation for core instructional materials for FY2003 will be no less than required in the approved implementation plan and budget for FY2003.

Complied. In his letter dated 31 January 2003, the Minister of MOEYS submitted the approved budget for the Government’s program with an allocation of KR15 billion for core instructional materials. This is consistent with the approved implementation plan for FY2003 set out in the joint review of the Government’s program in September 2002.

- The implementation of the budget for instructional materials was 100% in 2004, 93,12% in 2005, 96.97% in 2006 and 99.97% in 2007. In 2008, the expenditure for the first 4 months was 43.91%.2

4. Enhanced management and deconcentration of education services 4a. Strengthen the financial planning and budgeting process at central and provincial levels v) MOEYS will prepare the education budget for 2003, based on overall sector allocations, and PAP shares, as agreed with MEF and consistent with ESSP priorities.

Complied. The approved education budget for FY2003 includes an allocation for the PAP of KR90.6 billion, which is 28% of the overall education budget for 2003, consistent with the performance target agreed.

- Cash release as a percentage of the annual PAP budget was 93% in 2003, 88% in 2004, 115% in 2005, and 105% in 2006.3

vi) EF will approve the education budget for FY2003, based on overall sector allocations and PAP volumes, as agreed with MOEYS.

Complied. See Section 4.a above

- The MTR of the ESP and ESSP 2006–2010 revised the financing of MOEYS for 2008, 2009, and 2010.

2 Department of Finance. 3 Compliance with trigger 4b for the release of the third tranche of the Second ESDP: Loan 2121-CAM(SF), p. 8.

22 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS vii) MOEYS will prepare and MEF will issue guidelines, satisfactory to ADB, defining roles and responsibilities of provincial authorities and communities for financial management, procurement, and reporting procedures.

Complied. On 31 January 2003, MOEYS confirmed approval of the financial monitoring and reporting guidelines for the priority action program, including identification of responsibilities at various levels, developed with the assistance provided under TA 3858. Specimen financing reporting forms and a specimen financial report for early 2003 were prepared based on the use of agreed procedures. MOEYS has also taken steps to strengthen its capacity to implement these guidelines through technical assistance and workshops supported by ADB and UNICEF-SIDA.

- MOEYS has conducted training on the foundations of accounting for provincial and municipal accounting officers and issued a guiding principle on program-based budgeting for those who use the FMIS. There were meetings to guide all institutional officers on mechanisms, expenditure procedures, budget liquidation, budget flow, and the reporting system of program-based budgeting.4 - MOEYS issued Guideline No. 480 on 5 February 2008 on the functions and duties, preparation of documents, and legislative instruments for institutions involved in managing and using program-based budgeting at the center and in provinces and municipalities.5

4b Improve sector performance monitoring system viii) The Government will achieve sector performance targets in FY2003 and approve sector performance indicates and targets for FY2004, as agreed with ADB.

Complied. On 31 January 2003, MOEYS sent a progress report on the achievement of the sector performance targets in FY2002 and sector performance indicators and targets for FY2003. The Government has experienced short-term difficulties in the release of cash at both provincial and central levels, due in part to the need to finalize an improved regulatory framework for PAP spending within MOEYS. Since the issuance of the necessary Prakas and sub-decrees, PAP disbursements have accelerated significantly. The strengthened regulatory framework will continue to facilitate improved financial management for future years, including FY2003.

Same as section 4.a, v, vi, and vii above condition for second tranche

4 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 4. 5 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 4.

Appendix 1 23

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 4c Improve productivity of education service personnel ix) The Government will ensure satisfactory compliance of the education service rationalization plan and performance targets, as agreed with ADB, including the following: For FY2002: - redeployment of administrative positions into teaching positions with a minimum of 2,000 - transfer of staff from one location to another with a minimum of 3,000

Partly Complied. MOEYS approved the Education Service Efficiency, Performance and Rationalization Plan for 2002-06 in January 2002 and began personnel redeployment in SY2002-03. - As of September 2003, the total number of administrative staff redeployed to teaching positions totaled 1,400 and there were 1,000 teachers transferred to more need locations. MOEYS plans to deploy 4,000 out of 5,062 new postings in SY2003-04 to remote areas. While targets have not been fully attained due mainly to difficulty in relocating families and the constraints in funds (for incentives), the Government is making substantial progress. For example, the number of grade 1–9 teachers in rural/remote schools has increased from 45,500 in 2000-02 to 50,000 in 2002-03, an increase of 4,500 – against an increase of just 1,300 in the number of urban school teachers over the same period. A continuing support of ADB is critical to the attainment of redeployment targets.

- The Three-Year Staff Deployment and Rationalization Action Plan was agreed by MOEYS and CAR in October 2006 to ensure than no district has a pupil-teacher ratio more than 50:1. - The number of new remote/difficult postings as a proportion of new postings was 99% in 2006-07.6 - Very few graduates are seconded to work in non-teaching positions. More than 85% are deployed in teaching positions.7 - Guideline No. 3632 addresses the deployment and redeployment of education personnel and incentives given to those who work in remote disadvantaged, and ethnic minority areas.8 - Revised list of disadvantaged schools and schools in remote and ethnic minority areas.9

4f. Develop effective education governance systems x) MOEYS will issue guidelines and regulations,

Complied. In December 2002 MOEYS

- The Education Law was promulgated

6 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 39. 7 Long Sovat, former head of the staffing office and now head of the personnel office of the Department of Personnel. 8 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3. 9 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 9.

24 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS satisfactory to ADB, defining the powers and responsibilities of education authorities and communities in managing and monitoring school performance.

issued the guidelines, developed under TA 3858, for program and school performance monitoring. Workshops were conducted in March and April 2003. Formal school performance assessment and rating commences in October 2003 (TA Progress Report received on 9 October 2003). MOEYS has deferred the issuance of a formal Prakas since it is currently finalizing appropriate legislation and regulations that set out roles, responsibilities and delegated authority. It is anticipated that legislation will be presented to Council of Ministers in December 2003. In the interim MOEYS has issued the following: (i) a Prakas (8 October 2003) for school directors performance monitoring; (ii) administrative circular (17 October 2002) on prevention of primary school misconduct, including roles and responsibility at district, commune and school levels; and (iii) administrative circular (22 May 2003) on institutional arrangements in support of the implementation of administrative circular (item ii above). Further, MOEYS is currently implementing a nationwide school governance development program with UNICEF support, including school governance guidelines (Prakas planned in December 2003), training of 6,500 school directors and commune officials in school governance, and related logistics support.

by the Royal Kram on 8 December 2007. MOEYS is preparing action plans to improve other legislative instruments.10 - MOEYS has drafted a strategic plan for decentralizing education that awaits the endorsement of the Organic Law.11 - A Prakas was issued in 2006 on gradually increasing school operational budgets.12

10 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4.

11 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4.

12 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 3.

Appendix 1 25

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS III. CONDITION FOR THIRD TRANCHE 1. Increased resource allocation to the education sector 1b. Increase education sector allocation i) The Government will ensure that sector recurrent-total recurrent budget expenditure ratio for FY2004 budget is presented to National Assembly, representing not less than 19.5% of the total recurrent budget expenditures.

Complied. The Bank received a letter dated 13 September 2004 from the Senior Minister, MEF, indicating the share of budget allocation for the MOEYS for FY 2004 at 19.5% of the total Government recurrent expenditure. The Senior Minister further confirmed in his letter that this allocation will be presented as part of recommended budget law FY2004 to the National Assembly as soon as it is convened for this purpose.

- The share of the government budget allocated to education during the program was 13,9% in 2000, 15.7% in 2001, 18.2% in 2002, 18.3% in 2003, and 19.5% in 2004, for an increase of 5.6 percentage points. - However, from 2005 to 2008, the shares fluctuated, measuring18.5%, 18.3%, 19.2% and 18.1%. - From 2000 to 2008 the average share of the Government budget allocated to MOEYS was 18%.

3. Improved quality and internal efficiency of education 3b. Strengthen school and student performance assessment systems ii) MOEYS will prepare a report, satisfactory to ADB, on the trials of student performance standards and assessment mechanisms for grades 2 and 4

Complied. In his letter dated 14 September 2004, the Senior Minister of MOEYS stated that the trials on student performance standards and assessment had been completed in selected primary grades in 2003-04. The Senior Minister further confirmed that the trials' findings have been fully incorporated into new institutional arrangements for nationwide student standards assessment which will be implemented as part of the new ESP 2004-2008 which the Senior Minister approved in September 2004.

-- MOEYS issued Guideline No. 1767, dated 6 June 2005, on grade 3 and 6 testing. - The Policy for Curriculum Development 2005-2009, endorsed by MOEYS, includes a learning standard for grades 3, 6, and 9. The curriculum standard for grades 3, 6, and 9 was published and distributed to schools. - Testing of the learning standards was carried out by MOEYS, with support from the World Bank‘s CESSP. - Guidelines on the implementation of the new curriculum for basic education include the learning standards.13

13 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3.

26 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS - The results of the standardized test in

grades 3 and 6 in the academic year 2006-2007 were publicly disseminated.14

3c. Maintain sustainable supply of instructional materials iii) The Government will ensure that budget allocation for core instructional materials for FY2004 will be no less than required in the approved implementation plan and budget for FY2004.

Complied. In his letter dated 14 September 2004, the Minister of MOEYS submitted the approved budget for the Government’s program with an allocation of KR13 billion for core instructional materials, supplemented by an additional KR43 billion allocation for basic education supplies. The Senior Minister also submitted a report confirming that the textbook availability targets were achieved and further measures for program decentralization and cost efficiency were being implemented. This is consistent with the approved implementation plan for FY2004.

- The longer-term textbook financing strategy was adjusted as part of the revised ESP in June 2004. - MOEYS is preparing a supply of core textbooks and is developing a framework.15 - The pupil-textbook ratio for grades 1–9 should be 1:1, and for grades 10–12 1:2, but in practice it always falls short.16 - The implementation of the budget for instructional materials was 100% in 2004, 93,12% in 2005, 96.97% in 2006 and 99.97% in 2007. In 2008, expenditure in the first 4 months was 43.91%.

4. Enhanced management and deconcentration of education services 4a. Strengthen the financial planning and budgeting process at central and provincial levels iv) MOEYS will prepare the education budget for 2004, based on overall sector allocations, and PAP shares, as agreed with MEF and consistent with ESSP priorities.

Complied. In his letter dated 14 September January 2004, the Senior Minister of MOEYS submitted the approved implementation plan and FY 2004 budget.

Same as section 4.a, v, vi, and vii above condition for the second tranche

v) MEF will approve the education budget for FY2004, based on overall sector allocations and PAP volumes, as agreed with MOEYS.

Complied. The approved education budget for FY2003 includes an allocation for the PAP of KR106.9 billion, which is 29% of the overall education budget for FY2004, consistent with the performance target agreed.

Same as section 4.a, v, vi, and vii above condition for the second tranche

14 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3. 15 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3. 16 Sok Rithy, director general of PDH.

Appendix 1 27

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 4b. Improve sector performance monitoring system vi) The Government will achieve sector performance targets in FY2003 and approve sector performance indicators and targets for FY2004, as agreed with ADB.

Complied. In his letter dated 14 September 2004, the Senior Minister, MOEYS presented a progress report on the achievement of the sector performance targets in FY2003 and sector performance indicators and targets for FY2004. The Senior Minister also presented a companion report on sector financial performance, indicating that PAP 2003 budget execution had

Same as section 4.a, v, vi, and vii above condition for the second tranche

reached 100% by July 2004. The Government has experienced short-term difficulties in release of cash at both provincial and central levels, due in part to unforeseen revenue shortfalls and fiscal shocks (e.g., avian flu, SARS). Despite these difficulties, PAP disbursement for FY2003 has reached over KR90 billion for operational programs, compared to only KR10 billion FY2001.

4c. Improve productivity of education service personnel vii) The Government will ensure satisfactory compliance of the education service rationalization plan and performance targets, as agreed with ADB, including the following for FY2003: - redeployment of administrative positions into teaching positions with a minimum of 2,000 - transfer of staff from one location to another with a minimum of 3,000.

Partly Complied. In his letter dated 14 September 2004, the Senior Minister, MOEYS submitted a progress report on the Education Service Rationalization Plan covering 2002-03 and 2003-04. The report highlights the significant achievements with broader staff rationalization, including: (i) more efficient staffing ratios, (ii) implementation of revised staffing guidelines, (iii) piloting of staff performance appraisal, and (iv) effective implementation of performance based incentives for key managers and posting allowances for teachers in remote and difficult areas and schools. The report acknowledges that in school year 2003-04, only 336 staff were redeployed in the

- MOEYS issued Guideline No. 1799, dated 7 June 2005, on the establishment of PPMC in POE. - PPMC is functional and used in particular during post allocation for new graduates from teacher-training centers. Same as section 4.c above condition for the second tranche

28 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS manner envisaged. However, over 2,500 newly trained teachers have been deployed to understaffed and remote/difficult schools, replacing attrition or retired staff. For example, the number of teachers in rural/remote schools has increased from 45,500 in 2001-02 to 56,252 in 2003-04. The report highlights unforeseen resettlement constraints and difficulties with timely release of funds at the start of the school year to enable redeployment. The Ministry intends to continue with the existing redeployment strategy, complemented by targeting newly trained teachers to under-staffed, remote/difficult and new schools. The report presents a plan and budget detailing postings of 4,367 newly trained teachers (87% of total) to the schools targeted under the rationalization program for school year 2004/05. MOEYS has established central and provincial personnel management technical committees to plan, implement and monitor the program from 2004 onwards.

IV.OTHER POLICY ACTIONS POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS

1. Increased resource allocation to the education sector 1b. Increase education sector allocation

MEF will provide ADB with written confirmation that the budget for the education sector in FY2002 is consistent with the requirements included in the ESSP.

The confirmation was made during program implementation.

Appendix 1 29

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 2. Increased equitable access to education services 2b. Remove access barriers to basic education for all, especially females and ethnic minorities. MOEYS will prepare, in line with the ESSP, the teacher deployment and teacher incentives implementation plan and budget for FY2002, satisfactory to ADB and consistent with supply and demand projections to be part of the education service rationalization plan.

Same as section 4c above condition for the second tranche.

MOEYS will prepare an implementation report of female and ethnic minority participation plan of FY2003, and on the basis of discussions with ADB, will make appropriate modifications to the plan for FY2004.

Implementation plan was prepared by MOEYS, assisted by ADB and UNICEF consultants and in consultation with MOWVA. Plan was endorsed by MOWVA Minister and was consistent with the MOEYS ESSP 2002-2006. Same as section 2.b condition for second tranche.

2c. Provide targeted assistance for poor students in grades 4–12

MOEYS will approve the implementation plan and budget for FY2002 for merit-driven targeted assistance to poor children, including criteria for poverty-indexed targeting, allocation, and institutional arrangements, prepared in line with the ESSP. MOEYS will include financing for the incentive plan in its capital or recurrent budget for FY2002.

The incentive mechanism to attract education personnel to difficult, remote, and ethnic minority areas was implemented.

MOEYS will prepare a report, satisfactory to ADB, detailing the disbursement for FY2002, and results related to the implementation of the merit-driven targeted assistance plan for poor children.

Completed and sent to ADB as part of second tranche approval.

MEF will ensure that the allocation to provide merit-driven targeted assistance to poor children, based on the approved plan, is included in the budget for

Completed and sent to ADB as part of second tranche approval.

30 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS FY2003.

MOEYS will prepare a report, satisfactory to ADB, detailing the disbursement for FY2003, and results related to the implementation of the merit-driven targeted assistance plan for poor children. MEF will ensure that the allocation to provide merit-driven targeted assistance to poor children is based on the approved plan, included in the budget for FY2004.

Included in revised ESP and ESSP 2004-2008 by September 2004 Included in MOEYS 2004 budget, including Government support and JFPR and Belgian financing.

2d. Expand public-private partnership MOEYS will approve public-private partnership strategies, satisfactory to ADB, consistent with the approved ESSP for secondary education, technical and vocational education and training, and higher education (i.e., post-basic education), and will define preconditions for such extended public-private partnership in post-basic education.

Broad strategy principles and forward action plan approved in ESSP 2003 and EFA plan 2002–2015. ADB project preparatory TA for the Second ESDP is assisting with more detailed plans and programs.

3. Improved quality and internal efficiency of education 3a. Increase equity and efficiency in provision for pre-service and in-service teacher development

MOEYS will approve an implementation plan and budget for FY2002 for teacher development consistent with the ESSP and with MOEYS supply and demand projections, incorporating multigrade methodologies in pre-service and in-service teacher development programs.

Action plans for implementing multigrade teaching and other strategies for border, remote, and ethnic minority areas were carried out.17 - The multigrade and integrated teaching methodologies were incorporated in the pre-service and in-service teacher training curriculum, following the adoption of the new curriculum policy in 2005.18

17 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3.

Appendix 1 31

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS - The incentive mechanism to attract

education personnel to difficult, remote, and ethnic minority areas was implemented.19

MOEYS will modify the implementation plan and FY2004 budget based on its review of progress on deployment and multigrade training initiatives.

Approved in May 2004 as part of revised ESP.

3b. Strengthen school and student performance assessment systems

MOEYS will approve an action plan, satisfactory to ADB, defining and assessing minimum standards of student performance in grades 2, 4, and 6 consistent with the approved ESSP

Pilot programs were completed in 2003-2004 with support from the World Bank’s EQIP.

3c. Maintain sustainable supply of instructional materials

MOEYS will approve an implementation plan and budget for FY2003-2005, satisfactory to ADB, which will sustain the supply of core instructional materials at agreed student:book ratios.

The 5-year action plan and budget allocation was approved as part of the ESSP 2002-2006. Implementation difficulties arose from delays in cash release. MOEYS and MEF set up a group to resolve issues in 2004.

MOEYS will implement the approved plan and budget for FY2002 and provide to ADB an implementation report including information on financing, production, and distribution.

The implementation report was included in the sector performance reports of 2003 as part of PAP 7 instructional materials progress report. The plan was modified in early 2004 to promote the decentralization of textbook financial management.

MOEYS will implement the approved plan and budget for FY2003 and provide to ADB an implementation report including information on financing, production and distribution.

The current plan is under review, and modifications will be included in the revised ESP as discussed during the MTR in April 2004.

4. Enhanced management and deconcentration of education services

18 Tan Lyhourng, TTD head office. 19 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 3.

32 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS 4b. Improve sector performance monitoring system

MOEYS will prepare a set of outcome and output indicators derived from the education PAP and capital investment priority program

- Sector performance indicators were designed and included in the ESP and ESSP 2006-2010. - The MTR of the ESP and ESSP 2006-2010 in 2008 revised and proposed new indicators for the next ESP and ESSP.

4e. Improve education sector effective disbursement and audit

MOEYS, in consultation with relevant line ministries, will specify arrangements for facility implementation at the provincial level. MOEYS will discuss with funding agencies the necessary capacity building inputs for PAP planning and management along with necessary capacity building in institutional development for sector management, as identified in the ESSP.

- A handbook on school facility planning and management was developed by the team leader of the Second ESDP.20 - A resource allocation formula was developed for investment in the provinces based on demand for schools. It is used in the distribution of new facilities.21 - Under the ESDP, 490 classrooms were built in 125 incomplete schools.22 - MOEYS has conducted training programs on the foundations of accounting for provincial and municipal accounting officers and issued a guiding principle on project-based budgeting for those who use the FMIS. There were meetings to guide all institutional officers on mechanisms, expenditure procedures, budget liquidation, budget flow, and the project-based budgeting reporting system.23 - MOEYS issued Guideline No. 480 on 5 February 2008 on the functions and duties, preparation of documents, and legislative instruments for institutions involved in managing and using project-based

20 Dr. Sri Mathe. 21 Dr. Sri Mathe. 22 Dr. Sri Mathe. 23 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 4.

Appendix 1 33

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS

budgeting at the center and in provinces and municipalities. 24

MEF, through EFMC, will approve disbursement mechanisms, performance monitoring modalities, financial report, financial compliance auditing systems.

Accounting and audit guidelines were issued in early 2003. Sample audits were completed in 2004, and the MEF PAP cash management task force was established in late 2003 to improve disbursement. An IT-

based provincial financial management information system was set up in 2003.

The Government will ensure that the education PAP for 2002 achieves 90% disbursement by the end of FY2002.

Compliance was achieved with a time overrun into FY2003, as agreed between MEF and ADB.

MOEYS will submit to ADB a financial report on PAP disbursement, and a technical report on progress of PAP-funded activities.

Submitted in late 2003 as part of the approval process for second tranche

The Government will ensure that the education PAP for 2003 achieves 90% disbursement by the end of FY2003

As agreed with ADB, an MEF task force was established with the target of compliance by the end of May 2004.

MOEYS will provide ADB with its internal audit report for FY2003 for PAP and school facilities.

The sample audit report was completed in early 2004. The school facilities audit plan is a Loan 1865:CAM activity.

4f. Develop effective education governance systems

MOEYS will approve an information, education and communication strategy on the education reforms, satisfactory to ADB.

- An annual IEC work plan was prepared in early 2003 and implemented with UNICEF support, including an annual enrolment campaign in August 2003. The new IEC and ICT strategy paper was prepared for ESP revision in April 2004.

- The policy on ICT was endorsed in 2005, including its action plans.

24 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 4.

34 Appendix 1

POLICY AREA STATUS OF COMPLIANCE ASSESSMENT OF PROGRESS - Central and decentralized staff were

oriented on program budgeting and trained on the FMIS.

MOEYS will carry out a progress review of the information, education and communication strategy and program for FY2003

- A case study of IEC strategy was prepared in November 2003 as part of ADB’s results-based management program. - The policy and strategy on ICT in education in Cambodia was endorsed in January 2005. It is a medium-term policy for 2004-2010. The master plan on the use of ICT in education was being prepared in 2008.25

ADB = Asian Development Bank, CAR = Council on Administration Reform, CESSP = Cambodia Education Strategic Support Project, CMC = cash management committee, DOE = Department of Education, EFA = education for all, EFMC = Education Financial Management Committee, EMIS = education management information system, EQIP = Education Quality Improvement Project, ESDP = Education Sector Development Project, ESP = education strategic plan, ESSP = Education Sector Support Program, FMIS = financial management information system, FY = fiscal year, HRMIS = human resource management information system, ICT = information and communication technology, IEC = information, education, and communication, IT = information technology, JFPR = Japan Fund for Poverty Reduction, KR = Cambodian riel, MEF = Ministry of Economy and Finance, MOEYS = Ministry of Education Youth and Sport, MOWVA = Ministry of Women’s and Veteran’s Affairs, MTR = midterm review, NGO = nongovernment organization, PAP = priority action program, PDH = publishing and distributing house, POE = provincial office of education, PPMC = provincial personnel management committee, PRD = Pedagogical Research Department, SARS = severe acute respiratory syndrome, SIDA = Swedish International Development Cooperation Agency, SY = school year, TA = technical assistance, UNICEF = United Nations Children’s Fund.

25 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of

Cambodia, Phnom Penh, p. 9.

Appendix 2 35

PROGRAM FRAMEWORK

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

1. Development Goal/ Impact Higher educational attainment among new entrants to the workforce

• Universal access to and completion of basic education by 2010

• Demographic

projections and EMIS data for 6-year-old cohort.

• Net enrolment ratio in

primary school was 93.3% in 2007-2008, and net enrolment ratio in lower secondary school was 34.8% in 2007-2008.1

• Adult literacy improved by 50%, especially for women, by 2015

• In 2000, the adult literacy rate was 67.8%.2 By 2006, it had increased to 75.6%.3

• The female adult literacy rate was 57.7% in 2000.4 By 2005, it had increased to 64.1%.5

• Net enrolment at grade 1 increased from 78% in 2000 to 90% by 2010

• Net admission rate was 82.6% in 2005-2006, 85.7% in 2006-2007, and 89.5% in 2007-2008.6

• Transition rate to lower secondary school increased from 77% in 2000 to 90% in 2006

• The transition rate of students to lower secondary school increased from 77.3% in 2000/2001 to 81.9% in 2004/2005 but declined to 78.7% in 2006/2007.7

2. Objective/Outcome

Increased access to educational services of improved quality

Increased allocation to the education sector • Increase in sector

allocation of recurrent budget from 15.7% in 2001 to 19.5% in 2004

• Annual recurrent

expenditure by MEF

• The education sector share

of the Government recurrent budget increased from 13.9% in 2000 to 18.7% in 2004.8

• Increase in education budget outturn from 90% in 2000 to 95% in 2006.

• Annual financial reports

• The education budget outturn rose from 90% in 2000 to 95% in 2006.9

1 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 5. 2 http://hdr.undp.org/en/media/HDR_2002_EN_Complete.pdf?bcsi_scan_B90AE85AF6AB15C6=0&bcsi_scan_filename=

HDR_2002_EN_Complete.pdf 3 http://hdrstats.undp.org/2008/countries/country_fact_sheets/cty_fs_KHM.html 4 http://hdr.undp.org/en/media/HDR_2002_EN_Complete.pdf?bcsi_scan_B90AE85AF6AB15C6=0&bcsi_scan_filename=

HDR_2002_EN_Complete.pdf 5 http://hdrstats.undp.org/indicators/272.html 6 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 38. 7 Department of Planning (2007) Education Statistics and Indicators, 2006/07, Table 10, Government of Cambodia,

Phnom Penh. 8 H.E. Nath Bunroeun and Richard Bridle (2009) Enhancing Aid Effectiveness through Education SWAp in Cambodia,

Presentation to Fast Track Initiative Partnership Meeting, Copenhagen, slide 5. 9 Sok Sohema, deputy director of the Department of Finance, MOEYS.

36 Appendix 2

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

Improved access • Increase in

representation in grades 1–9 by the poorest quintile from 5% in 2001 to 10% in 2006

• Demographic

projections and EMIS data

• Indicator not monitored

• Increased female share of total enrolment in lower secondary school from 30% in 2000 to 40% in 2006

• Demographic projections and EMIS data

• In 2006-2007, the female share of total enrolment in lower secondary school was 45.6%.10

• Increase in gross enrolment in grades 1–9 in remote and ethnic minority areas from 46% in 2000 to 55% in 2006

• Demographic projections and EMIS data

• In 2006-2007, the gross enrolment ratio in primary schools in remote areas was 121.9% and in lower secondary 24.6%.11

• Increased access to post-secondary education for residents of non-urban areas from 10% to 30% between 2001 and 2006, including public and private provision

• EMIS and household survey data

• Indicator not monitored

Improved quality and internal efficiency

• Increase in output of

trained teachers for primary and secondary schools from 4,000 per annum in 2000 to 5,500 per annum in 2006.

• EMIS, TTD, and FOP reports

• The number of graduates

annually from TTCs fell from 4,000 in 2000 to 2,857 in 2006.12

• Access ratio to core textbooks for grades 1–9 at 1:1, and for grades 10–12 at 1:2, maintained between 2001 and 2006

• DGE and PDH reports

• The unweighted average for the number of textbooks per 100 students in grades 1–6, averaged across four subjects, fell from 108.5 in 2000-2001 to 72.3 in 2005-2006 for grades 1–6.13

• The textbook access ratio

10 Department of Planning (2007) Education Statistics and Indicators, 2006/07, Table 11, Government of Cambodia,

Phnom Penh. 11 Department of Planning (2007) Education Statistics and Indicators, 2006/07, Table 11, Government of Cambodia,

Phnom Penh. 12 Teacher Training Department of MOEYS, 2008. 13 National Education for All Committee (2007) National EFA Mid-Decade Assessment Report 2005, UNICEF, p. 196.

Appendix 2 37

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

for lower secondary students was not monitored.

• 50% of 2001 editions of core textbooks republished with improvements by 2006

• EMIS • Indicator not monitored

• Net survival rate increased for grade 1–6 from 45% in 1999 to 75% by 2006

• EMIS • The survival rate for grades 1–6 was 52.5% in 2006-2007.14

• Repetition rates for

grades 1–3 reduced from 30% in 1999 to 15% in 2005

• EMIS • In 2005-2006, the repetition rate for grades 1–3 combined was 17.7%. The repetition rate for grade 1 was 23.2%, grade 2 was 15.5%, and grade 3 was 12.9%.15

• Increased daily

attendance for grades 1–9 from an estimated 50% in 2001 to 75% in 2006

• EMIS • Indicator not monitored

• Increased rate of employer satisfaction with employers for graduates from TVET and higher education institutions, reaching 50% by 2006.

• Sample employers surveys in selected institutions and programs

• Indicator not monitored

Enhanced management and devolution of education services • Increased devolution

of responsibility for delivering and monitoring selected education services

• Legislative and

regulatory frameworks in 2001 and 2006

• The Education Law was

promulgated by the Royal Kram on 8 December 2007. MOEYS is preparing action plans to improve other legislative instruments.16

• MOEYS has drafted a strategic plan for decentralizing the education sector that awaits endorsement under the Organic Law.17

14 Department of Planning (2008) Education Statistics and Indicators, 2007/08, Table 25, Government of Cambodia,

Phnom Penh. 15 Calculated using data from Department of Planning (2006) Education Statistics and Indicators, 2005/06, Table 13,

Government of Cambodia, Phnom Penh. 16 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4. 17 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4.

38 Appendix 2

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

• Increase in facility program implementation by POEs from no provinces in 2001 to 12 provinces in 2006

• Reports of all facility implementation units

• Indicator not monitored

• Increased operational autonomy for TTCs, TVET, and higher -education institutions, 100% of which having their own annual operating budgets by 2004

• Annual reports by Directorate of Higher Education and TVET

• A decentralized system of operational budgets to over 8,628 schools and 24 teacher-training colleges has been introduced.18

• By 2005-2006, 194 budget management centers were created, delegating authority to managers closest to students, parents, teachers, and communities.19

• Increased autonomy for the NTB to manage training funds for private and public TVET providers through an annual National Training Fund operating budget from 2002.

• Annual reports by Directorate of Higher Education and TVET

• The NTB has not been provided with an annual operating budget.

Program Components/Outputs 1. Improved allocation to the education sector Sector financing framework reformed

• Joint MEF and MOEYS financial management mechanism operational and sustained through late 2006

• Minutes of meeting

• EFMC was established in compliance of the conditionality for the release of the first tranche under the program. This was replaced by CMC, which is used as a mechanism to determine program priorities. CMC is chaired by the secretary of state of MEF.

• Sector share of

recurrent national budget 17.5% in 2002, 18.5% in 2003, 19.5% in 2004

• National budget

• The education sector share of the government recurrent budget was 18.4% in 2002, 17.1% and 18.7% in 2004.20

• School and institution operating budgets increased and sustained

• National budget

• The PAP share of total education budget rose from 5.5% in 2000-2001 to 27.9% in 2004-2005.21

Sector efficiency improved

• Allocation of MOEYS personnel to

• Personnel management

• The non-teaching staff share of the total education

18 www.ceefoundation.org/index_files/kolpheng.pdf 19 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 40. 20 H.E. Nath Bunroeun and Richard Bridle (2009) Enhancing Aid Effectiveness through Education SWAp in Cambodia,

Presentation to Fast Track Initiative Partnership Meeting, Copenhagen, slide 5. 21 MOEYS (2005) Education Strategic Plan 2006-2010, Government of Cambodia, Phnom Penh, p. 7.

Appendix 2 39

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

instructional positions increased from 78% in 2000 to 85% by 2006.

information system

workforce fell from 18% in 2000-200122 to 15% in 2005-2006.23

• Community’s role defined in financing, governance, and performance monitoring to improve quality

• Records of MOEYS legislative and regulatory policies and actions on community participation in public education

• The draft strategic plan on devolution policy was approved as part of the process of developing the Organic Law.

• Sector performance monitoring system enhanced

• MOEYS and funding agencies’ sector review mechanisms established and operational annually between 2001 and 2006

• Annual reviews of the ESP and the ESSP undertaken.

• Performance audit system enhanced

• New audit regulations agreed

• Functions of the Internal Audit Department strengthened, and sample audits for provincial, district, and school BMCs conducted.

• DOE and POE performance assessment conducted, and report being compiled.

• Budget use by the Internal Audit Department increased to KR258 million in 2008.24

• 42% of BMCs underwent annual internal audits in 2006.25

• Budget management

centers are all fully operational by 2005

• ESSP and project reports

• The number of BMCs in operation increased from 64 in 2000-2001 to 194 in 2004-2005.26

• By 2005-2006, 40% of BMCs had trained accountancy staff. By 2006-2007, 100% had trained accountancy staff.27

22 MOEYS (2005) Education Strategic Plan 2006-2010, Government of Cambodia, Phnom Penh, p. 7. 23 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 40. 24 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 18. 25 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 56. 26 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 40. 27 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program

2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 40.

40 Appendix 2

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

Government, funding agency, NGO partnerships enhanced, including consultative mechanisms and rolling program review processes

• MOEYS and funding agencies annual reviews held, 2002-2006

• MOEYS and ESSP progress and annual reports

• Indicator not monitored

2. Increased access Financing for increased equitable access

• Incentive programs

for basic education introduced for poor children, especially for poor girls, and children from disadvantaged areas from 2002.

• Records of MOEYS

legislative, regulatory, and targeting policies and actions

• PAP 12 program funded

from 2003-2004. ln 2007-2008, 25,872 students in lower secondary school received PAP 12 and JFPR scholarships. This was up from 13,938 in 2003-2004 and 18,103 in 2004-2005.28

• Private sector participation at all education levels expanded from 2002

• JFPR and World Food Programme reports • Indicator not monitored

• Incentives provision to ensure adequate teacher supply to disadvantaged areas from 2002

• MOEYS and MEF reports

• Indicator not monitored

• Facility investment targeting policies developed to ensure increased provision to poor and disadvantaged areas from 2002

• MOEYS and DMPS reports

• Resource allocation formula developed for investment in the provinces based on demand for schools. This formula is used in the distribution of new facilities.29

Provision of facilities • Expanded facilities in

120 selected incomplete schools in rural, remote, and ethnic minority areas to enable delivery of 6 years of schooling by 2006

• Progress reports • 490 classrooms built in 125 incomplete primary schools, 37 classrooms in 8 incomplete lower secondary schools, and 89 classrooms in 17 incomplete upper secondary schools.30

• Provision of 110 primary schools to deliver 6 years of schooling through multigrade strategies in unserved remote villages, including

• Progress reports • 70 new primary schools comprising 273 classrooms built in villages without primary schools.31

28 Scholarship Office, DGE. 29 Dr. Sri Mathe. 30 Dr. Sri Mathe. 31 Dr. Sri Mathe.

Appendix 2 41

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

ethnic minority areas, by 2006

• Provision of 1,400 additional classrooms with priority given to grades 1–6 in underserved areas by 2006

• Progress reports • 655 additional classrooms built in 149 overcrowded primary schools, 175 classrooms in 36 overcrowded secondary schools, and 627 classrooms in 126 new lower secondary schools.32

• Provision of 100 units of teacher-incentive housing in remote and ethnic minority areas by 2006

• Progress reports • Under ESDP, 101 teacher quarters provided in 23 provinces and municipalities in Cambodia.33

• Improvement of science and technology learning and teaching environment and dormitories in selected TTCs

• Progress reports • Provision of improved science and IT training facilities in 14 teacher training and resource centers in 14 provinces.34

• Improved facilities and equipment in 8 existing provincial training centers and 2 new provincial training centers

• Progress reports • Additional classroom and workshop facilities provided in 4 existing provincial training centers, and 4 new provincial training centers established, with provision of classroom and workshop blocks as well as equipment.35

3. Improved quality and internal efficiency

General curriculum reformed, and related textbook publication plan implemented, including multigrade teaching reforms

• Integrated plan for the reform of primary and secondary education and teacher education curricula and related publication program of new instructional materials, including modifications for ethnic minority areas, by 2002.

• MOEYS and ESDP reports

• 33 new editions of textbooks published by 2006.

• PDH reports

• PDH republished the old textbooks with improvements and corrections. Regarding

32 Dr. Sri Mathe. 33 Dr. Sri Mathe. 34 Dr. Sri Mathe. 35 Dr. Sri Mathe.

42 Appendix 2

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

textbooks for the new curriculum, only grades 1 and 10 were published in 2006 for use in 2007. PDH has conducted surveys on the use of textbooks.36

• 10 new editions of teacher training textbooks published by end 2003

• Progress reports

• Teacher training textbooks were published by TTD with support from UNICEF.37

Improved financing and increased internal efficiency measures for quality enhancement

• Action plan for minimum standards of student performance in grades 2, 4, and 6 approved and piloted in grades 2 and 4 by 2004

• MOEYS standards and policy

• Availability of core instructional materials at agreed ratio sustained through recurrent budget

• Sample surveys on textbook availability

• Indicator not monitored

4. Enhanced management and deconcentration of services

Reformed policy and regulatory framework established for devolving sector financial and technical management and performance monitoring, including arrangements for facility and scholarships implementation

• Strategic framework for devolved education service delivery and monitoring established by 2002

• Provincial and district

education services restructured to provide effective PAP disbursement by end 2002

• MOEYS and ESDP reports

• Midterm review • Research findings

• A survey of devolution was done in 2006, and the draft strategic plan on devolution policy awaits approval under the Organic Law.38

Central and provincial management systems strengthened in technical and financial planning, program management, and monitoring, including for PAP implementation

• Capacity-building program for devolved planning and management covering all provinces and districts in progress in 2002

• Policy analysis and dialogue process

• MOEYS has conducted training programs on the foundations of accounting for provincial and municipal accounting officers and issued a guiding principle on project-based budgeting for those who use the FMIS. There were meetings to guide all institutional officers on mechanisms, expenditure procedures, budget

36 Sok Rithy, deputy general director of PDH. 37 Sok Rithy, deputy general director of PDH. 38 The Organic Law was promulgated.

Appendix 2 43

Design Summary Targets/Performance Indicators

Monitoring Mechanisms Achievements

liquidation, budget flow, and the project-based budgeting reporting system.39

• The Budget Strategic Plan 2009-2011 was prepared and submitted to MEF, and central and decentralized staff were oriented on program budgeting and trained on the FMIS.

• MOEYS issued Guideline No. 480 on 5 February 2008 on the functions and duties, preparation of documents, and legislative instruments for institutions involved in managing and using project-based budgeting at the center and in provinces and municipalities.40

BMC = budget management center, CMC = cash management committee, DGE = Directorate General for Education, DMPS = Department of Materials and State Property, DOE = Department of Education, EFA = education for all, EFMC = education financial management committee, EMIS = education management information system, ESDP = Education Sector Development Program, ESP = education strategic plan, ESSP = Education Sector Support Program, FMIS = Financial Management Information System, FOP = Faculty of Pedagogy, JFPR = Japan Fund for Poverty Reduction, MEF = Ministry of Economy and Finance, MOEYS = Ministry of Education, Youth and Sport, MTR = midterm review, NGO = nongovernment organization, NTB = National Training Board, PAP = priority action plan, PDH = publishing distribution house, SIDA = Swedish International Development Cooperation Agency, SWAp = Sector Wide Approach, TTC = teacher training college, TTD = Teacher Training Department, TVET = technical and vocational education and training, UNICEF = United Nations Children’s Fund.

39 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4.

40 MOEYS (2008) Mid-Term Review Report of the Education Strategic Plan and Education Sector Support Program 2006-2010 Implementation, Government of Cambodia, Phnom Penh, p. 4.

44 Appendix 3

COMPARISON OF APPRAISAL AND ACTUAL PROJECT COST

Table A3: Cost Estimates and Financing Plan at Appraisal and Actual

($ million)

Appraisal Estimates Actual ADB ADB Component

Foreign Exchange

Local Currency Total

Gov’t Local

Total Local

Total Project Cost

Foreign Exchange

Local Currency Total

Gov’t Local

Total Local

Total Project Cost

A. Base Costs 1. Equitable Access: Education Facilities

a. Facilities Civil Works, Furniture, and Equipmenta 5.49 8.45 13.94 2.76 11.21 16.70 6.17 9.36 15.53 2.96 12.32 18.49

b. Project Operation and Supervision Costs 0.00 0.30 0.30 0.28 0.58 0.58 0.00 0.44 0.44 0.44 0.88 0.88

c. Equipment and Vehicles to MOEYS/Provinces 0.37 0.00 0.37 0.06 0.06 0.43 1.27b 0.00 1.27 0.00 0.00 1.27

d. Consultants 0.25 0.07 0.32 0.08 0.15 0.40 0.00 0.08c 0.08 0.00 0.08 0.08 Subtotal (A1) 6.11 8.82 14.93 3.18 12.00 18.11 7.44 9.88 17.32 3.40 13.28 20.72

2. Institutional Strengthening a. Consultants 0.75 0.11 0.86 0.12 0.23 0.98 1.61d 0.00 1.61 0.00 0.00 1.61 b. Workshops and Seminars 0.00 0.05 0.05 0.00 0.05 0.05 0.00 0.09 0.09 0.00 0.09 0.09 c. Equipment and Vehicles 0.03 0.03 0.06 0.04 0.07 0.10 0.00 0.00 0.00 0.00 0.00 0.00

Subtotal (A2) 0.78 0.19 0.97 0.16 0.35 1.13 1.61 0.09 1.70 0.00 0.09 1.70

Subtotal (A) 6.89 9.01 15.90 3.34 12.35 19.24 9.05 9.97 19.02 3.40 13.37 22.42

B. Contingencies 1. Physical Contingenciese 0.44 0.57 1.01 0.86 1.43 1.87 2. Price Contingenciesf 0.17 0.42 0.59 0.30 0.72 0.89

Subtotal (B) 0.61 0.99 1.60 1.16 2.15 2.76

Service Charge 0.50 0.00 0.50 0.00 0.00 0.50 0.58 0.00 0.58 0.00 0.00 0.58

Total 8.00 10.00 18.00 4.50 14.50g 22.50 9.63 9.97 19.60 3.40 13.37 23.00 ADB=Asian Development Bank; MoEYS=Ministry of Education, Youth and Sport.

Note: Figures may not sum precisely because of rounding. a Classroom costs include classroom furniture, one administration room for 6 classrooms, 1 toilet per classroom, and one water tank or bore hole per school. b Combined figures for equipment and vehicles in components 1 and 2. c Figure represents staff allowances to Government counterparts. d Consulting requirements for components 1 and 2 integrated into one contract. e 10% pf base cost, civil works f 2.4% of the foreign exchange costs and 5% of the local currency. g Inclusive of an estimated average 15% taxes and duties on civil works, equipment, vehicles, and remuneration for consultants. Sources: ADB and MoEYS estimates.

Appendix 4 45

YEARLY DISBURSEMENT

Source: Asian Development Bank.

Table A4: Projected and Actual Disbursements ($ million)

Projected Actual Year Quarter Amount Cumulative

Total Quarter Amount Cumulative

Total 2002 I 0.000 0.000 I 0.000 0.000

II 0.300 0.300 II 0.600 0.600 III 0.000 0.300 III 0.207 0.807 IV 0.200 0.500 IV 0.119 0.926

2003 I 0.250 0.750 I 0.741 1.667 II 0.300 1.050 II 1.362 3.029 III 0.300 1.350 III 1.680 4.709 IV 0.350 1.700 IV 1.138 5.847

2004 I 0.800 2.500 I 1.512 7.359 II 1.500 4.000 II 1.155 8.514 III 1.500 5.500 III 2.008 10.522 IV 1.200 6.700 IV 0.737 11.259

2005 I 2.500 9.200 I 0.953 12.212 II 3.000 12.200 II 1.021 13.233 III 1.000 13.200 III 1.124 14.357 IV 0.500 13.700 IV 2.165 16.522

2006 I 0.600 14.300 I 1.069 17.591 II 0.550 14.850 II 0.531 18.122 III 0.500 15.350 III 0.488 18.610 IV 0.250 15.600 IV 0.376 18.986

2007 I 0.250 15.850 I 0.000 18.986 II 0.600 16.450 II 0.451 19.437 III 0.150 16.600 III 0.105 19.542 IV 0.000 16.600 IV 0.068 19.610

Source: Asian Development Bank.

Projected Actual

46 Appendix 5

PROJECT IMPLEMENTATION SCHEDULE

Activities 2001 Year 2002 Year 2003 Year 2004 Year 2005 Year 2006 Year 2007 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Actions before Loan Effectiveness Selection of six pilot districts Approval allocation formula Constitution of the project SC Constitution of the project Task Force Loan Effectiveness Opening and replenishing central imprest account Preparation Phase Budget allocation to provinces Procurement of consultancy services Survey of pilot provinces capacity and unit prices Preparation and approval of IG

Preparation and approval of TH including standard costs and BoQ for each province Design, installation of project MIS Training on MIS

Procurement of vehicles and equipment for needy provinces Constitution of provincial PEFC

Training workshops for PEFC on IG, TH Implementation Phase (project cycle) Opening the provincial accounts Replenishment of provincial account Information of schools and communes Application of schools received Applications ranked and prioritized Field appraisal of prioritized schools Cost estimates of school projects Preparation of provincial subproject Approval of subproject at deconcentrated level Approval of subproject at central level Approval of the first four subproject by ADB Prequalification of contractors Signing of letter of agreement with schools Bidding, award of contracts (primary, secondary) Bidding, award of contracts (TTC)

Appendix 5 47

Activities 2001 Year 2002 Year 2003 Year 2004 Year 2005 Year 2006 Year 2007 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Civil works and/or furniture supply Daily supervision of works

Supervision at key stages, issue certificate of payment Payment to contractors and/or schools

Monitoring progress and quality, continuous evaluation Internal/external audit Financial reports on subprojects to SC Financial reports on subprojects to ADB ADB = Asian Development Bank, BoQ = bill of quantities, IG = implementation guidelines, MIS = management information system, PEFC = provincial education facilities committee, SC = steering committee, TH = technical handbook, TTC = teacher training colleges. Sources: ADB and Ministry of Education, Youth and Sport.

48 Appendix 6

ORGANIZATIONAL CHART MINISTRY OF EDUCATION, YOUTH AND SPORT

Financial Services

Preah Vihear Steung Treng Takeo Svay Rieng Proj. Admin. Officer

Department of Department of Department of Pedagogical Publication and Materials and Finance TVET Research Distribution State Property Department Center

DomesticSihanouk Ville Training Spec.

Siem Reap Tvet Skills Std.School Facilities Engr.

Cleaners

Kampong Speu

Kampong Thom

DomesticDomesticDriver

TVET Staff Dev’t. Specialist Secretary Technical Officers Architect/Engineer

Other Delegated Provinces

DomesticDomestic

Accountant Project Officer

TVET Skills Standard and Quality Assurance

Specialist

Deputy Technical Group Leader

MIS Assistants

Secondary Educ. Curriculum Specialist

Specialist

Publishing Training Specialist

Specialist

Domestic Domestic International DomesticDomestic

MIS Design Specialist Accounting and Audit Specialist

MondulkiriRattanakiri

MEANCHEY

Battambang

Koh kong

Odar Meanchey

PailinPrey Veng

PursatKampong Cham

Chhang

Kampot

Kep

Krarie

MIS OfficerPilot Provinces

Kandal

Chief Accountant

Admin/Procurement Officer

Technical Group Leader

International

Secondary Educ. Curriculum Specialist

International

Publishing Specialist

International

Budget Planning, Acctng and Audit

International

TVET and Institutional Dev’t. Specialist

PEFC Delegated System

Centralized System

International Team Leader

Admin and Procurement Services

Technical Services MIS and BMS Services

Deputy Project Coordinator

Consultants

Deputy National Project Director and Project

Coordinator

PRDC

Steering Committee

Secretary of StateNational Project Director

BMS= business management system, MIS=management information system, PECF= provincial rural development committee, TVET=technical and vocational education and training. Source: Ministry of Education, Youth and Sport.

Appendix 7 49

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Loan 1864-CAM

Covenant

Reference in Loan Agreement

Status of Compliance

Standard Covenants The Borrower shall cause the Program to be carried out with due diligence and efficiency and in conformity with sound administrative, financial and engineering, environmental and educational practices.

Section 4.01 (a)

Complied with.

The Borrower shall make available, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan, for the carrying out of the Program and for the operation and maintenance of the Program facilities.

Section 4.02 Complied with.

The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Program and operation of the Program facilities are conducted and coordinated in accordance with sound administrative policies and procedures.

Section 4.03 Complied with.

The Borrower shall maintain, or cause to be maintained, records and documents adequate to identify the Eligible items financed out the proceeds of the Loan and to record the progress of the Program.

Section 4.04(a) Complied with.

The Borrower shall enable the Bank’s representatives to inspect any relevant records and documents referred to in Section 4.04(a)

Section 4.04(b) Complied with.

The Borrower shall furnish, or cause to be furnished, to the Bank all such reports and information as the Bank shall reasonably request concerning the (i) the Loan, and the expenditures of the proceeds and maintenance thereof; (ii) the goods and services financed out of the proceeds of the Loan; (iii) the Counterpart funds and the use thereof; (iv) the implementation of the Program, including the accomplishment of the targets and carrying out of the actions set out in the Policy Letter; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purposes of the Loan.

Section 4.05(a) Complied with.

Without limiting the generality of the foregoing, the Borrower shall furnish, or cause to be furnished, to the Bank quarterly reports on the carrying out of the actions set in the Policy Letter. Such reports shall be submitted in such form and in such detail and within such form and in such detail and within such a period as the Bank shall reasonably request and shall indicate, among other things, progress made and problems encountered during the quarter review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and

Section 4.05(b) Complied with.

50 Appendix 7

Covenant

Reference in Loan Agreement

Status of Compliance

expected progress during the following quarter. Promptly after the closing date for withdrawals from the Loan Account, but in any event not later than 3 months thereafter or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall prepare and furnish to the Bank a report, in such form and in such detail as the Bank shall reasonably request, on the execution of the Program, including its cost, the performance by the Borrower of its obligations under this LA and the accomplishment of the purposes of the Loan.

Section 4.05(c) Complied with.

It is the mutual intention of the Borrower and the Bank that no external debt owed a creditor other than the Bank shall have any priority over the Loan by way of a lien on the assets of the Borrower. To that end, the Borrower undertakes (i) that, except as the Bank may otherwise agree, if any lien shall be created on any assets of the borrower as security for any external debt, such lien will ipso facto equally and ratable secure the payment of the principal of, and interest charge and any other charge on, the Loan; and (ii) that the Borrower, in creating or permitting the creation of such lien, will make express provision to the effect.

Section 4.06(a) Complied with.

The provisions of paragraph (a) of this Section shall not apply to (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date.

Section 4.06(b) Complied with.

The term “assets of the Borrower” as used in paragraph (a) of this Section includes assets of any administrative subdivision or any agency of the Borrower and assets of any agency of any such administrative subdivision, including NBC and any other institution performing the functions of a central bank for the Borrower.

Section 4.06(c) Complied with.

Sector The Borrower shall (a) ensure that the policies adopted and actions taken as described in the Policy Letter, including the Policy Matrix, prior to the date of this LA continue in effect for the duration of the Program period and subsequently, and (b) promptly adopt the other policies and take the other actions indicated in the Program as specified in the Policy Letter, including the Policy Matrix, and ensure that such policies and actions continue in effect during and after the Program period.

Schedule 5, para. 1 Complied with.

MOEYS, as the Program EA, shall also be responsible for the implementation of all policy measures under the Program.

Schedule 5 para. 2

Forward action plan and revised strategies needed and will be included in ESSP performance report 2003 for joint review in May 2003.

Appendix 7 51

Covenant

Reference in Loan Agreement

Status of Compliance

The Borrower shall ensure that the SC established under the Program and the Project coordinates activities to ensure effective implementation of the Program and Project.

Schedule 5 para. 3

SC established in 2002.

MOEYS shall approve public/private sector partnership strategies, satisfactory to the bank, consistent with ESSP for post-basic education (secondary education, technical and vocational education and training, and higher education), and shall define pre-conditions for such partnerships in post-basic education.

Schedule 5 para. 6(ii)

Partnership governance and financing strategic options prepared in early 2003.

MOEYS shall approve an action plan, satisfactory to the Bank, defining and assessing minimum standards of student performance in grades 2, 4 and 6 consistent with ESSP.

Schedule 5 para. 6(iv)

Pilot programs completed in 2003/04 supported by WB EQIP project. WB BEIC TA, and ADB PPTA 4284 assisted with the preparation of detailed action plan incorporated in the revised ESP and ESSP 2004–2008.

MOEYS shall approve an implementation plan and budget for FYs 2003, 2004 and 2005, satisfactory to the bank, and shall sustain the supply of core instructional materials at student:book ratio of 1:1 for grades 1–9 and 1:2 for grades 10–12.

Schedule 5 para. 6(v)

Implementation Plan and FY2004 budget approved.

MOEYS shall implement the plan for core instructional materials and budget for FY2002 and shall provide the Bank with an implementation report which shall include information on financing, production and distribution.

Schedule 5 para. 6(vi)

Decentralized textbook management action plan prepared and approved in June 2003. Implementation report included in sector performance reports 2003 as part of PAP 7 instructional materials progress report. Textbook availability targets achieved and further measures for program decentralization and cost efficiency were being implemented, consistent with approved annual implementation plans.

MOEYS shall approve an IEC strategy on education reforms, satisfactory to the Bank.

Schedule 5 para. 6(x)

Annual IEC work plan prepared in early 2003 with UNICEF support for implementation, including annual enrolment campaign in August 2003. New IEC/ICT strategy paper prepared for ESP in April 2004.

MOEYS shall approve an implementation plan to pilot private/public partnerships in post-basic education for FY2004.

Schedule 5 para. 7 (iv)

Public private governance and financing strategies need to be agreed first. Partnership financing needs to be feasible in order to protect basic education spending levels.

MOEYS shall implement the plan for core instructional materials and budget for FY2004 and shall provide the Bank with an implementation report which shall include information on financing, production and distribution.

Schedule 5 para. 7(vi)

MOEYS shall carry out a review of the IEC strategy and program for FY2003.

Schedule 5 para. 7(ix)

IEC strategy reviewed as part of annual review.

52 Appendix 7

Covenant

Reference in Loan Agreement

Status of Compliance

Social MOEYS shall provide the Bank with an implementation report on females and ethnic minorities participation plan for FY2003 and based on discussions with the Bank, shall make appropriate modifications to such plan for FY2004.

Included in the revised ESP/ESSP 2004/08.

Financial Prior to submitting its first application to ADB for withdrawal from the Loan Account, the Borrower shall open an account at NBC into which all withdrawals from the Loan Account shall be deposited.

Schedule 3 para. 4(a)

Completed

The Borrower shall ensure that the Counterpart Funds shall be used for the following purposes in order of priority: (i) to finance costs associated with the implementation of the package of education policy reforms under the Program; (ii) to meet part of the Borrower's contributions under Bank-assisted projects; and (iii) to meet part of the Borrower's contributions under Bank-assisted projects in other social sectors.

Schedule 5 para. 5

MOEYS shall prepare a report, satisfactory to the Bank, detailing disbursement for FY2002 and results relating to the implementation of the merit-driven targeted assistance plan for poor children.

Schedule 5 para. 6(i)

Included in the revised ESP/ESSP 2004/08.

MEF shall ensure that the allocation or provide merit-driven targeted assistance to poor children, based on the plan approved by the Borrower and the Bank, is included in the budget for FY2003.

Schedule 5 para. 6(ii)

Government's contribution of US$ 0.75 million for 2003 in approved budget.

MEF, through EFMC, shall approve disbursement mechanisms, performance monitoring modalities, financial reporting, and financial compliance audit systems relating to improvements in disbursement and audit in the education sector.

Schedule 5 para. 6(vii)

Included in EFMC work plan and MOU for early 2003/4 execution.

MEF shall ensure that the education PAP for 2002 achieves 85 percent disbursement at the end of FY2002

Schedule 5 para. 6(viii)

Disbursements in 2003 have reached 100%.

MOEYS shall provide the Bank with a financial report on PAP disbursement and a technical report on the progress of PAP-funded activities.

Schedule 5 para. 6(ix)

Financial report is part of the ESSP performance report of May 2003.

MOEYS shall prepare a report, satisfactory to the Bank, detailing disbursement for FY2003 and results relating to the implementation of the merit-driven targeted assistance plan for poor children.

Schedule 5 para. 7(ii)

Included in the revised ESP/ESSP 2004/08.

MEF shall ensure that the allocation or provide merit-driven targeted assistance to poor children, based on the plan approved by MOEYS, is included in the budget for FY2004.

Schedule 5 para. 7(iii)

Government allocation of KR 5 billion (US$1.25 million) included in forward ESSP financing plan for 2003/06

MOEYS shall modify the implementation plan and budget for FY2004 based on its review of the progress on deployment and multigrade training initiatives

Schedule 5 para. 7(v)

Approved and incorporated in the revised ESP 2004-08 in Sep 2004.

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Reference in Loan Agreement

Status of Compliance

MEF shall ensure that the education PAP for 2003 achieves 90 percent disbursement at the end of FY2003.

Schedule 5 para. 7(vii)

Achieved.

MOEYS shall provide the Bank with its internal audit report for FY2003 on PAP and school facilities

Schedule 5 para. 7(viii)

Sample audit report completed in early 2004. School facilities audit plan part of the Project activities.

MOEYS shall carry out a review of the IEC strategy and program for FY2003.

Schedule 5 para. 7(ix)

Case study of IEC strategy prepared in November 2003.

Others Established, Staffed, and Operating PMU/PIU

Schedule 5 para. 4

A Project Task Force and an SC in charge of coordinating the ESDP implementation established.

Fielding of Consultants Contract was signed on 9 August and consultants commenced services on 2 September 2002.

Throughout the Program implementation period, the Borrower shall submit trade statistics and any other information as the Bank may require from time to time to assess the Borrower's compliance with the formula determining Eligible Imports.

Schedule 3 para. 4(c)

No withdrawals shall be made from the Second Tranche unless the Bank shall be satisfied, after consultation with the Borrower, that (a) sufficient progress has been achieved by the Borrower in carrying out the Program; and in particular, (b) the Borrower has fulfilled the conditions for the release of the Second Tranche.

Schedule 3 para. 5

Documentation submitted February and September 2003. Second tranche released on 10 November 2003.

No withdrawals shall be made from the Third Tranche unless the Bank shall be satisfied, after consultation with the Borrower, that (a) sufficient progress has been achieved by the Borrower in carrying out the Program; and in particular, (b) the Borrower has fulfilled the conditions for the release of the Third Tranche.

Schedule 3 para. 6

The Borrower shall keep the Bank informed of, and the Borrower and the Bank shall from time to time exchange views on, the progress made in carrying out the Program. The Borrower shall keep the Bank informed of policy discussions concerning the program with other international or bilateral agencies as the Bank may reasonably request and shall provide the Bank with the opportunity to comment on any resulting proposals.

Schedule 5 paras. 8 and 9

Process formalized through ADB participation in annual joint ESSP review and monthly meetings between MOEYS and donors, including CARM.

The Borrower and the Bank, together with other donor agencies and NGOs, shall review the implementation of the Project annually and assess the impact of all reforms in the education sector.

Schedule 5 para. 10

ESSP reviews for 2002, 2003 and 2004 completed.

1st Tranche Release Conditions

MEF will provide ADB with written confirmation that the sector recurrent and total recurrent budget expenditure

Section 6.01(b) Confirmation received on 19 February 2002.

54 Appendix 7

Covenant

Reference in Loan Agreement

Status of Compliance

ratio for FY2002 budget presented to the National Assembly represents not less than 17.5 percent of the total recurrent budget expenditures.

MEF will provide ADB with written confirmation that the budget for the education sector is consistent with the requirements included in the ESSP.

Section 6.01(c) Confirmation received on 19 February 2002.

LA, Article VI, Section 6.01(d). MEF, through EFMC, will approve sector performance indicators and targets for FY2002, satisfactory to ADB.

MEF approved the indicators and targets on 19 February 2002.

2nd Tranche Release Conditions

The sector recurrent/total recurrent budget expenditure ratio for FY2003 budget presented to the National Assembly represents not less than 18.5% of the total recurrent budget expenditures.

Complied. The Bank received on 19 February 2003 a letter dated 20 January 2003 from the Senior Minister, MEF, indicating the share of budget allocation for the MOEYS for FY2003 at 18.2% of the total Government expenditure. The Senior Minister further confirmed in his letter that the Government was committed to increase the allocation to the education budget from reserve funds so that the education budget reaches 18.5% of the national budget.

MOEYS in consultation with the MOWVA will prepare an implementation plan for FY2003, FY2004 and FY2005 and budget for 2003, satisfactory to ADB and consistent with the strategies and targets of the Education Sector Support Program (the Government’s program) for increased participation of females and ethnic minorities in schooling and at all levels in the education sector.

Complied. In his letter dated 31 January 2003, the Minister of MOEYS, stated that the implementation plan for increasing participation of females and ethnic minority students in education for the next three years (SY2003-04 to SY2005-06) had been prepared. The plan was prepared by MOEYS assisted by ADB, UNICEF consultants and in consultation with MOWVA and the interministerial gender mainstreaming group. In his letter dated 5 February 2003, the Minister of MOWVA endorsed the plan, which is consistent with the revised Government’s ESSP 2002–2006, and took account of the findings from the joint review of the program by the Government, funding agencies, and nongovernment organizations. Scholarship programs for poor girls, and children in the ethnic minority areas for the next three years (SY2003-04 to SY2005-06) started during the current SY2003-04, funded by Government’s PAP, ADB JFPR 9028, and Belgian Aid.

MOEYS will approve the implementation plan and Complied. On 5 February 2003

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Reference in Loan Agreement

Status of Compliance

budget for FY2003, for participation of females and ethnic minorities in schools.

MOWVA endorsed the implementation plan for increasing participation of females and ethnic minority students in education. The strategy and approaches outlined address the key barriers leading to the exclusion and high drop out levels affecting female and ethnic minority students.

The budget allocation for core instructional materials for FY2003 is no less than required in the approved implementation plan and budget for FY2003.

Complied. The budget for the Government’s program maintains an allocation of KR15 billion for core instructional materials, consistent with the approved implementation plan for FY2003 set out in the joint review of the Government’s program in September 2002.

MOEYS will prepare the education budget for FY2003 based on sector allocations and PAP shares, as agreed with MEF and consistent with the priorities of the Government’s program.

Complied. The approved education budget for FY2003 includes an allocation for the PAP of KR90.6 billion, which is 28% of the overall education budget for 2003, consistent with the performance target agreed.

MEF will approve the annual education budget for FY2003, based on overall sector allocations and PAP volumes, as agreed with MOEYS.

Complied. See Condition 5.

MOEYS will prepare, and MEF shall issue, guidelines, satisfactory to ADB, defining the roles and responsibilities of provincial authorities and communities for financial management, procurement, and reporting procedures.

Complied. On 31 January 2003, MOEYS confirmed approval of the financial monitoring and reporting guidelines for the priority actions programs, including identification of responsibilities at various levels. Specimen financing reporting forms and a specimen financial report for early 2003 were prepared based on the use of agreed procedures. MOEYS has also taken steps to strengthen its capacity to implement these guidelines through technical assistance and workshops supported by ADB, and by UNICEF-SIDA.

The Borrower will achieve the education sector performance targets in FY2002 and approve sector performance indicators and targets for FY2003, as agreed with ADB.

Complied. On 31 January 2003 MOEYS sent a progress report on the achievement of the sector performance targets in FY2002 and sector performance indicators and targets for FY2003. The Government has experienced short-term difficulties in release of cash at both provincial and central levels, due in part to the need to finalize an improved regulatory framework for PAP spending within MOEYS. Since the issuance of the necessary

56 Appendix 7

Covenant

Reference in Loan Agreement

Status of Compliance

decree and sub-decrees, PAP disbursements have accelerated significantly. The strengthened regulatory framework will continue to facilitate improved financial management for future years, including FY2003.

The Borrower will comply with the education service rationalization plan and performance targets, as agreed with ADB, including the following for FY2002: (i) redeployment of administrative positions at least 2,000 into teaching positions, and (ii) transfer of at least 3,000 staff to another location.

Partly Complied. MOEYS has approved the Education Service Efficiency, Performance and Rationalization Plan for 2002/06 and began personnel deployment since April 2003. The plan involves redeploying about 2,300 non-teaching staff and deployment of over 4,300 teachers to currently understaffed schools. As of 30 September 2003 the total number of staffing positions redeployed to underserved schools in 2002–03 was 2,400, including 1,400 direct redeployment and 1,000 deployed positions in response to attrition. During October 2003 it is envisaged that 4,000 out of 5,062 postings will be deployed to remote areas. The number of grade 1-9 teachers in rural/remote schools has increased from 45,500 in 2000–02 to 50,000 in 2002–03, an increase of 4,500 (as confirmed by the ADB TA 3858 consultants). An associated measure is the expansion of incentives for both multigrade and double-shift teaching to optimize the efficiency of staff and facility usage in both small and very large schools. Government commitment is roughly US$3.0 million annually for the next three years (2003–2006) from Government funds.

MOEYS will issue guidelines and regulations, satisfactory to ADB, defining the powers and responsibilities of education authorities and communities in managing and monitoring school performance.

Complied. In December 2002 MOEYS issued the guidelines for program monitoring and school performance monitoring defining the powers, responsibilities, and roles of education authorities and community groups. The ADTA consultants (TA 3858) developed the guidelines and conducted workshops in March and April 2003 Formal school performance assessment and rating commences in October 2003 (TA Progress Report received on 9 October 2003). MOEYS has deferred issuance of a formal Prakas since it is currently finalizing appropriate legislation and regulations that set out roles,

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Reference in Loan Agreement

Status of Compliance

responsibilities, and delegated authorities. In the interim MOEYS has issued the following:(i) a Prakas (Ref. 970/MOEYS/PK,8 October 2003) for school directors performance monitoring; (ii) administrative circular (Ref. 3138, 17 October 2002) on prevention of primary school misconduct, including roles and responsibility at district, commune and school levels; and(iii) administrative circular Ref 1306, 22 May 2003) on institutional arrangements in support of implementation of Circular No. 3138 (as confirmed by the ADB TA 3858 consultants by email of 15 October 2003).

3rd Tranche Release Conditions

The Borrower shall ensure that the sector recurrent/total recurrent budget expenditure ratio for the FY2004 budget presented to the National Assembly represents not less than 19.5% of the total recurrent budget expenditures.

Complied. The Bank received a letter dated 13 September 2004 from the Senior Minister, MEF, indicating the share of budget allocation for the MOEYS for FY2004 at 19.5% of the total Government recurrent expenditure. The Senior Minister further confirmed in his letter that this allocation will be presented as part of recommended budget law FY2004 to the National Assembly as soon as it is convened for this purpose.

MOEYS shall prepare a report, satisfactory to the Bank, on the trials of student performance standards and assessment mechanisms for grades 3 and 6.

Complied. In his letter dated 14 September 2004, the Senior Minister of MOEYS stated that the trials on student performance standards and assessment had been completed in selected primary grades in 2003/04. The Senior Minister further confirmed that the trials findings have been fully incorporated into new institutional arrangements for nationwide student standards assessment that will be implemented as part of the new ESP 2004-2008 that the Senior Minister approved in September 2004.

The Borrower shall ensure that the budget allocation for core instructional materials for FY2004 is no less than required in the approved implementation plan and budget for FY2004.

Complied. In his letter dated 14 September 2004, the Senior Minister of MOEYS submitted the approved budget for the Government’s program with an allocation of KR13 billion for core instructional materials, supplemented by an additional KR43 billion allocation for basic education supplies. The Senior

58 Appendix 7

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Reference in Loan Agreement

Status of Compliance

Minister also submitted a report confirming that the textbook availability targets were achieved and further measures for program decentralization and cost efficiency were being implemented. This is consistent with the approved implementation plan for FY2004.

MOEYS shall prepare the education budget for FY2004 based on sector allocations and PAP shares as agreed with MEF and consistent with the ESSP’s priorities.

Complied. In his letter dated 14 September January 2004, the Senior Minister of MOEYS submitted the approved implementation plan and FY2004 budget.

MEF shall approve the annual education budget for FY2004, based on overall sector allocations and PAP volumes, as agreed with MOEYS.

Complied. The approved education budget for FY2004 includes an allocation for the PAP of KR106.9 billion, which is 29% of the overall education budget for FY2004, consistent with the performance target agreed.

The Borrower shall achieve the education sector performance targets in FY2003 and approve sector performance indicators and targets for FY2004, as agreed with the Bank.

Complied. In his letter dated 14 September 2004, the Senior Minister, MOEYS presented a progress report on the achievement of the sector performance targets in FY2003 and sector performance indicators and targets for FY2004. He also presented a companion report on sector financial performance, indicating that PAP 2003 budget execution had reached 100% by July 2004. Government has experienced short-term difficulties in release of cash at both provincial and central levels, due in part to unforeseen revenue shortfalls and fiscal shocks (e.g., avian flu, SARS). Despite these difficulties, PAP disbursement for FY2003 has reached over KR90 billion for operational programs, compared to only KR10 billion in FY2001.

The Borrower shall comply with the education service rationalization plan and performance targets, as agreed with the Bank, including the following for FY2003: (i) redeployment of administrative positions into teaching positions with a minimum of 2,000; and (ii) transfer of staff from one location to another with a minimum of 3,000.

Partly Complied. In his letter dated 14 September 2004, the Senior Minister, MOEYS submitted a progress report on the Education Service Rationalization Plan covering 2002/03 and 2003/04. The report highlights the significant achievements with broader staff rationalization, including: (i) more efficient staffing ratios,(ii) implementation of revised staffing guidelines, (iii) piloting of staff performance appraisal, and(iv) effective implementation of performance based incentives for

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Reference in Loan Agreement

Status of Compliance

key managers and posting allowances for teachers in remote and difficult areas and schools. The report acknowledges that in school year 2003-2004, only 336 staff were redeployed in the manner envisaged. However, over 2,500 newly trained teachers have been deployed to under-staffed and remote/difficult schools, replacing attrition or retired staff. The number of teachers in rural/remote schools has increased from 45,500 in SY2001-2002 to 56,252 in SY2003-2004. The report highlights unforeseen resettlement constraints and difficulties with timely release of funds at the start of the school year to enable redeployment. The Ministry intends to continue with the existing redeployment strategy, complemented by targeting newly trained teachers to under-staffed, remote/difficult and new schools. The report presents a plan and budget detailing postings of 4,367 newly trained teachers (87% of total) to the schools targeted under the rationalization program for school year 2004-2005. MOEYS has established central and provincial personnel management technical committees to plan, implement and monitor the program from 2004 onwards.

ADB = Asian Development Bank, ADTA = advisory technical assistance, CARM = Cambodia Resident Mission, EA = executing agency, EFMC = education financial management committee, ESDP = education sector development program, ESP = education strategic plan, ESSP = education sector support program, EQIP = Education Quality Improvement Project, FY = fiscal year, IEC = information, education and communication, ICT = information and communication technology, JFPR = Japan Fund for Poverty Reduction, KR = riel, LA = loan agreement, MEF = Ministry of Economy and Finance, MOEYS = Ministry of Education Youth and Sport, MOU = memorandum of agreement, MOWVA = Ministry of Women’s and Veteran’s Affairs, NBC = National Bank of Cambodia, NGO = nongovernmental organization, PAP = property action program, PIU = project implementation unit, PMU = project management unit, PPTA = project preparatory technical assistance, SARS = severe acute respiratory syndrome, SC = steering committee, SIDA = Swedish International Development Cooperation Agency, SY = school year, TA = technical assistance, UNICEF = United Nations Children’s Fund, WB = World Bank.

60 Appendix 7

STATUS OF COMPLIANCE WITH LOAN COVENANTS

LOAN 1865-CAM

Covenants

Reference in the Loan Agreement

Status of Compliance

Standard Covenants The Borrower shall cause the Program to be carried out with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental and educational practices.

Section 4.01 (a)

Complied with.

In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in schedule 6 to this LA.

Section 4.01(b) Complied with.

The Borrower shall make available, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan for the carrying out of the Project and for the operation and maintenance of the Project facilities.

Section 4.02 Complied with.

In the carrying out of the Project, the Borrower shall cause competent and qualified consultants and contractors, acceptable to the Borrower and the Bank, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and Bank.

Section 4.03 (a) Complied with.

The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules, and construction methods acceptable to the Borrower and the Bank. The Borrower shall furnish, or cause to be furnished, to the Bank, promptly after their preparation, such as plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as the Bank shall reasonably request.

Section 4.03 (b) Complied with.

The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.

Section 4.04 Complied with.

The Borrower shall make arrangements satisfactory to ADB for insurance of the Project facilities to such extent and against such risks and in such amounts as shall be consistent with sound practice.

Section 4.05 (a) Complied with.

Without limiting the generality of the foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project and to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation and for such insurance any indemnity shall be payable in a

Section 4.05 (b) Complied with.

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Reference in the Loan Agreement

Status of Compliance

currency freely usable to replace or repair such goods. The Borrower shall maintain, or cause to be maintained records and accounts adequate to identify the goods, services and other items of expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof.

Section 4.06 (a) Complied with.

The Borrower shall (i) maintain or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 12 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditor’s opinion on the use of the Loan proceeds and compliance with the covenants of this LA), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

Section 4.06 (b) Complied with.

The Borrower shall enable ADB, upon ADB’s request, to discuss the Borrower’s financial statements for the Project and its financial affairs related to the Project from time to time with the Borrower’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree.

Section 4.06 (c) Complied with.

The Borrower shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning (i) the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods, services and other items of expenditure financed out of the proceeds of the Loan; (iii) the Project and any subproject; (iv) the administration, operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of Project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower, and the international balance-of-payments position of the Borrower, and (vi) any other matters relating to the purposes of the Loan.

Section 4.07 (a) Complied with.

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Covenants

Reference in the Loan Agreement

Status of Compliance

Without limiting the generality of the foregoing, the Borrower shall furnish, or cause to be furnished, to ADB quarterly reports on the carrying out of the Project and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the quarter under review, steps taken or proposed to be taken to remedy these problems and a proposed program of activities and expected progress during the following quarter.

Section 4.07 (b) Complied with.

Promptly after physical completion of the project, but in any event not later than three (3) months thereafter or such later date as may be agreed for this purpose between the Borrower and ADB, the Borrower shall prepare and furnish to ADB a report, in such form and in such detail as ADB shall reasonably request on the execution and initial operation of the Project, including its cost, the performance by the Borrower of its obligations under this LA and the accomplishment of the purposes of the Loan.

Section 4.07 (c) Complied with.

The Borrower shall enable ADB’s representatives to inspect the Project, the goods financed out of the proceeds of the Loan, and any relevant records and documents.

Section 4.08 Complied with.

The Borrower shall ensure that the Project facilities are operated, maintained and repaired in accordance with sound administrative, financial, engineering, environmental, and maintenance and operational practices.

Section 4.09 Complied with.

It is the mutual intention of the Borrower and ADB that no other external debt owed a creditor other than ADB shall have any priority over the Loan by a way of a lien on the assets of the Borrower. To that end, the Borrower undertakes (i) that except as ADB may otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest charge and any other charge on, the Loan; and (ii) that the Borrower, in creating or permitting the creation of any such lien, will make express provision to that effect.

Section 4.10 (a) Complied with.

Sector The Borrower shall ensure that the SC established under the Program and Project coordinates activities to ensure effective implementation of the program and the Project.

Schedule 6 para. 2

The SC established comprising representatives of MOEYS, MEF, MOI, MOWVA, MRD, MOLMUPC and CAR. Its 1st meeting was held in December 2002.

A number of subprojects, to be agreed by the Borrower and the Bank, shall be implemented according to a central system during the transitional phase where

Schedule 6 para. 4

A Project Task Force was formed by MOEYS on 27 February 2002 to serve as the central implementing

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Covenants

Reference in the Loan Agreement

Status of Compliance

responsibilities over school facilities or education institutions have not yet been deconcentrated at the provincial level. For this purpose, under the central system, DMSP and a Project task force, to be set up by DMSP, shall act as the central implementation agency in provinces where the delegated mechanism has not yet been implemented.

agency in provinces where the delegated mechanism has not been implemented. Several subprojects have been implemented by the Task Force since its creation.

Within 6 months after the effective date, the Borrower shall establish PEFCs for the first pilot provinces where deconcentrated budget management for facilities development will be piloted under the Project (the first 4 pilot provinces).

Schedule 6 para. 5

PEFCs for the pilot provinces of Kandal, Kampot, Kep, and Kratie were established on 19 June 2002, which is about two months from effectivity date. Under the delegated system, PEFCs have both technical and financial roles. Reporting and funds flow system were discussed during the inception mission in February 2002.

During the first year of Project implementation, the Borrower and the Bank shall agree on the date when the delegated system shall be implemented after the deconcentrated mechanisms for education facilities development have been worked out by MOEYS and other concerned agencies.

Schedule 6 para. 6(a)

A strategic framework for deconcentrated education services delivery and monitoring was established in September 2002. MOEYS prepared provincial allocation formula and developed guidelines for provision of school facilities under the delegated system. These were approved by SC and ADB on 19 February and 28 February 2003, respectively. Guidelines were subsequently revised to ensure better quality of school buildings and cost effectiveness prior to the implementation of the 3rd–6th phases, which were approved by the SC on 8 October 2003, 6 April 2004, 17 November 2004 and 19 May 2005.

Under the delegated system, a PEFC shall be established by the Borrower at the provincial level, as part of the existing PRDC. The PEFC shall be the implementing agency at the provincial or municipal level in each province covered by the Project.

Schedule 6 para. 6(b)

PEFCs established in 21 provinces under the provincial government in June 2002. Under the delegated system, PEFCs have both technical and financial roles. Reporting and funds flow system were discussed during the inception mission in February 2002.

The PRDC shall delegate day-to-day management monitoring and accounting responsibilities to the PEFC. The PRDC/PEFC shall be responsible for selection of eligible applicants, supervising ad controlling the quality of works at key stages and disbursing payments to schools, communes or contractors, whichever is applicable. The PRDC/PEFC shall be responsible for receiving and accounting the Project funds for school facilities.

Schedule 6 para. 6(c)

Under the centralized system, PFECs have technical functions only. Reporting and funds flow system vis-à-vis under a delegated system was discussed during the inception mission in February 2002. PEFCs trained to be fully responsible for selection of subprojects, for

64 Appendix 7

Covenants

Reference in the Loan Agreement

Status of Compliance

supervising and quality control of civil works and for payments to contractors. Funds are transferred from Task Force to PEFC accounts. Guidelines for supervision of civil works were prepared and updated, as necessary. Operational expenses were increased to cover more frequent site visits. Severe actions were taken against defaulting contractors/builders.

Each PEFC shall consolidate appraisal reports for the subprojects under the delegated system and submit them to the PRDC for review and approval. The PRDC shall then submit the list of subproject appraisals to the SC for approval.

Schedule 6 para. 6(d)

The PEFCs submit shortlists to the Task Force, and the SC approves the subprojects for implementation. The SC approved the subprojects in the pilot delegated provinces on 26 February 2003.

MOEYS shall approve the list of subprojects under the first 4 pilot provinces within 8 months after the effective date. MOEYS shall submit to the Bank the first 4 subproject appraisal reports (one for each province) for approval. The PRDC concerned shall submit to MOEYS subsequent appraisal reports for approval, and upon such approval, MOEYS shall submit these reports to the Bank for information.

Schedule 6 para. 6(e)

The subprojects for the first pilot provinces were approved by the SC in February 2003 and by ADB on 6 March 2003. Approval date was 11–12 months from the project’s effectivity date of 12 April 2002.

Upon approval of subprojects under the delegated system by the Bank or MOEYS, as applicable, the PEFC concerned shall sign a subproject agreement with representatives of the beneficiary communes and schools concerned. During subproject implementation, the PEFC shall be involved in the supervision of the civil works in association with the provincial authorities.

Schedule 6 para. 6(f)

After approval by SC and ADB, pre-construction briefings are held and PEFCs signed contracts with the school support committees.

Economic During Project implementation, MOEYS shall carry out benefit monitoring and evaluation activities under the Project, as agreed with the Bank. MOEYS shall monitor and evaluate the benefits of the Project after the Project has been completed with a schedule and terms of reference to be agreed between the Borrower and the Bank.

Schedule 6 para. 8

The BME study, is scheduled to be completed at the end of the project. The study covers a before-and-after scenario analysis to determine the impact of the project to the education sector using key indicators. Baseline data were drawn from results of a survey questionnaire, which was developed by the project team and administered to all 74 provinces. Response rate is currently at 80%, and remaining respondents, especially from four provinces (with less than 50% turnout) are being followed-up to close the survey soonest, prepare the summary of findings and conclude the BME study. This study has been complemented by a close monitoring of project

Appendix 7 65

Covenants

Reference in the Loan Agreement

Status of Compliance

activities throughout the implementation phase to ensure full delivery of commitments, and these have been documented in the regular progress reports of the project.

Environment MOEYS shall ensure the location, design, construction and operation of the school facilities to be established under the Project follow the Bank's Environmental Guidelines for Selected Infrastructure Projects.

Schedule 6 para. 7

The school buildings have been constructed in existing school compounds or on plots allocated for schools by the provincial/district/ commune authorities and comply with the relevant environmental guidelines.

Financial The Borrower shall establish immediately after the Effective Date, an imprest account at the Foreign Trade Bank of Cambodia.

Schedule 3 para. 8(a)

Following loan effectivity on 12 April 2002, an imprest account was established at the Foreign Trade Bank of Cambodia on 30 April 2002.

The SC shall determine the allocation of funds to the Provincial Education Facilities Committees after obtaining Bank approval. The provincial allocations shall be based on (i) timeframe; and (ii) allocation formulae, as agreed with the Bank. The Borrower shall ensure that MOEYS uses no less than 60% of the allocated funds for the provinces covered under the Project for basic education facilities.

Schedule 6 para. 6(g)

SC approved the provincial allocation formula for school facilities program and the first year ESDP program on 12 December 2002.

Others MOEYS, as the Project EA, shall be responsible for coordinating the overall implementation of the Project. The DMSP shall be responsible for school facilities and development in charge of (i) overall program, monitoring progress and quality control, and approval of provincial level activities; (ii) capacity building; (iii) financial management, accounting and audit compliance responsibilities as delegated by the SC; (iv) overseeing regularity of procurement; and (v) reporting tot the SC.

Schedule 6 paras. 1 and 3(a)

A Task Force to coordinate the implementation activities was formed on 27 February 2002.

The General Department of Administration and Finance within MOEYS shall oversee DMSP and shall ensure that (i) the Project activities are coordinated with other ongoing school building programs; (ii) duplication of beneficiary schools and operational costs are avoided; and (iii) targeting criteria and unit costs are consistent with ESSP.

Schedule 6 para. 3(b)

The services of consultants shall be utilized in the carrying out of the project, particularly with regard to: (a) facilities development for the equitable access component; (b) technical and vocational education and training for the equitable access component; and (c) budget, planning, accounting and audit (for the institutional strengthening component.

Schedule 5 para. 1

The consultants’ team comprised 13 experts, i.e., 6 international and 7 domestic. Contract signed on 9 August 2002. Consultants commenced services on 1 September 2002, except for the consultants on publishing and budget planning, accounting and auditing who were fielded on 14 October

66 Appendix 7

Covenants

Reference in the Loan Agreement

Status of Compliance

2002. Contract completed in November 2006.

The Borrower and the Bank, together with other donor agencies and with NGOs, shall carry out joint annual sector performance reviews during Project implementation.

Schedule 6 para. 9

The 1st annual sector review was conducted on 2–13 September 2002 with MOEYS, ADB, donor agencies and NGOs. The 2nd annual sector review was conducted on 19–23 May 2003 with MOEYS, ADB, donor agencies and NGOs. An MTR was conducted in November 2003. Final review carried on 1–8 November 2007.

The Borrower and the Bank shall carry out a midterm review during the third year of Project implementation or at any other time as agreed by the parties.

Schedule 6 para. 10

An MTR was held 29 March–6 April 2004, which is the 2nd year of the project’s implementation.

All major contract variations will need ADB's prior approval.

Schedule 4 para. 2

ADB = Asian Development Bank, BME = benefit and monitoring evaluation, CAR = Council for Administrative Reforms, DMSP = Department of Materials and State Property, EA = executing agency, ESDP = education sector development program, ESSP = education sector support program, LA = loan agreement, MEF = Ministry of Economy and Finance, MOEYS = Ministry of Education Youth and Sport, MOI = Ministry of Interior, MOLMUPC = Ministry of Land Management, Urban Planning and Construction, MOWVA = Ministry of Women’s and Veteran’s Affairs, MRD = Ministry of Rural Development, MTR = midterm review, NGO = nongovernmental organization; PEFC = provincial education facilities committee, PRDC = provincial rural development committee; SC = steering committee.

Appendix 8 67

SUMMARY OF CONSULTING SERVICES (person-months)

Position and/or Expertise Appraisal Actual

International School Facilities Specialist 24 31 Budget Planning, Accounting, and Audit Specialist 12 12 Technical and Vocational Education and Training Institutional Development Specialist

9 9

TVET Skills Standards and Quality Assurance Specialist

9 9

Secondary Curriculum Specialista 9 Publishing Specialista 12 Total 54 82

Domestic

Management Information System Design Specialist 18 33 Architect-Engineer 18 38 Accounting and Audit Specialist 24 24 TVET Staff Development Specialist 18 18 TVET Skills Standards Training Specialist 18 18 Secondary Curriculum Training Specialista 12 Publishing Training Specialista 12 School Facilities Engineerb 26.5 Project Administrative Officerb 23.5 Total 96 205

ADB = Asian Development Bank; MEF = Ministry of Economy and Finance; MOEYS = Ministry of Education Youth and Sport; OPCV = Overseas Projects Corporation of Victoria; SKM = Sinclair Knight Merz Pty. Ltd.; TVET = technical and vocation education and training.

a These positions were for the capacity building for quality and efficiency improvement included in the lump-sum contract envisaged at appraisal for curriculum development and materials production, standards development and strengthening of MOEYS capacity for procurement and quality assurance of textbooks, which were integrated into one consulting contract with SKM (formerly OPCV).

b These additional positions were created as requested by MOEYS, endorsed by MEF, and approved by ADB on 30 May 2003.

Sources: ADB and MoEYS.

68 Appendix 9

UPDATED PROCUREMENT PACKAGES AND SCHOOL FACILTIES BUILT BY PROVINCE

Table A9: Major Procurement Packages

At Appraisal At Closing Item

No. Total Cost ($ million) No. Total Cost

($ million) A. Civil Works, Furniture, and Equipment 1. Primary Education Classrooms 735 5.750 1,418 9.078 2. Secondary Education Classrooms 1,063 8.560 893 5.523 3. Teacher Houses and/or Teachers Quarters 100 0.810 101 1.030

4. Teacher Training College Facilities 21 0.810 14 0.996 5. Technical Vocation Education and

Training Facilities 10 0.780 12 0.663

B. Additional Civil Works, Furniture, and Equipment 1. Secondary Education Classrooms 35 0.514 2. Teacher Houses and/or Teachers

Quarters 1 0.016

3. Teacher Training College Facilities 1 0.424 4. Technical Vocational Education and

Training Facilities 1 0.158

C. Vehicles Ministry of Education, Youth and Sports and/or Provinces

1. Motorcycles 25 0.050 25 0.076 2. Utility Vehicles 2 0.044 4 0.060

Total Cost 16.804 18.539 Sources: ADB and MoEYS.