Decentralized Public Service and Financial Management Sector Development Program (Subprogram 2)

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The Decentralized Public Service and Financial Management sector development program is based on a programmatic cluster approach. The program cluster comprises two subprograms enveloped by a medium term results-based framework. The DPSFM has a policy-based loan and a project loan. Subprogram 2 of the cluster approach is structured around seven major outputs: (i) the development and regular update of a gender sensitive policy and regulatory framework for decentralization; (ii) the establishment of institutions for efficient coordination of SNDD policies; (iii) the definition of clear service delivery responsibilities of SNAs; (iv) assignment of efficient tax and non-tax revenue sources to subnational administrations; (v) the implementation of fiscal transfers that ensure comparable levels of service delivery across SNAs; (vi) the development of capacities for efficient decentralized public financial management; and (vii) the design and implementation of accountability mechanisms for SNAs to their constituencies.The project loan linked to subprogram 2 will support establishment and operations of the Sub-national Investment Fund (SNIF). The project will allocate $20 million dollar equivalent to the SNIF, a national government grant mechanism for local investment projects. Of the proposed amount, approximately $8 million will be allocated to financing civil works and equipment for SNAs (of an average project value of around $70,000), and approximately $1 million will be allocated to equipment and consultancy services of the SNIF Secretariat between 2016 and 2018. Consultancy services will include: a) training of SNIF Secretariat and SNAs; b) annual performance assessments of SNAs; c) annual evaluation and audit of investments; d) external audit of SNIF finances; and e) technical backstopping support for the SNIF Secretariat. Eligible SNAs will submit project proposals from a positive list of subsectors for investment decided by the SNIF Board. The SNIF Secretariat will evaluate the proposals and submit for approval of the Board. Eligible SNAs will pass the annual performance assessment against a number of criteria including, without limitation, financial management and procurement capacity.