ROYAL GOVERNMENT OF

National Committee for Sub-National Democratic Development Secretariat (NCDD)

Land Allocation for Social and Economic Development

IDA Credit No. 4441-KH Grant No. H 386-KH

INTERIM FINANCIAL REPORT (IFR)

Fourth Quarter Report as of ended December 31, 2010

Contents

1. Summary of Project Progress

2. Financial Report

2-1 – Project Sources and Uses of Funds by Project Components 2-2– Uses of Funds by Project Activity 2-3 – Project Cash Withdrawals (Disbursements)

3. Project Progress Report

4. Procurement status and Procurement Management Report

A – Procurement Process Monitoring (Goods and Works) B – Procurement Process Monitoring (Consultants’ Services) C – Contract Expenditure Report (Goods and Works) D – Contract Expenditure Report (Consultants’ Services)

5. Issues and Challenges

6. Continuing Activities Implementation Plan

1 1. Summary of Project Progress

International Financial Report (IFR) as part of Progress Report

The attached IFR is prepared for the fourth quarter as of December 31, 2010 of all LASED targeted provinces. The overall of all LASED Financial Management System through the computerized system is in place for accounting record of revenues and expenses at the three LASED target provinces.

The actual total revenues to this fourth quarter has been deposited into LASED designated account with the amount of USD737,314.00 from World Bank at rate of 13.91% reflecting to annual LASED budget. The actual expense to date is amount of USD895,413.07 at the rate of 16.87% reflecting to the budget.

Comments on the IFR (including explanation of major variances)

The Financial Reports summarizes the funds received from the Royal Government of Cambodia and the World Bank. The details the funds disbursed towards project components and to various disbursement categories.

The Project Progress Report details only the key project activities achievement such as Consultant Services, Community Development (Sub-grant and Credit), Training & Workshops, Procurement of Goods, Civil Works and Incremental Operating Cost in order to support for Social land concession at both national and sub-national level.

The progress in implementing the key activities agreed in the annual work plan and budget 2010 have been achieved 8.29% in component A of Commune-Based Social Land Concession; 9.25% in the component B of Community Service and Investment; 15.76% of component C of Sustainable &Transparent Program Development; and about 94.41% in component D for Project Administration.

The Cash Flow Report of three provincial LASED project have shown that the achievement rate of 9.06% in Kratie; 6.99% in Kompong Thom; and 13.22% in Kompong Cham that has been slighly increase if compare to third quarter and last year plan. The rate of LASED national (NCDDS) has reached about 33.22% of the total expenditures.

The above financial reports have been prepared in spreadsheets and attached to form an integral part of these Interim Financial Reports.

2. Financial Reports

2.1 Summary on Sources and Uses of Funds

i) Royal Government Funds (RGF)

As of September 30, 2010 the amount of US$14,876.29 of RGC contribution was carried over from 2009 which is currently deposited current account of LASED Designated Account at the National Bank of Cambodia.

ii) IDA Funds The amount of World Bank replenishment due date is totally USD737,314.00 and outstanding replenishment request in the NCDD-PST/011 for amount of USD502,620.47 has been submitted to the World Bank in Manila, Philippine. As of December 31, 2010, LASED has disbursed for amount of USD895,413.07 and ending bank balance is US$101,624.32

2.2 Summary on use of funds to project components

Component A: Commune Based social Land Concession and Land Allocation Planning

The allocation amount US$601,193.19 for component A in 2010. The amounts of USD49,825.02 has been disbursed for this year which has been achieved 8.29%.

Component B: Rural Development Services and Investment

The current allocation amount for this component B is USD3, 265,559.25 in 2010. The amounts of USD301,944.79 has been disbursed to contractors and suppliers during this year plan, which has been rated about 9.25%. The rate is being reflected to the slow disbursement of rural development activities.

Component C: Sustainable and Transparent SLC Program Development 2

The allocation amount of US$249,464.50 is in component C in 2010. The amounts of USD39,310.88 has been disbursed from designated account. The capacity building rate has been achieved 15.76%.

Component D: Project Administration

The allocation amounts of USD1,190,643.20 for this component in year 2010. There are USD504,332.38 has been disbursed for supporting procurement of goods, incremental operating expenses and training/workshops in which achievement rate 42.36%.

Summary of Expenses towards Project Components by Financier

Annual Fund Components Details To Date Budget Sources Commune Based social Land Concession Component A: 601,193.19 49,825.02 WB/ IDA and Land Allocation Planning

Rural Development Services and Component B: 3,265,559.25 301,944.79 WB/ IDA Investment

Sustainable and Transparent Program Component C: 249,464.50 39,310.88 WB/ IDA Development Component D: Project Administration 1,190,643.20 504,332.38 WB/ IDA Total 5,306,860.14 895,413.07 .

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2.3 Brief narrative on Project Cash Withdrawals (Disbursements)

This Financial Report details the amount disbursed under each disbursement category by method of procurement and by financier as follows:

Summary of Expenses towards Disbursement Categories by Financier

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3. Progress Report and Outputs/Achievement

The information of progress report section is produced annual/quarterly activities based on the components as mentioned in below: Overall achievement (from January to December 2010) of the project against work plan has was in 43 %, where the achievement of Component A: Commune-Based Social Land Concession Planning was 28.44%, the achievement of components B: Rural Development Services and Investment was 38.42%, the achievement of components C: Sustainable and Transparent Program Development was 44.13% and the achievement of component D: Project Administration Management was 55.07%.

3.1. Component A: Commune-Based Social Land Concession Planning

1. Kratie Province:  The 30 day public displays of SLC draft map and land application for poor households in Dar commune were completed and DWG has also completed the recommendation report for identification of private land of the state.  The provincial working group organized the meeting on PLUAC about Land Identification, Classification, and Registration for the private land of state using for social land concession, to approve on the land use planning for Sambok, Changrang, Dar, Thmei and Chambak communes. And the provincial working group has also held the meeting with PLUAC about approval on the TLRs selection criteria, solving the complaint of TLRs application and approval on the result of selction after scoring.  Department of Land management has cooperated DWG, CCs to conduct the site visit to post the boundary markers and spray the pain on the border of land in Sambok, Changrang and Dar communes.  572.37ha in Dar communes of Chetr Borei district has been full registrated with 8 lands titling issued for Social Land Concession (SLC) as the private land of state.  1,015ha in Thmey commune of Chetr Borei district has been declared as the area adjudication for SLC.  1,200ha in Chambak commune of Prek Prasab district has been conducted the primary surveying and hold a meeting with PLUAC and on preparing the documents for no objection from national level. And other 13 communes, equal 12,900ha for 5030 families has been entered in to SLC planning for the project of LASED.  Completed plot demarcation of 364 plots of residential land equal 40.50ha and 510ha for agricultural land and other land use planning for 2nd round SLC in Sambok and Changrang communes.  1000 application forms received from the local poorest families in Sambok and Changrang have been cored by follow the process of selection criteria of LASED PIM. And 367 Target Land Recipients (TLRs) has been selected for lottery the plot number of residential land and agricultural land for 2nd round SLC in Sambok and Changrang communes.  Conducted the public Awareness raising on selection criteria, application processing and public display to the poor households in Dar commune.  Department of agriculture has completed the priminilary soil survey and completed of conducting the agro-eco system in Dar commune.  Forestry Cantonment has been completed the priminilary survey the forest identification and fully completed detail survey and analysis the forest inventory in Dar commune of Chetr Borei district.  Department of Water Resources and Meteodology was completed survey the first step of irrigation study plan in Sambok, Changrang, Dar and Themy communes.  Department of Rural Development was completed survey the under ground water to find the place where can be drilled the well in Sambok, Changrang and Dar communes.  Department of Women Affair was gathered the gender data, analysis and present the result to the commune council in Dar and Thmey communes.

2. :  04 new communes (1) Kaul commune, Prasat Sambo district submitted SLC requested with total land 745 ha for distributing to 366 poor families, 2) Doung commune, Prasat Balangk district 5 submitted SLC request with total land 3,075 ha for distributing to 818 poor families, 3) Samaki commune, Prasat Balangk district, submitted SLC request with total land 756 ha for distributing to 171 poor families. 3) Sambo commune, Prasat sambo district, submitted SLC request with total land 1,000 ha for distributing to 375 poor families) submitted the SLC request to PLUAC.  Provincial Department of Land Management Urban Planning, Cadastre and Construction (PDLMUPCC) organized the provincial meeting, in term to screen SLC requests, participated by 71 person(f 8). The meeting approved the SLC requests of Samaki, Doung commune in Prasat Balangk and Sambo commune in Prasat Sambo districts. Then PDLMUPCC was requested to prepare the mission order to conduct the primary study in the 3 approved communes.  PDLMUPCC led the Provincial, district and commune working groups in total 28 participants including 1 woman to conduct the site visit and primary study at Sambo commune, Prasat Sambo district (financial supported by IP/GOPA-GTZ). During the visit, the team found and solves problems and based on their study they enabled to produce the draft the map of SLC site and submitted the draft report to PLUAC for their approval.  However, H.E provincial governor provided the official approval to Tipou, Krayea and Boeung Lvea communes and permitted to implement the classification of state land, and approved on registration of land in zone2 and zone3 in Tipou commune and also suggested to integrate zone 3 into zone2.  Provincial Department of Agriculture (PDA) under technical support of Ministry of Agriculture, Forestry and Fisheries (MAFF) conducted the study on soil classification and soil property in the social land concession area and completed AEA analysis in Tipou commune within the proper preparation of the report.  Under the financial support from IP/GOPA-GTZ, Forestry Administration completed a survey on potentials of forest in Tipou Commune and the Provincial Department of Women’s Affairs conducted Gender Analyses from 05-27 April 2010 in 11 villages, Tipou Commune, and complied as the book.  Provincial Department of Rural Development (PDRD) conducted a study to identify the appropriate area for digging well and to test water quality in 4 different sites in Tipou commune. In the same period, the Provincial Department of Water Resource and Meteorology cooperated with project working group to conduct the irrigation design in Tipou commune.  PDLMUPCC cooperating with provincial, district and commune working group, (55 persons) conducted premier study on SLC at Samaki and Doung communes, Prasat Balangk district , prepared the draft map and report, and conducted the meetings with the people in zone, posting 29 the boundary markers, solving the problem in SLC, submitted the request for registration of the state private land for SLC, for zone 1 and reviewed the result of study in (zone1 and 2), collected the related information and history of land owners, responding to 60 complaints, conducted the investigation on complaints in SLC of zone2 , completed 30 day of public Display of State Land Registration in Tipou commune before the registration of private land of state and offered the official registration on the requested SCL in Tipou commune, Santuk district as private land of state , event though The SLC requests of Krayea and Boeung Lvea communes of Santuk district were rejected by Forestry Administration.  9,225 persons including 4,730 females, and 371 of them women-headed households applied applications for SLC (in which 95 households were from other communes), and the Public Display of Applications List for 20 days was conducted in 11 villages of Tipo commune. As result, 454 families were selected as potential recipients for SLC. In term to assure to the accountability of the process, the validation of information on application forms was conducted in 11 villages of Tipou commune, participated by 673 persons (351 females). However, 418 families were selected as reserved.  The PDLMUPCC conducted 4 meetings at provincial, district and commune levels participated from relevant stakeholders in term to discuss and approve on preparation of land use planning in zone1 of Tipou commune and allocated some places as protected forestry area, public construction, community, children garden, school, pagoda, health center, market constructions, agriculture and residential lands for land recipients and road access and so on.  The lucky draw for parcel number was organized on 11 November 2010 in Tipou commune for 456 families of recipient (171 f) under the highly chairman of y H.E Im Chun Lim, senior minister and minister of MLMUPC, H.E Sak Setha, secretary of state, the Ministry of Interior 6 and H.E Chhun Chorn, provincial governor, and the second lucky draw for parcel number was organized for 23 absent families presented in the events for lucky draw.

3.2 Progress Report by components B: Rural Development Services and Investment

1. Kratie Province:  Completed the design of 10 km and 5 km of access tracks to residential land of Sambok and Changran and Dar communes was completed in 30% and 4.34 Km of access track to agriculture land in Changran commune were completed in 50%. 900 plots of residential and 600 plots of agriculture lands were demarked.  Provincial and District working groups under the direct technical support from advisors conducted the resettle assessment and compiled the documents and submitted to national level and Bank for non objection.  Provincial Department of Agriculture provided 37 courses of agricultural trainings (Rice production and Rice intensification) participated by 496 people (f281).  Provincial Department of Public Health conducted 07 courses of training on tuberculosis to the target land recipients with total participants of 553 people included 311 females.  Provincial Department of Environment provided 06 courses of training on environmental law with total participants about 294 people included 144 females.  PDLMUP 01 course of training on Land law and SLC policy to commune councils and district officer with total participants about 111 people (f15).  Provincial Department of Woman Affair conducted 02 courses of training on role and responsibility, gender mainstreaming and data collection for commune councils and gender focal person and 168 people included 81females participated.  Distributed 229,050 kg of rice to land recipients in Changran commune, Chet Borei district.

2. Kampong Thom province:  Under the support of TSU of ExCom/PRDC, the PDRD completed access track, placed demarcation poles and feasibility study for package2 of access tracks in July to August, 2010. The length of road to SLC in Tipou commune is 11,040 m.  Under the support of IP/GOPA-GTZ, 32.65 km of rural road and 30.35 km of road access to agricultural land in Zone1 of Tipou commune were done access track.  Plot demarcation was completed for 512 lots of settlement area, 13 lots for public administration and slashed bush for 33,693 m.  IP/GOPA-GTZ provided budget to dig a pond with 12x15x3m, install 10 wells and materials for the started up settlement of 479 target recipient families in zone1 of Tipou commune. Each family received 9 different kinds of materials.  The provincial department of agriculture (PDA) provided training on chicken raising and vegetable cultivation to 303 farmers including 157 females in 11 villages of Tipou commune.  Provincial Department of Health (PDH) conducted trainings on HIV/AIDS and birth delivery other to 328 farmers (f 227) in 4 different villages namely: Sre Sramore, Chouk Romdul, Chhum Thnanh and Tipou.  Distributed 217,410 kg of rice to land recipients in Tipo commune, Suntuk district.

3. :  250 plots of residential land were demarkated and provided to land recipients for resettlement  Compiling the procurement documents for three packages and submitted to national level to seek for non objection from Bank.  Provinical Department of Rural Development conducted the dessimination and education on pure water usage to 289 land recipients (f 114)  Provincial Department of Agriculture delivered the agriculture training and various seed of vegetable to 60 farmers ( 38 f).  Provincial Department of Public Health dessiminated about the infection ’s contamination, prevention of Malaria, participated by 280 persons (f140).

7  Prepared the procurement document of health center construction and submitted to national level in term to seek for the non objection from Banks.  Distributed 118,950 kg of rice to land recipients in Choam Kravean commune, Mimut district.

4. National Working Group  Opened assess track package bidding on the construction of 4,150 meters of assess track in Sambok commune, Chet Borei district, Kratie province, and four companies participated in this bidding on 13 July 2010 at the NCDDS meeting hall.  565,410 kg of rice for IPA agency to make procurement and to supply to the land recipients in the three target provinces.  Bid for the supply of 16 motorbikes to the project implementing agencies at the sub-national and national levels.  Bid for the supply of 17 computers to the project implementing agencies at the sub-national and national levels.  Completed a procurement of removal of unexploded objects within 837 hectares and has prepared contract with CMAC on 20 July 2010 at the price of 437,713 US dollars.  Completed the rice supply contract, which had been made since 2009 at the price of 79,570 US dollars and offset the supply of office equipment at the price of 39,503 US dollars.  opened bidding on construction of 4,150 meter access track in Chambak commune, Chet Borei district, Kratie province, and four companies participated in this bidding  Examined the CONSIA’s survey report of social economic data in the three target provinces and submitted a non-objection proposal to World Bank against the three technical experts as requested by the company. Currently, these people get no objection and they are completing the tasks as defined in the contract.  collaborated with GTZ to support the agricultural activities through providing trainings on preparation of vegetable gardening for 8 times and vegetable seeds to 16 families, trainings on animal raising techniques and providing animal vaccines to 16 families.  Studied the project, prepared bidding documents for 2010 of a 9,000 meter-laterite road connecting from the commune hall to the social concession land, and prepared bidding documents for construction of ring wells and pump wells in 10 places.

3.3 Progress Report by components C: Sustainable and Transparent Program Development

1. Kratie Working Groups

 Provincial Environmental Department conducted the dissemination and training on environmental law participated by 294 persons (f144).  143 Land Recipients (f75) received the dissemination and introduction on the role and responsibility of gender and gender mainstreaming in social land concession.  11 Provincial LASED staffs (02 f) joined the Project Guidance Meeting at Nargar World in .  Provincial Working Group conducted 5 times of the field visit to social land target, participated by 30 persons (02f) in term to review on the progression and provide the recommendation in order to meet the implementation of project to the project procedure within the good collaboration.  Provincial and District working groups, commune councils conducted the follow up to agriculture and environmental dissemination and trainings, to the rice delivery to land recipient and evaluated the wells and the use of water well.  Other wise, the provincial, district working groups, commune councils and concerned line departments conducted the project impact assessment and prevented the illegal encroachment.  Cooperated with GTZ to start trainings on home gardening for 16 times for the households living on the social concession land. 500 households were provided with vegetable seeds. Moreover, the Working Groups also conducted eight trainings on chicken raring and provided vaccines and medicines to treat the animals.

8 2. Kampong Thom province:  Assigned four officers to participate in the training on AutoCAD Design in Banteay Meanchey province.  18 Provincial LASED staffs (02 f) participated in exchanged Experience workshop and future works at Sunway hotel.  PLUAC organized one day meeting under the chairman of HE governor related to: 1) Land registration of Zon 3, 2) Review and decision on the primary land study in Samaki and Daung communes of Prasat Sambo district, participated by 34 persons (01f).

3. Kampong Cham Working Groups  Cooperated with GTZ to start trainings on home gardening for 16 times for the households living on the social concession land. 500 households were provided with vegetable seeds. Moreover, the Working Groups also conducted eight trainings on chicken raring by providing the land recipients with vaccines and medicines for treating ill animals.  Provincial Department of Environment conducted 12 times of field visits to target area in term to provide training to land recipient on the advantages of forest and the preservation of wild animals and then the Provincial Department of Water Resources Management also conducted the survey on design of pond digging for 250 families…  Provincial Department of Woman Affair conducted 12 meetings with gender volunteers and provided 3 day training on gender concept (1th module) to 32 gender volunteers.  Other wise, PDLMUP conducted 09 times of dessimination to land recipients as well as follow up and evaluated on the level of their understanding on the law of land management and policy of land concession. 4. National Working Group  Conducted orientation workshop on Land Allocation for Social and Economic Development with 100 participants, 18 of whom are females, coming from national and sub-national levels, GTZ and World Bank. All participants were provided with technical reviews on project implementation procedures, financial procedures, monitoring and evaluating systems, procurement procedures, 2010 development plans and contract management procedures of annual plans.  Prepared documents on procurement procedures for sub-national level (ExCom) for 7-8 June 2010 and the training handout was no-objection by World Bank.  These documents were sent to the sub-national level procurement working groups through two- day training at NAGA World Hotel in Phnom Penh with 67 participants and 12 of them were females. Fruitfully, participants understand well and they are able to implement this project.  Has inspected and strengthened the procurement work at the sub-national level for two times in three target provinces with 40 participants and 9 of them are females. The Working Group demonstrated the procurement plan and practiced exercises on seven points of forms in the procurement procedure documents.  Provided technical assistance and coordinated with provincial LASED team of the three target provinces as well as advisors to prepare AWPB 2011.

3.4 Progress Report by components D: Project Administration Management

1. National Working Group:  Repared a quideline on 24 March 2010 on contract and sub-contract preparation in consistence with the work-plans and budget without objection from World Bank.  Prepared a quideline on 25 June 2010 on procurement procedures process at the provincial and commune levels for the sub-national working groups to implement in compliance with the defined procurement plan which was no objection from World Bank.  Inspected and accelerated the project implementation for 16 times during the early 6 months of this year by focusing on procurement, finance, contract administration and the selection of locations for new communes and the target land recipients.  Facilitated the process of the mission team of World Bank on 14-25 June 2010 to assess the implementation and to enforce the contracts included into the aide-memoire during the mission in December 2009 to the three target provinces and the national level. Moreover, at the end of the 9 mission, a new aide-memoire was launched for implementing in next months. These documents are attached to the last part of this.  Organized monthly meetings to review the project progress and participated in seeking solutions to challenges occurred within each month, as well as disseminating new techniques or information to implementing officers to ensure the efficient and effective implementation. 2. Working Groups in the three provinces:  Regularly conducted monthly meetings to ensure the smooth, transparent, and effective implementation of the project in conformity with PIM of LASED and without objection from World Bank.  Conducted the meetings to set monthly and trimester action plans in conjunction with technicalsupport from advisor of LASED for allocating the budget to support the departments Line departments to implement the support service in the concession land and to assist in preparing the sub-contracts for 9 provincial Line departments within each province.  Involved in supporting the preparation of contracts and sub-contracts with Line departments by setting annual action plan for 2010 for each Line department to submit to ExCom for signature and approval.

3.5. Procurement Progress Report and Budget (46 %)

Description Amount (US$) Date of contract signed

1. Procurement of Goods  Procurement of computers 12,342.00 11-03-2010

 Motorcycles 19,920.00 10-03-2010

 Mine Clearance 437,713.00 20-07-2010

 Food for work 274,682.00 01-12-2010

2. Procurement of Works Amount (US$) Date of contract signed  Changkrang Access track 74,246.05 01-10-2010

3. Procurement of Services  National Financial Consultant for NCDD 18-08-2010

 National Operational Advisor/GSSLC 17-12-2010

 National Procurement Advisor 05-08-2010

 National Training Coordinator 25-08-2010

 National Infrastructure Advisor 28-12-2010

 International Procurement Expert 01-12-2010

 Administrative Assistant 11-08-2010

 Contract Administrative Advisor 19-08-2010

 Provincial Financial Advisor for Kratie In the progress of preparing EOI Evaluation Report

 Provincial Operational Advisor for Kg. Thom In the process of EOI Announcement

 National GIS Advisors (3) In the progress of preparing the EOI Evaluation Report

 National Environment Advisor (Short-term) Will be proceed soon

 Budget Procurement Plan: $1,790,046.00  Expenses for Procurement of 2010: $ 818,903.00

10 3.6. Issues, Challenges and Solutions (Please raise the issues and challenges appearing during the project‘s implementation and presenting the solutions against issues and challenges.)

 The inception of project implementation was late, as it was required by World Bank to seek no- objection to all the activities to be implemented in each month such as training, visit, dissemination meeting, etc., even thought the project received no-objection to the annual action plan and budget.  The procurement was slow so the construction activities of infrastructure and other services could not be accomplished as planned.  There is no allowance for the project implementing officers.  The project officer’s capacity is still limited  The plan preparation and adoption and other activities are inappropriate to the performing season.  Termination of incentives significantly affected to the work performance of project staffs and overall project implementation.  Lack of cooperation from provincial line department in preparing Sub-Contract and other report.  Lack of support officer from CAU, LAU and TSU for supporting to the provincial line department in implementing the project, documentation and NCDD Database management  Delay in receiving of objection letter from Forest Administration from sub- national  Result of AEA and soil classification so far can not be used as official data for land use planning, as commented by director of Provincial Department of Agriculture. There is a need to have an in- depth study so that data is reliable and useful  The project monthly meeting was not regular conducted.  Delay in preparing the Annual Work Plan and Budget (AWPB) for 2011, while waiting the approval from PLUAC for target zone.

3.7. Continuing Activities Implementation Plan

 Provide training on Result Base Management (RBM) and PIM to project staffs.  Conduct orientation workshop on AWPB 2011 ( Project Started Up workshop 2011)  Follow Annual Work plan and Budget 2011

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