Table of Contents 01 Introduction 1 1.1 Introduction 1 1.2 Concept of Mahinda Chintana and Local Government 1 1.3 Local Govern

Table of Contents

01 Introduction 1

1.1 Introduction 1 1.2 Concept of Mahinda Chintana and Local Government 1 1.3 Local Governments and Regional Development 1 1.4 Overall Local Government Situation in Sri Lanka 2 1.5 Administrative Structure and Strength of LAs 3 1.6 Present Socio-Political and Economic Situation in the North and East 4 1.7 Present Context of Local Governments in North & East 4 1.8 Project Coverage 5

02 Project Designing 7

2.1 Introduction 7 2.2 The Process of Selection of LAs 7 2.3 LA qualifying criteria 8 2.4 The Project Objective 9 2.5 LA Participatory Development Plan 10 2.6 LA Development Plan and Environmental Requirements 14 2.7 Project Implementation Period 16 2.8 Project Costs and Financing Plan 16

03 Project Components 17

3.1 Introduction 17 3.2 Component 1: Infrastructure Service Delivery 17 3.3 Component 2: Institutionalizing Accountabilities 20 3.4 Component 3: Building Capacities 21 3.5 Component 4: Assessments and Evaluation 23 3.6 Component 5: Project Management 24

04 Project Institutional Arrangements 26

4.1 Introduction 26 4.2 National Level Institutional Arrangements 28 4.3 Provincial Level Institutional Arrangements 29 4.4 Regional Level (District) Institutional Arrangements 29 4.5 Divisional Level Institutional Arrangements 30 4.6 Village Level Institutional Arrangements 31 4.7 Provincial, District and Divisional Coordination Committees 31

05 Project Implementation Arrangements 33

5.1 Introduction 33 5.2 National Level Implementation Arrangements 33 5.3 Provincial Level Implementation Arrangements 35 5.4 Regional Level (District) Implementation Arrangements 38 5.5 Divisional Level Implementation Arrangements 40 5.6 Grama Niladari Division Level (village level) Implementation 43

06 Project Cycle 46

6.1 Introduction 46 6.2 Start-up Stage 46 6.3 Pre-Planning Stage 47 6.4 Planning Stage 48 6.5 Implementation Stage 49 6.6 Post Implementation Stage 50

07 Project Appraisal Mechanism 51

7.1 Introduction 51 7.2 Need of Appraisal 51 7.3 Appraising of Sub-Projects 51 7.4 Appraisal Teams, Composition and Tasks 52 7.5 Appraisal Process and Steps 53 7.6 Role of Community Members in Appraisal 53 7.7 Service Standards 54 7.8 Sharing of Appraisal Learnings 55 7.9 Monitoring & Evaluation of Resources & Results 56

08 Project Financing Arrangements 57

8.1 Introduction 57 8.2 Disbursement Arrangements 57 8.3 Financial Management Arrangements 59 8.4 Fund Flow 61 8.5 Financial Reporting 64 8.6 Safeguarding Project Fixed Assets 65 8.7 Internal Audit 65 8.8 External Audit 66 8.9 Supervision Plan 66 8.10 Project Summary Cost 66 8.11 Financial Management Manual 67

09 Procurement Arrangements 69

9.1 Introduction 69 9.2 Procurement Manual 71 9.3 Possible Risks 71 9.4 Corrective Measures 72

10 Monitoring and Evaluation (M&E) 73

10.1 Introduction 73 10.2 Purposes of Monitoring and Evaluation 74 10.3 M&E Strategy 74 10.4 Monitoring and Evaluation of Outcomes/and Results 75 10.5 Project’s Outcomes and Indicators for Success 76 10.6 Participatory Stakeholder Monitoring System 77 10.7 Learning Forums and Experience Sharing 78 10.8 Independent Assessment and Impact Evaluation 78 10.9 Periodic Reviews 78 10.10 Process Monitoring 79

10.11 Key Monitoring Indicators for Progress Monitoring 80 10.12 Monitoring Methods and Tools 80 10.13 Methods for Generating Data 80 10.14 Field Visits 81

11 Communication Arrangements 83

11.1 Introduction 83 11.2 Communication Strategies 83 11.3 Implementation Arrangements for Communication 84 11.4 Communication Operational Plan 85 11.5 Sources of Information for NELSIP 86 11.6 Information Education Communication (IEC) 86

12 Stakeholder Participation 89

12.1 Introduction 89 12.2 Participation of Elected Members of LAs 91 12.3 Participation of Women 92 12.4 Participation of Youth 93 12.5 Participation of School Children 94 12.6 Participation of Community Organization 95 12.7 Participation of Civil Society Organizations 96 12.8 Participation of Religious Leaders 97 12.9 Participation of Regional Level Government Officials 97 12.10 Participation of Village Level Government Officials 98 12.11 People’s Gallery 98

13 Governance and Accountability 100

13.1 Introduction 100 13.2 Overall Governance Framework 100 13.3 Key Risk Areas of the Project 101 13.4 Types of Risks 101 13.5 Risk Mitigation Measures 103 13.6 Social Audit Arrangements 103 13.7 Governance and Accountability Action Plan (GAAP) 104 13.8 Citizen’s Charter 106

14 Conflict and Grievance Redressing Mechanism 108

14.1 Introduction 108 14.2 Arrangement for Resolution of Conflicts and Grievances in Steps-Wise 109 14.3 Project Exit Strategies 110

15 Sustainability of the Local Services 112

15.1 Introduction 112 15.2 Integrated Planning 113 15.3 Community Participation and Management 113 15.4 Technology Selection 114 15.5 Community Contribution 114 15.6 Operation and Maintenance 114

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15.7 Proposed Project Implementation Process 115

16 Capacity Building Arrangements 118

16.1 Introduction 118 16.2 Overall Capacity Building Framework 120 16.3 Awareness Raising for the Political and Administrative Leadership 123 16.4 Capacity Building Assessment and Strategies for Stakeholders 124 16.5 Capacity Building for Village Level 125 16.6 Capacity Building for Divisional Level 127 16.7 Capacity Building Programmes for District Level 131 16.8 Capacity Building Programmes for Provincial Level 133 16.9 Capacity Building Programmes for National Level 135 16.10 Capacity Building of other Stakeholders 136 16.11 Approaches and Methods to Implement the Capacity Building Plan 139 16.12 Implementation Methodology of Capacity Building Frame Work 141

List of Tables

Table 1.1 Distribution of Local Authorities in Sri Lanka 3 Table 2.1 LA Qualifying Criteria 8-9 Table 7.1 Service Standards and Appraisal Process 55 Table 8.1 Overall Project Summary Costs 65 Table 10.1 A guide for Field Visit Analysis 81 Table 11.1 Communication Operational Plan 85 Table 11.2 Overview of Information, Education and Communication Campaign 87-88 Table 15.1 Proposed Implementation Process a Rural Water Scheme 116-117 Table 16.1 Proposed Subjects of Trainings for Stakeholders at Village Level 126-127 Table 16.2 Proposed Subjects of Trainings for Stakeholders at Divisional Level 130 Table 16.3 Proposed Subjects of Trainings for Stakeholders at District Level 133 Table 16.4 Proposed Subjects of Trainings for Stakeholders at Provincial Level 135 Table 16.5 Proposed Subjects of Trainings for Stakeholders at National Level 136

List of Figures

Figure 4:1 NELSIP Institutional Arrangements 27 Figure 16.1 Major Stakeholders Considered for Capacity Building 124

List of Abbreviations

ACLG Assistant Commissioners of Local Government AF Asia Foundation CB Capacity Building CCs Community Centers CDO Community Development Officer CEA Central Environmental Authority CGRM Conflict Grievance Redress Mechanism CIRM Center for Information Resources Management CLG Commissioner for Local Government CO Community Organisations CQs Consultant’s Qualifications CSO Civil Society Organisations DCC District Coordinating Committee EA Environmental Assessment EIA Environmental Impact Assessment EIS Environmental Impact Statement EMP Environmental Management Plan FC Finance Commission FGD Focus Group Discussions GAAP Governance and Accountability Action Plan GDP Gross Domestic Products GIS Geographical Information System GN Grama Niladhari GND Grama Niladari Division GOSL Government of Sri Lanka GTZ German Technical Assistance HRD Human Resources Development IBRD International Bank for Reconstruction and Development IDA International Development Agency IDP Internally Displaced Persons IEC Information Education & Communication IEE Initial Environmental Examination IEER Interim Environmental Examination Report INGO International Non Government Organisations IUFR Interim Unaudited Financial Reports LAPDP Local Authority Participatory Development Plan LAEC Local Authorities Environmental Committee LAPIM LA Project Implementation Manual LAs Local Authorities LFA Logical Framework Approach M&E/MIS Monitoring & Evaluation/Management Information System MC Municipal Council MDTU Management Development Training Unit MES Monitoring and Evaluation Specialist MLGPC Ministry of Local Government & Provincial Councils MNBEID Ministry of Nation Building and Infrastructure Development MSD Management Service Department NEA National Environmental Act NGO Non-Governmental Organizations NPSC National Project Steering Committee O & M Operation & Maintenance ODUs Organization Development Unit

PAA Project Approval Agency PAS Performance Appraisal System PAT Project Appraisal Team PCC Provincial Coordination Committee PCU Project Coordination Unit PDO Project Development Objective PIP Project Implementation Plan PMU Project Management Unit PP Project Proponent PS Pradeshiya Sabha RAP Resettlement Action Plan RLGO Regional Level Government Officials SAC Social Audit Committee SLILG Sri Lanka Institute of Local Government SWOT Strength-Weaknesses-Opportunities- Threats TDS Training and Development System TOR Terms of Reference TOs Technical Officers TSP Technical Support providers UC Urban Council UNDP United Nation Development Programme UNOPS United Nations Office for Project Services USAID US Agency for International Development VLGO Village Level Government Officials YGG Youth Governance Group

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List of Attachments

No Name 1 Questionnaire to assess LAs 2 Map of potential PSs in Eastern Province 3 Map of potential PSs in Northern Province 4 Particulars of LAs 5 LA assessment criteria and scoring method

6 Result Framework 7 Negative List 8 Prescribed List 9 Initial Environmental Examination report 10 Environmental Impact Statement Format 11 Method of allocating Block Grants 12 Minimum required staff to implement the Project

13 Overall Project Implementation Plan 14 First Year Detailed Project Implementation Plan 15 Appraisal Process 16 A matrix for setting up a monitoring system 17 NELSIP Risk Management Matrix 18 Critical Risks and Possible controversial aspects 19 Governance and Accountability Action Plan

20 A guide to sustain a Rural Water Supply scheme. 21 TOR for Facilitating to develop LA PDP 22 A guideline for assessing staff capacities

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“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."

R. Buckminster Fuller

1895-1983, Architect, Author, Designer, Futurist, Inventor, and Visionary

Chapter 1 Introduction

1.1 Introduction

1. Mahinda Chintana, the National Development Policy of the government expects to stimulate economic growth and more importantly to ensure that it is equitable and trickle down to the poor. However, the recent estimates show that the regional disparity in poverty has become more pronounced. The growing urban-rural gap is the result of the concentration of economic growth in the urbanized Western Province. Therefore, by now the government intends to extend the effects of growth that have been achieved beyond the Western Province.

1.2 Mahinda Chintana and Local Government

2. The revised Mahinda Chintana: The Vision for the future highlights the need of local level decision making in the process of development of rural areas and an efficient public service, delivered at village level. Provision of basic services to all villages and enhancing the service levels to strengthen the local economy are of prime concern of the national policy. The aspiration of the Gama Neguma Programme, which is the focal strategy the government has put forward to address the rural development, is to enhance the overall living standards of the people in rural areas.

3. Going beyond the nationally implemented strategies, Mahinda Chintana promotes an expeditious implementation of regional development plans specifically identified for Northern and Eastern provinces, with some other lagging areas, which includes the Plantation areas. Development of those areas through strengthening the local level institutions viz. Jana Sabaha, Gam Sabaha, Pradehiya Sabaha, Town Councils and the Provincial Councils have been highlighted there.

1.3 Local Governments and Regional Development

4. In this scenario of increased focus given to the bottom level of development operations in the country, local government becomes a vital institution of the governance structure. It affects the lives of people at the grassroots level and it is perhaps easier to access by civil society than the larger district, provincial, regional, or national units of government. Therefore within the broader framework of sustainable development where economic growth with social, gender and other dimensions of equity, environmental sustainability are ensured, local government plays a central role. Sub national governments can play a greater role in designing and implementing development strategies.

1.4 Overall Local Government Situation in Sri Lanka

5. The evolution of local government in Sri Lanka was greatly influenced by the British during their colonial rule, particularly during the later part of the British rule (from 1865 to 1948). The following are the important landmarks in the evolution of local government structure under the British:

 Establishment of municipal councils for the cities of Colombo and Kandy in 1865 and for Galle in 1866;  Reconstitution of village committees by the Village Committees Ordinance in 1871;  Establishment of sanitary boards for small towns in 1892;  Establishment of urban councils in 1939; and  Establishment of town councils in 1946.

6. However, after gaining independence the above arrangements were revised. The village committees, which functioned as legal entities, served by village leaders on a voluntary basis were changed to Village Councils during the period 1940-1980.

7. Later, the powers and functions of Village Councils were transferred to newly constituted District Development Councils (DDC) in 1980. However, these new councils distanced the people from the administration and therefore they did not last long due to that inherent defect in the system.

8. DDC was replaced by the establishment of Pradeshiya Sabha which is the current organizational structure. Thus, the current local governance structure consisting of three legal instruments emerged. As local authorities are created by the Parliament under the 13th amendment of the constitution, they are subject to supervision by the government through the Ministry of Provincial Council & Local Government. The three new legal instruments of the local government structure are;

i. Municipal Councils ii. Urban Councils iii. Pradeshiya Sabhas

9. Although, powers to the provincial councils and other local authorities were to be officially transferred, it has not taken place fully. The functions of the local authorities currently focus more on environmental management and social services since their very inception. Distribution of local authorities in Sri Lanka is given in the Table.

Table 1.1: Distribution of Local Authorities in Sri Lanka

Province District Number of Local Authorities MC UC PS District Total Western Colombo 4 2 6 12 45 Gampaha 1 6 12 19 Kalutara - 4 10 14 Central Kandy 1 4 17 22 42 Matale 1 11 12 Nuwara Eliya 1 2 5 8 Southern Galle 1 1 15 17 42 Matara - 2 12 14 Hambantota - 2 9 11 Northwestern Kurunegala 1 1 17 19 31 Puttalam - 2 10 12 North-Central Anuradhapura - 1 18 19 25 Polonnaruwa - - 6 6 Uva Badulla 1 2 14 17 27 Monaragala - - 10 10 Sabaragamuwa Ratnapura 1 1 13 15 26 Kegalle - 1 10 11 North Jaffna 1 3 13 17 34 Mannar - 1 4 5 Kilinochchi - - 3 3 Vavuniya - 1 4 5 Mullaitivu - - 4 4 East Batticaloa 1 1 10 12 43 Ampara 1 1 16 18 Trincomalee - 2 11 13 Total 15 40 260 315 315

1.5 Administrative structure and strength of LAs

10. The administrative structure is similar in all local authorities, although the designations are different. The potential operational capability of the local government in Sri Lanka would however appear to have been not fully utilized. Over the years, Central Governments have always operated its policies and programmes through the local authority administrative apparatus, but not through the elected local bodies.

11. The scope of the local authorities has been restricted to providing a few services and facilities only. There was no way for them to undertake significant measures for the economic upliftment in the areas with which they dealt. A major share of their revenue is spent on meeting the administrative costs, leaving them dependent on grants from the Central Government for development activities.

12. All the urban local authorities are dependent on the government grants disbursed by the Finance Commission through the Provincial Councils. 5 out of 14 municipal

councils can be considered to be generating sufficient funds, whereas only 3 out of 37 urban councils have achieved this level.

1.6 Present Socio-Political and Economic Situation in the North and the East

13. Over the past 30 years the social, economic and political landscape of northern and eastern Sri Lanka has undergone a considerable transformation being subjected to heavy destruction and loss. The past three decades of conflict has hindered the growth of the economies of the two provinces during the civil war. However, non-utilization of resources, destruction of infrastructure, productivity loss due to uncertain social and economic environments, absence of favorable investment environment resulted in the non-functioning or running far below capacity of all economic sectors of the country as a whole.

14. The share of Northern Province to GDP was about 2.9 percent in 2007. These are the lowest shares that provinces are contributing to the GDP. Both provinces are predominantly have agricultural economies, where crop cultivation, livestock and fisheries are the main sub sectors. However, the area’s agricultural contribution to GDP has dramatically declined over the past years.

15. The socio conditions have deteriorated over the past years. Housing has become the foremost issue. Only 63 percent of the families own houses. The national average is around 90 percent of families in the country as a whole. Long standing deterioration and lack of maintenance have lead to poor commanding ability of all infrastructure facilities and now in a condition where major rehabilitation and or replacement is necessary.

16. Loss of income added to displacement has aggravated poverty among people. The recent assessments state that the incidence of poverty in Northern and Eastern Provinces are equivalent or more than that of the worst province (Uva) in the country.

1.7 Present Context of Local Governments in North & East

17. The grave situation prevailing in the Northern and Eastern provinces presents particular challenges as well as new opportunities to the local governments. There is already an emerging recognition of the need to coordinate at strategic level, to draw up a vision and plans for guiding policy development, investment and implementation for the two regions. Having a resource-rich provincial economic base in these regions, the need is to promote new trajectories of development. Local governments, which can work together in co-operation in a regional context, will be the best institutional arrangement to start with.

18. Cooperation between different horizontal tiers of local governments can strengthen the ability to lobby and influence government policy, develop service delivery,

funding plans and negotiate major projects with public agencies for the achievement of significant regional development outcomes.

19. The local government’s institutions in East have elected councils, after 16 years and have started revitalizing those with the assistance of the central government. However, the local government institutions in North do not have elected councils except in the Jaffna MC, Vavuniya UC and Pudukudueruppu PS. This occurred due to the conflict situation that prevailed and these institutions are functioning under the administrative arm of LAs. However, the government is making arrangements to hold elections for the councils within this year.

20. Considering the above facts in the given socio-political context, the NELSIP is planning to assist the LAs in both the provinces, which were heavily affected during the conflict period, in order to strengthen the capacities of LAs and to improve local services in the most effective, accountable and responsive manner possible.

1.8 Project Coverage

21. All Pradeshiya Sabahas (PSs), Urban Councils (UCs) and Municipal Councils (MCs) in North and East will be covered under the project. There are 65 PSs, 9 UCs and 3 MCs in the East and North. All of them are entitled to participate in the project. However, in the first round of implementation, a set of (LAs) Local Authorities which have adequate skills to implement the project will be identified. 58 out of 65 PSs and 9 UCs were assessed to find suitable LAs. In this assessment, qualifying criteria used are: (i) having a sound financial management system in place, (ii) required staffing arrangements in place, (iii) participatory plan prepared, and (iv) citizen participation in the process in place were especially looked at.

22. The questionnaire used to assess LAs is given as Attachment 1. This questionnaire can be used to assess the rest of the LAs, with necessary modifications.

23. As a result of the conflict, majority of the residents in all the PSs in Killinochchi and Mulativu districts in the Northern Province have been displaced. Furthermore, some families in this area are currently living in camps built for Internally Displaced People (IDP s). Presently, the government is making arrangements to resettle the people in their original places of domicile. Furthermore, at present, the local government administration in the North is primarily managed by the administrative/technical arm of the local government. It is assumed that the situation in the conflict affected area would come to normalcy very soon.

24. The government intends to implement the project immediately, in LAs, which have conducive environment and to implement the project in the conflict affected areas, once the resettlement of IDPs is completed and the local government system is reestablished. The MED will take prompt actions to prepare the ground situation to implement the project in affected areas as soon as possible.

25. Meanwhile, important activities such as facilitating the development of participatory development plans, budgets and conducting capacity building programmes to assist LAs to complete final accounts will be implemented in LAs in the North too assuming that the elections for the LAs in the North will be held during the year 2010. This will provide sufficient time for learning and capacity building for the PSs and UCs to qualify for participating in the project.

26. The maps of the LAs for the first round of implementation, indicating the provinces, districts are given in Attachments 2 and 3. The particulars of LAs in Northern and Eastern provinces are given in Attachment 4.

27. A group of LAs, which are ready to undertake the responsibility of implementing the project in the first round of implementation will be identified through a rapid assessment. The majority of the LAs in this group will be PSs while the rest will consist of UCs and a MC (probably Jaffna).

28. An especial capacity building programme will also be developed and conducted to improve the capacity of LAs, which received low marks in the rapid assessment exercise that they qualify for the second round of implementation. Accordingly, in the first year of the project, intensive capacity building activities will be conducted for such LAs in both the provinces to enable them to participate in the project. A need assessment for identifying the required assistance will be done through the CLGs under the guidance of the PCU.

Chapter 2 Project Designing

2.1 Introduction

1. Although the local government system in Sri Lanka has been well established for a long period of time, due to operational requirements local governments are dependent on and influenced by provincial councils and the central government to a large extent. The attempts to further strengthen local authority administration will depend on the availability of resources that they can obtain for operations at the local level, using their inherent and better capacity and capability to coordinate at the grass-roots and provincial level.

2. The project has been designed to provide opportunity to decentralize implementation responsibilities to the provincial and divisional levels. Contrary to the existing centrally controlled project management system, there will be no Project Management Unit (PMU) at the national level. Instead the national Project Coordination Unit (PCU) based in the MED will play a coordination and facilitation role, allowing the Provincial CLG to manage the project, as the Provincial Project Director while the ACLG based in the district will act as the Assistant Project Director, with a supervising role of the activities implemented by the LA.

3. The NELSIP will provide adequate support to the LAs in the two provinces badly affected by war to revitalize the governance within their councils and to deliver local services effectively. The capacity of many LAs in the two provinces has been identified as insufficient to implement a project like NELSIP since it utilizes many concepts such as stakeholder participation, accountability, governance demand responsiveness etc.

4. However, the project will not exclude any LA for lack of capacity to implement the project. Instead, the project will help the LAs, which have less capacity to acquire the required capacity, through an extensive capacity building programme enabling them eligible for the project. However, the capacity of LAs to implement the project will be assessed by the Commissioner of Local Government with the assistance of Assistant Commissioners of Local Government based on qualifying criteria.

2.2 The process for selection of LAs.

 Conduct an assessment in each LA based on criteria indicated in table 2.1 and focusing on existing capacity and level of performance.  Based on assessment results, identify the eligible LAs for the first year of implementation  Prioritize the most eligible LAs for the first round of implementation giving special attention to three criteria (a) Completion of final accounts for the last three

financial years (2006, 2007 and 2008) (b) Availability of qualified Technical Officers at the LA to undertake the design and implementation of sub projects, which involve construction activities and (c) availability of a participatory development plan for the LA.  Assist to develop financial management capacity of LAs, which are identified as weaker ones by employing a group of resource persons to make them eligible to participate in the project.  Assist LAs to develop consolidated participatory Development Plans through applying participatory methods and consulting citizens.  Consult CLGs and ACLGs in the participating districts of the respective provinces regarding the suitability of the selection  Notify Divisional as well as District Coordinating Committees of the list of selected LAs and table lists at Provincial Coordinating Committees for ratification.

2.3 LA Qualifying Criteria

5. There are four parameters with nine indicators to assess the capacity of the LAs. These criteria should be utilized to assess the LAs, but in the North, there should be flexibility given the socio political situation. However, the parameters and indicators could be improved in due course. The parameters and the indicators applied for assessing the LAs for first year implementation are given in the Table 2.1 below. The scoring method for the indicators is given in Attachment 5.

Table 2:1 LA Qualifying Criteria for First Year

Parameter Measuring Indicator  No of technical officers in place 1. Staff Capacity  No of Qualified Graduates in place (Program Assistants at LA level)  Completion of Annual Final Accounts for 2006, 2007 and 2008 2. Financial  Receipt of satisfactory certification from CLG and respective ACLG Management on Annual Final Accounts for 2006. 2007 and 2008  Board of surveys done in 2006, 2007, and 2008

 Availability of LA development plans completed using participatory 3. Participatory methods Planning Process  Availability of trained staff for formulating participatory LA development plan

 Citizen representation in all committees including: 4. Citizen . Finance and policy making participation  Housing and Community Development  Technical Service  Environmental & Common Amenities  Library etc.

 Evidence of consultations with LA citizen groups for participatory planning, budgeting and monitoring Community grievance redress mechanism in place  Complaint box  Complaint log book

2.4 The project objective

6. The primary development objective is to improve the delivery of local infrastructure services by local authorities in the Northern and Eastern Provinces of Sri Lanka in an accountable and responsive manner.

7. There are a set of outcome indicators developed to measure the progress of achievement of the objective. The Result Frame Work is given as the Attachment 6.

8. Key outcome indicators are as follows

Project Outcome indicators:

 Service delivery coverage, measured by number of households receiving improved local services under the project;  Demand responsive spending, measured by percentage of planned LA spending aligned with people’s preferences; and  Citizen satisfaction, measured by satisfaction of local people with local service delivery.

9. Intermediate Outcome indicators:  Financial reporting capacity, measured by number of LAs preparing annual financial statements within three months after close of the financial year;  Financial management capacity, measured by number of acceptable financial audits of accounts;  Participatory budgeting , measured by number of LAs with budgets prepared in a participatory manner; and  Budget and expenditure transparency, measured by percentage of LAs whose revenues, expenditures and procurement decisions are publically disclosed

10. The planning and implementing of the Project at the divisional level will be the responsibility of the LA in consultation with Community Centers (CCs), the village level citizen’s organization and other Community Based Organizations (CBOs). The LA Development Plan formulated in a participatory manner is a prerequisite for a LA to receive benefits from the project and therefore, it has been included in the LA qualifying criteria too.

2.5 LA Participatory Development Plan

11. LAs are expected to be the Planning Authority at the local level according to the Reform Circular No. 4 of the Ministry of Local Government and Provincial Council (MLGPC). 12. It is the generic experience in the local government sector that the LAs are not very much involved in development planning especially applying participatory approaches. 13. It has been observed that even though some of the LAs in East and North had undergone training on participatory planning and budgeting, it is only a handful of LAs, which practices the learning they gained. Yet, there is evidence that some of the LAs have efforts to develop Participatory Development Plans. 14. In such LAs, they have to be checked for the quality and the process of planning to ensure that the plans are at an acceptable level. NELSIP keens to promote governance practices within LAs and make them more accountable and responsive manner. Therefore, the LAs need to have Participatory Development Plans fiscal transfers to LAs. 15. The LA development plan should be a consolidated plan of a compact of plans derives from the villages through the LA, CCs and other stakeholders. The whole planning process should follow the participatory approach to ensure that the real community needs are identified and prioritized in the plan. The NELSIP promotes the already developed planning process within the local government sector which is discussed in “The Guide to Participatory Planning and Budgeting for Local Authorities in Sri Lanka” published by the MLGPC in 2007. The guide explicitly explains how a LA development plan is formulated through various steps. The guide introduces the following steps;

 Getting started  Data gathering, stakeholder Analysis and issue identification  Vision. Mission, Goals and Objectives  Prioritizing Programmes and projects  Financial Framework and Budget  Building Commitment and  Plan Implementation

16. Above steps are explained with examples for easy understanding for the staff of LAs. Therefore, when developing the LA development plan, this planning process is recommended since it is already familiar to the LAs.

17. The LA Participatory Development Plan will cover the following local services:

 Transportation: Village roads, bridges, culverts, cause ways etc. which will improve transportation connecting the village

 Rural markets: Weekly markets, shops, stalls, common markets, storage etc.

 Rural electrification: Solar power for villages and providing generators for health centers and community functions, Micro-hydro power schemes, street lamps

 Social Infrastructure: Libraries, community centers, pre-schools, cemeteries, public parks, bus stands etc.

 Water Supply: Wells, Water tanks, water services, tube wells

 Sanitation: Public lavatories, urinals, lavatory pits, sewerage

 Health: Ayurvedic hospitals, mother and child care centers

 Environmental: Waste management / waste disposal systems

 Other: play grounds, vehicle parks, cycle parks, boundary walls, watcher huts etc.

 Institutional development: Institutional development activities for LAs as well as CCs.

 Capacity building: Capacity building of staff of LAs and leaders of CCs for sustainability

18. Accordingly, the CLG has to play a major role with his/her team and respective ACLGs prior to and during the process of developing the Participatory Development Plan. Some of the key roles are; (i) get ready to implement the process by making the staff at provincial and district level well aware of the project procedures, components, implementation methodology etc. (ii) make LAs well aware of the project procedures, components, implementation methodology, LA Qualifying criteria and especially the importance of formulating the LA Participatory Development Plan (iii) form or revitalize LA Standing committees (iv) form or revitalize LA Advisory committees (v) form or revitalize Community Centers (CCs) in each and every village through LAs and elect sub committees (vi) make CCs and other CBOs aware of the importance of participating in the planning process, through Community Development Officers (CDOs). (vii) make an audit to identify the number of LAs, which have developed the Medium Term Plan or any other development plan for LAs. (viii) ensure that a copy of the Planning Guide is issued by the MLGPC is available at each LA. (ix) assess the level and quality of participation and social inclusion (gender, vulnerable groups or entities, local minorities) of the recent formulation of local

development plans by local authorities; this will include frequency and nature of public consultations, level of public participation herein (who and how many), issues debated and the level of impact, public views have had on final plans.

(x) assess the functioning of the local authorities with reference to popular participation in implementation with particular focus on inclusiveness checked through socio-economic, ethnic and gender profile of elected members, of standing committees, and of advisory committees.

(xi) assess the various stakeholder groups’ perception of the participatory quality of the completed planning process, as well as of the general functioning of the local authorities.

(xii) categorize the available local authority participatory development plans in to 3 categories: acceptable, rectifiable and rejected groups using the Guide to Participatory Planning and Budgeting for Local Authorities in Sri Lanka.

(xiii) guide the local authorities to review, correct and resubmit the plans that were categorized to rectifiable plans.

(xiv) assist and guide the local authorities to prepare and submit new plans to replace the rejected ones. 19. In this process, if the available staff within the CLG and ACLG offices are not adequate or do not have sufficient skills to contribute to the items (ix) to (xiv), the CLGs with the assistance of the Chief Secretaries and after consulting the Project Coordination Unit should look into the possibility to obtain the assistance of the following institutions: (a) Sri Lanka Institute of Local Government (SLILG) (b) Management Development Training Units (MDTU) established under the Provincial Councils and (c) Organization Development Units (ODUs) established under CLGs to assist LAs to prepare the LA development plan.

20. If these agencies also do not have the adequate capacity and quality to accomplish the task in time, service of an outside Capacity Building (CB) organization should be obtained through the Project Coordination Unit to complete the task. If an outside organization is hired, the CLG and respective ACLGs with the assistance of Project Coordination Unit should get the following work done through the CB agency.

(i) conduct at least 2 three-day refresher training programmes for the pool of trainers of MDTUs and ODUs to improve their skills to assist LAs to build the LA development plan

(ii) identify a qualified resource pool as much as possible within the provinces, which can work in local languages and facilitate the LAs to assess their existing plans and develop the Mid Term Participatory Development Plan.

(iii) Monitor the quality of each of the participatory plans developed by the LAs and to maintain uniformity.

(iv) facilitate and persuade the LAs to get the plans accepted by their councils/Advisory committees where appropriate and obtain the consent of the divisional and district coordination committees.

(v) facilitate the LAs, through resource pool to prepare the first year plan of the Mid Term development plan with a Logical Frame including clear outputs and indicators to be submitted to the NELSIP when considering granting funds.

2.5.1 Additional factors to be considered

21. When an outside agency (Consultant) is hired, the PCU with the CLG should make sure that;

 The consultant prepares a plan of action and then conducts meetings with Project Coordinator and the relevant staff of the PCU and the two CLGs to make them understand the nature of the Participatory Development Plan needed for LAs.

 The consultant should also meet the World Bank team decided by the Task Team Leader of the project to gain an understanding of the World Bank requirements with regard to the LA Development Plan.

 The Consultant mainly utilize the planning guide issued by the MLGPC for LAs (CLGs with the assistance of PCU should conduct an orientation programme for the Consultant on the Planning guide if the Consultant is not familiar with the Guide) with other participatory approaches, which ever is appropriate to enrich the quality of the planning process.

 The Consultant will work very closely with the ACLGs in the respective districts, Chairpersons, Secretaries and other relevant staff of Local Authorities during the whole consulting and facilitating process.

 The consultant ensures that all stakeholders especially all the elected members, the CCs, Standing Committees and Advisory committees of LAs in the planning process are involved.

 At least 60% of the Trainers/Resource persons who are engaged for the consultancy is Tamil speaking persons, well experienced in conducting participatory training tools in formulating development plans.

 All community level planning processes are conducted in the mother tongue of the participants and when there are occasions where participants come from different ethnic groups and speak only their own language, parallel interpretation facilities are provided by engaging professional interpreters.

 All educational materials are provided in the local language spoken by the participants’ community.

 The meetings are conducted in places, which are easily accessable to the participants.

 When conducting meetings with communities and the LAs in the war affected areas, especially in the Mullaitivu, Killinochchi and Mannar districts, the consultant works closely with the security forces following the security regulations in practice.

 Any obstacles encountered in the implementation, in conflict affected areas and where there are IDP camps are brought to the immediate notice of the CLGs and the PCU.

 The consultant engages two competent teams of experts to facilitate the consultancy process in LAs in two provinces, but maintains the uniformity and the quality of the final product i.e. the LA Participatory Development Plan.

 While facilitating the LAs to develop the Medium Term Development Plan, the consultant will emphasis on developing for the First year plan of the longer term plan considering it as an urgent requirement for LAs to become eligible to take part in the project.

 The LA development plan is developed in Tamil or Sinhala languages appropriate as is. In addition, a copy of the plan of each of the LA is made available in English, too for the use of persons who are not competent in the local languages, for the purpose of mid term reviews, impact monitoring, evaluations etc.

2.6 LA Development Plan and Environmental Requirements.

22. All sub projects should be assessed for environmental and social impacts and provided with adequate safeguards to mitigate negative environmental and social impacts. Since, all activities funded under this project will have to satisfy the World Bank’s safeguard policies, in addition to conformity with the relevant legislation of the GOSL.

23. The LA and CC while preparing the Sub-project Proposals should include the Environmental Impact Statement (EIS), Initial Environmental Examination (IEE) or

Environmental Impact Assessment (EIA) as is appropriate to capture environmental impacts and resettlement information or Resettlement Action Plan (RAP) if there are social impacts, as part of the proposal and obtain the approval from the Project Appraisal Team (PAT), Local Authorities Environmental Committee (LAEC) and Social Audit Committee (SAC), Central Environmental Authority (CEA), Project Approval Agency (PAA) and/or the World Bank.

24. The CC and LA, while implementing the sub-projects will ensure that all mitigation measures are implemented. The SAC and LA Environment Committee (LAEC) should review the implementation on a quarterly basis.

25. The Project Appraisal Team (PAT) while certifying milestones for release of financial installments will also ensure that the mitigation measures are adequately implemented as recommended.

26. The PCU will conduct an independent environmental and social audit every two years to ensure safeguards compliance and report to the GOSL through the National Project Steering Committee (NPSC) and to the World Bank.

27. All sub-projects that are proposed and implemented under the project will be required to conduct an Environmental Assessment (EA) and prepare an Environmental Management Plan (EMP) as is appropriate prior to disbursement of funds for the proposed sub-projects.

28. Sub projects with any of the attributes listed in List of Negative Sub-Projects Attributes (Attachment 7) will be ineligible for support under the proposed operations. If the sub-project falls within the prescribed list (Attachment 8) of the Central Environmental Authority (CEA) a full-fledged EA in the form of an Initial Environmental Examination (IEE) or an Environmental Impact Assessment (EIA) should be carried out.

29. In such cases, the relevant LA should liaise with CEA for guidance to conduct the IEE/EIA. CEA will assist in identifying suitable PAA and the PAA will provide the Terms of Reference (ToR) to the project proponent (CC/LA) to conduct the IEE/EIA. Such ToRs should be also approved by the World Bank, prior to the commencement of the assessment. All IEEs/EIAs should be cleared and approved by the PAA, as well as the World Bank. The project can get the services of a consultant to prepare the required EAs.

30. The sub-projects, which do not fall into the negative or prescribed lists, will be required to prepare only an IEE Report (IEER) (IEER format - Attachment 9) or an EIS (EIS format - Attachment 10).

31. It is assumed that under the project principles, the sub-projects that fall in to the prescribed list or negative list may not be undertaken. This means, any sub-project

that have an impact on wetlands, coral reefs, sand dunes, forests and displace existing settlements should be avoided. Further, sub-projects proposed in private property and for promotion of religions and political parties shall not be funded.

32. Prior to initiate the planning process at the LA level, a training programme for the officials concerned has to be conducted at district level with the assistance of the PCU.

33. The PCU should coordinate and facilitate these workshops with the respective CLGs obtaining assistance from the Environmental division of the World Bank and the Officials of the CEA based at the district level.

34. For additional information regarding the environmental requirements of sub projects under the LA Participatory Development Plan is given in the LA Project Implementation Manual (LAPIM).

2.7 Project implementation period:

35. The project is designed and expected to be implemented and completed over five years. A four year project implementation is adequate to exhaust the available funding. It is the intention of the government to continue with the project design to fund LAs continuously from fourth year onwards (This has been indicated at the wrap-up meeting held by the WB mission with the officials of the Ministry of Finance on 12th February 2010). At the mid-term review of NELSIP, possibility for expanding it to other provinces will be considered.

2.8 Project Costs and Financing Plan

36. The project will be an important element of the World Bank’s overall funding envelope to the Government. It will also be complementary and supplementary to the funding available to the Government from its own sources and other development partners. Total estimated project cost is US$ 86 million. The project cost is financed 87.7% by IDA excluding the taxes and duties. 8.7% of the project cost will be met by the GOSL domestic funds and the beneficiary peoples’ contribution is 3.6%.

a. Retroactive Financing

37. The project will include retroactive financing of the eligible expenditures incurred before Credit signing but after May 1, 2010, for the five project components up to 10 percent of the proposed Credit amount, approximating to about US$ 5 million. The eligibility Criteria for Retroactive financing are as follows.

 Standard Bidding Documents and procurement procedures agreed between the Bank and the Government will have been used to award contracts;  All direct contracts have been awarded on the basis of revised construction rates for each district.

Chapter 3 Project Components

3.1 Introduction

1. The strategy to achieve the project development objective is to improve and augment the flow of funds to LAs, improve interconnectivity infrastructure, develop adequate capacity of all three tiers of governments, and improve the information flow to enhance transparency and accountability of local governments to their constituents. Infrastructure development is a requirement in North and East and the local government is an appropriate means of service delivery.

2. Local authorities do prepare participatory development plans, but they do not have adequate funds to implement them fully. NELSIP intends to finance such plans.

3. Therefore, the project components have been designed in a way to strengthen the LAs to act independently and to implement their development plans without barriers. The Fiscal Transfer Component will enable the LAs to invest in the Participatory LA Development Plan to provide better local services in a responsive and accountable manner. The project components are as follows;

3.2 Component 1: Infrastructure Service Delivery (US$76.0 million):

4. The objective of this component is to enhance the resources available to LAs for improving local service delivery in a transparent and predictable manner within the context of a sound inter governmental fiscal framework. This component will ensure predictable and transparent resource transfers in the form of simple capital grants from the central government to the LAs, to enable them to plan and deliver these services, in accordance with the GOSL’s guidelines for participatory planning. Though these capital grants are different from the present “block grants” received by the LAs from the Provincial Councils and used for recurrent expenses, they are similar to the “grants” like the Provincial Specific Development Grant and Criteria Based Grant received by them. IDA and GOSL basic capital grant contributions during the five year project period are about US$ 41 M and US$ 33 M respectively. Beneficiary contribution towards infrastructure rehabilitation is about US$ 2 M.

5. The capital grant will be allocated to all LAs, with or without councils, in the North and East that meet the eligibility criteria comprising of (i) completion of all annual accounts; (ii) receipt of an acceptable audit opinion from the Auditor General on the annual accounts for the past two financial years, (iii) presence of adequately trained key staff at the LA level; (iv) submission of a participatory plan and budget; and (v) establishment of standing or advisory committees for citizen’s participation. The LAs will be assessed on these eligibility criteria for acceptance into the program, and continued to be assessed on an annual basis for further continuation of assistance.

6. Provision of basic block grants will give an opportunity for the local government to show capacity for service delivery with greater autonomy and efficiency. On average a LA would receive Rs. 15 million in the first year, compared to an average of Rs. 10 million received in 2009. The initial increase is motivated by a desire to enable LAs to rapidly overcome the backlog of needed investments. At the same time, recognizing that it takes time to build capacity in the LAs, it is envisaged that the grant size will only be increased gradually over a period of time. Eventually, the grant for an average LA is projected to reach 30 million – a level broadly similar to the current average in the rest of the country. The GOSL share of total grants paid to LA,s is programmed to increase during the project period. In the project’s final year the average GOSL grant payment would be Rs. 20 million i.e. twice the current level.

7. The process for selection of Local Authorities has been already mentioned. Any Local Authority that does not qualify for the first round of implementation will be supported by the project with the assistance of CLGs to prepare them for the second round of implementation. The first tranche of fiscal transfers to LAs that qualify in the first year will be released in July 2010. The fiscal transfers could be invested on public services such as rural roads, drains, culverts and bridges, public buildings, markets and fairs, waste disposal, rural water supply, parks, recreation facilities, libraries, nursery schools, playgrounds, dispensaries and similar public utility services.

8. The amount of the individual Capital Grant allocation to a LA will be based on a formula (Attachment 11) that takes into consideration the population size, land area and number of displaced people, with a minimum allocation to ensure that LAs with smaller population and land area are sufficiently covered. This formula would be kept flexible, and IDA will work with the GOSL in adjusting this formula during implementation of NELSIP appropriately. Though the capacity of the LA is limited, there had been noticeable improvement in the capacity of many LAs during the project preparation period and the project will continue to work with all LAs to build their capacity, while they perform their services with the initial Capital Grants.

9. It is expected that the roll-out of Capital Grants will be staggered in keeping with the varying capacity levels. Initially, it is expected that 15 LAs will benefit from the Grants, with another 15 being included after one year. The remaining LAs are expected to qualify after 18 months. LAs in the east and in some areas of the Jaffna district generally have the highest capacity, and are expected to be included in the early batch. In much of the Northern Province, the institutional challenges are more significant. The LAs that do not qualify initially will receive support for strengthening their basic capacities and systems from the inception. They will be then re-assessed for eligibility for capital grants.

10. The project will assist the activities of LA Participatory Development Plan, which will be formulated by the LA applying a bottom up planning process. The objective of the bottom up planning is to assist the LA’s members to work jointly with community members and identify and prioritize the development needs and investments through a participatory process starting from the village upwards. Prioritization of development issues at village level will be done by considering criteria such as (i) the size of population and villages covered; (ii) cost effectiveness; (iii) ability to contribute to improve local services; (iv) ability to acquire technology & resources (including labor participation); and (v) social and environment impact.

11. The project appraisal team (PAT) based at provincial level will conduct the appraisal of LA development plans to ensure the proposals are technically feasible; economically viable; consistent with regional and provincial development plans; satisfy the agreed criteria for sub-projects; the bottom-up planning process has been followed; and will avoid the regional imbalances and duplications of investments.

12. LAs would allocate Technical Officers (TOs), knowledgeable on procurement procedures in order to implement interconnectivity sub projects. The civil engineers attached to ACLG’s office will assist TOs in implementing projects. The sub project proposal should consist of (a) feasibility study (b) pre-appraisal with appraisal engineer (c) detailed investigation, design and estimate (d) preparation of implementation plan and preparation of sub project proposals.

13. The activities proposed under this component will include: Funding directly the LA for implementing the LA Development Plan; Co-coordinating and monitoring the activities implemented under LA Development Plan; Providing technical facilitation to LA, strengthening proposal preparation, Appraise institutional development plan, conducting community assessment and feed back exercises and promoting good governance practices within the LA.

14. The Implementation Arrangement for the component consists of:

 The CC or CBO will be assigned to implement certain sub projects on behalf of the LA. Wherever CCs are available and willing to implement part of sub project, CCs will be contracted by the LA after assessing the capacity.  The LA will contract private agencies only when complicated designs or sophisticated equipments are required. The LA Advisory Committee will help the LA in contracting.  LA will hire necessary technical assistance to help planning and implementation of activities of the LA Development Plan.  The Financial Manual, Procurement Manual and Environment Manual along with the LAPIM and PIP will guide the LA in implementing the activities.  The LA members will be trained in participatory project management.  The implementation process will follow a bottom-up participatory approach starting from CC level.

 The village level plans will be prepared through wide community consultation using participatory methodologies like transect walk, mapping etc. The details of the ranking of the sub projects after applying the prioritization criteria will be disseminated among all villages.  The prioritization will be the responsibility of the LA Advisory committee and will be assisted by the ACLG.  The LA will approve the LA Development Plan comprising of all the prioritized sub projects submitted by the villages.  The technical assistance for planning as well as implementation will be from the existing technical staff, of ACLG or from the LA staff. The LA can also hire technical assistance to help in preparing detailed implementation proposals and estimates for the prioritized sub project proposals taken up for implementation.  The LA Advisory Committee members, staff members will be trained on various aspects of participatory planning and implementation of sub projects including technical, financial, procurement, environmental aspects by CLG through outsourced resources /agencies persons, with the assistance of the PCU.  The LA will approve the sub project proposals and submit the same to the ACLG for appraisal.  The Project Appraisal Team (PAT) will appraise the sub project proposals and will communicate to the CLG through ACLG for the approval of sub project proposals.  The CCs will be assisted by the LA Advisory Committee and a Procurement Committee to guide procurement related aspects.  The CLG and ACLG will assist the LA in identifying implementation bottlenecks in the existing Financial Management and Procurement rules, hindering implementation of sub project proposals utilizing community participation.

3.3 Component 2: Institutionalizing Accountabilities (US$2.0 million):

15. This component aims at ensuring that LAs undertake public expenditures and deliver local services in a transparent and accountable manner. This component will thus strengthen upward and downward accountability systems at the LAs and Provincial Council levels, and it will support:

(a) Transparent and independent annual financial audits of LAs to ensure their financial accountability;

(b) Social and technical audits of public expenditures undertaken by LAs to ensure effective use of funds in line with citizen expectations and

(c) Systems and processes to bring greater transparency in LA affairs and strengthen citizen voice in planning, budgeting and monitoring of public expenditures and local service delivery.

(d) Preparing and funding the implementation of an Institutional Development Plan for strengthening the institutional capacity of the LA. In order to strengthen LA and build the capacity of their functionaries, separate institution development activities, technical assistance on issues like governance, participatory planning, participatory budgeting and expenditure tracking, social accountability measures, raising own resources, strengthening Social Audit and other auditing tools etc will also be carried out.

16. This component include: Establishing Community Centers and Sub committees in each village; Establishing LA Standing Committees, Establishing LA Advisory Committees and Sub-Committees (30% of LA members and 70% community members from the Community Centers (CCs) and Preparing LA Participatory Development Plan comprising of the aggregated and prioritised development needs. The component will also assist the Local Authorities to complete their outstanding audit issues with assistance from MLGPC. Establishing a MIS and well planned M&E system are also the major activities f this component.

3.4 Component 3: Building Capacities (US$4.0 million):

17. This component aims at strengthening the service delivery systems and building capacities of the LAs to deliver their mandated services as well as strengthening the monitoring capacities of the provincial and national level institutions. It will support (a) improving the efficiency of current systems and procedures relating to planning, budgeting, financial management, revenue management and procurement at the LA level, (b) improving the efficiency, timeliness and follow up of the internal and external audits of LAs, (c) training elected representatives and staff of LAs on financial management, procurement and project management, (d) providing effective hand holding support to LAs by the district local government staff on day to day basis, and (e) developing a long term capacity building strategy for LAs including the organizational development Unit (ODU) of the local government departments.

18. It will also support the strengthening of the capacities of the national and provincial level institutions that play a critical role in the support and oversight of local government functions.

19. This component will strengthen a number of institutions at the local, provincial and central government levels that are essential to an effective local government system. This includes the following institutions at divisional level;

Divisional level

 Community Centers  Local Authorities

20. At the divisional level, this component will support capacity building in core areas such as planning, budgeting, public financial management and procurement, social and environmental safeguards, and civic engagement. This will be done through a combination of methods, including direct training, peer learning, continuous hand- holding support, provision of equipment, etc. Separate modules will be prepared for the training.

21. It will also provide support for more flexible and higher order institutional development initiatives to a smaller group of LAs based on their demand, performance and need assessments. The capacity building of Community Centers will also be done through the LAs.

District level

 Assistant Commissioner of Local Government

Provincial level

 Commissioner of Local government  Provincial treasury  Provincial Auditor General  Management Development Training Units  Organisation Development Unit

22. At the district and provincial level, this component will support the institutional capacity development of institutions such as the offices of the provincial Commissioner for Local Government (CLG), Assistant Commissioner for Local Government (ACLG), the Provincial Treasury, and the Management and Development Training Units (MDTUs), Organisation Development Units established under CLGs to support, train and monitor the LAs.

National level

 The Ministry of Nation Building & Estates Infrastructure Development  The Ministry of Provincial Councils and Local Government.  The Sri Lanka Institute for Local Government

23. At the National level, the component will support capacity enhancement of key central government institutions such as the Ministry of Provincial Councils and Local Governments (MPCLG), and the Sri Lanka Institute of Local Government (SLILG) to regulate and manage an efficient and accountable local government system within the context of an intergovernmental framework.

24. It will also support an Information Education & Communication (IEC) campaign aimed at disseminating project related information to different stakeholders at all levels. GOSL will also contract private sector agencies to assist in areas where there are gaps in their capacity. This will provide on-site technical assistance for local government and also contribute to putting in place an improved accountability and good governance system.

25. This component will also assist the Local Authorities to provide minimum staff required to implement the project, since there is a delay in obtaining Management Service Department (MSD) approval to appoint staff approved by the Cabinet.

26. NELSIP is not a traditional investment project. It is a multispectral intervention, to test an innovative approach for participatory and demand driven investment planning, budgeting, execution and maintenance of projects at local government level. Preparation of Local Authority Development Plans (LADP) will be guided by: (i) current planning models utilized at provincial level and the Guide to Participatory Planning and Budgeting for Local Authorities in Sri Lanka in 2007 by the MLGPC ; (ii) bottom-up planning, budgeting and implementation; (iii) holistic and integrated planning approach to Local Area Development; (iv) Fixed Budget Envelopes based on a per capita basis; and direct funding to the Local Authorities subject to compliance with agreed rules; (v) participatory decision-making processes; (v) simple and transparent rules of engagement; (vi) cost sharing and cost effectiveness; and (vii) building capacity within Local Governments and existing public sector agencies.

27. Sub-project investments would be decided during the implementation of NELSIP on a purely demand driven basis at the local government level, following the participatory identification by local communities. Sub-projects are identified, designed and appraised during the course of NELSIP implementation.

28. Eligibility principles to determine sub-projects would include (a) the sub-project in line with the priorities of Local Authority; (b) the sub-project is technically feasible and socially & economically viable; (c) Local Authority is capable of effectively managing the implementation of the sub-project; and (d) beneficiary communities are involved in decision making related to subproject planning, supervision and maintenance.

3.5 Component 4: Assessments and Evaluation (US$1.0 million):

29. This component will support a range of analytical and advisory activities aimed at strengthening the ability of central government to make effective policies related to local government. Some of the key activities which can be supported under this component are;

 Baseline survey

 Social Impact Assessment  Progress and output monitoring  Impact Monitoring  Mid term reviews  Impact evaluation  Policy changes  Project completion report (PCR)  Social accountability assessment  Preparation of citizen’s score cards

 Policy Studies

i. Study on integration of public administration and local government system ii. Study on re-establishing village council system iii. Study on sustaining LAs

3.6 Component 5: Project Management (US$3.0 million):

30. This component will support agencies at the central and provincial levels that are involved in the day to day management of the project to procure necessary consultant and equipment support for the smooth implementation of the project. In particular, this will include agencies such as the Ministry of Economic Development at the central level, the offices of the CLG at the provincial level and ACLG offices at the district level. The Key activities include:

 Providing technical assistance to LA Advisory Committee to elaborate sub project proposals as included in the LA Development Plan;  Launching an information, education and communication campaign (IEC) to cover all the villages in each of the LA about the project;  Carrying out strategic communication at National, provincial, District and Divisional level to disseminate the project approach, institutional and implementation methods.  Integrating project implementation with Provincial, District and Divisional local government administrative setup.  Providing human resource requirements at the national, provincial, district and divisional levels, for facilitating project implementation effectively.  Establishing and strengthening Project Appraisal Teams (PAT) at provincial level  Providing facilities for the Project Coordination Unit, Commissioner of Local Government, Assistant Commissioner of Local Government, Local Authorities, Provincial Project Sub-offices (PSO) and Project Appraisal Teams to achieve project objectives effectively.

 Reimbursing the cost of transport of the government officials engaged in facilitating the project at various levels.  Managing a human resource development system, including training, performance evaluation, and managing professional development of staff;  Maintaining offices for PCU, Provincial Sub-offices and if necessary the CLG and ACLG with minimum essential, office equipment and other logistical support required for successful project implementation.  Integrating a monitoring, learning and evaluation system to the MIS of the project to monitor progress of results achieved  Integrating key learnings into advocacy and policy formulation.  Managing the fund flows for funding directly to LAs through CLG and other operational expenses-required for the smooth functioning of the project teams;  Defining and monitoring service standards for the performance of the project teams.  Implementing report card systems at the community level to assess the performance of project teams.  Providing assistance to PCU, CLG and PAT for covering necessary administrative expenditure (staff remuneration, transport and vehicle hiring charges, stationary cost, consultancy services, office operating costs such as rent, electricity, water, telephone, cleaning etc. , other expenses, refreshment, meetings, workshops, OT, furniture and equipment, other consultancy services such as external auditing, internal auditing, various environmental studies).

Chapter 4 Project Institutional arrangements

4.1 Introduction

1. The subject of local governance comes under the purview of the Ministry of Local Government and Provincial Councils (MLGPC). It is also a devolved subject. Therefore, while the MLGPC has the overall responsibility for making policy decisions related to local governance at the national level, the nine Provincial Commissioners of Local Governments are responsible for implementing activities at the provincial level.

2. The overall institutional model for the NELSIP has been developed in such a way that it obtains efficient services from national to village levels to implement the project effectively. When developing the institutional model, major stakeholders such as the Ministry of Economic Development, Ministry of Provincial Council and Local Government, Provincial Councils, CLGs, representative of LAs, the World Bank etc. were consulted.

3. At present, two provincial CLGs, eight ACLGs and all 77 LAs are performing their services with inadequate resources. Therefore, implementation arrangements for the project have been designed considering the prevailing administrative capacity of the Local Government system, incorporating lessons from implementation structures of the past and ongoing projects implemented by the MED in the North and East.

4. Thus, the existing institutional model in the local government system has been recommended for the purpose of implementing the NELSIP with slight improvements to the system.

4.1.1 Existing Institutional Arrangements in the Local Government Sector

5. Due to the conflict situation that prevailed in the Northern and Eastern provinces, execution of all development programmes in both provinces have been assigned to the MED by an especial gazette notification. Thus, implementation of NELSIP also comes under the purview of MED and is expected to be implemented in collaboration with MLGPC. As such, the MLGPC co-chairs the National Steering Committee for NELSIP together with MED.

6. It is expected that over a period of time; lessons from NELSIP will influence an expansion of the project to the rest of the provinces in the country to be managed by MLGPC. The overall institutional arrangement for the NELSIP is shown in the figure 4.1.

Figure 4:1 NELSIP Institutional Arrangements

National Project Ministry of Local Steering Ministry of Economic Government and Committee (NPSC) Development Provincial Council Project Coordination (MLGPC) Unit (PCU)

Technical Consultants

Monitoring SL Institute of

Provincial Council Local Governance Chief Sec, Secretary- MLG (SLILG) Provincial Training Unit Provincial DCS Planning Commissioner of Local Committee Government (CLG) Sec.PMLG

Management Management Regional Assistant Development District Commissioner of Training Unit

Coordinating Local Government (MDTU) and Committee (ACLG)

ODU

Building Capacity

Supervision Capacity Building / CapacityStudies Building Divisional Local Authorities Coordinating

Committee

Implementation

Community Community Community Centers Centers Centers

4.2 National level institutional arrangements

7. At the national level, the Ministry of Economic Development (MED) will be responsible for the execution of the project, ensuring that the project resources are managed in an accountable and transparent manner at all levels. Specifically, within the MED, the Project Coordination Unit (PCU) will be responsible for coordinating activities, overseeing overall implementation of the project and reporting to the Bank.

8. The main responsibilities of the Ministry relating to project implementation will include:

(i) ensuring overall policy coordination between the two provinces (ii) ensuring coordination among and linkages with relevant line ministries as well as similar development programmes (iii) ensuring linkages at various levels of government as well as between Public Administration and Local Government systems at the local level (e.g. issuing Circulars as necessary); and (iv) ensuring budgetary support for the project. PCU will play a major role in coordinating NELSIP with other donor funded projects in the North and East.

9. The MED is already executing many projects in North and East and discharging the above said responsibilities satisfactorily. Project Agreements between Ministry of Finance (MOF)/ MED and the two PCs will be established during negotiations. Minimum essential staff of PCU is in place and the full staff is expected to be functional by mid April 2010. The delay of recruiting staff for the project occurred due to the regulation enforced by the Election Commissioner to freeze all transfers, promotions and recruitments during the presidential and general election period, which has concluded on April 8th.

10. For the capacity building of LAs, the services of Sri Lanka institute of Local Government, which comes under the MLGPC and the Management Development Training Units function under the provincial councils will be sought.

4.2.1. National Project Steering Committee

11. Inter-ministerial coordination at the national level will be ensured through a National Project Steering Committee (NPSC). The NPSC, co-chaired by the Secretary, MED and Secretary, MLGPC, will consist of senior officials from key national level ministries (such as Finance and Planning, Local Government and Provincial Councils, Public Administration and Home Affairs and any other related agencies as and when needed), provincial level Chief Secretaries, Secretaries of Provincial Ministries of Local Government (PMLG), Commissioners of Local Government and one representative of LA chairpersons from each district on rotation basis for one year.

12. NPSC will be responsible for:

(i) providing policy guidance and monitoring support at national level (ii) ensuring overall coordination and linkages with other line ministries and (iii)promoting an enabling environment.

4.3 Provincial level Institutional arrangements

13. The chief secretary and the secretary to the Provincial Ministry of Local Government (PMLG) will take the responsibility of overall supervision of the project management activities carried out by the Commissioner of Local Government (CLG) in each province. The Assistant Commissioners of Local Government (ACLGs) in each district will take the responsibility of supervising the project implementation activities carried out by LAs. Further, the existing Provincial Planning Committee (PPC) headed by the Provincial Chief Secretary and represented by the District Secretaries, will review overall project progress and coordinate activities among the different government agencies at the provincial and district level. The CLG will report to the Chief Secretary/Secretary-PMLG at the provincial level and to the Project Coordinator at PCU at the national level.

14. Key responsibilities of the CLG will include:

(i) coordinating closely with and reporting to PCU at national level. (ii) selecting LAs for participation in the project implementation based on eligibility criteria (iii) raising awareness about the project at the provincial level through Information Education Campaigns (iv) providing support to PAT, ACLGs and LAs on project implementation matters (v) coordinating provincial level capacity building activities (vi) ensuring financial management of the program, including coordination of audit of LAs, receiving funding from the Treasury and remitting to LA bank accounts (vii) conducting program monitoring, including gathering baseline data, process and impact monitoring activities (viii) liaising and sharing LA development plans with Provincial Planning Committee (ix) ensuring coordination and linkages with other development programs; and (x) operating a public grievance redressal mechanism.

4.4 Regional level (district) institutional arrangements

15. The regional ACLGs at district level will undertake the responsibility of supervising, supporting and monitoring project activities within their jurisdictions while the LAs will be responsible for implementing the project at the local level. Within each LA, the CC will act as the community level mechanism, to carry out development works and implement project activities at the GND/village level. The ACLGs will be in

charge of district level project implementation/supervision and will report to their respective CLGs.

16. The responsibilities at the ACLG level include:

(i) support, supervise and monitor LAs and oversee implementation progress and utilization of block grants at the LA level (ii) assist LAs in the preparation of LA development plans and budgets and help submit these plans to the CLG for clearance. (iii) assist LAs in the application of rules and regulations related to procurement, financial management, and social and environmental safeguards (iv) supervise and certify requests for funds of LAs (v) carry out technical supervision of infrastructure sub projects prepared by LAs (vi) function as the liaison between higher levels of governments and LAs (vii) assist the CLG in programme and impact monitoring, and capacity building activities; and (viii) Oversee public grievance redressal mechanism at the district level.

17. The existing district and divisional coordinating committees are the arms of the central government and they also represent the non-devolved functions. As part of the project supported planning process, Local Authority Participatory Development Plans (LAPDPs) will be coordinated with the divisional and district plans through these committees. The monthly progress reviews presently conducted by the ACLGs will be streamlined to capture all aspects of project supervision.

4.5 Local Authority Level Institutional Arrangements

18. The LAs under the project will take full responsibility for implementing the project at divisional level. The LAs have a council of elected members and an administrative structure. For purposes of advising the LA Council on development related activities, the standing committees and a LA Advisory Committee will be formed.

19. The responsibilities of the commissioner / secretary of the participating LAs will include:

(i) undertake the overall project management responsibility at the divisional level (ii) prepare the consolidated LAPDP with the assistance of the CCs. (iii) receive block grants and utilize the monies for implementing the approved Development Plans (iv) prepare and submit progress and financial reports to CLG through ACLG (v) disseminate project related information to all relevant stakeholders (vi) maintain all records pertaining to the project including but not limited to financial management, procurement, safeguards (vii) maintain their accounting system and bank account as agreed (viii) support and help build capacity of the CCs for implementing GN level projects and maintain liaison with communities and

(ix) arrange Capacity Building programmes for the members of the committees and leaders of the CCs.

4.6. Village level Institutional arrangements

20. The CC operates at the Grama Niladhari (GN) level and consists of representatives of all the village organizations that exist at the GN Division. It is the legal entity endorsed by the MLGPC to work directly with the Local Authority. The CC will play a key role in preparing the village development plans and take full responsibility for implementing subprojects at village level with the guidance of the LA Advisory Committee. The CC will have a Maha Sabha (General Body) and an executive committee. Four committees will undertake day to day project implementation and monitoring activities and they are;

(a) Planning committee (b) Sub- project implementation committee (c) Social audit committee and (d) Procurement Committee.

21. The CC is an autonomous organization, and will report on progress of the project to the LA Advisory Committee through the Community Development Officer of the LA.

22. CC is the institutional arm of the LA in a GND for participatory planning process, implementation of village level projects and social accountability mechanism at village level. Establishing CC – LA linkage for downward and upward accountability mechanism is critical for NELSIP to achieve its goal of ensuring transparency in the local government system. This is probably the first time and the only mechanism by which funds would be transferred from a LA to a village level organization in the North and East to carry out development activities within a village. In situations where the CCs are not available, the LA will consider working with available reliable and active CBOs within the GND to implement the sub projects.

4.7 Provincial, District and Divisional Coordination Committees

23. All these committees come directly coming under the public administration system and play very important roles at their respective levels in taking decisions on development projects and monitoring the progress of them. It has been evident that apart from very exceptional situations, the local government and the public administration systems are not coordinating sufficiently with each other, which is a barrier to the regional development.

24. Therefore, in designing the NELSIP, this matter has been taken into consideration and utmost effort will be taken to create a favorable ground situation for the two systems to work in collaborative and coordinated manner to mobiles resources meaningfully and avoid duplication.

25. For this the assistance of the Provincial Chief Secretaries will be obtained and therefore the CLGs and the PCU have to keep close links with them as well as the district secretaries (Government Agents) of the respective districts where the project is planned to be implemented.

Chapter 5 Project Implementation arrangements

5.1 Introduction

1. The project implementation mechanism has been developed to match the project institutional arrangements. Accordingly, the functions and responsibilities in each level of the implementation mechanism are described in this chapter. The implementation arrangements have also been made suit to national, provincial, district, divisional and village levels. The minimum required staffs to implement the project efficiently at each institutional level and the implementation mechanism are given in the Attachment 12.

5.2 National Level implementation arrangements

5.2.1. Ministry of Economic Development (MED)

2. The executing agency of the project is the MED. The ministry will provide direct political and administrative support to the project. The main responsibilities of the Ministry relating to project implementation will be to:

 Coordinate overall policy implementation  Ensure coordination and linkages with relevant line ministries as well as similar development programmes  Ensure linkages at various levels of government as well as between Public Administration and Local Government systems at the local level (e.g. issuing Circulars as necessary)  Maintain effective coordination with donors  Ensure budgetary support for the project.

5.2.2. National Project Steering Committee (NPSC)

3. This is the inter-ministerial set up developed to implement the project with participation of different government line ministries and agencies. In order to bring about greater convergence and coordination for smooth implementation of the project, NPSC has been set up and it will be co-chaired by both the Secretaries to the MED and MLGPC. The NPSC consists of senior officials of the following ministries:

 Ministry of Economic Development  Ministry of Finance and Planning  Ministry of Local Government and Provincial Councils  Ministry of Public Administration and Home Affairs  Ministry of Road Development  Representatives of the World Bank

 Provincial Chief Secretaries  Secretaries to the Provincial Ministries of Local Government  Commissioners of Local Government  One LA chairperson from each district, on rotational basis for one year period.

4. The NPSC will be responsible for:

 Providing policy guidance and monitoring support at national level  Ensuring overall coordination and linkages with other line ministries  Promoting an enabling environment.

5.2.3. Project Coordination Unit

5. For NELSIP, a Project Coordination Unit (PCU) will be established within the MED and it will be headed by a Project Coordinator appointed by the MED. Accordingly, the project will be implemented through provincial and local government systems under the coordination of the PCU.

6. The main responsibility of the PCU will be to facilitate the smooth running of the project, which is to be implemented through the provincial and LA systems of the North and East. The PCU will be responsible for overall project coordination, monitoring and reporting.

5.2.4.1. The Project Coordination Unit will be responsible for;

 Monitoring project at national level (procurement, financial management and administration functions)  Supporting smooth implementation of the project at local level  Reviewing all LA development plans submitted by CLGs for funding  Ensuring project funds are remitted to Provincial Treasury in time  Maintaining a MIS for the project  Conducting overall project monitoring and reporting activities  Carrying out overall financial management and auditing functions  Ensuring lessons learn are captured and disseminated as necessary  Acting as convener of the National Project Steering Committee  Raising awareness regarding project principles, policies and procedures to all stakeholders including politicians and senior government officials  Maintaining linkages with various technical line ministries as well as government agencies involved in local governance  Coordinating capacity building efforts for all key stakeholders by leveraging existing training and skill development efforts

7. Composition of Project Coordination Unit:

8. The PCU Unit will consist of a small multi-functional team of specialists headed by the Project Coordinator. The Project Coordinator will report to the Secretary of the MED. The personnel for the PCU will be recruited from the human resource pool of the ministry and from the open market. The Project Coordinator will take the overall responsibility in managing the functions of the PCU with the assistance of the Deputy Project Coordinator and the team recruited for the PCU. In addition, the PCU can obtain the services of consultancy firms such as Management Information System, Information Education and Communication, Social Impact Assessment and Audit when necessary.

9. The team of the PCU will be as follows ;

 Project Coordinator  Deputy Project Coordinator  Finance Manager  Capacity Building Specialist  M&E Specialist  Public Financial Management Specialist  ESMF Coordinator  Data Keeper and other necessary support staff

5.2.5. Sri Lanka Institute of Local Government (SLILG)

10. The SLILG has been established under Parliament Act no. 31 in 1999 to promote good governance in local authorities through research, training, capacity building and sharing of information. It assists to strengthen the Management Development and Training Units established at Provincial Councils to develop capacities of provincial as well as local authorities. The project will work closely with these institutions to identify gaps in training of LA, ACLG and CCs members and build their capacities as necessary. The SLILG is established at national level and provide various courses including diplomas for the officials of the sector. SLILG could be utilized for strengthening the capacity of LAs for longer term sustainability.

5.3 Provincial Level Implementation arrangements

5.3.1 Provincial Councils

11. Provincial Councils are one of the tiers of the three tier government system in Sri Lanka. Local government structures at the provincial level are considered a devolved subject and come under the purview of the PC. For the most part, the provincial portfolio or ministry for Local Governments comes directly under the Chief Minister. Within the ministry, the department of local government, which is headed by the Commissioner for Local Government, has the overall responsibility for managing

local government activities under the guidance of the Secretary to the Provincial Ministry of Local Government.

5.3.2 The Commissioner of Local Government

12. The Commissioner of Local Government (CLG) is the head of the Department of Local Government at provincial level and will act as the Provincial Project Director of NELSIP. He/she will be in charge of overall implementation of NELSIP at provincial level and will report to the Chief Secretary, through the Secretary to the provincial Ministry of Local Government as well as to the Project Coordinating Unit at the national level. There will be full time Deputy Provincial Project Director to assist the CLG in managing the project activities.

The CLG will be responsible for;

 Raising awareness among policy makers and relevant government officials of project policies and procedures through Information Education Campaign  Liaising closely with local political authority as well as the administrative authority  Strengthening the planning capacity of LAs (through training, hiring of consultants etc.)  Ensuring financial management of the programme (including obtaining funding from Project Coordination Unit to PC Treasury and remitting to LA accounts)  Supporting preparation of LA development plans and budget in a participatory manner and obtaining approval of the plans from Provincial Secretariat and Project Coordination Unit  Liaising with Provincial Coordinating Committee and submit LA development plans  Coordinating closely with Project Coordination Unit and report on progress  Selecting LAs for project implementation in consultation with Provincial Secretariat and Provincial Coordinating Committee based on defined eligibility criteria  Conducting program monitoring, gathering baseline data, processing and impact monitoring activities  Maintaining roster of competent service providers  Ensuring coordination and linkages with other development programmes, private sector and banks  Liaising with media personnel as necessary  Organize Provincial level learning forums  Putting in place a grievance redressal mechanism  Conducting a Price Fixing Committee, once in six month at district level

Composition and Structure of CLG Level Team

13. This team will take full responsibility for managing the project at both provincial and district levels. The team will consist of four sections (a) administrative (b) finance and

internal audit (c) planning and development (d) legal and reform section (Attachment 12 for staffing arrangements). The team will be managed by the CLG with the assistance of the Deputy Provincial Project Director.

14. The optimal composition of the sections in CLG office would be ;

Administration Section: Administration officer, Programme Assistants and Management Assistants and office Assistant

Finance & Internal Audit Section: Accountant, Internal Auditor, Financial Management Assistant, Programme Assistants and Management assistants,

Planning and Development Section: Assistant Director Planning, civil engineer, Procurement Specialist, Institutional Development Specialist, Social Protection Specialist, IEC specialist, programme assistants and management assistants.

Legal and Reform Section: The section will be headed by the Assistant Commissioner of Local Government who is an officer of the Sri Lanka Administrative Service. S/he will be assisted by a Community Development Officer and support staff consisting of programme assistants and management assistants.

15. However, to launch the NELSIP, it has been agreed by the CLGs that the following team is adequate for the first year. Thus, the team is as follows;

 CLG (Provincial Project Director) for overall management  Deputy Provincial Project Director (Full Time basis)  Procurement Specialist  Civil Engineer  Institutional Development Specialist  Social Protection Specialist  IEC Specialist  Accountant  Data Entry Operator  Prog. Asst, / Magt. Asst. 1 (for financial work)  Driver 2  KKS 2

5.3.3 Provincial Coordination Committee

16. The Provincial Coordination Committee (PCC) is chaired by the Chief Secretary of the province. The Chief Minister provides the political leadership to the committee. All provincial level heads of government agencies participate in PCC meetings and therefore the PCC is very important for NELSIP to receive provincial resources to implement the project. Further, it could be used as a platform for resolution of implementation issues, which would be arise at the provincial level.

5.3.4 Management Development Training Units (MDTUs), Organization Development Units (ODUs) and Center for Information Resources Management

(a) MDTUs

17. The MDTUs are supposed to assist the LAs to improve their capacities and therefore, the project will seek their assistance to build capacities of LAs when required. The MDTU for the East is cited in Trincomalee and provides a variety of training programmes for the governments well as the officials and elected members of the LAs. The MDTU for the North is also currently located in Trincomalee, but will be relocated in a central place of the Northern province, once the infrastructural facilities for the PC are completed soon. It also will provide similar services as that of the East.

(b) ODUs

18.There are two Organization Development Units (ODU) established under two CLGs and the ODU for the North is established in the ACLG’s office at Vavuniya while the same for the East is established in the ACLG’s office Batticaloa. Both the centers have well equipped training centers and can be made use for project activities.

19. The Center for Information Resources Management (CIRM) is a unit of the Eastern Provincial administration, but is governed by an independent board of management. CIRM receives funds from both the PCs, but also finances expenses by selling products and services. It works closely with the MDTU-East. This organization too has the capacity to conduct capacity building programmes for the LAs and is presently located in Trincomalee. Project can get the service of CIRM too, for improving capacities of LAs.

5.4 Regional Level (District) Implementation arrangements

20. The regional level organization unit of the implementation mechanism is the Regional Assistant Commissioner who is based in a district and reports to the CLG.

5.4.1 Regional Assistant Commissioner of Local Government (ACLG)

21. The Regional Assistant Commissioner of Local Government (ACLG) based at district level is in charge of regional level project supervising and will report to the Commissioner of Local Government.

22. The ACLG will responsible for;

 Supervising overall project implementation process at the LA level  Facilitating formation of the LA Advisory Committee  Facilitating formation of the Appraisal Team  Organizing capacity building efforts for advisory committee and staff members

 Liaising closely with local political authority as well as the administrative authority at the district level  Assisting LAs to prepare LA development plans and budget in a participatory manner and submitting plans to the CLG  Carry out technical supervision of infrastructure sub projects (and Technical Service Providers)  Developing, updating and maintaining a district/regional Rates Bank.  Supervising and guiding procurement process at LA level  Supervising financial management process at LA level  Supervising and certifying requests for funds by LAs  Conducting monthly progress review meetings with LAs  Facilitating periodic audits, reviews, evaluations, monitoring etc.  Assisting the CLG in programme monitoring functions including gathering baseline data, Process and Impact monitoring activities  Assisting CLG in organizing learning forums

23. Composition and Structure of ACLG Level Team

24. The team will consist of eight sections (a) planning and monitoring (b) community development (c) financial management (d) technical (e) administrative (f) human resources (g) investigation and internal auditing and (h) good governance reforms. This team will take full responsibility for supervising and guiding the project implementation at LA level. Please see Attachment 12 for details of staff.

25. In addition to the existing structures, a Project Appraisal Team (PAT) will be established at the ACLG office as part of the technical unit and will consist of a multi- disciplinary group of subject experts (i.e., civil engineer/senior technical officer, environmental officer, financial management officer, planning officer) and will appraise all LA level sub projects and budgets before funds are allocated.

26. Composition of the sections in ideal situation are;

Planning and Monitoring : Local Government Assistant, Programme Assistants Community Development : Community Development Officers Financial Management : Financial Assistant, Programme Assistants Technical : Civil Engineer / Senior Superintendent of Work, Technical officers, Administrative : Staff Assistant, Management Assistant, Drivers Human Resources : Programme Assistants Investigation & Internal Audit Section : Investigation Officers Accountability and Governance : Community Development Officers

27. To implement the NELSIP in the beginning, the staff suggested below will be sufficient at the ACLG level.

 Assistant Project Director (ACLG) 1  Civil Engineer/Senior Technical Officer 1  Draftsperson 1  Procurement Assistant 1  Programme Assistant (Finance) 1  Environmental Officer 1  M&E Officer 1  Com. Development Officer 1  Driver 1

A Project Appraisal Team (PAT) will also come under the provincial project implementation team. The members for the PAT will be assigned from the above staff and the PAT will consist of following members.

 Civil Engineer/STO  Environmental Officer  Com. Dev. Officer  M&E Officer

5.4.2. District Coordinating Committee (DCC)

28. The Regional Assistant Commissioner of Local Government will have a close working relationship with the District Coordinating Committee since it is the forum where all district level political and administrative authorities meet monthly to make decisions related to development activities within the district. It is chaired by a Senior Minister/member of parliament who represents the area. All Members of Parliament who represent the district and all government agencies involved in development work attend the DCC meeting.

29. The DCC will advise project implementers and ensure that all district development programmes are in line with the regional development priorities. The DCC will monitor divisional and district level annual plans. They will coordinate closely with line ministries and district level administrative authorities. It is expected that the DCC will also advise the implementers of NELSIP to keep in line with the district/divisional development plans.

5.5 Divisional Level Implementation arrangements

30. There are three institutions at the divisional level and they are Pradeshiya Sabhas (PSs), Urban Councils (UCs) and Municipal Councils (MCs) viz; Local Authorities.

5.5.1 Local Authorities (PS, UC and MC)

31. Pradeshiya Sabhas, Urban Councils and Municipal councils (MCs) function at divisional level and are formed for the purpose of providing local services to citizens ensuring citizens participation in local level development activities.

32. Roles and Responsibilities at the LA level

33. The functions of all the LAs are more or less similar and therefore the roles and responsibilities of these institutions are given below as the roles and responsibilities of LAs.

34. The LAs are for;

 Undertaking overall project management responsibility at the divisional level  Forming Standing Committees  Forming LA Advisory and other relevant committees  Facilitating the formation of Community Centers  Building capacity of the CCs for implementing GN level projects.  Preparing the consolidated LA Participatory Development Plan with the assistance of the CCs and the ACLG  Submitting the LA Development Plan through the ACLG to the CLG for forwarding to Project Coordination Unit for funding  Arranging Capacity Building programmes for the members of the committees and leaders of the CCs  Representing the LA in the Divisional Coordinating Committee  Developing and implementing financial management systems for the project  Developing and implementing procurement systems for the project  Providing technical supervision for infrastructure projects  Maintaining an accounting system and a separate bank account for the project  Disseminating project related information to all relevant stakeholders  Liaising closely with political as well as the administrative authority at the divisional level  Preparing and submitting progress and financial reports to the ACLG

35. Composition and Structure of LA level team

36. This team will take full responsibility for managing project implementation at LA and the GND level. The team will consist of five sections: (a) planning and monitoring (b) financial management (c) administration (d) revenue and (e) public utility. Please refer Attachment 12 for staffing details. The composition of sections in LAs is more or less similar and varies on the resources available and activities to be implemented (especially by MCs).

37. Composition of the sections of LA in ideal situation is;

Planning and monitoring Section : LG Assistant, Technical officer, Programme Assistants Financial Management Section : Finance Assistant, management Assistant Administration Section : Chief Management Assistant, Clerks Revenue Section : Revenue Inspector, Revenue Supervisor, Clerks Public Utility Section : Programme Assistants

38. However, considering the human resources available at LAs, it has been decided that a five-member team is adequate to launch the NELSIP effectively.

39. The team would consist of;

LA Secretary Technical officer 1 Local Govt. Asst./Prog. Asst./ Development officer 1 Programme Assistant (Com. Development) 1 Programme Assistant (Finance) 1 and Programme Assistant (Procurement) 1

5.5.2. Committees of Local Authorities

40. There are two types of committees in LAs

(a) Standing Committees: The Local Government Reforms Circular No. 2 recommends LAs to make committee system compulsory in the LAs. The Committee represents the citizens in the decision making process of the Local Authorities. The section 12 A of the PS Act and the section 29 (1) of the UC Ordinance provide the space to form advisory committees. The composition of the committee will be decided by the LA committee. The circular explains that every LA should have one committee for finance and planning and in addition a minimum of four other committees. Citizens in the area and representatives of youth and women sections, in the committees should be made compulsory to facilitate people’s participation in local government affairs.

(b) Advisory Committees: The Local Government Reforms Circular No.10 explains that there should be essentially an organizational structure within each Local Authority, facilitated by well recognized members of the general public. Their inclusion will motivate them to involve themselves/contribute to activities undertaken by the LA. It further describes that an Advisory Committee on community affairs should be appointed in every LA, consisting of senior citizens, subject specialists, ward members, and other competent persons in the area, who could contribute to the LA. This committee should serve as a link between the LA and the people. The Circular

further explains that the committee should be non-political and should have the following responsibilities.

 Assist LA in deciding development policies and distributing resources, taking in to account the needs of the people.

 Function as a communication channel between the LA and the people in the exchange of information and ideas.

 Assist and advice the Councilors in the discharge of their responsibilities.

41. In accordance with these legal provisions, the project will take actions through the CLG and ACLGs to form the two types of committees within LAs. It will focus on formulating the Advisory Committee. The Project will name this committee as the LA Advisory Committee.

42. The Local Authority Advisory Committee will responsible for;

 Meeting regularly to advice the LA Council  Maintaining cordial relationship with the LA council  Coordinating closely with standing committees  Assisting LA in the prioritization of sub project proposals submitted by the CC/citizen committees, and helping the LA to prepare the consolidated LA Participatory Development Plan  Advising LA on implementation of development programmes  Disseminating project related information to all relevant stakeholders  Liaising closely with political as well as administrative authority at the divisional level

43. Composition and Structure

44. The composition of the LA Advisory Committee will be decided by the LA. However, it is suggested that the percentage of members representing the CCs (citizens) or CBOs should be higher than that of the council members. Similarly, representation of women and youth will also be ensured. The Advisory Committee will report to the LA Council and chaired by the LA Chairperson.

5.6 Grama Niladari Division level (Village level) Implementation arrangements

45. The Grama Niladari Division (GND) is the lowest administrative Unit of the public administration system. A GND consists of 2-3 villages and the Ward System being scrapped, the LAs too use the GND for its activities. The Community Center (CC), which is the community level organization promoted by the LA is based at GND.

5.6.1 Community Centers (CCs)

46. The Local government Reforms No. 10 proposes to establish CCs in all LAs. The Community Center will be responsible for planning and implementing village-level projects with the guidance of the LA. The CC is an autonomous organization, and will report on the progress of the project to the LA -Advisory Committee through the Community Development Officer of the LA. According to the above circular, all local level government authorities are expected to establish CCs at Grama Niladari Division level.

47. The CC will be responsible for;

 Undertaking project planning and implementation as assigned by the LA.  Organizing participatory planning sessions with the assistance of the LA to formulate the Village Development Plan and submitting it to the LA Advisory Committee for LA to develop the consolidated LA Participatory Development Plan.  Undertaking procurement for village level infrastructure under the supervision of LA  Supervising sub-project construction work undertaken by service providers under the supervision of TO of the LA  Coordinating with other relevant stakeholders on village development initiatives.  Coordinating closely with village based government officials (Grama Niladhari, Samurdhi Development Officer, Family Health Officer, and Agricultural Officer)  Monitoring project activities through established monitoring mechanisms, under the supervision of CDO  Holding progress review meetings in the village and prepare progress (implementation and financial) reports to be submitted to the LA.

48. Composition and Structure of GND Level (CC)

49. The CC takes the responsibility for assisting the LA in planning and implementing the project at the village level with the guidance of the LA-Advisory Committee. The CC will have a Maha Sabhaa (General Body) and an executive committee. Four committees will be responsible for day to day project implementation and monitoring activities: (a) planning committee (b) sub - project implementation committee (c) social audit committee and (d) procurement committee.

50. Composition of the CC is;

General Body: All citizens registered under the electoral list of the GND can be members of the General Body regardless of their religion, ethnicity, gender etc. It is the decision making body of the CC

Executive Committee: The general body will elect an executive committee with 50% women, 30% youth and the rest representing the opinion leaders etc. For the purpose

of assisting the LA in implementing the NELSIP, the CC will have following 4 sub committees, appointed by the executive Committee. The sub committees are;

 Planning Committee: Planning Committee will consist of five members and take the responsibility in planning activities.  Sub Project Implementation Committee: The committee will have five members and take the responsibility in assisting LAs to implement the project activities.  Social Audit Committee: The Committee will have five members and take the responsibility in organizing social audit activities.  Procurement Committee: The Committee will have five members including the treasurer of the CC and will take the responsibility in arranging procurement activities.

It is expected that the CC will work closely with the village based for government officials in performing its activities.

5.6.2. Village Based Government officers

51. Grama Niladari Division (GND) is the village level administrative unit of the Public Administration System in the country and Grama Niladari (GN) is the officer in charge of this unit. He / She is mainly responsible for assisting the villagers to solve their day to day issues in relating to public administration.

52. GN reports to the Divisional Secretary and even though, he/she does not have an official relationship with the Local Government System, GN works in close collaboration with the elected members of the LA when required.

53. There are four village based government officials at GND level. While GN is serving the villagers representing the public administration system, there are three other officials also assist villagers in various activities. They are

(a) Samurdhi Development Officer, who is in charge of the welfare package and livelihood development activities for the poorest category in the village

(b) Agricultural Research and Production Assistant, who is responsible for assisting villagers to obtain government agrarian services and

(c) Family Health Officer, who facilitates the villagers in obtaining health facilities and services from the Ministry of Health.

54. All these four officers work closely with the villagers. When implementing the project at the village level, the CC with assistance of the LA will coordinate with these four officers in order to avoid duplication of work and lessen the gap between the local government and the public administration systems at the village level ensuring improved local services.

Chapter 6 Project Cycle

6.1 Introduction

1. Subproject investments will be decided, during implementation of NELSIP, on a purely demand driven basis at the local government level, following the participatory identification of needs by local communities. To ensure that only technically, economically and socially viable subprojects are approved for funding and that the investments are implemented cost effectively and are sustained the following guidelines should be observed.

2. The guidelines;

 defining eligibility as well as appraisal criteria to guide selection of subprojects for funding

 using of unit cost. standards and measures to guide subproject appraisal

3. Eligibility principles to determine subprojects would include;

 the subproject are in line with the priorities of Local Authorities

 the subproject is technically feasible and socially and economically viable

 Local Authorities are capable of effectively managing the implementation of the subproject; and

 beneficiary communities are involved in decision making related to subproject planning, supervision and maintenance.

4. The overall project cycle of NELSIP has five main stages: (i) Start-Up (ii) Pre- Planning (iii) Planning (iv) Implementation and (v) Post Implementation. These stages are common to all levels of project implementation i.e. national to GND levels. Within these five stages, key activities to be undertaken by the main stakeholders are also outlined. The overall project Implementation Plan is given as Attachment 13 while the first year detailed Implementation plan is given as Attachment 14.

6.2 Start-up Stage

5. National Level Activities

 Set up the National Project Steering Committee,  Prepare for appraisal of the project by the World Bank  Set up coordinating arrangements at the Gama Neguma Division and assigning duties for the Project Coordinator  Orientate political and administrative authorities

6. Provincial Level Activities

 Set up Provincial Steering Committee  Set up project arrangements at ACLG level  Prepare Appraisal Checklists  Appoint a team of Project Appraisers

7. District Level (ACLG) Activities

 Make LAs aware of the project

8. LA Level Activities

 Establish and/ or revitalize Community Centers  Establish Standing Committees

6.3 Pre-Planning Stage

9. National Level

 Set up project arrangements at CLGs,  Prepare annual implementation plan, annual procurement plan, and budgeting

10. Provincial Level

 Conduct LA assessment to identify potential LAs  Finalise the list of potential LA for the first round of project implementation  Obtain endorsement of the list of potential LAs from the Provincial Planning Committee  Conduct initial discussion with the selected LAs for preliminary arrangements  Train the required staff of the CLG office  Form LA-Advisory Committee and other relevant LA Committees  Sign Umbrella Financing Agreement between CLG and the LA (annually)  Creat an enabling environment (political support etc.) for the project

11. District (ACLG) Level

 Conduct the Baseline Study  Assess capacity needs of the LA and arrange training as necessary  Facilitate formation of LA Advisory Committee and train the members  Facilitate LA assessment  Prepare the Rate Bank (Prices fixed by the District Price Committee)

12. LA Level

 Mobilize Community Centers  Facilitate formation of CC level committees

6.4 Planning Stage

13. National Level

 Hire consultants and make them aware of project procedures  Monitor the provincial planning process  Release funds to CLG

14. Provincial Level

 Prepare a plan for project consolidation and sustainability  Release first tranche of funds for Local Authorities  Prepare a grievance redressal mechanism  Assess the status of GAAP

15. District (ACLG) Level

 Train leaders and members of the committees of CC on contents of Local Authority Project Implementation Manual (LAPIM) and the Project Implementation Plan (PIP)  Initiate participatory project planning for developing the Local Authority Participatory Development Plans (LAPDPs)  Train LA Advisory Committees and other related committees (procurement, SAC etc.) on LAPIM and PIP  Facilitate preparation of the consolidated LA Participatory Development Plan  Appraise proposals submitted to the LA at desk level  Appraise sub-project proposals at field level  Prepare a grievance redressal mechanism  Develop or update a Rate Bank  Assess the status of GAAP

16. LA Level

 Mobilise all CBOs including CC  Develop consolidated five-year LA plan based on village development plans  Develop the annual rolling plan based on the consolidated plan  Prioritize and approve village level plans  Develop Capacity Building Plan for LA as well as the CCs  Prepare a grievance redressing mechanism  Assess the status of GAAP  Undertake Technical visits

 Develop/Update data base

17. GND Level Activities

 Form committees for CCs  Organise participatory planning process  Prepare the village development plan and submit to the LA

6.5 Implementation stage

18. National Level Activities

 Coordinate with stakeholders  Provide technical support to CLGs  Approve Provincial level plans  Release funds to the provincial treasury  Monitor the overall progress of the project

19. Provincial Level Activities

 Conduct IEC Campaign at provincial level  Approve district level plans  Establish a monitoring mechanism to assess the progress of the sub projects  Coordinate with stakeholders to facilitate implementation of the project  Participate in Provincial Coordinating Committee  Make arrangements to obtain services of Provincial Council Technical Support Unit  Monitor project activities at ACLG level  Implement projects

20. District (ACLG) Level Activities

 Conduct IEC campaign at district level  Facilitate formation of LAs Sub committees  Facilitate LA to undertake needs analysis to prepare village plans  Endorse/Clear LA level plans  Supervise project implementation activities at LA level  Conduct Social Audit  Participate in District Coordinating Committee  Monitor the project activities  Establish Accountability mechanism including Community Score Cards at LA level

21. LA Level Activities

 Establish a LA Technical Support Unit for O&M  Train relevant staff for O&M activities  Implement projects  Participate in Divisional Coordinating Committee  Release funds to CCs for community sub-projects as necessary  Monitor the project activities

22. GND Level Activities

(c) Organise Committees for implementing the project (d) Train CC committee members on project implementation procedures (e) Coordinate closely with other civil society organizations, active in the village to monitor the project activities

6.6 Post Implementation Stage

The post implementation activities will be confined to the following levels

23. District level Activities

 Prepare and implement the O&M plan

24. LA Level

 Operate and maintain the MIS system  Continue the function of LA Advisory Committee  Establish the Social Accountability mechanism  Conduct CAP to assess performance of CCs, every six months  Network with private sector to increase participation

25. Village level Activities

 Operate and maintain community infrastructure sub projects through LA Technical Support Unit  Ensure CC involvement in O&M activities, LA Technical Support Unit  Ensure continuation of service of village level government officials for the project

Chapter 7 Project Appraisal Mechanism

7.1 Introduction

1. Local authorities’ access funds for the consolidated LA development plans directly from the CLG and the LA councils are accountable for the proper utilization of funds to their own community and to the Ministry of Nation Building and Estate Infrastructure Development. The LAs will sign an agreement with the CLG before receiving the first installment of funds with a written confirmation to follow the principles, norms, rules and procedures outlined in the LAPIM and the PIP of NELSIP.

2. The Project Appraisal Team (PAT) is mainly responsible to check compliance before recommending the release of funds to the LA. Compliance to these rules help the LAs to take decisions, resolve conflicts and mobilize efforts of the elected members as well as the people to perform effectively, maintain the quality of collective work adhering to the principles of good governance within the project environment. The PAT will act to ensure observance principles, procedures and governance.

7.2 Need of Appraisal

3. Sub-project appraisal is to provide an additional opportunity to consider the proposals objectively and thereby to assess the feasibility of the proposed sub projects. It is also needed to consider the appropriateness of the selected activities in relation to the NELSIP principles, values and priorities.

4. Looking at the cost effectiveness of the expected outcomes, question the assumptions on which the proposed activities are based and assess whether the aims and objectives as stated are likely to solve the problems.

5. Accordingly, participation of women and youth in leadership, degree of transparency, level of programme benefits to the most needy and destitute etc. are monitored through the appraisal process. Therefore, appraisal constitute an integral part of the proposed project and it makes accountable to LA councils, CCs etc.

7.3 Appraising of sub projects

6. NELSIP will implement many local services improvement sub projects, which need appraisals to ensure that the sub projects are implemented according to the project guidelines and address the community needs. Appraisal teams based in district levels will appraise the sub project proposals submitted by the LAs for funding.

7. There will be a Project Appraisal Team (PAT) in each ACLG’s office. The PAT will consists of four appraisers including a team leader who will facilitate the team. It is a multi-disciplinary team and will consist of (a) Civil Engineer (b) Environmental Officer (c) Monitoring and Evaluation Officer and (d) Community Development Officer.

8. The PAT will undertake the responsibility of appraising the sub project proposals submitted to the ACLG by the LA to be submitted to the CLG. The district level Appraisal Teams will develop appropriate mechanism within the district to maintain the uniformity and quality of appraisal work. The PAT will directly report to the ACLG and work closely with the elected members and the staff of the LAs. The PAT will also work closely with the CCs. However, the appraisal teams will function independently to ensure transparency and accountability. The Attachment 15 describes the Appraisal Process.

9. LA Consolidated Participatory Development Plan will have several cluster/village development plans to address the issues prevailing in individual communities. All these plans will be appraised by the PAT prior to consideration for funds.

7.4 Appraisal Teams, Composition and Tasks

10. The project area will be divided in to eight districts and there will be a PAT for each district to appraise the sub project proposals and monitor the project process. Each team will cover the LAs participating in the NELSIP in their respective districts.

11. The multi-disciplinary teams of appraisers are expected to be well experienced in their respective fields and familiar with the local government sector. Every possible effort will be taken to identify the members for the PAT from the existing carder of the government officials, with the assistance of the Chief Secretary. The team leader who is responsible for overall appraising role will play a coordination role as well with relevant stakeholders.

12. The PAT is expected to play a facilitation role and pave the way for the LA to achieve the mission of the LA. While, the individual appraiser has a special role assigned, the team as a whole too has a specific role to play i.e. to monitor the degree of compliance of project procedures. Each appraiser has to contribute to the team to achieve the common objective of the team, while performing the one’s role effectively and efficiently to strengthen the team activities.

13. Carrying out desk and field appraisals of sub projects, Certification of milestones for approval of sub projects and maintaining a database on programme monitoring are some of the tasks included in the role of PAT. The project designers believe that the role of the appraiser should evolve to meet the changing needs of the society and also to contribute to identify change of the project strategies when necessary.

14. At the end of the project, the appraisal responsibilities are to be handed over to LAs. Therefore, capacity building of potential appraisers within the local government institutions will be considered as a priority.

7.5 Appraisal Process and Steps

15. The LA Consolidated Participatory Development Plan, which consists of sub project proposals derived from the village plans is submitted to the CLG through ACLG. The ACLG will make arrangements to appraise the plans through the PAT, to check whether the sub projects have been identified and formulated in accordance with guidelines of the NELSIP, and can be implemented in the field to produce expected outputs.

16. Once, the sub project proposal is received by the PAT, immediate action will be taken to appraise the proposals and submit their recommendations or comments.

17. The appraisal is done in three steps viz. (a) Appraise Indicative LA Plans (b) Desk Level Appraisal - to check the suitability of the proposal submitted by the LA for a field appraisal and (c) Field level appraisal- to verify the content of the proposal to tally with the actual field situation. Once, the Desk Appraisal indicate that prerequisites are satisfied, the team will organize a second round appraisal to appraise the proposal at field level with the CCs.

18. Once, the proposal is appraised and recommended for the funds by the PAT and cleared by the CLG, the proposal is sent to the Project Coordination Unit for funding. Based on this recommendation, the Project Coordination Unit too will make a brief review and if everything is in compliance with the requirements of the project, the funds will be released immediately to the CLG for funding.

19. If the proposal is not recommended by the PAT, it has to be resubmitted by the LA with corrections for reappraisal. In such a situation, the PAT will initiate the same re- process for appraising the proposal.

7.6 Roles of Community Members in Appraisal

20. The objectives of the project are to improve the delivery of local services and make the LAs accountable to citizens. The sub projects for the local services will also be developed in participatory manner. In that sense, the stake owned by the community in the project is higher than that of other stakeholders. Hence, the community responsibility in appraising the project is greater importance. Since, the consolidated LA development plan is developed through greater community participation they have the rights to take part in appraising the whole process.

21. The project respects the principles of governance and therefore participation of community members in sub project management is accepted as essential. Appraisal is also an integral part of the project process. It is to make sure that good governance practices among the stakeholders are promoted and practiced. Once again, the role of the community in appraising sub projects becomes vital.

22. The outside Appraisers alone can not fulfill the task of appraising the whole process unless the community assists them. The role of CC on behalf of the community in appraising is different. Primarily, it is to assist the PAT to generate information on sub project proposals and to help the team in analysing the data. This would initiate a dialogue among the various parties to understand/identify the real picture.

23. In this process, leaders of CCs will participate actively in site visits, random sample checking, verification of documentation, discussion with selected stakeholders, convening the Maha Sabah of CCs, if necessary to discuss the proposal further, provide information to the checklists prepared by the appraisal team etc.

24. This process characterizes the features of Multi-Stakeholder Dialogue, which is essential in the development process to create opportunities for stakeholders to learn and thereby to develop a sense of ownership of the project.

25. The councils of LAs and the CCs will assist the appraisal teams to arrive at independent decisions of the process and finally will agreed to implement the suggestions made by the PATs, which help the community to go forward with a clear understanding of their own development activities.

7.7 Service Standards

26. The PAT will emphasis on the standards in each of the steps of the project cycle in order to verify whether the LAS and CCs have followed the set process. The procedure of preparing LA development plans, submitting of sub projects proposals, timing of appraising & reappraising, prerequisites that the CCs and LAs should fulfill when submitting sub projects and remitting of funds etc. will be taken into serious consideration when checking the standards. The service standards with appraisal process are given in Table 7.1 below.

Table 7.1 Service Standards and Appraisal Process

Appraisal Process Service Standard

Registration of proposals and Desk Within 02 days Appraisal at ACLG

Desk Appraisal, Field Appraisal and Within 10 days Submission to the CLG Office by PAT with recommendation

Clearance of CLG and submitting to the Within 03 days Project Coordination Unit

Brief review at the Project Coordination Within 02 days Unit for funding and no objection notice

Releasing of funds to CLG by Accountant Within 02 days

Releasing of funds to LA by CLG Within 02 days

7.8 Sharing of Appraisal Learning

27. The process of appraisal enables learning opportunities for all stakeholders. While the members of PAT can learn new things, regularly through the appraisal process, they can also disseminate knowledge acquired to the relevant parties, especially to the LA councils, CCs and project management and other relevant stakeholders.

28. During and after the appraisal, the PAT will keep log notes at LAs and hold meetings with LA Advisory Committee to share the learning and thereby to encourage good governance practices. Simultaneously, findings and recommendations of PATs regarding sub projects appraised will be reported to the CLG for further action.

29. Individual appraisers, who are exposed to valuable experience and learning in different geographical and project situations will share their experience and knowledge with the team at monthly meetings held by the appraisers. The learning of appraisals will also be shared with the management team of NELSIP at the monthly progress meetings and could be shared with the District and LA level officials too. All information will be stored in a database for the use of interested parties.

30. The LA Advisory Committee will be briefed on a regular basis of the appraisal findings, enabling them to take decisions. The District Coordinating Committees and Divisional Coordinating Committees will also be utilized to brief both the political as

well as administrative authorities about the progress of the project and thereby to obtain their assistance to the LA Advisory Committees.

7.9 Monitoring & Evaluation of Resources & Results

31. Monitoring the progress of milestone is also an integral part of the appraisal. Further, PAT should contribute to strengthen the overall monitoring system, managed by the CLG and the Project Coordination Unit as well. This situation will create opportunities to crosscheck or triangulate with the information generated about the progress by the M&E and the Social Audit Committee (SAC).

32. Accordingly, it is suggested that PAT needs to work closely with the Monitoring & Evaluation Unit of the Project Coordination Unit and the planning units of CLG, ACLG and LAs. In this process, PAT will pay its special attention to the following areas;

 Assisting NELSIP in monitoring the Process of the project.  Assisting M&E Division of the Coordination Unit in monitoring results and impact of the project interventions.  Monitoring of distribution of benefits among poor and poorest and share the information generated with ACLG, CLG and the project Coordination Unit.  Assisting Communication Unit to document lessons learnt by providing important information related to the project.  Developing a systematic mechanism to provide feedback of PATs to the relevant stakeholders.

Chapter 8 Project Financing Arrangements

8.1 Introduction

1 NELSIP Project Coordination Unit (PCU) will prepare a comprehensive Financial Management Manual for the project. The manual will cover, among other things, a negative list of expenditures that cannot be financed from IDA funds as specified in the Financing Agreement, procedures for selecting LAs for project funding, the utilization of funds for the project funds, disbursement, financial reporting, internal audit and performance monitoring. It will also provide the Terms of Reference (TOR) of the auditors. The first withdrawal from the loan will not be made until the project FM Manual is cleared by IDA. The detail factors included in the FM Manual are given in the latter part of this chapter.

8.2 Disbursement Arrangements

Disbursement Category Amount Disbursement % (SDR million) (Inclusive of Tax) Goods, works, consultants’ services and 5.270,000 100% Incremental Operating Costs Grants under Part 1 of the Project 27,000,000 100% of amount disbursed from the proceeds of the Financial Agreement Refund of Preparation Advance Amount payable pursuant to

730,000 Section 2.07 of the General Conditions

Total Amount 33,000,000

2. Project funds will be mostly spent at LA level. The LAs selected for the project will be based on (i) the availability of up to date financial statement and (ii) having an audit report acceptable to IDA for those financial statements. An acceptable audit report for the selecting LAs is any audit report without an adverse or disclaimer opinion.

3. Since LAs for the project are selected on the above criteria and due to the sound public financial management framework at LA level, IDA will only track expenditures for IUFR reporting up to the point the funds are disbursed from provincial level to LAs.

4. Hence, a negative list of expenditures that cannot be financed from the proceeds of IDA credit will be included in the Financing Agreement. Further, expenditure at LA level will be subjected to review during FM supervision on a sample basis.

5. Project funds will be disbursed by IDA on the basis of periodic interim unaudited financial reports (IUFRs) incorporating financial & physical progress reports in agreed formats submitted by the PCU on a quarterly basis. These reports will look at both components and activities.

6. Supporting documentation, including completion reports, financial reports sent by LAs and CLG at provincial level will be retained by the PCU and will be made available to the IDA during project supervision. IUFRs will be used by IDA to reimburse/replenish funds to the Special Account. The IUFRs and the withdrawal application will be prepared by the PCU and forwarded to Treasury for approval.

7. The PCU will be responsible for project financial management arrangements and coordinating activities at the Provincial Councils and LA levels. The CLG will coordinate the project FM activities including funds flow to the participating LAs, obtaining the periodic progress and financial reports from the LAs and conveying them to the PCU, liaise with the Auditor General regarding the annual audit of LAs.

8. A Fiscal Analysis Cell (FAC) is to be created as part of the Office of the Deputy Chief Secretary- Finance who will be responsible for review of financial reports and audit reports of the participating LAs. At the LA level, the Secretary will be responsible for satisfactory financial management arrangements for the activities implemented by the LAs under the project, subject to the supervision and oversight of the LA council wherever elected councils are in place. The Finance and Planning Committees of the LA will provide oversight regarding the implementation of the block-grant financed activities as well as their financial management.

9. The financial management arrangements for Component 1 of the project relating to capital grants will rely on the government systems to the extent possible. Where such systems and capacities are found inadequate they will be (a) strengthened through focused technical assistance and capacity building efforts and (b) supplemented through the use of consultants. The emphasis will be to enable the participating local governments to learn the skills and practices of efficient financial management through a “learning by doing” method and by providing them with the necessary incentives for doing so.

10. Thus the project will provide technical assistance to the participating local governments to improve their FM systems and at the same time insist on a higher level of standards in terms of FM practices to be part of the project, as is evidenced through the eligibility criteria prescribed. The capital grants provided to the participating local governments will be disbursed on a lump-sum basis (in two installments) based on the compliance with a set of eligibility conditions. These eligibility conditions will be verified annually to decide on continued eligibility. The capital grant funds will be used to finance local development activities that are

included in the participatory plans prepared by the LA in consultation with the community.

11. The participating local governments will be required to enter into an agreement with the MED that will specify the roles and responsibilities of the MED/Ministry of Finance (representing the National Government), the two Provincial Councils and the local governments. The LAs will be required to provide reports on the physical and financial progress of the activities undertaken and will be subject to an annual audit by the Auditor General. In addition, the project will be supported by the Provincial Internal Audit Department to carry out specialized audits including a Management Audit and a Value for Money Audit at least twice during the course of the project. The project will rely on the existing institutional system of oversight of the provincial and national government and will supplement them with additional measures as required.

8.3 Financial Management Arrangements

12. At the MED level, the PCU will be responsible for the overall project financial management of the project. A Senior Assistant Secretary of the MED has been appointed as the Coordinator for NELSIP who shall be the primary contact person for the Bank on all matters concerning the project. The Project Coordinator will be responsible for the day-today management of the activities implemented under the project. The Senior Assistant Secretary will be supported by a full time Finance Manager (FM) who will be responsible for carrying out all projects financial management activities and would recruited under Management Circular 33. The FM will be supported by three FM staff that will be seconded from the Government.

13. It has been agreed with the GoSL that all finance staff will be seconded to the PCU on a fulltime basis for project effectiveness. The two CLG offices will maintain financial records of disbursements made to LAs and the project level books of accounts will be maintained by the PCU encompassing the two provincial level financial reports.

14. The FM will be responsible for all project financial management activities including project budgeting, disbursement planning and forecasting, operation of the Designated Account (DAs) including claiming replenishments, financial administration of contracts for supply of goods and services for the project, disbursement of project funds, monitoring , maintaining books and records for project financial transactions, submission of quarterly FMRs to World Bank for the project, preparation of annual project financial statements and he/she will interact with project auditors on the audit issues and their follow up.

15. The PCU of MED will open a current account in the Bank of Ceylon to which funds are credited from the designated Account (DA) in the Central Bank of Sri Lanka. The payments at national level relating to Components #2, 3, 4 and 5 will be made from

this LKR account. The fund transfer to CLGs relating to capital grants under Component 1 will be transferred from this account to the CLGs through a LKR account maintained by the MOF.

16. The PCU will be responsible for preparing and submitting the Interim Unaudited Financial Reports (IUFRs) to the Bank. PCU shall ensure that IUFRs of the project are prepared and submitted to the World Bank, not later than forty five days after the end of each calendar quarter. The PCU will follow the GOSL Financial Regulations (FRs). The internal controls stated in the FRs are considered to be adequate for accounting and reporting the utilization of the project funds. The external audit of the NELSIP will be carried out by the Auditor General as a part of the NELSIP project audit.

17. At the Provincial and Local levels, the responsibility for financial management of the project funds within each of the two provinces will be shared between the CLG at the Provincial Level as well as the participating local governments. The finance unit in the office of the CLG will be responsible for the project financial management activities at the provincial level. The CLG through the ACLG and the Investigation Officers will be responsible for monitoring that the project funds have reached the participating local governments on time and that the expenditure on of the projects funds are carried out in accordance with the objectives and norms of the program as well as in accordance with the financial rules of the Government. The CLG will ensure that the participating local governments submit the financial reports on time, coordinate with the office of the Auditor General to ensure that the annual audits of the participating local governments are carried out on a timely basis and make sure that the recommendations and follow up actions arising from the external audits, internal audits and inspections are carried out diligently. The finance section will prepare summary financial reports regarding the utilization of the project funds and submit to the PCU and will work in close coordination with the PCU to ensure smooth implementation of project financial management.

18. The PPC will be responsible for deciding on the eligibility of local governments into the project after verifying that the eligibility conditions have been satisfied. The Deputy Chief Secretary – Finance (DCS-Finance) of the respective Provincial Councils will be responsible for the verification of the eligibility conditions and for recommending the list of eligible LAs to the PPC. The fiscal analysis cell (FAC) being constituted in the office of the Secretary to the Provincial Ministry of Local Government (PMLG) will assist the DCS (Finance) in verifying the eligibility conditions. The FAC will also be responsible for the financial monitoring of local governments and will review the annual financial reports and audit reports of local governments on a regular basis. The Fiscal Analysis Cell will also monitor the follow up of audit observations with the objective of ensuring diligent audit follow up.

19. The local governments who obtain eligibility into the program will be required to open a separate bank account for the receipt and custody of the project funds. The local governments will account for the project funds within their books of accounts in accordance with the existing local government accounting systems and procedures. The participating local governments will be required to submit quarterly financial reports to the CLG which will report on the receipt and utilization of project funds as a separate line item. In addition the participating local governments will include the details of the activities undertaken using the project funds in the annual report that they prepare and submit to the CLG.

20. The external audit of the receipts and expenditure of the project funds will be carried out by the Auditor General as part of the annual audit of the local government. The project will provide the necessary incentives and technical assistance to ensure that the annual financial statements of the local governments are prepared within three months after the close of the financial year and the annual external audit of the local government is carried out within six months after the close of the financial year. As part of the project objectives of strengthening the transparency and accountability of local governments, the participating local governments will be required to publish the annual audited financial statements and discuss the annual audit report findings in an open meeting.

8.4 Fund flow

21. A Designated Account (DA) in US Dollar will be maintained at the Central Bank of Sri Lanka. Project funds will be advanced to the DA based on the projected expenditures for two calendar quarters. The DA will be operated by the MED. Withdrawal applications will be prepared and processed by the MED and replenishments to the DA will be based on IUFRs.

22. A LKR DA for the project will be maintained at the Bank of Ceylon by the MED. The MED will transfer the funds under Component #1 to the two CLGs through a pass- through LKR account maintained at the MoF. This arrangement has been made with the intention of switching to a uniform mode of funds flow (that will not distinguish between the GoSL transfers and the Bank financed capital grants) that is expected to start subsequent to the mid-term review of the project. When funds are transferred through the LKR account maintained by the MoF, MED will inform the MoF on the amounts that need to be transferred to the two accounts maintained by the CLGs at provincial level. During project preparation stage this arrangement was discussed and agreed with the MOF.

23. The Treasury Operations Department (TOD) will be responsible for the operation of the pass-through account. The department will identify an officer to assign the responsibility of operating the pass-through account by negotiations. As agreed with the TOD, funds will be transferred under the Component #1 to the CLGs based on the

instructions given by the PCU within three working days. Until the project switches to a uniform mode of funds flow, the only responsibility of the TOD is to promptly transfer the funds under Component #1 to the two CLGs based on the instructions given by the PCU.

24. Separate LKR project bank accounts will be maintained for the project at provincial level for the North and East Provinces by the two CLGs. The purpose of these two accounts is to facilitate the transfer of project funds from national level to LA level. No payments other than the transfers to LAs shall be made from the LKR project bank account at provincial level maintained by the CLG.

25. The MoF will transfer the block grant funds to the project bank accounts maintained by the CLGs based on the information provided by the Finance Manager of the PCU. The two CLGs will in turn transfer the funds to the respective local governments eligible for the grants. The LKR DA maintained by the MED will be used for payments made to suppliers, vendors and to consultants under components 2-5 of the project.

26. Separate LKR project accounts will be maintained at all selected LAs. This will ensure transparency in the project fund flows and will facilitate the tracking of project expenditure during supervision.

27. No project funds will flow to any LA unless that LA opens a separate LKR bank account for the project and submit the details of that account to the respective CLGs. Upon receiving this information, the CLG will authorize the first transfer of project funds from provincial project bank account to LA project account.

28. IDA will advance an amount to the designated account, to meet estimated expenditures for next 6 months, as forecasted within the interim unaudited financial reports (IUFRs). In addition PCU will have the option of requesting IDA to make direct payments to any foreign consultant or supplier.

29. The project is intentionally adopting a ring-fenced approach on disbursement of project funds due to the capacity constraints at the provincial and local levels at the start of the project. However, it is the intention of GoSL to merge the capital grants financed by the Bank with the fiscal transfers that it provides to the provincial and local governments currently. This will require a better understanding of the procedures and systems of fund transfers being utilized for fiscal transfers at present as well as the risks arising from commingling of funds. The Task Team will undertake an in-depth analysis of the above and will explore the possibility to switch to a uniform mode of funds flow (that will not distinguish between the GoSL transfers and the Bank financed capital grants) starting from the mid-term review of the project.

8.4.1 Accounting Policies and Procedures

30. Project will maintain accounts on the cash basis of accounting and will also comply with the government finance regulations. The project specific accounting and reporting procedures will be laid down in financial management manual that will be prepared by the PCU by negotiations. The FM manuals will ensure compliance with all existing public financial reporting regulations and circulars of the Government

8.4.2 Project Staffing

31. The MED has approved the PCU cadre including a Finance Manager and two management assistants for financial management activities. The finance staff has been identified by the MED and will be seconded to the PCU on a fulltime basis.

32. The finance unit of the CLGs in the two provinces is well staffed and has an accounts officer and a Management Assistant who will be responsible for the project financial management activities at the provincial level. The finance unit will be supported using short term consultants to cope up with the increased work load.

33. The participating LAs will be required to have adequately trained FM staff for gaining eligibility joining the project. At the LA level, the Secretary of the LA will be primarily responsible for the financial management of the project funds. The Secretary will be assisted by a Management Assistant who will be responsible for financial management. The FM staff at the local level will be provided training at at periodic intervals.

34. The training and capacity building activities of the project relating to strengthening the public financial management systems of local governments will be coordinated by a Local Government Financial Management Specialist who will be on board by project approval will based at the PCU. The Local Government Financial Management Specialist will be responsible to work with the participating local governments to identify their training and technical assistance requirements, coordinate with the supply side to ensure that the design and content of the training programs match with the requirements of the local governments and oversee the quality of the implementation of the training programs.TOR for the Local Government Financial Management Specialist will be cleared with IDA by Project Approval.

8.4.3 Internal Controls

35. The PCU will follow the government financial regulations and circulars. These regulations address all aspects of procedures and controls necessary for authorizing, approving, executing, recording, and reporting expenditure. 36. These procedures/controls are considered to be adequate and any additional internal control procedures will be specified in the financial management manual to bridge

any gaps and to promote outcome/output focused accountability. In addition, the FM manual will also contain disbursement and reporting procedures required by IDA.

37. The LAs presently operate within their regular internal control framework as stipulated by the rules applicable to LAs. These rules are input focused, but they cover controls necessary to authorize, approve, execute, record, and report expenditures.

8.4.4 Budgeting

38. The provincial councils will submit their cash budgets on a quarterly basis to PCU. The PCU will use these budgets to prepare the six months cash forecast stated in IUFRs. The project will be included as part of the national/provincial budget with a separate line item. The participating local governments obtaining eligibility into the program will be provided indicative figures in advance regarding the grant allocations to them, which will enable them to include the grants into their annual budgets.

8.5 Financial Reporting

39. The PCU will use IUFRs to report to IDA on a quarterly basis. The formats of IUFRs, designed in accordance with the guidelines issued by IDA will be agreed during negotiations. For expenditures incurred in both provinces, one consolidated IUFR will be prepared by the PCU.

40. Since IDA will treat the expenditures from the CLG as project expenditures, IUFRs are based on the expenditure disbursed at provincial level. The PCU will prepare and submit single IUFR to the IDA consolidating disbursement reports sent by provincial councils.

41. For project activities carried out by LAs, accounting records will be kept by the respective LAs. LAs will account for the project funds transferred from the provincial council using spate books of accounts within its own financial management systems as defined in the financial and administrative rules applicable to LAs. Format of such books/records has also been prescribed in these rules. The LA secretary will be responsible for financial management for the funds.

42. In addition, the LAs will report periodically to the CLG on the Financial and Physical Progress of the Project. The CLG will consolidate the financial and performance reports and send them to the PCU. The FAC will also monitor the expenditures at the LA level by reviewing the financial reports.

43. It is expected that under the component 3 of the project the capacities of (1) the LAs to prepare comprehensive financial reports (2) the capacity of the CLG to monitor and review the expenditure at the LA level as well as monitor and follow up on audit reports will be developed.

44. The Secretary, MED will be responsible for the appropriate and diligent use of project funds. The Project Coordinator and the Finance Manager of the PCU in turn will be answerable to the Secretary for the use of project funds.

8.6 Safeguarding project fixed assets

45. PCU of The NESLIP Unit will use a simple excel based system to safeguard the fixed assets of the project. The system used would ensure that records of fixed assets and stocks are kept up to date and reconciled with control accounts. The project assets will be adequately insured

8.7 Internal Audit

46. Internal Audit is an important part of the overall governance and financial management arrangements for the project. Internal audit will be carried out at two levels. At the national level, the PCU will engage an independent audit firm to carry out internal audits of the project activities on a periodical basis. The internal audit will be carried out on an ongoing basis starting from the second year of the project and will cover the entire project. The internal auditor will report to the Chief Secretaries and Secretary of MED with a copy to the Project Coordinator, NELSIP to initiate necessary follow up actions. The internal audit report and the follow up action taken will be presented to National Project Steering committee and shared with the Bank. The overall scope of internal audit services will

 evaluate the internal control systems of Las and the integrity of project financial information produced by LAs

 assess whether the projects funds have been used for the purpose intended and whether the funds have reached the intended recipients

 assess the internal controls over payments made from the project account

 verify the existence of project assets

 appraise the economy and efficiency of resource utilization in accordance with the credit agreement and

 determine whether LAs have complied with the FM manual, Operations Manual and other existing laws and regulations.

47. The TOR of the internal audit assignment cleared by IDA will be included in the Financial Management Manual.

8.8 External Audit

48 The external audit of the project will be carried out annually by the Auditor General of Sri Lanka. As a part of the project external audit, the Auditor General will audit the Project Accounts and FM arrangements at Provincial level and LA level. The project external audit reports will be submitted to IDA within six months from the financial year end.

49 The LAs selected under the project will be required to submit copies of entity level audited annual financial statements to the CLG within six months of the close of each financial year. The PCU will be responsible for reviewing these audit reports and deciding any corrective action.

50 The CLG will be tracking the overdue audit reports and ensuring that follow-up actions are taken by the LAs on any audit observations. IDA will review only the consolidated project audit report prepared by the AG regarding the project which covers project activities at provincial and LA level.

8.9 Supervision Plan

51. The proposed project has a High financial management risk rating. Therefore, in consistent with the risk based approach to supervision, a substantial portion of the supervision activities would consist of intensive field visits, supplemented by desk reviews of internal & external audit reports, quarterly financial reports, fixed asset physical verification reports and dialogue with the project staff as needed, especially in the initial years.

8.10 Project Summary Cost

52. The overall Project Summary Cost is given in Table 8.1.

Table 8.1 Overall Project Summary Costs

Component Foreign US Million Local US$ Million Total US$ million Component 1: Fund Transfer 41.50 32.50 74.00 Component 2: Institutional Accountabilities 1.50 0.50 2.00

Component 3 : Building Capacities 3.50 0.50 4.00 Component 4: Policy development and 1.00 0.00 1.00 Evaluation Component 5: Project management 2.50 0.50 3.00 Beneficiary Contribution 0.00 2.00 2.00 Total Project Cost (including physical, price contingencies) 50.00 36.00 86.00

8.11 Financial Management Manual

53. Apart from the major areas mentioned in the beginning of the chapter, the FMM will cover the following areas in detail. The manual will be developed in a way that it could be easily utilized by the LAs and the other officials of the different levels of the project implementation mechanism. The FMM will be made available to all the LAs and the relevant parties for reference. The areas which will be covered by the manual are as follows;

 Overall organization chart of the financial management function of the project  Procedures for opening a separate LKR account for the project by Pradeshiaya Sabha, Urban Councils and Municipal Councils clearly specifying the application and approval procedure, document flow and the officers authorizing the account opening procedure at each level.  Procedures of selecting a local authority to be financed under the project, clearly specifying the eligible criteria, application process, supporting documents required, approval process and documentation process.  Procedures for releasing the first tranche to each selected Local Authority clearly specifying the conditions that the selected local authorities should fulfill, initial advance approval process and the document flow  Procedures for releasing subsequent tranches to each selected Local Authority clearly specifying approval process and the document flow  Procedures for preparing the quarterly financial monitoring report (FMR) which should be submitted to the World Bank clearly specifying the outputs and timelines of each officer who is involved in the FMR preparation process.  Procedures to be followed by the two Finance Managers/Accountants who will be based in Northern Provincial Council and Eastern Provincial Council CLG office clearly specifying the reporting and monitoring responsibilities.  Project financial records and books of accounts that need to be maintained by the two Finance Managers/Accountants stationed in the two CLG offices  Procedures for receiving and reviewing audited financial statements of the Local Authorities selected under the project and follow-up action on the issues raised by the Auditor General in those reports reviewed  Project financial records and books of accounts to be maintained by the Accountant/Management Assistant in local authorities funded under the project  Project Financial records that Local Authorities should submit to the two Finance Managers and their formats and frequency.  The financial management and monitoring responsibilities of the NELSIP coordinating unit in Colombo, other than the preparation of the FMR.

 Withdrawal application preparation and approval procedures  Cash/cheque payment approval limits for the project expenditure.  Appropriate segregation of duties and other internal controls at all levels for finance related activities  Define main accounting policies applicable for the financial reporting of the project.  Procedures for preparing the quarterly and annual budgets and cash forecasts  Accounting and finance procedures to be followed by Community Centers when using the project funds.  Fund disbursement procedures by World Bank  Financial document required to be submitted by LAs

Chapter 9 Procurement Arrangements

9.1 Introduction

1. Procurement for the proposed project would be carried out in accordance with the World Bank’s "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 revised October 2006, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below.

2. Local Authority’s (LAs) will develop medium-term rolling implementation plans covering all sources of funding. Procurement plans will be prepared based on the implementation plans. Specific activities will be earmarked for IDA financing under the project. For each contract to be financed by the Loan/Credit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan.

3. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

9.1.1 Procurement of Works:

4. Works to be procured under this project will include small civil works such as road rehabilitation, water supply, sanitation and solid waste disposal systems, and other community infrastructure, over widely dispersed sites. No ICB procurement of civil works is expected under the project. Labor intensive works estimated to cost less than US$50,000 per contract will be procured in accordance with the procedures of Community Participation, or under National Shopping procedures, as detailed in the LA Operational Manual.

5. Works estimated to cost US$50,000 equivalent or more and less than US$ 2 million per contract will be procured following National Competitive Bidding (NCB) procedures acceptable to the Bank. The procurement will be done using the Bank’s Standard Bidding Documents (SBD) for all ICB and National SBD agreed with or satisfactory to the Bank.

9.1.2. Procurement of Goods:

6. Goods to be procured under this project would include office equipment and furniture, audio visual equipment, educational material, vehicles, networking and website software, and printing of IEC material, training material, manuals etc. Goods estimated to cost US$50,000 equivalent or less per contract may be procured on the basis of National Shopping; goods estimated to cost more than US$50,000 and less than equivalent of US$ 200,000 per contract may be procured following NCB procedures acceptable to the Bank; and goods estimated to cost of equivalent US $200,000 or more per contract will be procured following ICB procedures. The procurement of goods will be done using the Bank’s standard bidding documents (SBD) for all ICB and National SBD satisfactory to the Bank for all NCB and shopping.

7. Procurement of goods by Local Authority’s will include materials for works under community participation, and office, IT and infrastructure maintenance equipment for the Local Authorities and will follow procedures set out in the LA Operational Manual, as agreed with the Bank.

8. Additionally, similar type goods (such as cement and steel), may be procured under packaged contracts by the respective Local Authority’s, under NCB procedures acceptable to the Bank. Direct Contracting will be used for items of a proprietary nature and small value items urgently required.

9.1.3. Procurement of Non-Consulting Services:

9. Non-consultant services required under the project including website maintenance, vehicle hiring, and janitorial services, will be procured under NCB or National Shopping procedures, following the same thresholds as for goods.

9.1.4. Selection of Consultants:

10. The Project would contract private firms, NGOs and other service providers including social, technical, accounting, procurement and environmental specialists, for supporting project implementation. These services would include management support for: mobilizing and strengthening communities; implementation technical assistance; rural banking and micro enterprise support services including public- private partnership LA to improve livelihood opportunities; conducting special studies; developing monitoring, learning and evaluation (ML&E) systems; and capacity building.

11. Short lists of consultants (firms) for services estimated to cost less than of equivalent US$200,000 per contract may comprise entirely of national consultants, in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. For consultant

services estimated to cost less than equivalent of US$100,000 per contract, the method of Selection Based on Consultant’s Qualifications (CQS) may be used, in accordance with the provisions of paragraph 3.7 of the Consultant Guidelines.

9.1.5. Operating Costs:

12. These costs will include incremental recurrent expenditures incurred on account of the Project for traveling and subsistence expenses, office supplies, vehicle rental charges (including insurance), vehicle operating charges (fuel, maintenance, and insurance), maintenance of office equipment, telephone and other communications charges, office rent, bank charges, advertising costs, and salaries and contractual allowances of contracted staff, but excluding salaries of Government officials.

9.6.1. Others: (Training):

13. Institutional development plans will be developed by each LA, prior to any training being availed of. The training programs will be revised/updated and reviewed by the CLGs. Exposure visits for Local Authority members and others will be arranged with selected single sourced organizations/institutions.

14. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procured, are presented in the LA Project Implementation Manual (LAPIM).

9.2 Procurement Manual

15. The GOSL procurement guidelines, which are consistent with the Bank’s guidelines, are currently followed by all provincial and local government authorities. MED will hire a consultant to help prepare a procurement manual, specifically for use at the provincial and LA levels, detailing procedures and thresholds. It is expected that all PCs and LAs would adopt this manual for use for procurement activities carried out by the PCs and the LAs, irrespective of the source of funding.

16. The procurement manual would provide details on procurement method options, thresholds, rules and procedures, and documents to be used, consistent with the Bank’s and GOSL’s guidelines. Procurement staffing and job descriptions will also be included in the manual. Model bidding documents and forms of contract as agreed with the Bank (mainly for shopping) would need to be translated for use at the LA level.

9.3 Possible Risks

17. The key issues and risks concerning procurement for implementation of the project have been identified and include the following:

 While it may be possible for communities to be involved in the decision-making process, it is unlikely they would be able to take the lead in procurement activities, given the fragmented nature of the newly resettled communities in the North and East.

 The absence of a good procurement system and dedicated staff for procurement limits its capacity to undertake large value procurement.

9.4 Corrective measures

18. The corrective measures, which have been agreed upon are:

 Prior to initiating any procurement activities, selected LAs will be subject to mandatory capacity self-assessments.  Dedicated procurement staff will be identified and a clear chain of responsibility for procurement monitoring and reporting will be identified.  The LA institutional development plans would include procurement training based on the capacity assessments.  Contracts for rural infrastructure works will be implemented through community contracting or shopping, managed by the LAs.  Infrastructure development proposals will be prepared by the LAs in consultation with the communities, and will include procurement plans.  Procurement options will be selected based on the procedures outlined in the procurement manual (to be developed).  Governance and Accountability action plans (GAAP) will include procurement risk mitigatory actions, which will also be incorporated in the institutional development plans.  Once the first batch of LAs is selected, detail fiduciary assessments would be carried out, together with an assessment of existing community-based societies - CCs.  A procurement capacity building plan will be developed in consultation with the ACLGs, CLGs and relevant provincial authorities.  Designated staff at the LA level would process the procurement activities, under clearly defined procedures.  Procurement capacity building and monitoring would be led by the respective ACLG offices, in consultation with the Management Development & Training Unit (MDTU) at the provincial level.  The provincial internal auditing would also need strengthening. Community-led monitoring would be promoted.

Chapter 10 Monitoring and Evaluation

10.1 Introduction

1. NELSIP will consider monitoring as an in-built integrated activity and not as a separate activity and therefore it will become integrated in regular activities. Thus, it will emphasis on the timely use of the results of monitoring. A strong and very comprehensive monitoring mechanism will be established at every level: national to LA level including the CCs in order to generate information and thereby to measure progress and to make sure whether the project is moving on the correct tract producing expected outputs. Accordingly;

 Monitoring in NELSIP will be based and planned on solid knowledge of objectives and activities  Information generated will be used to resolve issues, answer questions, improve the project and adapt activities  Monitoring information will be collected and acted upon at the lowest level possible  Monitoring in NELSIP will be focused and simple (limit number of indicators, length and cost of data collection)  It will be on a careful definition of indicators. The PCU with CLGs should develop pragmatic indicators for the project.  NELSIP will always combine quantitative information with qualitative information.  Information will be triangulated to ensure checks and balances (Validity and reliability of information)

2. NELSIP will use following methods through out the project in order to generate information to assess whether the expected results are being achieved as planned.

1. Appraisal: to assess a situation in the planning stage to design or implement a future activity 2. Audit: to analyse of use of resources (inputs) in order to maximize of use of resources and achievement of results 3. Monitoring: To assess achievement o targets and results fixed by the plan (performance, efficiency etc.) and to take decisions relating activities, to enhance achievement of the objectives (effectiveness). 4. Review: This is an occasional assessment of the development of the project to take decisions on improvement of project performance, or modifications of project activities and objective, or continuation or end of project.

10.2 Purposes of Monitoring and Evaluation

3. The purposes of Monitoring and evaluation are;

 Making available adequate and reliable data and information for the project management at national, provincial, district and divisional levels and the village communities to take appropriate and timely decisions and also to tackle implementation issues promptly.  Providing continuous feedback for different stakeholders on the efficiency and effectiveness of project institutions, project processes and project impacts  Creating learning and knowledge management opportunities for fine tuning and adapting project implementation, documenting best practices and evolving policies for wider adoption and replication of project principles

10.3. M&E Strategy

4. The NELSIP is designed in a way that LAs directly involve themselves in the project cycle: designing, implementing and monitoring & evaluation in consultation with the CCs. The Project Coordinating Unit based at the national level will concentrate more on a coordination and facilitation giving authority of project management to the CLG. In other words, the implementation arrangement of NELSIP is decentralized by giving opportunity to CLG, ACLG and the LAs to play management, supervising and implementation roles respectively.

5. However, the PCU will play a greater role in the monitoring aspect of the project. Accordingly, the PCU unit will generate genuine and accurate data & information of the project for the stakeholders to learn lessons and take decisions to make appropriate corrections. The M&E/MIS Specialist of the PCU will take the responsibility in implementing a pragmatic and smooth monitoring mechanism through out the project with the assistance of all the implementation levels.

6. A simple, cost effective and appropriate M&E strategy will be developed for the project. This strategy will be easy to translate into pragmatic solutions at the field level. Accordingly, M&E strategy will focus more on the following factors.

 MIS - monthly, quarterly, annual progress reports and progress evaluations by CCs, LAs, district, provincial and national levels.  Periodic evaluations by World Bank (WB)  Project appraisal and monitoring by the project Appraisal Teams  Establish a Process monitoring mechanism  Establish a proper Community Assessment System  Establish a Social Audit Mechanism  Establish statistical surveys and check status of components  Mid Term Reviews etc.

7. A matrix for setting up a Monitoring Mechanism is given in Attachment 16.

10.4 Monitoring and Evaluation of Outcomes/Results

8. Overall monitoring of the project will be carried out at the national level by the PCU. A Monitoring and Evaluation Specialist (MES) will be appointed to the PCU to coordinate the M&E efforts and MIS. Monitoring will consist of collecting quarterly and annual progress reports from provincial CLGs and preparing summary reports based on this. The MES in the PCU will provide necessary capacity support to the provincial CLG and ACLG offices and oversee monitoring of inputs and outputs.

9. Further, with regard to monitoring of outcomes, surveys will be conducted at the beginning, mid-term and end of the project.

10. These will be coordinated centrally by the M&E specialist with the provincial CLG offices. At the provincial level, monitoring will be undertaken by the respective CLG offices where designated officers in the M&E Unit will be responsible for tracking progress on a regular basis using a robust web-based Management Information System (MIS). The key instruments for monitoring progress will vary from component to component.

11. The utilization of block grants to LAs will be monitored by the provincial CLG and ACLG offices using standard monitoring reports such as quarterly progress reports from LAs, field supervision reports from ACLG staff and annual audits undertaken by the Auditor General’s office.

12. A rigorous evaluation framework will be developed to assess the outcomes and results as well as quality of processes. Independent impact evaluations will also be conducted with surveys at mid-term and project completion to assess progress towards achieving the project development objective (PDO).

13. Since disbursement is considered as completed when the fund transfer occurs from CLGs to LAs, a robust M&E system will be put in place to track the expenses and assets created. Extensive monitoring of progress will be carried out to assess the use of the block grants by LAs using output indicators. Some such potential output indicators are;

 km of rural roads rehabilitated / reconstructed  km of non-rural roads rehabilitated / reconstructed  km of drainage system rehabilitated / reconstructed  no of improved water points rehabilitated / reconstructed  no of new pipe borne household connections established  no of rural health facilities renovated

 no of libraries renovated / reconstructed  no of street lighting posts set up  no of playgrounds set up / rehabilitated; and  no of waste collection facilities set up.

14. In addition, social accountability mechanisms such as functioning of LA social audit committee, public displays, grievance resolution system and participatory community assessments will also be enforced.

10.5 Project’s Outcomes and Indicators for Success

15. The project will develop output indicators to measure the progress and thereby to verify the outcomes. Though, it may be difficult for NELSIP to claim sole responsibility for the outcome, the outcome indicators will be developed for the purpose of measuring the progress. Some of the outcome indicators are given below;

10.5.1. Project outcome indicators:

 Service delivery coverage, measured by improvement in public goods delivered by LAs such as the construction/rehabilitation of (i) rural and other village roads (kilometers), (ii) drainage systems (meters), (iii) water points (number), (iv) piped water connections (number of households), (v) playgrounds and nursery facilities (number), and (vi) waste collection facilities (number);

 Percentage of capital grants released against allocations;

 Satisfaction of local people measured by score cards and assurance audits to verify improved access and quality of local service delivery.

10.5.2. Intermediate outcome indicators:

 Financial reporting capacity, measured by number of LAs preparing annual financial statements within three months after close of the financial year;

 Financial management capacity, measured by number of acceptable audit opinions of LA accounts;

 Participatory budgeting, measured by number of LAs with budgets prepared in a participatory manner; and

 Budget and expenditure transparency, measured by number of LAs whose revenues, expenditures and procurement decisions are publically disclosed.

10.6 Participatory Stakeholder Monitoring Systems

16. A uniform monitoring system for all LAs, which is acceptable to the local government system should be adopted. In developing such a Participatory stakeholder monitoring system, it is essential to develop a consolidated Participatory LA Development Plan for each of the LA, where the real issues of the villages are represented.

17. Based on the LA Participatory Development Plan, the LA will be facilitated by ACLG to prepare an annual monitoring and implementation plan using proper guidelines. It is also proposed to use advance software to get final outputs of the LA development plan. For this, the planning unit of the CLG office, with assistance of the M&E unit of the Coordination Unit will apply for a Geographical Information System (GIS).

18. The GIS system will be tested in a few of the LAs in the first year of implementation to learn lessons. Based on the experience of the first year, the GIS system will be introduced to rest of the LAs.

19. It is also planned to introduce a MIS to monitor regularly the results and compliance at village and LA levels. This system will be initiated from the Coordination Unit and it is planned to introduce a MIS from national to LA level.

20. With a view to provide opportunities for leaders of the CCs and the citizens to participate in the monitoring process, a monthly “LA Progress Monitoring Day” on a fixed date will be organised. The Monitoring Day will be held in the respective LAs. This will be open for all the stakeholders. The community can discuss the progress of the previous month on this day. This opportunity could also be used by the LA staff to complete the monthly progress report.

21. The LA Advisory Committee in each of the LA will meet with the council members to review the progress in the first week of each month during the project period. The secretary of each LA will meet with the ACLG once a month to review the progress.

22. Based on the monthly reports submitted by the LA and the information generated through the monthly review meeting, the ACLG will prepare the district monthly progress and financial reports to be submitted to the CLG.

23. The CLG will prepare a provincial quarterly progress report and submit it to the Project Coordination Unit. The Project Coordinating Unit will cross check the information with the information available in the MIS.

24. It is the responsibility of the PCU to submit progress and financial reports to the World Bank and the Department of External Resources. Remittance of funds to

various levels will depend on the submission of reports in time quality and their accuracy.

10.7 Learning Forums and Experience Sharing

25. Learning Forums are very important in NELSIP because it is considered as pilot project, which has to create learning to be applied in future projects planned to be implemented in the rest of the provinces. They enable stakeholders are made aware of the progress through Learning Forums and also to learn from each other to enhance the performance of the project.

26. Learning Forums will be held at the level of provinces annually. A national level Learning Forum will also be held to share the lessons with other stakeholders.

27. Further, it is suggested to publish educational materials (best cases and video clips etc). A News letter and a Community Radio will also be utilized to disseminate lessons learned to the public.

10.8 Independent Assessment and Impact Evaluation

28. Arrangements will be made to carry out a Baseline survey for the project by an outside consultancy agency. The data generated will be compared with the post project data to measure the impact. A LA level, similar baseline study is also proposed to generate data to compare with the data generated after the completion of the village development plan identifying the changes that have been brought to the village by the project.

29. It is suggested that the LA level baseline survey could be coupled with a Participatory Rural Appraisal exercise, to be conducted at the outset of the programme to prepare the LA Participatory Development Plan. Similarly, Independent Assessments are encouraged to assess the progress to get unbiased opinions of the project.

10.9 Periodic Reviews

30. The basic purpose of the reviews is to take a closer look at a task/project than is possible through the process of monitoring. Reviews will be carried out to look at different aspects of the project, using a range of criteria to measure progress and thereby to take appropriate management decisions. Regular reviews as part of a monitoring system by the stakeholders, especially the World Bank will be facilitated by the NELSIP. The activities are;

 To identify key issues and problems, which need to be addressed.

 To get feed back from partners and people affected by the project and provide opportunities to people to take part in the whole process.  As a staff development exercise.

31. The findings of the World Bank reviews will be emphasized in rectifying mistakes and will be shared with other stakeholders especially the GOSL. It is suggested that the multi-disciplinary review team of the World Bank needs to plan the review with the M&E unit of the PCU.

32. The management team of the PCU will review the project periodically as planned by the M&E unit. The planning units of CLG, ACLG and the LAs will also develop appropriate monitoring mechanism to measure the progress.

33. In addition, the LA Advisory Committee will also conduct monitoring exercise through the monthly coordinating meetings. The village level monitoring system will be implemented by the CCs with the assistance of the Community Development Officer.

10.10 Process Monitoring

34. The programme monitoring should include information about the use of resources, the progress and implementation of the activities. This also is known as Process Monitoring and it is highly recommended for the NELSIP. The process monitoring is for;

 Reviewing and planning work on a regular basis  Assessing whether activities are carried out as planned, according to the accepted standards and quality  Identifying and dealing with problems as they come up  Building on strengths and taking advantages of opportunities as they arise.  Assessing whether the style of work is the best way to achieve the development objectives of the work (capacity building, changing power relationship etc.)

35. Process Monitoring will be considered as an integral part of the overall monitoring mechanism of NELSIP and therefore due attention will be paid to this important management tool.

36. However, the project will engage independent process monitoring agencies to review processes. It is also anticipated that the staff at the provincial, district and divisional level will also learn from this process in conducting process monitoring exercises and be able to conduct them independently in future.

37. The human resource employed for implementing the monitoring mechanism from national to divisional level, will be systematically utilized for process monitoring by

incorporating the process monitoring into normal monitoring activities that will be implemented by the NELSIP project management system. For this, PCU in consultation with the CLGs and ACLGs will design NELSIP’s monitoring mechanism to include the issues related to the process monitoring. Thus, the monitoring methods will also be developed.

10.11 Key Monitoring Indicators for Progress Monitoring

38. The Project coordination unit will facilitate the LAs to develop log frames for the LA consolidated Participatory Plans that they submit for funding. The logical frame work (LFA) will include development objectives, outputs, activities with indicators and the necessary inputs for the project. They will eventually help the project implementers to monitor progress effectively.

39. The process indicators will monitor whether the Project implementation follows the prescribed processes. The financial indicators will monitor the financial progress of the project. The results indicators are used to monitor the benefits to the primary target groups and also the success of the project based on key outcome/results.

10.12 Monitoring Methods and Tools

40. Without information, monitoring is not possible. Therefore, practical and cost effective set of methods will be used in the monitoring mechanism in order to generate both quantitative and qualitative data and information on lessons learnt.

41 Different types of methods should be used to generate relevant data. The project will concentrate more on generating data than collecting. The traditional data collection may not provide ground reality.

42. Hence, methods will be utilized in the monitoring process in participatory manner. They will provide opportunities for all stakeholder to take part in the monitoring process enthusiastically.

10.13 Methods for Generating Data  Selected PRA tools meant for generating data (Mapping, Venn Diagram, Wealth Ranking, Transact Walk etc.)  LA monthly Progress Monitoring Day  MIS and progress reporting system  National Steering Committee Meeting  Monthly progress review meetings (LA, ACLG, CLG)  Coordination Committee Meetings (Provincial, District and Divisional)  Baseline surveys (district and LA level)  Mid Term Reviews (World Bank and GOSL)  Sector wise impact studies  LA Public Gallery meetings

 Community Score Cards (CAP to develop to measure Balance Score Cards )  Project Appraisal and Monitoring System  Structured Field Visits (a guide for Structured Field Visit is given separately).

10.14 Field Visits

43. Field visits are a most common monitoring tool that many development workers use. However, it has been observed that field visits done, without purpose is a waste of resources.

44. Though the field visit in itself is a monitoring method, it needs to combine with other monitoring methods such as individual discussions, group discussions, focus group discussions, interviews, record checking, observations, meetings, interviews etc. also to generate information effectively.

45. It is a very powerful, but expensive and time consuming monitoring method which can be used to identify needed changes to the project. Also field visits can create both negative and positive impacts to the monitoring process, if it is not applied in a meaningful manner. Hence, the following suggestions are made for those who are fond of field visits.

46. The analytical tool known as SWOT (Strength-Weaknesses-Opportunities- Threats) is very common in analyzing external and internal forces in planning projects, but in NELSIP, a monitoring tool explained below is suggested to get maximum benefits.

47. The information that will be generated through field visits should be analysed in two way; (a) analysing the present situation and (b) analysing the future trends. The matrix for this analysis is given in table 10.1 as follows.

Table 10.1: A Guide for Field Visit Analysis

1 2

What are the strengths in terms of planning, What are the weaknesses in terms of planning, implementation, monitoring, or operation implementation, monitoring, or operation and and maintenance in the present situation? maintenance in the present situation?

3 4

On the basis of the successes and weaknesses On the basis of the present situation, and the of the present situation, general context, what are the possible threats, which the project (LA/CC) will have to face and what are the opportunities/potentials to what solutions could be found to overcome them. improve the planning, implementation, monitoring, or operation and maintenance aspects

48. To get a meaningful result from the field visit by using SWOT analysis, the officer concerned should prepare a check-list to obtain specific information to accomplish the purpose of the field visit. The check-list may consist of the following aspects;

 Governance  Accountability  Stakeholder participation  Implementation,  Environmental  Technical  Institutional  Financial, processes  Resources Utilization etc.

49. The CLG should assist the relevant staff to develop check-lists for field visits for assessing. The PAT will develop a comprehensive Check-List for this purpose with the consultation of the CLGs and the Project Coordination Unit. It is suggested that any one who is making field visits should make it fruitful by utilizing this method.

Chapter 11 Communication Arrangements

11.1 Introduction

1. Centralized information flow is found to be not that effective for NELSIP type of projects. In the Centralized Information Flow, the information is collected, but feedback is poor. There can be very long delays in taking appropriate actions. Collection is often done by a special team, which can be costly.

2. Therefore, for NELSIP a Participatory Information flow is suggested. In participatory information flow, the information flows to the actors who have a direct interest in it, and who can take action. Monitoring is a part of regular activities of each group. In this process, costs are reduced and efficiency increased.

3. Accordingly, the project management will ensure a systematic and effective information flow because different stakeholders such as local political as well the administrative authorities, community members and organizations may create confused communication arrangements. Hence, an effective communication system has to be developed from the beginning of the project

11.2 Communication Strategies

4. The NELSIP is planned to be implemented through the local government system and will work closely with different stakeholders in and out the system. They may be officials of the local government system at various level, elected members of LAs, LA Advisory committees, CCs, staff in the public administration system, members and agencies represented in the NPSC etc. The “bottom up planning process”, which is going to be applied in preparing the LA Participatory Development Plan, perhaps will be a novel experience for the LA. Thus, all these new changes need to be discussed with the stakeholders to minimize communication gaps and barriers in order to achieve the expected outputs effectively and efficiently.

5. Major communication activities such as Information Education Communication (IEC) GNF District campaign, materials development, audio and video programmes, media activities, Facilitation Team event organizing, news letter in both local language, community radio etc. will be organized by the PCU in consultation with the CLGs.

6. The information flow in the project will be a two way process that would create an opportunity for the stakeholders to have a dialogue among each other for the furtherance of the project. Therefore, the relevant information generated through

various participatory methods will be made available through suitable MIS for stakeholders, in time to enlighten them about the project.

7. Therefore, the project will take the utmost effort to develop a two way democratic information flow, horizontally and vertically within the project. The vertical information flow will be managed through MIS. The information required to the Web site of the project will be transferred through MIS.

11.3 Implementation Arrangements for Communication

8. The close working arrangements and implementation structure will be arranged to establish proper and positive communication channels with relevant stakeholders.

9. The LA council’s need to develop good rapport with political as well as administrative authorities in the project area to make them aware of the progress of the project in time. This is very essential.

10. Attention should be paid to identified communities as well as all pressure groups in implementing the IEC campaign and need to be maintained through out the project process. This will be discussed separately.

11. Arrangements need to be made to involve stakeholders as much as possible in the review of the progress of the activities, obtaining their ideas, suggestions and other inputs relevant to the project implementation process.

12. IEC campaigns will be conducted in both local languages using facilitators who are competent in both languages.

13. Since a large number of LAs are going to be involved in the project, IT based communication methods (e.g. audio conference with LA Advisory committees, having a hotline for the CLG and ACLG and LA office, internet facilities in all above offices) are highly recommended, to develop an effective communication mechanism within the NELSIP.

14. The government officials who will be involved in the project will be made aware of the project through exposure visits, video films of Best Cases etc.

15. The news letter will be utilized in a more organized manner to disseminate the knowledge of NELSIP project activities to the general public and arrangements will be made to distribute it within the two provinces using the national and local news papers. The Project will hire consultants, on part time basis to prepare the news letter and other media materials.

16. A panel of journalists in both print as well as the electronic media will be identified and their services will be solicited for promoting the project activities. This will be done from national to divisional level. The PCU will take the full responsibility in sustaining the relationship with a national level pool of journalists. At the provincial and district levels the CLGs and the ACLGs are responsible for keeping close contacts with the regional reporters and journalists.

11.4. Communication Operational Plan

17. The communication operation plan is given in the table 11.1 below.

Table 11.1. Communication Operational Plan

Activity Time 1. Make a Communication plan by the PCU in consultation with the CLGs and Parallel to the LA the ACLG selection process 2. Hire a Strategic Communication Specialist on contract basis to assist the PCU to make a strategic communication plan for the project. 3. Get the Communication department of the MED involved in preparing the communication strategy 4. Design materials for IEC campaign and make them available for the campaign (videos, leaflets, posters, presentations) 5. Equip the LA offices with key communication instruments such as Parallel to the launching of computers, multimedia, cameras and facilitate field staff to handle them the project 6. Meet and share of information with designated leaders and head of the local After finalizing the list of authorities, Divisional Coordinating Committee, LA Advisory Committee. LAs 7. Commence IEC campaign at National, provincial, District and Divisional Before launching the level project Meeting with Provincial Chief Secretary, District Secretary, Divisional Secretary, Chairpersons and the members of LAs, Conducting awareness meeting for village based government officers (Samurdhi, ARDA, Gramaniladari and Samurdhi Development officer) Display Posters and exchange of leaflets Organising meetings in the village with CC leaders and community members 8. Train and conduct awareness of progress gradually in Las 9. Start News supplement parallel to the project commencement With the progress of the project 10. Publications, telecast news, telecast documentaries on demand and During the project according to the situation implementation 11. Maintain rapport with the political leaders and brief them on important Do matters and keep them well informed about the progress of the project 12.Attend all coordinating meetings (provincial, district and divisional) Do 13.Organise Learning Forums at provincial level After one year of implementation 14.Organise Public Gallery meetings and report the progress of the council During the project affairs appropriately implementation 15.Obtain feed back from the citizen on the service of the LA and publish them Do in the news letter

11.5 Sources of Information for NELSIP

 Book keeping records, accounts, audit: to monitor purchase, payments, contracts. Data in books need to be compared with vouchers, purchase orders and receipts  Log books: to keep record of visits to include total distance rather than number and type of villages visited  Check- lists: to measure conformity to standard, needs to be formulated in concrete, unambiguous words; needs pre testing  Minutes of the Council, LA Advisory committee, and Social Audit Committee / CC : Needs to be noted and emphasised  Monitoring sheets: to check issues, which change over a period of time. Monitoring sheets needs to be user-friendly  Periodic reports: project staff to report on progress of activities. Data should be collected using the format developed by the project  Direct observation: to appreciate general conditions of setting or to appreciate behavioral change. This needs to be done in a structured and organized manner  Semi-structured Interviews: For short interviews informal questions need to be prepared beforehand  Focus Group Discussions (FGDs): This is for discussions in segment groups and on a specific theme and need to be prepared beforehand.  Questionnaires, Surveys: to collect specific information. This needs to be kept short and pre-tested  Workshops: to gather stakeholders to obtain or share specific information  Mapping: to correlate variables and to analyse problems within the community

11.6 Information Education Communication (IEC) campaigns

18. Information creates knowledge and fills communication gaps. Naturally, people are keen to obtain information. The NELSIP believes that lack of information creates high information gaps and hence conflicts. Subsequently, the conflicts create risks and they adversely affect the progress of the project. Accordingly to avoid such a situation, NELSIP should implement IEC campaign from the inception and through out the project in order to make all the stakeholders adequately aware of all aspects of the project. Thus, IEC is an integral part of communication arrangements of the project. An overview of an IEC campaign is given Table 11.2 below.

Table 11.2: Overview of IEC Campaign

No Level Potential Subjects to be Methods/tools/ Responsibility Participants discussed materials 01 National Administrative Project concept, Presentation of project Relevant authority of methods, materials such as officials of national level and implementation Project Proposal, MNBEID and member of NPSC methodology , location, LAPIM, LAPIP,ESMF WB funding arrangements, period, impact, role of NPSC Political Project concepts, Brief presentation, MNBEID and Authority implementation A folder of information PCU methodology, location, benefits to the country 02 Provincial Provincial Project concept, Presentations PCU and the political implementation WB Authority and methodology, selection A folder of information Administrative method of project Authority location, benefits to the province, role of Provincial Coordinating Committee

03 District District Political Project concept, Half a day workshop Chief and implementation Secretary, Administrative methodology, selection A folder of information CLG, PCU Authority method of project and WB location, Method of selection of LAs,Amount of funds made available to the district, role of District Coordinating Committee One day workshop Local Project concept, CLG, PCU Government staff implementation and WB who will be methodology, selection involved in the method of selection of project LAs, A folder of information Amount of funds and , how it flows, benefits Copies of LAPIM, PIP, to the district, role of ESMF staff assigned to the project, LA Participatory Development Plan (LAPDP), Project documents such as LAPIM, PIP, ESMF Role of PAT peoples Gallery 04 Divisional LA chairpersons, Project concept, Two-day workshop ACLG, PCU, elected council implementation WB members, methodology, amount A folder of information, External CB Secretaries, of funds and how it Brief, presentation on agency Members of flows, benefits to the LAPDP, LAPIM, PIP, standing LA, role of the council ESMF, FMM, PM committees, and committees, role of

members of staff assigned to the Advisory project, LA committees, staff Participatory assigned to the Development Plan project (LAPDP), Involvement of CCs, Project documents such as LAPIM, PIP, ESMF, institutional development and capacity building strategies for LAs, project monitoring and reporting system, project exist strategies Role of PAT

Project concept, Half a day workshop Divisional Level implementation officials of Public methodology, selection A folder of information, ACLG,PCU,W Administration method of LAs, B System LAPDP, External CB Amount of funds agency available to LA, activities covered under the project, benefits to the division, role of Divisional Coordination Committee 05 Community Community Project concept, Half a day workshop PS level Centers (CC) and implementation for leaders of CCs in a chairperson, representatives of methodology, amount LA area, brief meetings CDO, the team the CBOs of funds and how it for clusters of of officials flows, benefits to the communities/hamlets, assigned for community, role of the posters, public the project at LA, LA Advisory addressing systems etc. the LA Committee, LA Participatory External CB Development Plan agency (LAPDP), project monitoring strategies, capacity building strategies for CCs

Role of PAT Peoples Gallery One-day workshop Community Project concept, PS Based implementation A folder of information chairperson, government methodology, amount CDO, the team officials of funds and how it of officials flows, benefits to the assigned for community, role of the the project at LA, LA Advisory the LA Committee, LA External CB Participatory agency Development Plan (LAPDP) role of the CC, role of the four officials based in the village

Chapter 12 Stakeholder Participation

12.1 Introduction

1. Many governance failures of the past have been attributed to the "command and control" approach of governments. Civil society, Business sector and Governments have increasingly chosen to engage one another and work with each other. There has been growing recognition among these three sectors that they need each other for a concerted and effective pursuit of society's shared goal of improving human wellbeing for both present and future generations.

12.1.1. Stakeholders:

2. A stakeholder is any person, group or institution that has an interest in development activity, project or programme or in governance. Stakeholders can be divided into two very broad groups: those with some intermediary role - secondary stakeholders - and those ultimately affected, primary stakeholders, who expect to benefit from or be adversely affected by development programmes, projects or governance systems.

3. The main stakeholders of NELSIP are the local authorities elected members, local politicians, the citizens, the staff of the project and the government institutions.

12.1.2. Participation

4. The goal of participation is to make stakeholders responsible for the decision making process and for their behavior, which have a significant influence on ways they use their resources.

5. In this exercise, participation is considered essential and important in the main three areas, planning, implementation and monitoring of all activities of the project.

12.1.3. Why seek Stakeholder Participation?

6. Ultimate aim of obtaining stakeholder participation is to produce well informed governance system, in which the needs and wants of the stakeholders are clearly identified and defined, with improved chances of implementation. It is based on the idea that both decision-makers and stakeholders benefit from communication between them. Stakeholder participation is expected to improve the quality, efficiency, effectiveness and sustainability of projects.

7. Benefits and strengths of stakeholder involvement include:

 It can lead to improved decision-making as stakeholders often possess a wealth of information. It can increase the legitimacy, transparency, and accountability of decisions;

 Communication and consensus at early stages of the project can reduce the likelihood of conflicts, which can harm the implementation and success of the project;

 Stakeholder involvement contributes to the transparency of public and private actions, as these actions are monitored by the different stakeholders;

 The involvement of stakeholders can build trust between the governance mechanism and civil society, which can possibly lead to long-term collaborative relationships. People should have a say in decisions that affect their lives.

 TO summarize obtaining stakeholder participation is beneficial because it can result in better-informed and more creative decision-making, a greater public acceptance of decisions, more transparency and better communication, leading to a more effective and more democratic decisions or policies, with better chances of implementation.

8. Further, as explicitly described in the Local government Reform No. 10: People participation and Social Development, stakeholder participation is very necessary to pay attention to ensure ethnic harmony among the community in the area. The two provinces had undergone unpleasant experience due to the war during the past three decades and it has resulted in distancing the ethnic groups from each other. Therefore, this project pays great attention to this factor. Following areas as proposed in the Circular should be ensured;

 Equitable distribution of resources, among all groups without communal/racial consideration.  Pay equal attention to proposals originating from all sections of the community  Pay equal attention to cultural values of all communities  Promote opportunities to obtain contributions of all communities at the GND level.  Take steps to develop a philosophy of peaceful living within the area preventing discriminations on grounds of race, religion, caste and creed.

12.1.4. Partnership arrangements

9. Partnership is the type of participation in which two or more stakeholders share power equally in the management of the activity. It could be achieved only by a conscious and informed effort in planning, design and implementation.

10. Trust among the stakeholders has to be ensured for genuine partnership. The LA through the LA Advisory committee, LA council and the CCs have to build the trust to get people involved actively in the project.

11. In order to achieve the above following guidelines should be observed.

 The CC, the only community based organization, which has direct links with LAs should be formed, revitalized and fully involved in assessing needs, planning community sub projects, implementing and monitoring them. In all possible occasion, community contribution as explained in the LAPIM needs to be collected and CC should be involved in sustaining the community projects. For this;

 Regular and open communication with the Community Partnerships will be promoted as information is vital to build trust,

 Mechanisms will be established with the Community Partnerships to ensure transparency and constructive discussions,

 Minority groups will be given the opportunities and enabled to participate fully in developing their own plans for development through their established Community Partnerships fully,

 Participatory approaches will be used to develop these plans and everyone would be allowed to participate in the Community Partnerships,

 A good and unbiased of organisational mechanism will be in place in the LA with deep understanding in participatory approaches to interact with the people so that they could build trust with the intended stakeholders as partners.

12.2 Participation of Elected Members of LAs

12. Elected members of the PS are the representatives of the people. As such they should take decisions on behalf of their constituencies, but in “consultation” with the people. The LA members should hold regular consultations in their constituencies and listen to people and evaluate the implemented programmes or projects together with them. Through this process they too will be benefited and get new ideas, etc.

For this purpose;

 There should be grass root people’s consultations regularly organized by CCs, creating an environment in which public debate, discussion and deliberation can flourish,

 LA members should be involved with the citizens to plan implement and monitor,

 LA members from both the governing party and opposition should be included in the selected thematic committees (standing and LA Advisory committees formed under LA Acts.

 All decisions made at these committees should be made available to the public.

12.3 Participation of Women

13. Community governance process can facilitate the democratic participation of groups that are frequently marginalized within formal governing structures. Women are one such group and their policy priorities often include issues that affect their families’ daily lives: healthcare, education and infrastructure.

14. Increasing the number of women in local leadership therefore can enhance the provision of basic services and improve citizens’ perception of governance.

15. In order to ensure women’s participation in local governance the Local Government Reform Circular No. 2 under “Committee System” suggests that inclusion of women in the committees should be compulsory. Similarly, the Reform NO. 11 to highlights the importance of involving women in LA affairs. To enable the environment for this purpose, following steps should be considered as important.

 It is critically important to have a strong political will towards gender equality if women’s participation is to be developed. However, political will must be supported by strong gender advocacy and gender sensitisation to achieve results,

 Women should be well informed about the governance mechanism, especially on the LA Act should be provided, enabling them to fully understand the functions of the LA, its structure and its powers, duties and obligations to the public, and grassroots level dialogue should be promoted with the people to make the Act / ordinances familiar. This has to be done by the CC with the assistance of the CDO,

 As an area emerging from conflict and war there may be greater opportunities in implementing the LA Acts enshrining gender parity as a principle,

 Women should be involved in the planning process, especially when applying participatory tools to develop the community plans for the consolidated LA

Participatory Development Plan, the CC must ensure that women participation is secured.

 All such women Community Partnerships planning sessions should be attended by the elected LA members, as it will give first hand information of people decide as their needs,  A standardized monitoring system should be introduced by the LA with the assistance of CC at the community level, based on the performance indicators, so that women group could successfully monitor the progress; gender sensitivity of the budgets etc.,

 The decisions of the meetings of the women Community Partnerships should be made available to the public, assuring transparency, so that the people are aware of proposals made and actions recommended.

 Women should be represented in the LA Advisory committee

 Community Development Officer (CDO) of the respective LA should make sure that obstacles or barriers for women to involve themselves in the project are removed.

12.4 Participation of Youth

16. Youth participation in the processes of local policy design, implementation and evaluation is extremely important. As for the women, The Reform Circular No. 2 makes participation of youth is compulsory in committees as in the case of women and Circular No. 11 points out the importance of involving youth in LA affairs. It is therefore proposed that;

 Orientation process should be organized by CC, with the suitable resource persons for youth enabled them with the community governance system rather than considering them as mere voters,

 Involve youth in sub committees of the CC in every constituency so that youth could bring up their issues after interactive discussions among them to the main agenda,

 Provide room for youth through the CC to present their suggestions on development issues and propose projects, from infrastructure development to health, education etc., enabling them to participate wholly in the planning process,

 Promoting formulating youth governance groups (YGGs) as resource groups and link them with the LA advisory committee and other committees,

 Link the “Youth Governance Groups” (YGGs) of the Northern and Eastern parts with likeminded southern youth groups to share experiences and learn from each other on governance issues.

 Community Development Officer (CDO) of the respective LA should ensure that barriers for youth to involve themselves in the project are removed

12.5 Participation of School Children

17. The Cabinet of Ministries has already approved the recommendation of the MLGPC to include the subject of Local Governance in the school curriculum, considering it as a vital national need. Subsequently, the subject of Civic Studies has been introduced to the school syllabus from year 2008.

18. The programme sustainability could be assured by involving and facilitating the school children to participate in governance. The school children also will learn how the LA works and what contributions that they could make. For this purpose, it is proposed to select one or two school projects in each LA area every year and engage children in the planning, implementation and also monitoring sub projects which directly affect to them.

19. The projects like campaigns against Malaria or Dengue, maintaining a school mobile library system, tree planting, protecting catchment areas etc., could be selected.

20. A Children’s Committee could be formed within the school and children get elected as councilors. The child councilors will take great pride in inaugurating the projects funded from the budget allocated by the LA. Although the total investment in these projects is small, the social significance is great.

21. Steps to introduce children to the LA should be taken. A good relationship between LA staff and the project implementers and facilitators should be built that will put the children at ease and encourage them to express themselves freely and participate in the activities.

 The CC with the assistance of LA (CDO) and the teacher who is responsible for civic studies will facilitate this setting up school children’s committees and school children as members (councilors) to the committees, plan and prepare school projects based on their needs and submit them to the LA to be included in to the LA Participatory Development Plan,

 The civic studies teacher could be appointed as the Coordinator to liaise with LA and the relevant staff

 Introduce children’s committees to various projects of the schools, including the budgets

 Encourage discussions with the children, so that they speak freely of the projects, and monitor the implementation,

 Facilitate the organization of children’s groups to adopt a systematic monitoring mechanism based on the indicators developed,

 Introduce children to the PS officials and elected members and allow them to take part in discussions and meetings,

 Help facilitate children to monitor the projects of the schools, so that they will be responsible for monitoring and also learn how to plan, implement and monitor projects

 Make the children aware that they are the leaders of tomorrow and as such help them understand the core values of collective participation in planning, implementation and monitoring so that they will be able to grasp the eight most important characteristics of governance; participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable & inclusive and follows the rule of law.

12.6 Participation of Community Organizations (COs)

22. Established Community Organisations are an asset for the project. All the Community Organisations have a “Shared interest” and agreement among its members and stakeholders to induce collective action. Collective action is an indicator of increased social capital.

23. They should be harnessed as they provide a readily available system through, which the governance programmes could be introduced to the public. However, it is important to bear in mind that most COs are not thoroughly familiar with Community Governance and as such it is essential to hold several orientations before they are involved in this process.

 Community Organisations in some cases may also be taken in as Community Partnerships. This has to be carefully studied and the COs should be given an orientation before taken in as partners,

 Facilitate the Community Organisations to take part in organising and mobilizing their members so that they could be engaged as stakeholders of the programme,

 Initiate a dialogue with the Community Organisations and engage them when ever and where ever possible to organise and mobilise grass roots communities,

 The CCs should make sure that all active community organizations in the village are involved in planning, implementation and also monitoring the community projects under the guidance and facilitation of CC and LA.

12.7 Participation of Civil Society Organizations

24. Civil society constitutes a vast array of associations, including trade unions, registered charities, development non-governmental organizations, community groups, women's organizations, faith-based organizations, professional associations, self-help groups, social movements, business associations, coalitions and advocacy groups etc.

25. As such the Civil Society Organisations (CSOs) have a major role to play in the governance system. The CC in the respective community and the CDO have to make sure to get NGOs assistance to the project.

26. Therefore, it is proposed that the following steps be adopted to obtain their participation in the governance programme.

 Civil Society Organisations (CSOs) also could be taken in as partners in the promotion of the people’s participation since they have experience in organising, mobilizing and awareness raising among communities,

 However, there should be an orientation for them in order to make them fully understand about the community governance systems, objectives and its functions and this has to be arranged by the CC with assistance of the CDO.,

 According to their expertise they should be given different tasks such as organising, mobilizing and awareness raising,

 Some CSOs will be better equipped with trained personnel on various special skills and their services could be obtained if a CSO capacity identification is carried out. Such institutions or organisations will be of value to the programme. The CDO and the CC should carry out a capacity assessment of CSOs,

 It is an establish fact that some CSOs are better in building relations with most disadvantaged or marginalized groups. As this programme will be launched in an area where most people are in that category, it would be important to harness the services of such CSOs under the guidance of CC.

 It is a known fact that some reputed CSOs (including International Non Government Organisations - INGOs) have tremendous experiences in community governance matters. Such experience and research work carried would be invaluable and every effort should be made to harness such knowledge rather than repeat the same research or studies by the LA,

 Possibility of organizing INGOs working in the community to form a consultative panel to get their views, ideas and share their assessments to manage the project at the district level should be explored.

12.8 Participation of Religious Leaders

27. The Local Government Reforms Circular No. 11 identifies the importance of working with religious organizations.

 In order to get their advice and participation in the process, a dialogue with them on governance issues should be initiate/opened and religious centers could be utilized as meeting place for the community members,

 Orientation programmes for the multi-religious leaders could be held on governance to familiarize them on social aspects of governance,

 As religious leaders are closer to people, it is very likely that they could discuss sensitive/complicated issues of concern the people more freely. Religious leaders may act as the voice for the voiceless.

 The CDO with the assistance of LA and the CC should take the lead to coordinate the community religious leaders and obtain their involvement in the project,

 The religious leaders may also take part in the preparation of the village development plans with the people’s committees,

12.9 Participation of Regional Level Government Officials (RLGOs)

28. The participation of the Regional Level Government Officials should be assured from the very beginning of the whole process and they should be kept updated on all the activities that are being carried out. When preparing the road map of the programme, the involvement and participation of key officials should be assured and secured.

29. The Commissioners of Local Government (CLGs) and the Assistant Commissioners of Local Government should make arrangements to get the support of regionally and provincially based government officers for the project. For this, the provincial, district and divisional coordinating committees would be very useful in this.

 All the relevant government officials should be made aware of the project through the IEC campaign at the outset.

 The roadmap should be prepared indicating the meeting time and frequency of various committees, especially the committees in which the RLGOs are participating,

 The elected LA members should take part in these meetings with the people’s representatives (Community Partnership members),

 At the final ratification meeting to accept and adopt the LA Participatory Development Plan, the RLGO participation should be assured,

 A clear up to date reporting system showing the progress of the programme should be prepared and maintained indicating all measures taken to implement the programme, changes made, results etc., so that it could be used at the implementation committee meeting with RLGOs.

12.10 Participation of Village Level Government Officials (VLGOs)

30. From the community level to implementation level the participation of the Village Level Government Officials should be assured. In order to meet this need, the following measures are to be considered.

 At the outset, it is important to hold orientation programmes for the VLGOs to familiarize them with the project, community governance mechanisms highlighting, what it is, why it is and how it functions with people’s participation through the IEC campaign.

 When forming village committees, the VLGOs should be invited and they should be given the opportunity to express their views openly,

 When data and information is generated using PRA methods, participation of the VLGOs should be assured,

12.11 People’s Gallery in LA

31. The concept of people’s gallery at LA is very important for citizens to participate in the LA affairs. A handful of LAs in the South are practicing this method with the assistance of a forum of civil society organizations, which promote governance and it has shown good results.

32. The Project through the LA Advisory Committee will promote the People’s Gallery in each of the LA. The capacity needed for LA to establish People’s Gallery, (space, furniture, communication equipment, staff to coordinate the activity etc.) will be improved.

33. The Local Government Specialist/Institutional Development Specialist with the assistance of the Legal and Reforms unit of the CLG and the Good Governanace Unit of the ACLG’s will facilitate the LA to establish People’s Gallery.

34. The Local Government Specialist/Institutional Development Specialist with the assistance of the above two units will develop a guideline on “How to utilize the People’s Gallery “ for elected members as well as the citizens

35. In addition, a orientation programme for the elected members as well as the members of LA Advisory committee will be organized by the Project through the CLG.

36. Exposure visits for leaders of CCs and organizations such as Civil Society, Women, Youth, Children, Religious etc. to a LA, which is implementing the People’s Gallery will be organized.

37. Orientation programme for elected members and the community leaders on how best to utilse People’s Gallery for promoting governance will be organized.

38. Education materials to enhance awareness about community governance of citizens will also be developed.

39. The discussion of the monthly meetings of the LA and the involvement of the Gallery in the discussion will be published in the News Letter as well as in the national news papers appropriately.

Chapter 13 Governance and Accountability

13.1 Introduction

1. The political manifesto presented by the president at the presidential election 2010, reiterates the importance of establishing governance in all the three tiers of government viz. central, provincial and local. Strengthening the local government system by establishing Jana Sabha, Gam Sabaha, Pradeshiya Sabaha and Urban Councils has been given special attention in the revised Mahinda Chinthana: The New Vision for Sri Lanka.

2. In this context, Government plans to reestablish the Northern provincial Council consequent to adopting the amendments to the existing 13th amendment. This would enable greater participation by people in the decision making process that affect them.

3. Another constitutional reform envisaged by the government is to reintroduce a 2nd chamber-the Senate. Representatives from various social strata and professionals appointed to the Senate would then be able to review legislations by both Parliament and Provincial Councils, before adoption into law. Senate, it is hoped would create opportunities for representatives of smaller groups and interests, who cannot contest elections and who are not interested in contesting.

4. All these steps indicate the government’s interest in establishing good governance and promoting the better governance principles. The NELSIP in this context has a greater opportunity in promoting governance in the local government sector.

13.2 Overall Governance Framework

5. Greater awareness and commitment to good governance principles by all stakeholders/ parties involved directly or indirectly in project implementation will no doubt minimize corruption, malpractices, abuse of power at all level of project implementation, national, provincial, district, divisional and village levels.

6. Risk of corruption exists at all levels, given the large amounts of funds allocated and available for various activities in a programme of this nature. Rigorous governance policies and practices therefore are needed. All stakeholders should be made aware of the core values of good governance and develop skills to perform according to these core values.

7. The LA members as well as the staff and leaders of CCs who may not have sufficient experience in participatory implementing of projects involving large amount of funds

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to local services. They should be prepared to understand the principles, core value and best practices of good governance and especially of their ethical responsibility in exercising of power and use of public resources.

8. In the light of the above facts, the design, approach, strategies and procedures of the NELSIP will be formulated to be consistent with the core values of the good governance viz: (i) consensus orientation (ii) equity participation (iii) inclusion (iv) accountability (v) transparency and (vi) honesty or sincerity.

13.3 Key Risk Areas of the Project

9. Success of NELSIP activities at LA level will depend solely on their capacities and skills in project implementation. The quality and the system adopted to transfer technical know-how to beneficiary communities, directly and through technical partners, are the main factors for the sustainability of sub projects and subsequent outcomes. Scarcity of skilled and competent technical partners, weak capacity of LAs and CCs, non existence of suitable system to transfer of technical knowledge could be considered as some of the other project risks.

10. Knowledge of project management, business plan development and financial controls skills are very necessary for LAs.

11. NELSIP project management may have some constraints and difficulties during project implementation. Many of them may be political influenced against the project procedures, policies and approaches, which will be difficult to manage. Majority of local level political leaders will be keen to produce quick outputs and therefore may tend to neglect the project procedures, which would affect negatively, the relationship among process, outputs and the sustainability.

12. Awareness of corruption-related issues and skills for dealing with suspected or reported cases of corruption are normally limited at LA level, where most of the funds are disbursed and where most procurement are conducted. At present, it is doubtful whether the project staff at every level are trained in matters of corruption control, which are essential to their role as guardians of the integrity of the project. NELSIP Risk Management Matrix is given in Attachment 17 while Critical Risks and Possible Controversial Aspects is given in Attachment 18.

13.4 Types of Risks

13. Risks of the project can be categorized into two main areas viz (i) village level risks and (ii) project level risks. Description of main risks of the project at village level and project levels are indicated below:

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13.4.1. Malfunctions in Village and Project Level Governance Systems

14. Malfunction of village and project levels governance systems will be the major potential risks in NELSIP. Main reasons for the malfunctions of governance at village and project levels are as follows:

15. At village level: elite may capture the leadership of CCs and dominate the decision making process; improper selection of office bearers, improper targeting of poor, individual benefits received by members, non-participatory decision making; violation of project principles; non-performing Social Audit Committee; lack of need based training of vulnerable groups and communities can be some of the potential risks in governance at village level.

16. At project Level: high attrition levels of project staff; poor quality of training at village level and of project staff; supervision staff not visiting the field and/or submitting inaccurate reports; malfunctions at the village and LA level not being detected; sanctions not imposed on non-performing/difficult CCs and LAs; audit procedures being applied ineffectively; audit exceptions/ recommendations not being followed up; independent evaluation assessments not being commissioned in time etc.

17. The project has to take necessary precautions to overcome these risks taking into consideration these.

13.4.2. Financial management weaknesses leading to inadequate accounting and/or leakage of funds

18. Lack of financial disciplines and accountability at village, LA and project level will be a risk, which can be anticipated. Weaknesses in financial book keeping, delays in disbursement of funds and absence of efficient audit mechanism will aggravate the financial management weaknesses at any level.

19. At LAs and village level - weak financial management capacity, poor record keeping and other irregularities in management of funds; misappropriation of funds; inflated budgets; kickbacks for payments to contractors/suppliers; lack of experience in handling bank accounts, misuse of funds; false reporting; diversion of public funds for activities not meant for the purpose etc. may be the possible risks.

 At project level – weaknesses will be delays of disbursement of funds to provinces/LAs/ diversion of funds for other projects than NELSIP at provincial level. Kickbacks for payments of contractors/ suppliers etc may be the possible risks at this level

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13.4.3. Irregularities in Procurement

20. Procurement of goods and services will be a very sensitive area in project implementation as it involves a large sum of money. CCs leaders, who may not have any experience in managing public funds, unaware of the gravity of misusing public funds and human weakness leading to corruption would result in various irregulaties in procurements. Following are the main reasons for such irregulaties.

 At LA level - lack of adequate information and knowledge on procurement procedures and quality of materials; inadequate number of bidders to meet guidelines; prices exceeding rate bank norms; accepting lower quality materials or construction than specified; lack of post-purchase checks or asset verification.

 At project level - collusion between suppliers and officials; frequent cancellation of bid invitations; contract specifications rigged in favor of a small number of potential bidders; kickbacks in selection of consultants/suppliers; procurement information not being disclosed on website in timely and complete manner; quality standards of product not specified properly.

13.5 Risk Mitigation Measures

21. Two Project Appraisal Teams will verify compliance before recommending the projects funding. Participatory identification of recipients and public display of such list. Social Audit Committee of CC should have 50 % women members.

22. Regular reports by Social Audit Committee to CC Maha Sabah. NELSIP will have two separate teams to do appraisal of village proposals (including the governance arrangements) and verification of milestones for releasing of funds. Independent Process Monitoring through external consultants in consultation with CCs and LAs of randomly selected LAs in all districts will help to detect early warning signals.

23. A MIS tool- LA Matrix- developed to monitor key performance/governance indicators and publicly displayed monthly, NELSIP can suspend or stop on-going project support to LAs that do not adhere to good governance principles. Regular Training programmes at LA level for good governance should be organized.

24. Recruitment of project staff should be outsourced- assuring merit based selection rigorous staff training programme (in-service as well Service standards developed for all staff and external service providers). Report cards can be used to hold service providers accountable.

13.6 Social Audit Arrangements

25. This is one of the key methods that can be introduced to maintain the governance practices within the project. Social Audit will help in (a) verifying that the money for

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LA Development Plan is spent as per approved plans (b) checking the LA Development Activities are undertaken in a participatory manner consulting the LA Advisory committee and (c) verifying that there are no violation of the NELSIP procedures in implementing all LA development activities.

26. The social audit functions carried out by the Social Audit Committee appointed by the LA Advisory committee will also include financial reviews and audits on all aspects of quality, quantity and procurement. The LA Social Audit Committee will report its findings directly to the LA Advisory Committee, along with recommendations for rectifying short falls.

27. The social auditing will ensure transparency and accountability of project implementation at the LA as well as the village level. Certification of the utilization and achievement of milestones by Social Audit Committee together with the recommendation of the CDO is a pre-requisite to trigger the release of fund installments to the LAs/CCs.

28. In the functioning of the SAC and to produce quality outcome, a variety of methods are utilized to cross check and ensure whether the activities of Social Accountability are being implemented properly and as expected. Some of these methods are attending participatory activities, observing community meetings, verifying the LA development plan, LA Advisory committee meetings, verifying the minutes of the meetings, verifying records of selection of service providers, discussion with standard committees of LA etc., verifying books of accounts and other records of the CCs, physical verification of items produced by LA, verifying bank passbooks, random visits to project sites and etc. The SAC will use these methods appropriately to ensure accountability.

29. The nature of the Social Audit, it purpose, Composition of SAC, Criteria for selection of SAC members, term of office, removal of committee members, Functions of SAC (regarding implementation of LA Participatory Development Plan, etc.), will be decided by the LA.

13.7 Governance and Accountability Action Plan (GAAP)

30. The World Bank recommends the GAAP as a tool to identify governance or corruption related risks and planning mitigation measures to be applied in the projects it assists. This tool has already been field tested in some projects and found to be very useful. Therefore, the NELSIP will also apply this tool to ensure governance. The tool suggests eight categories to check for identifying corruption related risks and they are as follows;

 Procurement;  Financial Management;  Communication and Disclosure;

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 Community Participation;  Monitoring and Supervision;  Sanctions;  Capacity Building and Learning  Project Specific Elements.

31. The GAAP for NELSIP consists of a matrix framework (given as Attachment 19). The framework includes risks areas, prioritized risk levels, existing and proposed control measures, and locus of responsibility for action and status reporting.

32. Before launching the project, the CLGs with the assistance of PCU will develop a Governance and Accountability Action Plan for the project operation purpose. In addition, the project will encourage the LA Advisory Committees to develop separate GAAPs for respective LAs through SACs, which eventually would contribute to improve the overall GAAP for the project.

33. In order to build up capacities and awareness of good governance and related subjects such as forms of corruption, their causes and consequences, red flags and early warnings, measures to prevent and deal with everyday forms of corruption in community projects and procurement processes, methods for handling complaints and undertaking preliminary investigation etc. awareness raising activities will be organized by the CLGs with assistance of the PCU. It is suggested that a team of trainers would be conduct one-day workshop of the subject on these subjects for the government officials and the elected members of LAs as well.

13.7.1. Governance Plan at LA Level

34. LA is one of the local government institutions established to deliver the welfare and development services in the LA area. It also provides adequate space for people to take part in decision making process related to service delivery.

35. In many situations, the chairpersons of LAs exercise power dominate. This discourages good governance practices. Therefore, the project will form the LA Advisory Committee where at least 70% are the community leaders. The balance will be from the LA elected members. A few committees such as Procurement, SAC will be formed to assist the LA Advisory Committee. The LA Advisory Committee is the body, which takes decision related to the project. Functional LA Advisory Committee will minimize opportunity for malpractices, since community members are in the committee.

36. Lack of knowledge of LAs about liberalized project policies and their implementation through community empowerment will be a problem for the project at LA level.

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13.7.2. Governance Plan at Village Level

37. Target communities are encouraged and motivated to be involved in decision making at all stages of project cycle including planning, designing and creation of facilities and services. Setting up a healthy project environment, capacity building of sub committees of CCs, provision of adequate and necessary data and information for communities to take appropriate decisions will be the major contributing factors for success.

38. The actions suggested for good governance at village level are:

 Inclusion of all community members to benefits from project irrespective of their social and economic status  All members of the community should be well informed of projects, their investments and other factors.  Fifty percent of the committee members of CC should be allocated for women  All decisions should be taken at the CC executive meeting and general meeting  Any interested member of the community should be provided with an opportunity to participate in committees  All records of project implementation should be well maintained and open to examination.  All dealings such as procurement of good and services should be made in a transparent and open manner.  Grievances of members should be solved quickly as possible and, if no satisfactory solution are found, they should be directed to the authority that can take decision on their grievances.  There should be undue penalizations or favoritism in the provision of project benefits to target communities

13.8 Citizen’s Charter

39. “The Citizens Charter sees public services through the eyes of those who read them. Far too long the provider has dominated and now it is the turn of the user. The citizens Charter will raise quality, increase choice, secure better value and extend accountability (Cabinet office, UK, 1992).”

40. Thus, the basic thrust of citizens’ Charter has been to bring the citizen to the fore and see public services from the service users’ angle. It implies that public services must be demand driven. The rational for citizen’s charter and potential benefits are given below.

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13.8.1. Rationale of Citizens Charter

 The main aim of the citizens’ charter is to make services more responsive and the service providers more accountable to the service users.  Non discrimination in terms of race, creed, marital status, gender, age, disability when dealing with citizens  Encouraging participation of all citizens in the activities of the Local Authority.  Citizens Charter maximize the contribution of the community in the local Authority decision making process.  It contributes to change the attitudes of the Local Authority elected members and staff to become more disciplined, accountable and responsive to citizen’s requirement.  It allows participatory planning and monitoring processes to assess performances of Local Authority

13.8.2. Potential benefit of a citizens’ Charter

 Changing of the attitudes for the better, in all stakeholders of Local Authorities  Helping to improve the performance in the service delivery system  Helping to maintain the processes and systems that contribute to improve the service delivery  Creating space for participation of and contribution by, the citizens’ in decision making and implementation of activities  Promoting continuing dialogue between the Local Authority and citizenry about the performance of the local Authority  Enhancing feedback from the citizenry, on improvement projects and programmes that can be helped by the Local Authority, facilitating better expression of the needs and demands of the people and enabling effective delivery of services  Binding citizenry and Local Authority by reciprocal rights, obligations, responsibilities and duties.

41. The MLGPC promoted Citizens Charter in all LAs in order to make them to deliver local services more responsive and accountable. This objective is clearly compatible with the objective of the NELSIP and therefore it is recommended that all LAs develop a citizen charter within the first year of the NELSIP implementation.

42. For this, the “Guide to Citizen’s Charter for Local Authorities” developed by the MLGPC could be used. NELSIP will facilitate the LAs in developing citizens Charter. The CLG will take steps to provide a copy of the Guide to citizen’s charter to each LA.

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Chapter 14 Conflict and Grievance Redressing Mechanism

14.1 Introduction

1. An effective conflict Grievance Redress Mechanism (CGRM) will be an essential part in NELSIP, as it assures that project benefits are provided in an equitable manner with no undue penalizations or bias either to beneficiaries, stakeholders or non- beneficiaries. It will also address issues of the vulnerable and poor in a community to a significant extent.

2. The main principles to be considered in establishing of the CGRM, to solve grievance, complaints and conflicts are as follows:

 The affected party should have access to any level of CGRM irrespective of its status;  CGRM should be in-built in the existing LA structure and co-ordination mechanisms;  An effective monitoring system should be incorporated, to be vigilant and to ensure that satisfactory solutions are provided to these grievances; and  Outcomes of the monitoring system, including the types and frequencies of grievances, should be available to policy makers in order to make appropriate changes and adjustments in implementation procedures, so that such grievances are minimized in subsequent rounds of implementation

3. To achieve the desired benefits of the CGRM, the all stakeholders should be made aware of the availability of the system, its structure, and access to the system. This could be done during the orientation and awareness programmes conducted from national to village level.

4. In the light of these principles, the CGRM of the NELSIP has to be formulated to ensure timely attention is given to the grievances and concerns of beneficiary communities and other stakeholders and appropriate prompt remedial actions are taken.

5. However, it is important to understand that the CGRM is not a monitoring activity. It is only attend to any specific problems faced by any of the above mentioned stakeholders and provides reasonable answers, or takes remedial actions to mitigate the impact of the problem.

6. The stakeholders will be made aware through orientation and awareness campaigns of the most appropriate level to complain, depending on the type of grievance.

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7. The complaint at any level should be forwarded by filling a standard form, which will be made freely available at the different levels viz. CC, LAs, ACLG offices, CLG offices and PCU.

8. On receiving this form at any level, a part of the form will be detached and returned to the complainant as a receipt. The unit, which the complaint is received will provide a satisfactory solution if possible. Otherwise, the complaint will be forwarded to the correct unit with an endorsement on the form.

9. If a complaint is not solved within a month, it will be reflected in the reporting format with a brief explanation. The report will also be used as a tool to monitor and identify the types of complaints made. This will help the management to identify the modifications in the methodology and strategies necessary to alleviate or mitigate the causes of such grievances/conflicts and Grievances Redressing Strategies

10. It is realistic to expect more conflicts since project is planned and implemented in a decentralized manner. Since, the proposed implementation mechanism involves both government officials and elected members as well as in planning, conflicts and grievance are likely to surface as the project is implemented.

11. The conflict mechanism strategy, which is used in Gemidiriya project assisted by the Bank and implemented under the MED is suggested as an appropriate conflict mitigation mechanism for NELSIP as well with suitable changes. The steps of the mechanism are as follows;

14.2 Arrangements for Resolution of Conflicts and Grievances Steps-Wise

12. Please note that, if one step fails to provide a satisfactory solution, then the issue is taken to the next steps until it is resolved to the satisfaction of the affected person/party.

13. The steps of the process of conflicts and grievances resolution are;

Steps

(a) Try to find a solution to the conflict among the members involved (b) Bring it to the attention of Chairperson of CC and s/he will be given a week to find a solution. (c) If a solution is not received at CC level, take the issue to the chairperson of the LA through the SAC of LA advisory Committee. They too can be given a week to resolve the problem. (d) If the issue is not solved at that level it can be taken to the ACLG. The ACLG will take, it is hoped, less than a week to resolve the issue to the satisfaction of the affected parties.

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(e) If the issue is not solved even at this level, then the complaint should go to the CLG and s/he should provide a solution for the issues within two weeks. (f) However, if the Project Director (CLG) is also unable to solve the issue, it will be taken to the Project Coordination Unit and if the coordination unit is also unable to reach at a solution, the issue will be forwarded to the National Project Steering Committee. (g) The National Project Steering Committee (NPSC) is the final arbitrator and it is hoped that it could provide a acceptable solution for the issue. It is assumed that any conflict related to programme, should be resolved by the NPSC, which consists of the Secretaries to the Ministries concerned in executing the project and other high powered members representing various ministries, government agencies and private sector organizations and finally the World Bank.

14.3 Project Exit Strategies

14. The project needs to have and apply its exist strategy, if it finds the a LA not emanate to the principles and approach of the project. The following strategy could be applied for the LAs which have received only the first installment.

Steps 1

 Obtain the decision of 80% of the members of the council regarding their inability to implement the project by the LA following the guidelines and procedures set by the Project.  All members of the council need to be called for a council meeting of the LA to discuss the matter and at least 80% of the membership should consent to the decision to exist. The ACLG and the CLG should participate in this meeting.  If the attendance is less than 80% participation of the membership presented, those who presented at the meeting need to be made aware of the decision and their signatures need to be obtained for the decision concerned, along with a recommendation of the ACLG and CLG to terminate the project from the LA.  A report containing all the relevant information, notice convening the council, matters discussed, list of attendants and the consent of the members to exit proposal need to be sent to the Project Coordination Unit with copies to the Provincial, District and Divisional Level Coordination Committees.

Step 2

 Cancellation of the Bank Accounts opened for the project by the LA. (This need to be done as soon as the project is withdrawn).

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Step 3

 External Auditing. The following matters need to be certified

- Funds received from the project - Expenses incurred for the goods and equipment and whether they are physically available in the LA - Expenses incurred for training programmes - Cash at hand and at the bank

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Chapter 15 Sustainability of the Local Services

15.1 Introduction:

1. The Local Government Reforms Circular No. 5 on Construction and Maintenance Work of Local Authorities accepts that people do not have good impression about the construction work of LAs. Failures to decide upon works after correct identification of the people’s needs and poor maintenance after completion of construction are two main reasons, among others for this openion. Therefore, the Circular makes several suggestions to improve the situation. The NELSIP too agrees with these suggestions and persuades the LAs to implement them with the assistance of the Project.

2. Discussions on decentralization and improving government responsiveness at grassroots have acquired strategic importance at the national level, following the cessation of armed hostilities in the two provinces. The government has also made it’s intention to fully implement the 13th Amendment and support the strengthening of the North and East provinces.

3. With the cessation of armed hostilities, greater attention has been given to issues of deficient service delivery and weak government responsiveness at the lower levels of government.

4. It is in this context that elected local governments assume a critical role in addressing the above issues. Accountable and responsive local institutions, especially those that are directly elected by people, have a frontline role in such fragile post-conflict environments in fostering peace and reconciliation, rebuilding public confidence and improving living conditions.

5. Central and provincial agencies currently have limited abilities to support, monitor and regulate local governments. The technical and human capacities within key agencies such as the Finance Commission, the MPCLG at the central level, and within CLG and ACLG offices at the provincial level are limited.

6. The local bodies in East which, have elected councils have now been in operation for more than two years. However, their ability and resources do not match public expectations at this point.

7. Furthermore, how far they represent the entire communities and what level of trust they enjoy are open questions as well. Following the cessation of armed hostilities in the Northern Province, the government held elections for a few local bodies.

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8. The project is expected to have a positive impact in making basic services more sustainable. As a result of the project, first central transfers and then own revenues of LAs are expected to increase, thus improving their overall financial situation and enabling them to sustain higher levels of services to rural people in North and East.

9. The enhanced accountability of LAs to their constituents is likely lead to expenditures that are more consistent with local preferences. There would be strong incentives to LAs to maintain and operate the assets created.

10. To provide local services such as provision of drinking water, construction of rural roads, agricultural paths, etc. and to sustain effective management of the such activities. Efficiency and reliability in providing the service at desired level and efficient usage of the service are other expectations. Especial mechanisms with support of various stakeholders are essential to achieve these expectations.

11. It is believed that the above factors would greatly contribute to the sustainability of local services provided by the LA.

12. Sustainability is discussed, taking a rural mater supply scheme as an example since it could be applied in other similar sub projects too. Therefore, the sustainability is discussed in relation to maintaining and sustaining a rural water supply scheme of a LA.

15.2 Integrated Planning

13. If the intended service is a scheme to provide drinking water to a particular group of citizens, the planning should include various other factors. The water supply systems are linked with water resource management, sanitation, hygiene promotion, cultural habits and various other social issues. Therefore, integrated planning is an essential factor for a sustainable water supply scheme. Hence, provision of sanitation facilities, promotion of hygiene education, protecting environment and catchment areas etc. need to be integral components of rural water supply schemes.

14. Thus, when developing the LA Participatory Development Plan, the factor of integration too has to be considered seriously.

15. In like manner, a garbage disposal project would include adequate considerations of various factors such as education, environment protection, hygiene promotion, waste water disposal methods etc. Various factors need to be taken into consideration to assure the sustainability of the sub projects.

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15.3 Community Participation and Management

16. Community participation and management in designing and implementing sub projects create a considerable impact on sustainability of sub projects, because the active participation by the community in the schemes develops a sense of ownership.

17. Involving the community (users) in managing the sub projects means they are more or less self-reliance on this matter and they have a control over taking decisions in consultation with the LA. However, the ability of the community to manage a sub project depends on: (a) resources available within the community and (b) resources that can be drawn from outside the community.

18. Therefore, capacity of community in managing sub projects and necessary resources to run the project have to be provided by NELSIP.

15.4 Technology selection

19. Selection of technology is an important factor for sustainability of subprojects. The selected technology should be appropriate for the specific community viz. it should be acceptable, reliable, easily accessible and manageable by the community.

20. The technology should also be environmentally sound and of good quality. Accordingly, a suitable technology should be decided by the user community. This participatory approach should be a major activity when preparing the LA development plan.

15.5 Community Contribution

21. Community financing creates the sense of ownership among community and it is a way to use the system safely and efficiently. Therefore, the community should contribute at least 10% of the total cost of the sub project in cash or kind. Donation of land for construction of the water tower, intake point and for laying pipes etc in relation to a drinking water sub project may also be included as this contribution.

22. In this regard, the CC will have to play a greater role with assistance of the CDO to make citizen aware of the whole process. It is the responsibility of the CC to organise free labour (Shramadana) and get other civil society organisations and NGOs involved in sustaining such projects.

15.6 Operation and Maintenance (O&M)

23. Operation and Maintenance is a key of a sub project in terms of sustainability. For example, if the sub project is provision of drinking water scheme, the system should

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be managed at the lowest appropriate level to get the better results because efficiency and the cost effectiveness are important factors in operation and maintenance.

24. For example, the LA could plan a set of activities to train at least two members from community in the operation of the rural water supply scheme, on subjects such as pump operating, maintenance of pumps, panel board repairing, pipe joining and laying etc. So that they prepared to undertake the O&M. Selection of capable community members could be done through the respective CC.

25. LA needs to make sure to compensate the service provided by the trained community members to operate the scheme. It is suggested that the CC be given the responsibility of monitoring of the efficient functioning of the water supply scheme under the guidance of the Technical Officer of LA.

26. As an experiment, the LA could consider of making the CC responsible for managing small rural drinking water supply scheme, after providing necessary training and under a close supervision of the LA. This may reduce the burden of the LA in managing many services with limited human resources. Also the involvement of citizens in managing resources would help to sustain the services.

27. If the CCs is involved in managing the services such as water supply and disposing of garbage etc. continued institutional support is also essential for sustainability. Especially, in the case of provision of drinking water, at the beginning, the water supply system may not encounter many problems, because the system is new. However, during the O&M period, the system might face various issues in the technical, social, financial, institutional and environmental areas.

28. Therefore, it is necessary to have continued support from LA to help them to resolve these problems. LA can coordinate with national and regional government sector organisations, private parties, NGOs, etc. in this regard to help the CCs.

29. It is clear that a set of well planned activities is necessary for strengthening the operation and maintenance system of facilities constructed to ensure the sustainability of the local services such as provision of drinking water. These activities should be executed throughout the project cycle (planning, construction, and maintenance phases).

15.7 Proposed Project Implementation Process

30. Experience shows that rural drinking water supply schemes, which have been implemented by Las, without participation of the user and without due consideration of the sustainability aspects have failed in many places. Therefore, if the LA intends to implement local services such as disposing of garbage, protection of water shed areas especially of the rural drinking water supply schemes, the LA has to implement

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those sub projects in a way that it receives higher community participation is obtained and user community is allowed to take decisions, if they are to be sustained.

31. Therefore, it is suggested that the user community be involved actively from the outset of the project creating an environment for them to develop a sense of ownership and thereby to take the responsibility in contributing to sustain the water supply schemes.

32. For this, a comprehensively planned set of strategies and activities to prepare them for undertaking the task and to develop their capacities are very essential. The CLG with the assistance of the PCU should develop these strategies before such sub projects are implemented,

33. The table 15.1 below suggests a set of strategies and responsibilities for the implementation organizations, to avoid possible weaknesses and to ensure effective and efficient project implementation mechanisms which would contribute to achieving the set goals. Though the example given is for a rural water supply scheme, this guide could be utilized by LA in other similar sub projects too.

Table 15. 1: Proposed Implementation Process and Responsibilities for the Implementing organization of a Rural Water Scheme

No. Project Implementation process Responsible organization

01 Selection criteria of rural water schemes within the LA CC/LA/ACLG area should not be decided by political or any other influences. They should be according to the participatory needs assessment process.

02 When selecting service providers to construct the CC/LA/ACLG schemes, availability of qualified staff (technical) should be given serious consideration. 03 A set of criteria should be introduced for service LA Advisory Committee providers by LA to recruit experienced technical staff.

04 Comprehensive programme of activities for sustainability LA Advisory should be prepared and it should be monitored closely committee/CLG/ACLG/Engineer/TO form the beginning of the project with experienced staff.

No. Strategies for developing capacities of CCs Responsible organization

01 CCs should be strengthened to prevent water theft, damaging the LA schemes, attending to minor repairs etc. with the assistance of LA

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No. Strategies for ensuring technical, institutional, social, Responsible and environmental effectiveness organization

01 Technical aspects a. Water should be treated to meet the standards. LA b. Water should be supplied by gravity where-ever possible or LA with low-cost appropriate treatment. c. Adequate and reliable water sources should be identified for LA/CC water supply systems. d. Monitoring Non Revenue Water (NRW) CC e. Testing water quality regularly. LA/CC

02 Institutional aspects a. Management skills of CC should be improved. LA b. Women membership of CC in managing the scheme should be trained CC/LA

Social aspects

a. Community involvement activities should be arranged to CC/LA 03 build the sense of ownership during O&M phase.

b. It is suggested to provide water supply for

most poor category of the citizens on especial rates. LA

04 Financial aspects a. Deciding of water tariff with the concurrence of beneficiaries LA/LA Advisory and LA Advisory committee. Committee/CC b. Introduction of water savings measures LA/CC

05 Environmental aspects a. Introduction of catchment protection activities and tree LA/ CC planting programmes b. Encouraging organic farming methods within the LA/CC community.

No. Strategies for establishing a back up support system Responsible organization

01 Establishing a Technical Support Unit within the LA LA/ACLG/Engineer/TO

Consolidation activities for sustainability

34. Consolidation activities are very important in terms of sustainability. A guide for sustaining a rural drinking water scheme is given as Attachment 20

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Chapter 16 Capacity Building Arrangement

16.1 Introduction

1. The major stakeholder in terms of designing, implementing and monitoring the NELSIP is the LA. To implement the NELSIP, the LAs should have various capacities. Without capacities, it is unlikely to achieve the set objectives. The Presidential Commission of Inquiry on Local Government Reforms has observed that in general, the LAs do not have adequate capacities to fulfill the objective of the LA i.e. to provide necessary facilities for the local community to make their living comfortable and convenient. The commission, notes that they have shortcomings and deficiencies in the areas of office management, staff management, assets management and financial management. The Commission further explains that this situation is due to various factors such as;

 Shortage of staff  Lack of awareness  Lack of proper training and guidance  Deficiencies in personnel administration  Shortfalls in administration of resources  Deficiencies in accounting system  Lack of proper revenue administration etc.

2. Since this is the generic situation within the Local Government sector in the country, it is reasonable to assume that the situation of LAs in North and East, which had undergone many difficulties during the thirty year of conflicts is worse. In North, for the last two decades, the LAs are without elected councils.

3. Majority of the citizens and officials of LAs in Mullaitivu and Killinochchi districts had to live in IDP camps for some time due to recent war. Some of the LA buildings in these two districts have been demolished. MNBEID is taking the lead role with other line ministries to bring the area to normalcy by resettling people and rebuilding the areas. It includes provision of welfare packages to the affected citizens.

4. In East, situation is compared to the North much better . However, it is only two years since they established elected councils in LAs. Before that the situation was similar to the North.

5. The government is planning to hold elections for the LAs in the North very soon. Perhaps, the members who would be elected for the councils may be the persons who were distanced from the democratic political process for a long period of time due to the war. In addition, the officials of the LAs in these areas may not have recovered

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fully from the habits developed under severe repression to perform their roles effectively. These hardships include those experienced during the last year.

6. The MED is enthusiastic about ex-militants returning to the mainstream politics and being elected to the councils in forthcoming LA elections. But, it has serious concerns of preparing them to undertake the responsibility of running LA councils in democratic, accountable and responsive manner. It considers a comprehensive capacity building programme indispensible for the elected members and officials of the LAs, to improve their knowledge on local government politics and managerial capacities as well to achieve the objective of the LAs. Accordingly, the MED considers the Project a timely blessing at this juncture.

7. Therefore, a significant role that it might play in terms of building capacities of the LAs through the Capacity Building component of the Project along with the component of Institutionalizing Accountabilities.

8. This component will provide support to the strengthening of the systems and capacities of LAs to enable them to deliver their mandated services. It will also support the strengthening of the capacities of the institutions at the national and provincial level like the Finance Commission, CLGs, ACLGs, Provincial Finance Department, Provincial Audit Departments, and SLILG that play a critical role in the support and oversight of local government functions.

9. Activities under this component will initially focus on enabling LAs in the North and the East to satisfy the eligibility conditions necessary to qualify for capacity for transparent and efficient utilization of the block grant funds. At the same time the project will work with the SLILG, who are the mandated training institution for LAs in Sri Lanka to implement its existing menu of training courses relating to the strengthening of local government management with a focus on the LAs of the North and the East.

10. This component will also support the Provincial Councils of the North and the East to develop a long term capacity building framework for LAs that will ensure a coordinated approach between the initiatives taken by the national and provincial governments as well as the donor community. The various activities under this component are described below.

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16.1.1. Objectives

11. The objective of the capacity building component is two fold and they are;

To develop the institutional development aspect of LAs and other agencies engaged at all levels of project implementation mechanism, through training programmes and providing other facilities.

 To enhance the competence of elected members, the staff and all relevant personnel involved in the project on project management, technology transferring, skills and attitudes on governance practices.

16.2 Overall Capacity Building Framework (CB Framework)

12. The overall capacity building framework for the NELSIP will be developed taking into consideration the following factors;

 Contributing to achieve the objectives of the project  the existing level of capacities of the LAs  the overall intuitional arrangements of the project  the project implementation approach  socio-political context prevailing in the provinces  urgent need of producing outputs of the project and  the work implement by other development agencies in terms of capacity building within the LA sector in the two provinces.

13. In like manner, the experience within the LA sector and learning of the MLGPC and MED in working with LAs and awareness of the challenges to be faced in the future will also be considered when planning the CB framework. The strategies of implementing the capacity building framework will take different approaches in accordance with the socio political situation prevailing in the North.

14. The project intends to apply a multi-stakeholder approach for implementing the project. Therefore, the capacity building framework will emphasis on pooling the capacities of major stakeholders to enrich the capacity of the LA, the most important stakeholder of the project, to implement the sub project activities in the most efficient and effective way ensuring the sustainability.

15. In the CB Framework, primary focus of capacity building will be first to strengthen the capacity of the LA and then to the other stakeholders.

16. In this process, the financial resources allocated in for each of the project components will be utilized appropriately to build the capacities of LAs.

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17. The Capacity Building Component has five sub components;

(a) Developing and Strengthening Systems and Processes: this sub-component will support the strengthening of the critical components of the public expenditure management cycle of LA s in the Eastern and Northern Provinces. This would include improving the efficiency of the current systems and processes relating to planning, budgeting, accounting and financial management, revenue management, procurement, and auditing. The existing procedures in each of the above areas will be reviewed and strengthened as necessary. Manuals and guidelines will be prepared to ensure the uniform and efficient application of such procedures.

Technical assistance will be provided to improve the quality of the participatory planning and budgeting process. Specific assistance will be provided to LAs to clear the existing back log of audits (where such backlogs exist) and to obtain a “clean” audit opinion. Technical assistance will be provided to the provincial audit departments of both provinces to improve the quality of their mandated internal audit function as well as to progress new areas like Value for Money (VFM) audits. The Provincial Finance Departments will be provided technical assistance and advisory support to build up its skills and systems for effective fiscal and financial monitoring of local government public expenditure management.

The Fiscal Analysis Cell (FAC) to be formed as part of the office of the DCS (Finance) will be provided support for carrying out the verification of the eligibility of LAs to access the capital grants under the project as well as to ensure robust follow up on the audit observations relating to LAs. At the national level, the project will support the institutions like the Finance Commission to fulfill their roles and responsibilities in strengthening the LAs.

(b) Supply of Formal Training to LAs: This component will support the development and implement a series of structured training programs with the objective of building up of the skills and competencies of LA staff and leadership. The development and implement the training programs are planned to be carried out in two tracks; under track #1 a series of targeted short term courses relating to the eligibility conditions of the project and the utilization of the capital grants provided through the project will be developed and carried out with the LAs immediately after the start of the project. Under track #2 the content and delivery of the existing menu of courses offered by SLILG relating to the core areas of local government management will be strengthened with a focus on the LAs of the North and the East.

The courses in track #2 will cover a broader set and will include both the elected representatives as well as executives of LAs in its coverage. The Ministry of Local Governments and Provincial Councils (MLGPC) will form a Committee under the Chairmanship of the Secretary/Additional Secretary MLGPC that will provide

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oversight on the content of the training courses and will be responsible for the overall management of the implementation of the training programmes.

The PCU will coordinate with the Management Development Training Units (MDTUs) of the two provinces and SLILG on the development of content of trainings and standardization of delivery through a variety of service providers (including formal training institutions like SLILG and SLIDA, NGOs and private sector providers) as well as provide quality assurance of the training programs. In addition to class room courses, this sub-component will also provide support for other training modes like exposure visits, in-country long term courses etc. on a limited scale.

© Strengthening the mentoring role of CLG and ACLGs: At present the CLG and the ACLGs play a critical role of supporting the efficient functioning of LAs by providing guidance and advice on LA management. This sub-component aims to strengthen this mentoring role of the CLG and ACLG by strengthening the skills and capacities of the CLG and the ACLG staff. In addition, consultant support will be provided to the office of the ACLGs to set up rapid response teams in their offices in technical areas like financial management, procurement, preparation of technical estimates and supervision of works that will enable the ACLGs to provide just-in-time support to the LAs. The ACLGs will also be supported to facilitate peer learning among LAs through the sharing of good practices among the LAs. (d) Demand driven Capacity Building Support: Considering the various types of LAs involved in the project and the differences in the capacities and requirements among them, the project proposes to set up a window for providing capacity building support that is tailored to the specific requirements of LAs on a demand driven basis. The Window will invite proposals from LAs on a specific menu of areas that are not covered by the other activities under this component. Based on the evaluation of these proposals by a competent committee, support by way of financial resources and/or technical assistance will be provided. This window will be operational from the third year of the project following the development of detailed operating rules and criteria.

(e) Developing a Long Term Capacity Building Strategy: This sub-component will support the MLGPC and the Provincial Governments of the North and East to develop a coordinated and strategic approach for long term capacity building of LAs in the North and the East. The project will support the preparation of a Capacity Building strategy that will assess the existing capacity building efforts carried out by the national and provincial governments as well as the various donors, assess the long term needs and requirements of LAs, and will help to prepare a road-map for the long term capacity building of LAs.

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16.3 Awareness raising for the political and administrative leadership

18. Apart from the capacity building requirements of the personnel who will be directly involved in the project, a series of awareness raising programmes need to be organized by the PCU/CLG at many levels. These awareness raising programmes will be organized for the political as well as administrative authorities of the provincial, district and divisional coordinating committees in order to make the members of those committees aware of the project procedures, guidelines and the principles.

19. The PCU will also organize awareness raising programme for the members of the National Project Steering Committee. These awareness programmes will be conducted under the Information Education and Communication (IEC) campaign.

20. Some of the awareness raising programmes envisaged are as follow

 Half a day orientation programme for raising awareness among senior officials at national level, more specifically the Secretaries and Additional Secretaries of related ministries such as Ministry of Nation Building, Ministry of Local Governments, Ministry of Public Administration, Ministry of Agriculture, Ministry of Finance etc. on the project scope, principles, approach and the management style. These awareness raising sessions will be organized by the PCU of the MED.

 Half a day awareness raising workshop at provincial level targeting members of the Provincial Coordination Committee (provincial political and administrative authorities such as Chief Minister, Members of Parliament, Provincial Councilors, Chief Secretary, District Secretary, the officials of relevant provincial ministries etc). These awareness raising workshops will be conducted by the PCU with the assistance of the CLG and the Task Team leader of the Project.

 One-day divisional level orientation workshop on the project scope, principles and approaches for the members of the Divisional Coordinating Committee including the chairperson of LA, Divisional Secretary, political leaders at divisional level and the officials coordinated by Divisional Secretary and the selected officials of other relevant government agencies. This workshop will also be conducted by the PCU and the CLG with the assistance of ACLG and the task team leader of the Project. The District Secretary and the relevant political authority of the area will also participate in the programme.

 Two-day orientation workshop on the project scope, principles, approaches and the management styles for the LA Advisory committees. The Workshop will be organized by ACLG with the assistance of the CLG. The LA chairperson will also participate in the process through out.

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16.4 Capacity Building Assessment and Strategies for Stakeholders

21. As discussed earlier, the project will involve many organizations and personnel in the implementation of the project at various levels of the project implementation mechanism. Therefore, various capacity building programmes and awareness raising programmes will be organized appropriately after assessing the needs. These assessments will be done by the Project Coordination Unit with the assistance of CLGs and the ACLGs.

22. The meetings held with the provincial administrative authorities such as;

(a) Provincial Chief Secretaries (b) Advisor to the Provincial Governor (North) (Ex-Chief Secretary -North) (c) Secretaries to the Ministry of Local Government in both the provinces (d) Commissioners of Local Government in the two provinces (e) Assistant Commissioners of Local Government and (f) Heads of the MDTUs and CIRM

revealed that there are many deficiencies in human and institutional capacities in the two provinces. The officials highlighted the need of improving capacities of organizations as well as the staff, considering that as an urgent task.

23. The PCU will take every effort to organize capacity building programmes for the stakeholders based on the needs identified. The major stakeholders who will be considered for capacity building are given in the figure 16.1

Figure 16.1 Major Stakeholders Considered for Capacity Building

MED Capacity Building Organizations

MED LA Level Provincial Level  Chairpersons  Elected members Village Level District Level  Secretaries  CLG  The group of  The group of  ACLG officials staff allocated for National Level NELSIP  The group of allocated for staff allocated NELSIP  Leaders of  Other staff of the for NELSIP  Staff of MDTUs  Staff of PCU Community LA  Finance Centers  Members of LA  Members of the  Provincial Project Appraisal Coordination Commission Advisory Committees Team Committee  SLILG  Divisional  District  Provincial  Govt. officials Coordination Treasury based in village Co-ordination Committees Committees  Staff of Provincial Audit  Officials at Department Divisional Secretariats

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24. According to the figure 16.1, different categories of personnel will be involved at each level in the project implementation process. The office bearers of the CCs, elected members and staff of LAs, members of LA Advisory Committees are the most important ones in terms of implementing the project at field level. Therefore, a well designed capacity building programme is vital to get maximum benefits form the human resources and thereby contribute to achieve the desired objectives.

16.5 Capacity Building for village level

25. The capacity building programmes at the village level will focus on two areas viz. (a) the office bearers and committee members of CCs and (b) the four government officials based in the village.

(a) Leaders of Community Centers

26. The project is meant for the citizens. Project adopts the participatory approach and encourages citizens to take part in planning and implementing the village level sub projects. Accordingly, project will pay attention to effectively improve the planning, monitoring and advocacy skills of citizens involved in LA affairs and thereby to make the LA accountable to the people. In this process, the community will take the ownership of certain activities, which eventually would strengthen the capacity of LAs.

27. The capacity building needs of the CC will be identified through the CDO of LA. The training for the CCs will mainly be looked after by the LA with the assistance of ACLG.

28. In addition, the project will consider necessary training for women, youth, school children and school teachers who will involve in the project. These training will focus more on governance practices.

29. Major areas of subjects that should be considered for inclusion in the capacity building plan for CCs are given in the Table 16.1.

(b) Government officials based at the village level

30. In working with the CCs, the project expects to work with four village based government officials: the Samurdhi Development Officer (SDO), the Grama Niladari (GN), Agriculture Research and Production Assistant (ARPA) and the Family Health Officer. They will work as advisors to the sub committees of the CCs and link the relevant line ministries with the community. Their involvement in preparing and implementing the LA Participatory Development Plan in the village is very important.

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31. It is the experience that the majority of all these officials lack knowledge in participatory approaches and techniques in working with underprivileged and in obtaining their participation. This is due to the lack of available opportunities to obtain such training. Further, they are unaware of the project approach and the principles and therefore capacity of these officials need to be built up. Major areas of subjects that should be considered for including in the capacity building plan for these officials are also given in the Table 16.1.

Table 16.1: Proposed subjects for trainings for stakeholders at village level.

Project Stakeholder Key subject areas Responsibility

Leaders of  Awareness building on  IEC Campaign organized Community NELSIP procedures by LA through CDO. Centers  NELSIP will supply the Women, Youth, IEC materials etc. School teachers  Techniques on  LA through CDO and Participatory project monitored by ACLG planning  Awareness on LA  CDO with the Assistance Act/Ordinances of ACLG

 Awareness on LAPIM and Do PIP

 Participating in public gallery Do of LA effectively

 Implementing sub-project proposals including skills for  Technical Service procurement, quality, Providers will provide monitoring, accounting and relevant technical training. record keeping.

 Capacity to operate and  Technical assistance from maintain assets created service providers

 Working in partnership with Do the LA

 Working with the four village  LA with assistance of the based four officials and the ACLG team coordinated by the Divisional Secretary

 Understanding the concept of  LA will make the ground governance and practicing situation for the CCs to good governance principles work cordially with the LA

 Governance Practices  CDO with assistance of the ACLG

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Four government  Project principles,  The ACLG through officials at village level guidelines and procedures MDTUs with the support  Participatory Project of CLG and PCU. Designing  Participatory Project Implementation  Participatory Project monitoring and evaluation  Good governance practices

16.6 Capacity Building for Divisional level

32. The project has to make arrangements to build capacities of following institutions and personnel (a) elected members and staff of LAs (b) the members of LA Advisory Committees (c) officials coordinated by the Divisional Secretary and (d) Divisional Coordinating Committees.

(a) Capacity Building of LAs

33. The LA is the major stakeholder, which takes the responsibility in designing and implementing the LA Participatory Development Plan. The Project is planned to be implemented in all the 77 LAs in the two provinces. Accordingly, all of these LAs have to bear a large number of responsibilities and accomplish many tasks as well. For that, they need to possess various capacities

34. The LA need have (a) financial capacity (b) organizational or institutional capacity (c) physical capacity and (d) sufficient human resources, capacity for easy understanding and planning. The project has been designed in a way that it improves all these aspects of capacities of LA to perform effectively.

 Building financial and physical capacities

35. Thus, the component of Fiscal Transfers of the project will build the capacity of LA to implement variety of local services identified and prioritized by the citizens. It will remove the financial constraints of LA to invest on local services.

36. Project will be a great opportunity for the LA to build its financial capacity to provide services in a more transparent and accountable manner. Details of building the financial capacity and physical capacity of LA have already been discussed under the Fiscal Transfer Component in the Chapter 3: Project Components.

 Building institutional capacities

37. The financial resources available in the component of Institutionalizing Accountabilities will help to build institutional capacity of the LA. It will improve; (a) council affairs

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(b) legal aspects (c) improve and management of LA revenues (d) facilitate forming and strengthening of Standing Committees and LA Advisory Committee (e) office management (f) promote governance practices (g) establish the citizen’s charter (h) promote the Social Audit activities (i) Ensure implementation of the GAAP (j) help prepare by-laws for strengthening the LA activities and removing barriers for citizens to take part in decision making process (k) make arrangements to fill the carder positions (l) prepare a meaningful resource mobilization process etc. (m) Peoples Gallery

38. The Capacity Building component of the project will address issues relating to the capacity of the human resources of the LAs. Considering it as an urgent requirement, initially the capacity needed to develop the LA Participatory Development Plan will be strengthened. For this, the service of an external CB agency will be obtained. The CB agency will assist the MDTUs and the ODUs to facilitate the LAs to develop the Participatory Development Plan in consultation with the CCs. The relevant ToR for the CB agency is given in the Attachment 21.

39. Training needs of the elected members, staff and the members of the LA Advisory committee will be assessed through a systematic needs assessment with the support of PCU. A guideline for assessing staff capacities is given as Attachment 22

40. Some of the major subject areas, which could be considered when preparing the comprehensive capacity building plan, are given in the Table 16.2.

(b) LA Standing and Advisory Committees

41. In addition to the Standing Committees, the LA Advisory committee, which will be formed within the LA with the majority being representatives of CCs, will play a major role in linking citizens with the LA. The project at this stage has no estimate of the level of capacity of the members of the LA Advisory committee.

42. However, considering this as a good opportunity to bring elected members and the community leaders together, to promote governance practices and to make the LA members more accountable to the citizens, the project will pay special attention to develop the capacity of this committee. Some of the trainings, which could be considered for this team, are given in Table 16.2.

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c) Staff at Divisional Secretariat

43. Except in a few exceptional cases, LA area, would include a Divisional Secretariat (DS). A DS would have a group of development officials including Rural Development Officer, Environmental Officer, Social Development Officer, Women Development Officer etc. They work under the coordination of the Divisional Secretary (DS) who is the Divisional Head of the Public Administration setup.

44. Services of some of these officers are essential to build up capacities of the village based officers.

45. Hence, the project will arrange capacity building programmes for the selected officials coordinated by the DS through the SLILG and MDTUs with the assistance of the PCU.

46. The Project will explore the possibility of developing a pool of trainers from these officials in order to get their service to improve the capacity of the staff in the local government sector. This will be coordinated by the Chief Secretary, through the District Secretary, with the assistance of the Divisional secretary. Some of the useful trainings are suggested in Table 16.2.

(d) Divisional Coordinating Committee (DCC)

47. The DCC is a divisional body, which meets regularly at divisional level to review progress of development programmes implemented at divisional level and to provide coordination facilities required for them.

48. Divisional level political as well as administrative authorities participate in this important meeting, which is headed by the senior member of the political authority and the Divisional Secretary of the division. This meeting is important to maintain links between the government line agencies and to find solutions to implementations issues.

49. Awareness raising of the project approach through the IEC campaign and updating the progress of the project regularly will be sufficient for these stakeholders.

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Table 16.2: Proposed subjects for trainings for stakeholders at divisional level.

Project Key subject areas Responsibility Stakeholder

LA elected  Project concept  ACLG with assistance of CLG, members  Overall project components CB and LG Specialists and  Participatory LA Development external CB agency Plan  Participatory budgeting  Council Affairs  LA Act/Ordinances  Reform circulars  People’s Gallery  Citizen’s charter

LA staff  Process monitoring  ACLG with assistance of CLG and  Office management CB Specialists  Effective project implementation  Progress reviewing and reporting  Financial management  LA Act/Ordinances  Public relations  Team work

Officials  Project principles, procedures, Capacity needs of this group will coordinated by guidelines and expected be addressed by the SLILG and Divisional outcomes MDTUs. Similarly, service of the Secretary  Participatory techniques in Divisional Secretary and members working with underprivileged of PCU will also be utilized to communities build up capacities.

 Training of Trainers

LA Standing and  Project guidelines and As for the government officials at Advisory procedures District Secretariat, the capacity Committees  Bottom up planning approach needs of these committee will be  Participatory project designing assessed and addressed by the PCU.  Participatory project implementation  Participatory project monitoring and evaluation  Procurement  Participatory budgeting  Good governance practices  Risk management  Conflict resolution  Progress reviewing and reporting

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16.7 Capacity Building programmes for district level

50. There are different stakeholders at the district level. The ACLG, project Appraisal Team and District Development Committee are the stakeholders, who will be considered for capacity building and to be made aware of the project approach.

(a) The Assistant Commissioner of Local Government (ACLG)

51. The ACLG is based at district level and there are eight ACLG’s offices in both the provinces. The ACLG will act as the Assistant Project Director and will be responsible for supervising all the activities related to the Project at the district level. In addition, ACLG has to facilitate the LAs for improving their capacity and especially in developing the LA Participatory Development Plan. ACLG will also facilitate LAs to organize training programmes for community level stakeholders

52. The ACLG’s office has eight units namely;

(a) Planning and Monitoring

(b) Community Development

(d) Technical

(e) Administration

(f) Human Resources Service

(g) Investigation and Internal Audit and

(h) Good Governance Reforms.

53. The role of the ACLG in supervising the activities and project implementation process is critical and therefore the capacity of the staff at the ACLG level is becomes vital. The capacity of all the ACLG offices to supervise NELSIP activities and to facilitate LAs has been done and a potential group of staff for the Project has also been identified. The CLGs have already agreed to provide necessary staff for the ACLG offices to implement the project smoothly. New and refresher training will be organized for enable them to achieve the tasks effectively.

54. As for the LA, the physical, institutional and human resources capacities of the ACLG office will be improved to play the expected role effectively. A training programme for the staff will be developed by the CB Specialist, while the Local Government Specialist will prepare an institutional development programme for the ACLG office.

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55. From allocations for the institutional capacity building, the ACLG will receive assistance such as office equipment, communication facilities, vehicles, part of expenditure for office management etc. to manage the project without hindrance.

56. Some of the useful training which could be included in to the training programmes are suggested in the Table 16.3.

(b) Project Appraisal Team (PAT)

57. This is a new unit, which will be introduced to the Local Government sector. There will be eight district level PATs, which comprise of a multi-disciplinary team of appraisers. The group of appraisers includes;

(a) Technical Officer (b) Social/Environmental Officer (c) Financial Management officer and (d) Planning Officer

58. The experienced and capable officials who are already in the local government sector will be recruited for the team after assessing their capacity to play the expected roles effectively.

59. A comprehensive capacity building programme will be organized to improve the capacity of the appraisers in order to ensure effectiveness. This will be done by the CB Specialist after assessing the needs of the appraisers to perform their jobs.

60. Some of the subjects, which could be considered in preparing the training plan for the PAT are given in the Table 16.3.

61. The DCC is a district level set up where the district level administrative and political authorities meet to discuss district level development issues. It will assist the project implementers to be in line with the district development context and priorities, monitor annual plans, coordinate with line ministries, solve implementation issues and linking with district level elected representatives and the district administration.

62. It will also ensure the participation and involvement of staff of line ministries at district level.

63. Awareness raising of project approach, principles and regular updating of project progress is necessary at this level. An awareness raising programme through the IEC would be sufficient for this group at the initial stage, but with regular up dates of the progress of the project at meetings.

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Table 16.3: Proposed subjects for trainings for stakeholders at district level.

Project Key subject areas Responsibility stakeholder

ACLG  Assessing training needs

 Designing awareness raising  The PCU will arrange programmes capacity building  Effective presentation skills programmes for the staff at  Effective project monitoring ACLGs.  Managing capacity building programmes  In country and overseas visits  Monitoring and evaluation of capacity to similar projects building events

 Progress reviewing and reporting  Institutional development  Governance and accountability  Preparation of by-laws  Implementing local government reforms  Conflict resolution  Mentoring and Coaching

Project  Method of project appraisal The capacity building needs of Appraisal Team  Overall project components the PATs will be addressed by  Process monitoring the PCU utilizing internal and  Developing indicators external capacity building  Gender sensitive project planning agencies.  Local government and participatory development approach  Progress reviewing and reporting  Team work  Governance and accountability  Environmental and social safeguard methods

16.8 Capacity Building programmes for provincial level

64. In addition to the CLG, selected staff of the Planning, Finance, Technical and Treasury departments of the Provincial Councils will also contribute to implement the Project. The staff members of those departments will be provided necessary training based on the needs identified and the departments will also receive assistance to improve their institutional capacities.

(a) The Commissioner of Local Government (CLG)

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65. The Provincial Department of Local Government will act as the Project Management Unit at the Provincial level. The CLG, the Head of the department will act as the Provincial Project Director. In the department there are the following units;

Administration Unit Finance and Internal Audit Unit Planning and Development Unit and Legal reforms Unit

66. The capacity of the entire department to manage the project at the provincial level has already been assessed and a group of staff who will be assigned fulltime for NELSIP work has also been identified in both the provinces. The project will help to recruit new positions such as (a) Civil Engineer (b) Procurement Specialist (c) Institutional Development Specialist (d) Social protection Specialist and Information Education and Communication Specialist for the Unit within or outside the government sector.

67. Officials for these new positions will be recruited/seconded for the department, after assessing their qualifications, experience and the skills, to perform the duties. A full time Deputy Provincial Project Director will also be recruited to strengthen the institutional capacity of this team and s/he will assist the CLG to manage the project efficiently.

68. A capacity building programme will be prepared based on a needs assessment by the CB Specialist of the PCU. The Local Government/Institutional Development Specialist will also prepare an action plan for improving the institutional capacities of the department, which will be combined with the capacity building Programme. Some of the useful subjects which could be considered in preparing the training plan for the provincial level staff are given in the Table 16.4.

69. In addition to the human resources, the department will also receive assistance such as office equipment, communication facilities, vehicles, part of the expenditure for office management etc. to manage the project at the provincial level without barriers.

(b) Provincial Coordinating committee (PCC)

70. The PCC is a provincial set up where the provincial level administrative and political authorities meet to discuss provincial level development issues. It will assist the project implementers to be in line with the provincial development context and priorities, monitor annual plans, coordinate with line ministries, solve implementation issues and link with provincial level elected representatives and the provincial administration.

71. Awareness raising of project approach, principles and regular updating of project progress is necessary at this level also. An awareness raising programme through the

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IEC would be sufficient for this group at the initial stage, followed by regular date about the progress of the project at meetings.

Table 16.4: Proposed subjects for trainings for stakeholders at provincial level.

Project stakeholder Key subject areas Responsibility

CLG and staff  Refresher training on project management THE PCU will take the full  Overall project components responsibility in providing  Strategic planning necessary capacity building  Process monitoring training for the team. CB Specialist will also identify  Conflict resolution the capacity building gaps of  Gender sensitive project designing the team during performance  Local government and participatory evaluations. special training development approach need assessment will also be  Effective Project Management conducted through external  Progress reporting capacity building agencies  Designing awareness raising programmes to identify further needs in  Effective presentation skills organizing training,  Governance and accountability  Preparation of by-laws  Implementing local government reforms  Mentoring and Coaching

16.9 Capacity Building programmes for National level

(a) Project Coordination Unit (PCU)

72. Being at the center, the PCU role in coordinating the project is critical important. This will be a newly formed unit, which consists of a group of multi-disciplinary specialists;

(a) Project Coordinator (b) Deputy project Coordinator (c) Capacity Building Specialist (d) Local Government/Institutional Development Specialist (e) Financial Management/Procurement specialist (f) M&E/MIS Specialist and (g) Other support staff such as Project Secretary, Project officers etc.

73. The strategic role the PCU has to play in coordinating project with the National project Coordinating committee, the World Bank, Ministry of Nation Building and Estate Infrastructure Development, Ministry of Finance, Ministry of Local Government and Provincial Councils, the Provincial Councils, national and local political authorities, CLGs, ACLGs, Internal and External Capacity Building

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Agencies, Service Providers, Contractors etc. may involve high risks, if it does not functions strategically.

74. Therefore, the capacity of this unit should be of its optimum in terms of both human resource development and institutional development. The unit has been established with the Project Coordinator, Deputy Project Coordinator, Financial Management Specialist (Accountant) and with some support staff. It is in the process of identifying competent specialists for other positions and will recruit them very soon.

75. Even though, the PCU is planning to recruit people who are expert in the fields concerned, a refresher capacity building programme will be prepared to match the current needs of the local government sector.

Table 16.5: Proposed subjects for trainings for stakeholders at national level

Project Key subject areas Responsibility stakeholder

Staff at PCU  Refresher training on project The CB Specialist with the management guidance of the project  Strategic planning coordinator will take the full  Process monitoring responsibility in providing  Conflict Resolution necessary capacity building  Gender sensitive project designing training for the team. A special  Governance and Accountability training need assessment will also be conducted through  Effective Coordination external capacity building  Progress reporting agencies to identify further  Designing awareness programmes and needs. effective presentation skills  LA’s Act/Ordinances  Mentoring and Coaching

16.10 Capacity Building of other stakeholders

76. It is one of the specific objectives of the project to assist all the major stakeholders who contribute to implement the project, to build their capacities in order to play their roles effectively. This is to assist the Local Government Sector to have competent and committed staff to provide their services more effectively and in a responsible manner. Among the organizations identified, the major organizations which have been established for building capacities in both the public and local government sectors are given below.

77. By improving the capacities of these organizations, the project expects to receive a better service from them to improve the capacities of LAs.

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i. Sri Lanka Institute of Local Government (SLILG)

78. The SLILG has been established under parliament Act no. 31 in 1999 to promote good governance in local authorities through research, training, capacity building and sharing of information. It assists in strengthening the Management Development and Training Units established at Provincial Councils to develop capacities of provincial as well as local authorities. The mission statement of SLILG describes that it is for Building capacities of sub national (Regional/Provincial) and local government institutions through advocacy, training, research and consultancy services towards upliftment of the quality of life of people.

79. It has six divisions namely; (a) Human Recourse Management (b) Engineering (c) General Management (d) Financial Management (e) Physical Planning and (f) Legal and a research section with sufficient number of administration staff. SLILG has a pool of resources persons, but mainly depends on external resource persons for conducting its programmes.

80. SLILG is willing to assist the project and is ready even to establish a separate unit for NELSIP.

81. Through a rapid assessment of the capacity of SLILG with the MLGPC, its opinion was that even though SLILG has capacity to implement certain courses, it still needs to get their own capacities improved to offer longer term courses effectively. Some of the clients e.g. MDTUs have the same opinion of its capacities and mentioned that SLILG utilizes their resource persons too when it conducts programmes in North and East. The Administrative authority also felt that the capacity of SLILG has to be further improved to make it a competent capacity building agency for the sector of local government.

82. Taking this situation into consideration, the Project will assess how best the NELSIP could utilize its services to develop capacity of LAs. A systematic capacity assessment of SLILG will be carried out by the CB Specialist in order to identify its strengths and areas to be improved.

83. Based on the assessment, the project will assist SLILG to fill the gaps in terms of developing human resources. The project will also come to an agreement with SLILG on how to utilize its services for building capacities of LAs. SLILG will also be utilized as a coordination agency to obtain services of individual as well as CB agencies to build capacities of LAs.

84. SLILG will be assisted to improve the institutional capabilities to serve as a competent CB agency and thereby to utilize it for strengthening the capacity of LAs for longer term sustainability.

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ii. Management Development Training Units (MDTUs)

85. The MDTUs are established at provincial level under the supervision of the Chief Secretaries to build capacities of the staff of the public sector and the local government sector as well. MDTUs offer various capacities building progrmmes and undertake consultancies at provincial level.

86. The MDTU for the East is established in Trincomalee and provides a variety of training programmes for the governments well as the officials and elected members of the LAs. The MDTU for the North also provides similar services as that of the East and is located currently in Trincomalee. It will be moved to a central place of the province, once the infrastructural facilities for the PC are completed soon. Both the MDTUs have a greater potential to be developed as provincial CB agencies and can contribute a lot to both the public as well as local government sectors.

87. However, It has been observed that there a number of capacity gaps within these two organizations to perform the expected roles. The CB Specialist along with the assistance of the Local Government /Institutional Development Specialist will conduct a capacity assessment of the MDTUs and prepare a plan of action to help the two organizations to fill the gaps.

88. The project intends to improve the capacity of the MDTUs and obtain their services to improve the capacities of LAs.

89. There are two ODUs established under two CLGs. The ODU for the North is established in the ACLG’s office Vavuniya, while the same for the East is established in the ACLG’s office in Batticaloa. Both the centers have well equipped training centers and could be made use for project activities.

90. It is learned that the two organizations were established recently and are in the process of accumulating experience. Therefore, the capacities of these two Units need to be assessed to help them in address issues related to them effectively. The Capacity Building Specialist with the assistance of the Local Government/Institutional Development Specialist will assess the needs of the two units in order to help them to improve their capacities.

91. The project intends to improve the capacities of the two units and involve them in capacity building process of LAs along with the MDTUs under the guidance of CB Specialist and Local Government/Institutional Development Specialist. As for the MDTUs, a plan of action for capacity building will be prepared based on the need assessment.

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(d) Center for Information Recourses Management (CIRM)

92. The CIRM is a unit of the Eastern Provincial administration, but is governed by an independent board of management. CIRM receives funds from both the PCs, but also finances expenses by selling products and services. It works closely with the MDTU- East and is presently located in Trincomalee.

93. CIRM has two main Units (a) the Information System Unit, which develops tools for planning, monitoring and good governance and produces spatial maps for planning purposes and (b) Mainstreaming best practices Unit, which focus on promoting community centered rehabilitation and development. It also provides training on participatory development approaches to the staff of public and local government sectors.

94. It is observed that this organization too has the potential to become competent CB agencies for the two provinces. The Project will respond to the need of helping this organization to improve its capacity so that it can contribute more in building capacities of the LAs.

16.11 Approaches and methods to implement the Capacity Building Plan

95. The NELSIP will implement various capacity building approaches to improve the capacity of personnel involved in the project. Some of them are;

 Internal Resources Utilise government CB agencies such as SLILG and MDTUs and government officials such as Rural Development Officer, Environmental Officer, Social Development Officer, Women Development Officer, Youth Development Officer etc. who are working with the Divisional Secretary.

 External Resources Engage external resource agencies such as NGOs, Human Resource Development agencies, training institutions or a combination of these agencies to provide capacity building services appropriately. Obtaining service of both local and foreign (regional) CB agencies can be considered as external agencies. The tasks expected to be performed by the CB agencies are discussed in section under Methodology of Capacity Building below.

 Mentoring and Coaching These two methods of training will be applied through out the project period. Especially, the team leaders of every stage of implementation (CLG, ACLGs CDOs etc. and the CB agencies have to play the mentors and Coach’s roles in order to improve the capacity of staff involved in implementing the project. For example, the CDO will have to play both of these roles with leaders at village level.

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 Modular Approach Follow a modular approach to match the capacity building requirements of the project cycle. The capacity building approach will emphasize on cascading effects of the expert agencies to build the capacity of stakeholders. The capacity building activities should depend more on experiential learning methodologies using participatory tools.

 Rosters of CB Agencies and Recourse Persons Maintain a roster of training agencies. A strong network of experienced and committed resource persons and institutions will be identified and oriented. The roster of trainers will be engaged in the various evaluation activities of the project so that, they will be able to feed in learning and inputs from project implementation into the capacity building curricula. The experienced expert agencies and service providers who have demonstrated successful project implementation in their respective assignments will also be engaged as trainers.

 Existing training materials Utilize existing training materials within PCs. The existing training materials, case studies, success stories and trained and experienced staff of the local government sector will also be utilized to develop capacity building at various levels. The PIP will be utilized as a base document in training stakeholders.  Experiential Learning The project will provide learning opportunities to all stakeholders to reflect on their own experience and share their experience with others and learn from them. The project monitoring framework would provide such interactive learning from experiences. Learning fora is one such method.

 Best Practices Successful innovations and adaptations will be documented and disseminated for the benefit of other stakeholders. Exposure visits and cross learning from the best practices will be utilized.

 On-Job- Training Many Training will be conducted using this approach. The training of officials who cannot leave their working places or the community leaders who cannot allocate much time for training will have to rely on this training.

 Off-the Job-Training Certain trainings need to be conducted by CB agencies, where they can conduct training in their own training institutions on residential basis. Such training will be considered off-the-job training.

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 Overseas Training Project will organize overseas training for selected staff on special subjects, which are not delivered in CB agencies within the country. An exposure visit to organizations, which implement similar projects in the region e.g. the government organizations or NGOs, which implement local government projects with Panchayat Raj System in India will come under this category.

16.12 Implementation Methodology of Capacity Building Framework

96. The overall capacity building aspect of the project is the responsibility of the PCU, but the CLG and the ACLG will also have an important role to play in this regard. The LA will also take certain responsibilities to build capacities of the CCs.

97. However, when addressing the capacity building issues at the divisional level, the PCU alone will not be able to accomplish this task since the workload is high. This situation is common to the CLG and the ACLG as well. Therefore, the PCU will have to obtain the services of external and internal CB agencies to accomplish.

98. Hence, the services of qualified and committed capacity building agencies will have to be obtained. The PCU in consultation with CLG and ACLGs will decide to what subject areas and in what capacity, the service of those agencies should be obtained. The role of the capacity building agencies will be as follows;

 Conducting training need assessment of the project stakeholders  Designing, planning and implementing a training calendar including workshops, field trainings, building model LAs to demonstrate desired training on capacity building effects  Building training materials in both the local languages  Conduct training in both the local languages  Building capacities of agencies decided by the PCU on the request of the CLG and the capacity plan of the NELSIP  Conducting Training of Training programmes for the MDTUs and ODUs and Officials of the Divisional Secretariat.  Facilitating PCU to build up a pool of trainers in subject areas of Governance, Conflict Resolution, Ethnic Integration, Co-existence, Advocacy and Gender.  Facilitating CDOs to monitor the performance of the pool of trainers and provide coaching, mentoring and counseling services for the trainers to improve competence.  Assisting PCU to develop training specifications for each of the key positions of the organizations including staff at provincial, district and divisional level  Developing a data base containing information on training needs, training specifications and training received by each of the key roles of the NELSIP staff.

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99. Capacity building agency will study the project approaches and prepare training modules in consultation with the CB Specialist and LG/ID Specialist on the training needs identified.

100. The training need assessments will also be conducted on request by the CB Specialist and Task Analysis, 360 Degree Analysis etc. will be utilized appropriately in assessing training needs.

101. The Capacity Building Agency should apply participatory methodologies from identification of needs to the delivery of training. They should also apply androgogical methods giving the focal concentration to the Experiential Learning Cycle.

102. The PCU will engage a few carefully selected Capacity Building Agencies for this purpose under very close supervision and guidance of the CB Specialist.

103. In conducting capacity building programmes for various stakeholders, PCU will decide the most appropriate delivery methods considering the prevailing situation and availability of resources. However, existing resources both within and outside the provinces will be utilized appropriately.

104. To implement the Capacity Building Framework, the PCU will also obtain the assistance of the MLGPC. A committee for managing the capacity building programme of the entire project will be formed and the CB Specialist will be the convener of the committee. The committee will comprise of the (a) Project Coordinator, Additional Secretary MLGPC, Deputy Project Coordinator, Task Team Leader of NELSIP, Director SLILG, CLGs and two Independent Capacity Building Specialists.

105. The role of the Committee is to review the capacity needs identified by the CB Specialist, decide the trainings need most, check the quality of the curriculum, materials and training delivered by the delivery agencies and organize reviews to assess the impact of capacity building framework

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Attachment 1

Sample Questionnaires for Rapid Assessment of Local Authorities in Northern and Eastern provinces

1. Demographic and socio-economic data - General background

1.1 Divisional Secretary and Grama nildhari divisions

1.1.1 Name (s) of DS Division(s)

1.1.2 No of GNDs

1.2 Population (in the PS area) (Give the latest year figures, if not available give the available year data)

1.3 1.1.1. TOTAL 1.1.2. Source 1.1.3. Published year of the source 1.1.4. No. of families 1.4 Ethnic composition

Ethnicity Number

1.4.1 Sinhala 1.4.2 Sri Lanka Tamil 1.4.3 Sri Lanka Muslims 1.4.4 Burgher 1.4.5 Malay 1.4.6 Others 1.5 Gender (Population) Number 1.5.1 Male 1.5.2 Female 1.6 IDPs Number 1.1.5 Resettled 1.1.6 To be resettled 1.7 Land area and use

Description Square Kilometers 1.1.5 Total area 1.1.6 Forest and greeneries 1.1.7 Inland waters 1.1.8 Households 1.1.9 Commercial

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1.1.10 Government Buildings 1.1.11 Other (Schools and religious places) 1.1.12 Roads and streets (If the data is not available in the above form, please write the available form of data below)

2. Economic activities

Type of activities Count or % of population involve 2.1. Agriculture 2.2. Industries 2.3. Fishing 2.4. Construction 2.5. Trade and Commerce 2.6. Government service 2.7. Other 2.8. Other (If the data is not available in the above form, please write the available form of data below)

Employment % 2.9 Employed 2.10 Unemployed

Poverty indicators

Description Count 2.9. Samurdhi beneficiaries 2.10 Infant Mortality 2.11 Head Count Index 2.12 Other (………………………………)

3. Political and administration environment

3.1 Elected officials

Total number of elected officials Number of women elected officials

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3.2 No of representatives from political parties

Party Count 3.2.1 Governing party (specify……………...) 3.2.2 Opposition (specify……………………)

3.3 No of staff and categories and vacancies

Staff According to approved Existing Additional carder list of the year of * No of staff no of staff ----- requested 3.3.1 Management Assistant (Supra) 3.3.2 MA - Gr I 3.3.3 MA - Gr II 3.3.4 MA - Gr III 3.3.5 Technical Officer 3.3.6 Environmental Officer 3.3.7 Program Assistant 3.3.8 Local Government Assistant 3.3.9 Sanitary laborers 3.3.10 Road laborers 3.3.11 Others

* Write the year of approved carder list

Availability of Contract/ substitute/ Casual / Temporary Staff

Position No of Type Current actual staff (Contract/substitute/Casual/temporary) job function in the PS

3.3.12 Road laborers 3.3.13 Sanitary laborers 3.3.14 Drivers 3.3.15 Others

4 Services and Resources

4.1 Services

Services Priorities the service need in Approximate amount of funds the PS (Mark as H - High or M spent for the year in Rs - Medium or L - Low) 2008 2009 up to now Road maintenance – tarring Road maintenance – gravelling

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Road maintenance – concrete Stormwater drainage maintenance Solid waste management Sanitary services Provision of water Primary health care Pre schools Natural disaster relief Relief for Displaced Any other, (please specify) Any other, (please specify) Any other, (please specify)

4.2 Resources (Owned by the PS)

Resource Type of Resource Quantity /Number Vehicles Tractors Hand Tractor Lorry Three-Wheeler Water Bowser Double cab Gully Bowser Bicycle Machineries Road Roller Fire brigade Tipper Motor Grader Grass Cutter Water pump Mini road roller Service Oriented Wells Properties Tube wells Street lights Tarred Roads Gravel Roads Other types of Roads Public Toilets Pre Schools Sub Office Building Common Toilets Cemetery Library Play ground Children Park

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Community Centres Community Health Centre Revenue Oriented Number of Assessment Tax units Properties Number of Acreage tax units Trade License Weekly Fairs Pavement shops Market Buildings Individual Shops that are owned by the PS(not in a shopping complex) Shops that are owned by the PS (in a shopping complex) Houses for rent

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5 Fiscal transfers and financial management [for last three years]

5.1 Summary of Budget

2009 2007 2007 2008 2008 2009 Actual Revenue Budget Actual Budget Actual Budget (by April 09) Rates & Taxes Rents Fees for License Fees for Service Warrant & Fines Fees Other Charges Revenue Grants

Sub Total - Revenue Capital Receipts Grants Sales of Capital Assets Sub Total – Capital Receipts

Total A (Revenue + Capital Receipts)

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2009 2007 2007 2008 2008 2009 Actual Expenditure Budget Actual Budget Actual Budget (by April 09) Personal Emoluments Traveling Expenses Supplies & Requisites Repairs & Maintenance Transportation & Other Service Interest & Dividends Contributions & Subsidies Pension & Gratuities Sub Total – Expenditure

Capital Expenditure Capital Expenditure Loan Payments Sub Total – Capital Expenditure

Total B (Expenditure + Capital Expenditure) Budget Excess / Deficit (A – B)

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5.2 Summary of Grants

2007 2008 2009 Grants Form of Grants Name of Grant Purpose Amount Name of Grant Purpose Amount Name of Grant Purpose Amount provider provider provider (Ministry/proje (Ministry/proje (Ministry/proj ct/name of MP/ ct/name of ect/name etc) MP/ etc) of MP/ etc) From Decentralized Central budget from Government MPs

Central Government Line Ministry grants

Special project grants

Any other grants from Central Government

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From Salary Provincial Reimbursement Councils s to permanent staff - block grant

Criteria Base Grants Provincial ministry grants Project Specific development Grant Any other grants from provincial council From Specific grants Outsiders / Donors Material / capital support

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5.3 Expenditure and Liabilities

Sources Purpose Amount to be paid Loans from Projects Loans from LLDF Bank Loans Any other loans

5.4 Documentation

Documentation 2007 2007 2008

Last year of the final accounts prepared

Year of final accounts sent to the Audit

Department

Are comments adequately responded

Satisfactory comment from the Audit

Department is obtained Last month of the monthly financial reports

sent to ACLG (PS 10 and 14)

Year of board of survey completed

6 Planning, budgeting, and participatory processes and capacities

6.1 Availability of development plans

Plans Yes / No Who supported the Who are the stakeholders and planning process personnel from PS involved in the planning a. Participatory medium Term Plan b. Village development plans c. Any other plans, specify

6.2 Current budgeting process

Explain the budget process

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6.3 Practice of community consultations

Explain the current practice of community consultations by your PS

6.4 Availability of public redress systems

Systems Yes / No a. Citizen Charter b. Compliant box c. Complain log book d. Any other, specify

6.5 Availability of trained facilitators in citizen participation and planning

Name of the training No of staff trained No of trained staff currently program and year available with the PS

6.6 Currently available committees in the PS

Committees How often the No of total No of No of No of No of committee meets members elected PS women citizen (biweekly, monthly, officials staff bi monthly, quarterly)

Tender Committee Finance Committee Environment & Common Facilities Committee Housing & Community 1. Development Committee Technical Services Committee Library committees Any other , specify Any other , specify Any other , specify

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Attachment 2 Potential Pradeshiya Sabhas in Eastern Province (First Year)

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Attachment 3: Potential Pradeshiya Sabhas in Northern Province

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Attachment 4: Particulars of LAs in Northern and Eastern Provinces

District Local Authority Elected Area Population Members (km2) Mullative Manthai East Pradeshya Sabha 0 494 24,298 Mullative Maritimepattu Pradeshya Sabha 0 728.6 55,809 Mullative Puthukkudiyiruppu Pradeshya Sabha 9 968 115,605 Mullative Thunukkai Pradeshya Sabha 0 326.3 24,965 Vavuniya Vavuniya Urban Council 11 22.5 75,175 Vavuniya Vavuniya North Pradeshya Sabha 0 Vavuniya Vavuniya South (Sinhala) Pradeshya 0 188.5 15,000 Vavuniya VavuniyaSabha South (Tamil) Pradeshya 0 588.2 93,147 Vavuniya VengalacheddikulamSabha Pradeshya Sabha 0 399.1 23,448 Mannr Mannar Pradeshya Sabha 9 286.4 0 Mannr Mannar Urban Council 9 27.85 22,581 Mannr Manthai West Urban Council 9 1,053.06 46,639 Mannr Musali Pradeshya Sabha 9 458.25 6,195 Mannr Nanattan Pradeshya Sabha 9 256.1 19,223 Kilinochchi Karachchi Pradeshya Sabha 0 240.57 161,997 Kilinochchi Pachchilaipalli Pradeshya Sabha 0 167.09 12,405 Kilinochchi Poonakari Pradeshya Sabha 0 448.75 27,455 Jaffna Chavakachcheri Pradeshya Sabha 0 239.9 72,325 Jaffna Chavakachcheri Urban Council 0 19.4 21,693 Jaffna Delft Pradeshya Sabha 9 47.16 5,679 Jaffna Jaffna Municipal Council 23 20.2 83,563 Jaffna Karinagar Pradeshya Sabha 0 21.3 10,873 Jaffna Kayts Pradeshya Sabha 5 45.11 14,709 Jaffna Nallur Pradeshya Sabha 12 20.59 42,451 Jaffna Point Pedro Pradeshya Sabha 0 220 47,766 Jaffna Point Pedro Urban Council 0 11.65 20,543 Jaffna Vadamarachchi South‐West Pradeshya 18 68.95 53,541 Jaffna ValikamamSabha East Pradeshya Sabha 21 102.2 75,935 Jaffna Valikamam North Pradeshya Sabha 21 58.5 26,566 Jaffna Valikamam South Pradeshya Sabha 16 33.26 57,619 Jaffna Valikamam South‐West Pradeshya 16 55.24 62,201 Jaffna ValikamamSabha West Pradeshya Sabha 14 47.3 47,620 Jaffna Valvettithurai Urban Council 9 4.85 18,000 Jaffna Velanai Pradeshya Sabha 11 180 19,725 Trincomalee Eachchalampaththu (Verugal) 98 6617 Trincomalee GomarankadawalaPradeshya Sabha Pradeshya Sabha 285 5879 Trincomalee Kanthalai Pradeshya Sabha 11 397.3 48,632 Trincomalee Kinniya Pradeshya Sabha 146.9 61,558 Trincomalee Kinniya Urban Council 7 9.5 44,034 Trincomalee Kuchchaveli Pradeshya Sabha 9 333.3 29,967 Trincomalee Morawewa Pradeshya Sabha 116 10,000 Trincomalee Muthur Pradeshya Sabha 11 179.4 60,000 Trincomalee Padavi Siripura Pradeshya Sabha 9 217.1 13,000 Trincomalee Seruwila Pradeshya Sabha 277 13,886

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Trincomalee Thampalakamam Pradeshya Sabha 9 244 33,967 Trincomalee Trincomalee Urban Council 12 7.5 101,958 Trincomalee Town & Gravets Pradeshya Sabha 148 89,046 Batticaloa Batticaloa Municipal Council Batticaloa Eravur Pattu Pradeshya Sabha 585.7 77,203 Batticaloa Eravur Town Pradeshya Sabha 9 4.9 40,819 Batticaloa Kattankudy Urban Council 9 6.5 46,597 Batticaloa Koralai Pattu Pradeshya Sabha 242 125,000 Batticaloa Koralai Pattu North Pradeshya Sabha 11 645 21,202 Batticaloa Koralai Pattu West Pradeshya Sabha 9 25 29,614 Batticaloa Manmunai Pattu (Arayampathy) 21.5 30,218 Batticaloa ManmunaiPradeshya SabhaSouth & Eruvil Pattu 44.17 70,256 Batticaloa ManmunaiPradeshya SabhaSouth West Pradeshya 9 161.6 25,279 Batticaloa ManmunaiSabha West Pradeshya Sabha 9 292.65 30,026 Batticaloa Poratheevu Pattu Pradeshya Sabha 176 49,066 Ampara Addalaichchenai Pradeshya Sabha 9 94.5 43,499 Ampara Akkaraipattu Pradeshya Sabha 11 64.22 39,148 Ampara Alayadivembu Pradeshya Sabha 9 129.2 26,175 Ampara Amparai Urban Council 32.34 17,965 Ampara Damana Pradeshya Sabha 426.2 35,705 Ampara Dehiyatakandiya Pradeshya Sabha 432.5 55,930 Ampara Kalmunai Municipal Council 19 22.8 100,427 Ampara Karaitivu Pradeshya Sabha 5 8.6 18,435 Ampara Lahugala Pradeshya Sabha 616.9 8,259 Ampara Maha Oya Pradeshya Sabha 10 697.8 17,801 Ampara Namal Oya Pradeshya Sabha 9 105.1 Ampara Navethanveli Pradeshya Sabha 57.69 21,803 Ampara Nintavur Pradeshya Sabha 7 42.9 28,247 Ampara Padiyatalawa Pradeshya Sabha 464.4 16,451 Ampara Pottuvil Pradeshya Sabha 9 269 31,995 Ampara Sammanthurai Pradeshya Sabha 12 198.4 75,257 Ampara Thirukkovil Pradeshya Sabha 9 212.12 29,860 Ampara Uhana Pradeshya Sabha 15 415 60,071

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Attachment 5: LA Assessment criteria and scoring methods

Max. No Indicator Scoring method Score

1 Technical staff 0 for no TO; and 1, 2, 3 for # of available TOs 03 Qualified and Potential staff (No. of 2 1 for <5; 2 for 5-9; 3 for >10 03 graduates) Completion of annual final accounts, audit

responses and board of survey. * Final accounts in 2006, 2007and Total of 3 for Annual Accounts, if completed in 2008 2006, 2007, 2008 3 * Receipt of satisfactory certification 09 Total of 3 for satisfactory audit response in 2006, from the CLG and respective ACLG on 2007, 2008 final accounts for 2006, 2007 and 2008. * Board of surveys done in Total of 3 for Board of Survey, if done in 2006, 2006,2007 and 2008 2007, 2008 1 for medium term plan; 1 for village 4 Availability of PS development plans 02 development plan Availability of trained staff for project 5 0 for 0; 1 for <3; 2 for 3-5; 3 for >6 03 planning

Availability of committees with citizen as 6 0 for 0; 1 for each committee up to 4; 5 for >4 05 members Practice of Community consultations or 0 for 0; 1 for each practice/process up to 4; 5 for 7 applying of grievance redressal 05 >4 mechanism

Total score 30

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Attachment 06: Results Framework

PDO Project Outcome Indicators Use of Project Outcome Information

To support local government  Number of households Measure coverage achieved under authorities in the Northern and receiving improved local the project Eastern provinces of Sri Lanka to services by LAs supported deliver services and local under the project infrastructure in a responsive and accountable manner.  % of block grant allocation Measures the sustainability of released to LAs financed by block grant allocation IDA

 % of planned LA spending Assess demand-responsive local aligned with people’s spending preferences

 Rising satisfaction of local Gauge satisfaction level of local people with service delivery by people with improved service LAs delivery

Intermediate Outcomes Intermediate Outcome Use of Intermediate Outcome Indicators Monitoring Enhanced capacity of LAs to deliver services  Number of LAs preparing Measure progress on capacity annual financial statements building within 3 months after close of the financial year

 Number of “acceptable” Gauge local capacity technical financial audits of accounts and financial management

 Number of LAs with budgets Measure stronger responsiveness prepared in a participatory of LAs to its citizenry manner

 LA revenues, expenditures, Gauge accountability of LAs and procurement decisions publicly disclosed

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Arrangements for results monitoring

Target Values Data Collection and Reporting Project Outcome Baseline YR1 YR2 YR3 YR4 YR5 Frequency Data Collection Responsibility for Indicators and Reports Instruments Data Collection  Number of households receiving improved local services by LAs 0 0 25,000 50,000 75,000 100,000 Yearly Audit Reports Auditor General’s supported under the Office projects

 % of block grant allocation released to 0 100 % 100 % 100 % 80 % 60 % Yearly Annual Budgets CLG and Deputy LAs financed by IDA Chief Secretary (Finance) ,  % of planned LA Provincial Council spending aligned with 20 % 20% 25% 30% 40% 50% Yearly Audit Reports people’s preferences1 Auditor General’s Office  Rising satisfaction of 50% local people with service 10% 20% 40% 60% Yearly Service Delivery 30% delivery by LAs CLG Surveys including citizen score cards Intermediate Outcome Indicators  Number of LAs 28 - 30 40 50 60 Yearly Quarterly Progress Staff with M&E preparing annual Reports Unit of CLG and financial statements Internal Auditors within 3 months after of Provincial close of the financial year

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 Number of 18 - 30 40 50 60 Yearly Yearly Councils “acceptable”2 financial audits of accounts Auditor General’s Office  Number of LAs with budgets prepared in a 23 8 10 20 30 40 Yearly Citizen Score Cards Staff within M&E participatory manner on budget planning Unit of CLG  % of LAs whose revenues, expenditures, and procurement 0 10% 30% 50% 70% 90% Yearly Annual Budgets CLG and DCS decisions are publicly (publicly disclosed) (Finance) disclosed

Notes: 1 Computed from data of PSs that have received TA in the preparation of participatory budgets and for which data was available on their budget allocation. The percentage reflects the correlation between the spending preferences by the public and formulated in budgets versus actual spending of the LAs without such assistance.

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2. “Acceptable” being defined as all audits that do not have an “adverse audit opinion” or a “disclaimer of opinion”. This definition is in accordance with the LK audit standards. Attachment 06: Results Framework

PDO Project Outcome Indicators Use of Project Outcome Information

 % of planned LA spending Assess demand-responsive local aligned with people’s spending preferences

 Rising satisfaction of local Gauge satisfaction level of local people with service delivery by people with improved service LAs delivery

 Number of “acceptable” Gauge local capacity technical financial audits of accounts and financial management

 Number of LAs with budgets Measure stronger responsiveness prepared in a participatory of LAs to its citizenry manner

 LA revenues, expenditures, Gauge accountability of LAs and procurement decisions publicly disclosed

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Arrangements for results monitoring Target Values Data Collection and Reporting Project Outcome Baseline YR1 YR2 YR3 YR4 YR5 Frequency and Data Collection Responsibility for Indicators Reports Instruments Data Collection  Number of households receiving improved local services by LAs 0 0 25,000 50,000 75,000 100,000 Yearly Audit Reports Auditor General’s supported under the Office projects

 % of block grant allocation released to 0 100 % 100 % 100 % 80 % 60 % Yearly Annual Budgets CLG and Deputy LAs financed by IDA Chief Secretary (Finance) ,  % of planned LA Provincial Council spending aligned with 20 % 20% 25% 30% 40% 50% Yearly Audit Reports people’s preferences1 Auditor General’s Office  Rising satisfaction of -30%- 50% local people with service 10% 20% 40% 60% Yearly Service Delivery delivery by LAs CLG Surveys including citizen score cards Intermediate Outcome Indicators  Number of LAs 28 - 30 40 50 60 Yearly Quality Progress Staff within M&E Report preparing annual Unit of CLG and financial statements within 3 months after Internal Auditors close of the financial of Provincial year Councils

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 Number of “acceptable”2 18 - 30 40 50 60 Yearly Yearly Auditor General’s financial audits of Office accounts

 Number of LAs with budgets prepared in a 23 8 10 20 30 40 Yearly Citizen Score Staff within M&E participatory manner Cards on budget Unit of CLG  % of LAs whose planning revenues, expenditures, and procurement 0 10% 30% 50% 70% 90% Yearly CLG and DCS decisions are publicly Annual Budgets (Finance) disclosed (publicly disclosed)

2. “Acceptable” being defined as all audits that do not have an “adverse audit opinion” or a “disclaimer of opinion”. This definition is in accordance with the LK audit standards.

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Attachment 7: Negative List

Subprojects with any of the attributes listed below will be ineligible for support under the proposed operations.

Attributes of Ineligible Subprojects GENERAL CHARACTERISTICS Concerning significant conversion or degradation of critical natural habitats. Including, but not limited to, any activity within wildlife and forest Reserves, national parks, conservation forests and sanctuaries. Damages cultural property, including but not limited to, any activities that affect the properties inscribed in the World Heritage List and : Other archaeological and historical sites; and Religious monuments, structures and cemeteries. Requires involuntary acquisition of land, or the resettlement or compensation of more than 200 people Requiring pesticides that fall in WHO classes IA, IB, or II. Affecting waters of riparian neighbors. Drinking Water Supply New or expanded of piped water schemes to serve 10,000 or more households. Sanitation New wastewater treatment plants to serve 10,000 or more households. Solid Waste New disposal sites or significant expansion of an existing disposal sites. Roads New primary roads and highways. Irrigation New irrigation and drainage schemes. Dams Construction of dams more than 5 meters high. Rehabilitation of dams more than 15 meters high. Power New power generating capacity of more than 10 MW. Oil and Gas New exploration, production or distribution. Rehabilitation of production or distribution systems. Income Generating Activities Activities involving the use of wood for fuel or as raw material from natural habitats. Activities involving the use of hazardous substances.

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Attachment 8: Prescribed list

Prescribe Projects

Under the National Environmental Act (NEA) and regulations, made there under, an EIA or IEE is required for every listed projects referred to as prescribed projects. There are 52 projects listed by generic description, magnitude and location as prescribed projects under the NEA No. 47 of 1980 through the Gazette Extraordinary No. 722/22 dated 24th June 1993.

List of Prescribe Projects - Part (I)

Projects and undertaking if located wholly or partly outside the coastal zone as defined by coast conservation Act, No. 57 of 1981.

 All river basin development and irrigation projects excluding minor irrigation works (as defined by the Irrigation Ordinance Chapter 453)  Reclamation of land, wetland area exceeding 4 hectares.  Extraction of timber covering land area exceeding 5 hectares.  Conversion of forests covering an area exceeding 1 hectares in to non-forest uses.  Clearing of land areas exceeding 50 hectares.  Mining and mineral Extraction  Inland deep mining and mineral extraction involving a depth exceeding 25 meters.  Inland surface mining of cumulative areas exceeding 10 hectares.  All off shore mining and mineral extractions.  Mechanized mining and quarrying operations of aggregate, marble, limestone, silica, quartz, and decorative stone within one-kilometer of any residential or commercial areas.  Transportation Systems  Construction of national and provincial highways involving a length exceeding 10 kilometers.  Construction of railway lines.  Construction of air ports.  Construction of air strips.  Expansion of airports or airstrips that increase capacity by 50 percent or more.  Port and Harbour Development  Construction of Ports.  Construction of Harbours.  Port expansion involving an annual increase of 50 percent or more in handling capacity per annum.  Power Generation and Transmission  Construction of hydroelectric power stations exceeding 50 Megawatts.  Construction of thermal power plants having generation capacity exceeding 25 Megawatts at a single location or capacity addition exceeding 25Megawatts to existing plants.  Construction of nuclear power plants  All renewable energy based electricity generating stations exceeding 50 Megawatts.  Transmission Lines  Installation of overhead transmission lines of length exceeding 10 kilometers and voltage above 50 kilovolts.  Housing and Building  Construction of dwelling housing units exceeding 1,000 units.

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 Construction of all commercial buildings as defined by Urban Development Authority established by the Urban Development Authority Law, No. 41 of 1978 having built up area exceeding 10,000 square meters.  Integrated multi-development activities consisting of housing, industry, commercial infrastructure covering a land area exceeding 10 hectares.  Resettlement  Involuntary resettlement exceeding 100 families other than resettlement effected under emergency situation.  Water Supply  All ground water extraction projects of capacity exceeding ½ million cubic meters per day.  Construction of water treatment plants capacity exceeding ½ million cubic meters.  Pipelines  Laying of gas and liquid (excluding water) transfer pipelines of length exceeding 1 kilometer. Hotels  Construction of Hotels or holiday resorts projects which provide recreational facilities exceeding 99 rooms or 40 Hectares, as the case may be.  Fisheries  Aquaculture development projects of extent exceeding 4 hectares.  Construction of fisheries harbours.  Fisheries harbor expansion projects involving an increase of 50 percent or more in fish handling capacity per annum.  All tunneling projects  Disposal of Waste  Construction of any solid waste disposal facility having a capacity exceeding 100 tons per day.  Construction of waste treatment plants treating toxic or hazardous waste.  Development of all Industrial estates and Parks exceeding an area of 10 Hectares.  Iron and Steel Industries  Manufacture of iron and steel products of production capacity exceeding 100 tons per day using iron ore as raw material.  Manufacture of iron and steel products of production capacity exceeding 100 tons per day using scrap iron as raw material.  Non – Ferrous Basic Metal Industries.  Smelting of aluminium or copper or led of production capacity exceeding 25 tons per day.  Basic Industrial Chemicals  Formulation of toxic chemicals of production capacity exceeding 50 tons per day.  Manufacture of toxic chemicals of production capacity exceeding 25 tons per day.  Pesticides and Fertilizer  Formulation of pesticides of combined production capacity exceeding 50 tons per day.  Manufacture of toxic chemicals of production capacity exceeding 25 tons per day  Petroleum and Petrochemicals  Petroleum refineries producing gasoline, fuel oils, illuminating oils, lubricating oils and grease, aviation and marine fuel and liquefied petroleum gas from crude petroleum.  Manufacture of petro-chemicals of combined production capacity exceeding 100 tons per day from raw materials obtained from production process of oil refinery or natural gas separation. Tyre and Tube Industries  Manufacture of tyre and tubes of combined production capacity exceeding 100 tons per day from natural or synthetic rubber.  Sugar Factories

167

 Manufacture of refined sugar of combined production capacity exceeding 50 tons per day.  Cement and Lime  Manufacture of Cement.  Manufacture of lime employing kiln capacity exceeding 50 tons per day.  Paper and Pulp  Manufacture of paper or pulp combined production capacity exceeding 50 tons per day.  Spanning, Weaving and Finishing of Textiles  Integrated cotton or synthetic textile mills employing spinning, weaving, dyeing and printing operations together, of combined production capacity exceeding 50 tons per day.  Tanneries and Leather Finishing  Chrome tanneries of combined production capacity exceeding 25 tons per day.  Vegetable (bark) of combined production capacity exceeding 50 tons per day.

(Note: Projects and undertaking setout in item 20 to 30 are located within Industrial Estates and parks as described at 19 above, the approval shall not be necessary under the provision of Part (IVC) of the act.) Industries which involve the manufacture, storage or use of Radio Active Materials as defined in the Atomic Energy Authority Act, No. 19 of 1969 or Explosives as defined in the Explosives Act No. 21 of 1956, excluding for national security reasons.

Part (II)

All projects and undertakings listed in Part (I) irrespective of their magnitudes and irrespective of whether they are located in the coastal zone or not, if located wholly or partly within the areas specified in Part (III) of the schedule. The following industries, if located wholly or partly within the areas specified in Part (III) of the schedule:

 Iron and Steel  Non-Ferrous Basic Metal  Basic Industrial Chemicals  Pesticides and Fertilizers  Synthetic Resins, Plastic materials and manmade Fibers  Other Chemical Products  Petroleum and Petro- chemical Products  Tyres and Tubes  Manufacturing and Refining of Sugar  Alcoholic Sprits  Malt Liquors and Malt  Cement and Lime  Non-metallic Mineral Products  Paper, Pulp and Paperboard  Spinning, Weaving and Finishing of Textiles  Tanneries and Leather Finishing  Shipbuilding and Repairs  Railroad Equipment  Motor Vehicles  Air Craft

168

Part (III)

Within 100 meters from the boundaries of or within any area declared under:

 The National Heritage Wilderness Act No. 3 of 1988.  The Forest Ordinance (Chapter 451)  Whether or nor such area wholly or partly within the Coastal Zone as defined in the Coast Conservation Act, No. 57 of 1981.  Within the following areas whether or not the area wholly or partly within the Coastal Zone.  Any erodible area declared under the Soil Conservation Act (Chapter 450)  Any Flood Area declared under the Flood Protection Ordinance (Chapter 449) and any flood protection area declared under the Sri Lanka Land Reclamation and Development Corporation Act, No. 15 of 1968 as amended by Act, No. 52 of 1982.  60 Meters from the bank of a public stream as defined in the Crown Land Ordinance (Chapter 454) and having a width of more than 25 meters at any point of its course.  Any reservation beyond the full supply level of a reservoir.  Any archaeological reserve, ancient or protected monument as defined under the Antiquities Ordinance (Chapter 188).  Any area declared under the Botanic Gardens Ordinance (Chapter 446)

169

Attachment 9: Initial Environmental Examination Report format IEER is generally prepared for projects with level II impacts based on the screening checklist recommendations. However, if AMT recognizes that the recommendations given in the checklist is incorrect and the sub-project actually falls within the level II category, AMT will request the PM/PS to prepare an IEER. In addition, if AMT appraises that the proposed sub- project falls within the prescribed or negative list or include new activities, the IEER will be directed to the CEA. Should the CEA and/or PAA decides that either of them are unable to make a “finding of no significant impact” on the basis of the IEER and that more details are needed before final approval, the CEA and/or PAA will inform the Project Proponent (PP) – PM/PS accordingly with a request that the PM/PS should submit a complete IEE Report prepared in accordance with the Terms of Reference (ToR) drafted by the Scoping Committee. The IEER should focus on issues deemed significant by the scoping committee together with any other information bearing on the expected environmental impact of the proposed development activity and the measures suggested for minimizing its adverse environmental impacts.

The general format is indicated below:

Cover page: Same as for EIS. If assigned the project number may be included.

Executive Summary: Should be a one page synopsis of the proposed action. Present a justification for the proposed project and describe its significant environmental impacts and proposed mitigation measures.

Purpose & Need for Action: Should indicate the distances/area covered by the project, the important locations of the proposed activity and why such activity is needed.

Alternatives: Discuss available alternatives to the proposed action or project, including the “no action” alternative. If a preferred alternative has been identified, provide sufficient details pertaining to the criteria used in this selection and the method and the techniques used in evaluating the preferred alternative against one or more of the other alternatives.

Affected Environment: Based on the preferred alternative, Analyze the social, economic and environmental factors that are likely to be significantly affected and any other issues that are known or expected to be of concern to the public..

Impacts & their Mitigation: Describe the level intensity of impact for each significant category. The basis for establishing the levels should be scientific and systematic to permit proper assessment of the impacts. If the impacts on the environment are not expected to be significant, explain why it is so. Propose measures and other actions that will help to conserve or enhance the affected environment. Include a plan for monitoring environmental characteristics during and after the proposed action/project.

170

Information Gathering: Describe how the information presented was gathered. List the agencies, members of the public and any other parties consulted.

Appendices: Include only documents, maps, drawings, or other material that will help in arriving at a decision. Also include details of analytical or field tests conducted specifically to support any information provided in the report and the terms of reference for the assessment.

Certification:

I hereby certify that the sub project [Title] of PM Executive Committee [Name] in [Name] Pradeshiya Sabha generates significant negative environmental impacts, but does not fall within prescribed or negative lists and has/not prepared an IEER to the satisfaction.

…………………………………………… …………………………………….

Certified by [District], ESO Date

The IEER has been cleared by the CEA/PAA and the World Bank.

…………………………………………………………………………………………………………………

Approved by AMT – NRM Date

171

Attachment 10: Environmental Impact Statement format EIS will be prepared if the environmental screening checklist indicates that a given sub- project proposal will likely to generate Level 1 types of impacts, i.e marginal and/or short- term impacts.

The general format is as follows;

Cover Page: Should include the following on the cover page; Name of the project, Date of Submission, The names, addresses and telephone and fax numbers of the project proponent.

Purpose & Need for action: Present a justification for the proposed project. Should indicate the distances/area covered by the project, the important locations of the proposed activity and why such activity is needed. The purpose and need should be explained in two paragraphs.

Alternatives: Briefly outline the available alternatives to the proposed project. If a preferred alternative has been identified, provide a summary of the basis for selecting that alternative.

Affected Environment: Elaborate the Social, economic and environmental issues for each of the alternatives considered including the preferred alternative that is likely to be affected by the project. Also discuss any other issues that are known or expected to be of concern to the public or to the PAA.

Impacts & Mitigation: Describe the level intensity of impact for each major category. Proposed mitigation measures and other actions to preserve or, where possible, improve the affected environment. Also outline a plan for monitoring environmental quality during and after the adoption of mitigation measures.

Appendices: Include only documents, maps, drawings, or other material that will help in arriving at a decision and list of agencies, members of the public and any other parties consulted.

Certification:

We hereby certify that the sub project [Title] of [Name] PM Executive Committee in [Name] Pradeshiya Sabha generates marginal and/or short-term environmental impacts and has submitted/not submitted an adequate EIS. Therefore, the EIS is cleared/not cleared and need further revisions.

…………………………………………… ………………………………….

Certified by Chairperson, [Name] PSEC Date

I hereby certify that the EIS submitted is adequate.

…………………………………………… …………………………………….

Certified by [District], ESO Date 172

…………………………………………… ……………………………………….. Attachment 12: Minimum required staff implement NELSIP MED GN Unit Project Coordinator

Deputy Project Coordinator

Public Financial Magt. Project Accountant Capacity Building ESMF Specialist -1 M&E Specialist-1 Other Supporting staff Specialist -1 Specialist1

Provincial Project Director (CLG)

Deputy Provincial Project Director

Finance & Internal Audit Unit Planning & Development Unit Legal & Reforms Unit Administration Unit Accountant - 1 Assistant Director-1 Assistant Commissioner-1 Administration Officer -1 Internal Auditor -1 Civil Engineer -1 Community Development Program Assistant – 1 Officer-1 Financial Management Assistant -1 Procurement Specialist-1 Program Assistant-1 KKS - 1 Institutional Development

Program Assistant -1 Assistant Provincial Project Specialist-1 Director (ACLG) Social Protection Specialist-1

IEC Specialist-1 Program Assistant-3

Planning & Monitoring Community Financial Technical Unit Administrative Human Resources Investigation & Good Governance Management Unit Unit Unit Dev. Unit Service Unit Internal Audit Unit Reforms Committee Project Appraisal Team Chief Comm. Dev. PA/MA - 1 Engineer/Senr Staff Asst. – 1 Mgt. Asst. – 1 Officer - 1 Program Asst. – 1 .TO-1 Program Asst. - 2 Investigation LG Asst.- 2 Technical Officer 1 Driver Officers - 1 Social/ Envt/ Officer 1 LA Council Fin. Magt. Officer 1 Planning Officer 1 Planning & Monitoring Financial Mgmt. Unit Administration Unit Public Utility Unit Unit Revenue Unit PA/LG/DA/Do - 1/ Local Govt. Asst – 1 Mgt. Asst. - 1 Secretary – 1 Revenue Supervisor - 1 Program Asst. – 1 CDO - 1

Technical Officer - 1

173  The highlighted positions will be associated with the project and recruited from the provincial carder and from the open market.

Attachment 13: Overall Project Implementation Plan

Batch LA No 2010 2011 2012 2013 2014 2015 (PS/UC /MC) Quarter Quarter Quarter Quarter Quarter Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

UC 3

MC 1

2 PS 15

UC 3

MC 1

3 PS 35

UC 3

MC 1

Total 77

174

Attachment 14: First Year Detailed Implementation Plan

Period Main Process Key Activity Starting Date End Date

First year Start-Up Phase Identifying staff required for the implementation at National, Provincial and District level with the Job 1st week Jul.09 1st week Dec,09 Descriptions and preparation of time plan for recruiting the staff Establishing National 2nd week Jul.09 1st week Dec,09 Steering Committee Establishing the Project 2nd week Jul.09 1st week Dec,09 Coordinating Unit with Positioning Project facilities at NBM Staff Establishing the Project Management Teams with the 1st week Aug.09 1st week Dec,09 facilities at Provincial CLG level Establishing the 1st week Oct.09 1st week Dec,09 Convergence Gamaneguma Cell at NBM Establishing and Orienting 1st week Dec,09 Project Appraisal Team at 3rd week Nov.09 District level Establishing the Project Supervision and Technical 3rd week Nov.09 1st week Dec,09 team with the facilities at District ACLG level Developing and Finalizing 1st week Aug.09 4th week Criteria for selecting LA s Dec.2010 Orienting national level 4th week 1st week Sep.09 stakeholders on selection Dec.2010 criteria Educating CLGs, ACLGs 4th week and relevant Staff of North 2nd week Sep.09 and East PCs on selecting Dec.2010 Policy Development criteria and process and Orienting Relevant Initial orientation for Stakeholders Provincial and District level Government and Political 4th week 2nd week Oct.09 Authorities on project Dec.2010 concept, rules, process and roles and responsibilities

Translating final draft of 4th week Environment assessment and 1st week Aug.09 Dec.2010 management frame work into Sinhala and Tamil

175

Promotional Phase Formation of Local Authority Advisory Committee with 2nd week Oct.09 4th week Jan 2010 roles and responsibilities Introducing NELSIP to Establishing Provincial, District and Supporting mechanism 1st week Dec.09 4th week Dec.09 Divisional Coordinating Committees Developing Appraisal checklist and technical 1st week Dec.09 4th week Dec.09 guidelines Developing Rate Bank 1st week 4th week Jan.2010 Jan.2010 Contracting and orienting 2nd week Jan 2nd week Dec.09 PRA resource persons and 2010 Technical service Providers Orienting Political and 2nd week Oct.09 4th week Oct.09 Government authorities on the project at divisional level Conducting IEC on eligibility 1st week Nov.09 4th week Nov.09 Selection of Local criteria for assessing LAs Authorities Inviting applications from 2nd week 4th week Nov.09 LAs Nov.09 Evaluating applications of 1st week Dec.09 2nd week Dec.09 LAs Selecting eligible LAs 3rd week Dec.09 4th week Dec.09 Preparing Capacity Building 4thweek Dec.09 1st week Jan.2010 (CB)Plan for identified gaps of dropped LA s Implementing CB Plan for 2nd week 1st week Re-selection of Local dropped LA s Jan.2010 Mar.2010 Authorities dropped in Re-inviting applications from 2nd week 2nd week first selection LA s Mar.2010 Mar.2010 Evaluating applications of 3rd week 3rd week LAs Mar.2010 Mar.2010 Selection of LA s 4thweek 4th week Mar.2010 Mar.2010 Pre-Planning Phase Positioning GN level Orienting GNs, SDOs, FHOs 2nd week Government officers and ARPAs on the project 1st week Jan 2010 Apr.2010 to assist project and their role implementation Re-organizing LA planning 2nd week Jan 2nd week Positioning LA s for Unit and setting up LA 2010 Apr.2010 implementation the advisory Committee project Formation of Committees 4th week 3rd week Jan 2010 under LA advisory and train Apr.2010 them

176

Formation of Social Audit 3rd week Jan.2010 4th week Committee Apr.2010 Identification of staff required for the 2nd week Jan 1st week implementation at LA s level 2010 May.2010 and filling the vacancies and trained them Re-organizing CDCs with 2nd week Jan 3rd week Positioning CDCs relevant committees 2010 May.2010 (Prajamandala) for Signing MoU between LA s implementation the and CDCs ( Prajamandala) 3rd week 3rd week Jan.2010 project for implementing identified May.2010 project activities and constructions Conducting baseline survey 4th week Jan.2010 3rd week May.2010 Assessing suitability of LA 1st week Feb.2010 3rd week PDP May.2010 Facilitating LA s to revisit PDP Vision and Plan if 2nd week 4th week required and Capacity Feb.2010 May.2010 Building Plan for LA s Revised LA Development vision and Plan and CB Plan 3rd week 1st week June appraised by PAT and Feb.2010 2010 Approved by LA Councils Preparing proposal for 1st

installment of Basic Block 3rd week Feb2010 1st week Jun.2010 Baseline Survey, Grant by LA s Finalizing Proposals for 1st installment Development Vision 4th week of Basic Block Grant 2nd week and Plan of LA s Feb.2010 4th appraised by PAT and Jun.2010 week Feb,2010 approved by Councils

Submitting proposals for 1st 1st week installment of Basic Block 3rd week Jun.2010 Mar.2010 Grant to ACLGs by LA s

Submitting proposals for 1st 2nd week 4th week Jun.2010 installment of Block Grant Mar.2010 to CLG by ACLGs

Submitting Block Grant 3rd week 4th week Jun.2010 proposals to CLG by ACLG Mar.2010 Review and approve 3rd week 4th week Jun.2010 proposals by CLG and PC Mar.2010 2nd week Mar.2010 Receiving 1st installment of 4th week 1st week Jul.2010 Basic Block Grant Mar.2010

177

Identification of qualified LA s for Social Protection Planning activities for (Other grant) based on the 3rd week Other Grant- Social 1st week Feb.2010 need come from PRA and May.2010 Protection PDP ( 10 PSs and UCs) by ACLGs and approved by CLG Preparation of proposal for 3rd week Social Protection and 1st week Jun.2010 appraised by PAT and Feb.2010 approved by council Receiving Proposals for 4th week 2nd week June Social Protection by ACLGs Feb.2010 2010 Submitting Social protection 1st week 3rd week Jun.2010 to CLG by ACLGs Mar.2010 Review proposals by CLG and PC and release 1st 4th week 1st week Jun.2010 installment of Social Mar.2010 Protection fund (Other Grant) for selected LAs

Calling Quotations from 2nd week 3rd week registered contractors Mar.2010 May.2010

Evaluating quotations and 2nd week 3rd week Jun.2010 Hiring Contractors selecting suitable contractors Mar.2010

Awarding contracts and 3rd week 4th week Jun.2010 signing agreement with Mar.2010 selected contractors

Planning Phase Training Subcommittee

members of LA s on PIM 1st week 2nd week Jul 2010 Capacity Building for (Project Implementation Apr.2010 implementing LA Manual) Development Plan Training CDCs committee 3rd week 3rd week Jul.2010 members on PIM Apr.2010

Re-organizing Good 4th week 2nd week Governance Centers at Mar.2010 Apr.2010 district level with a plan Establishing Good Training selected staff on Governance assessing performance of LA mechanism at District advisory committee through 4th week and PC level 4th week Jul.2010 Score Card and preparing Apr.2010 Governance and Accountability Action Plan( (GAAP)

178

Deployment of Technical staff with orientation on the 2nd week 2nd week project at LA and ACLG Jan.2010 Apr.2010 offices ( before revisiting Preparation of plan for PDPs of LA s) sub projects Feasibility studies 1st week 2nd week Jul.2010 Apr.2010 Preparation of project 3rd week 4th week Jul.2010 proposals with estimates Apr.2010 Appraising Project proposals 4th week 1st week by PAT Apr.2010 Aug.2010 Proposals approved by 1st week 2nd week Councils May2010 Aug.2010 Preparation of project proposals for identified 1st week families / persons with the 2nd week Jul.2010 assistance of service Apr.2010 Preparation of plan for providers if required ( After Other Grant-Social assessing PDP ) Protection Proposals appraised by PAT 2nd week 3rd week Jul.2010 and approved by council Apr.2010 Releasing funds for 4th week 4th week Jul.2010 identified families /persons Apr.2010

Implementation Phase

Mobilizing community labor from 1stweek contribution and Cash May.2010 contribution based on the requirement Displaying constructors information, project estimate, community prior to commence

contribution, beneficiaries, construction project starting date and expected completion date on notice board Implementation of sub Implement constructions of Start from 3rd projects from Block sub projects by contractors week May.2010 Grant Funds including CDCs Supervising and monitoring At least once in a constructions by Social month- from Audit Committee and May.2010 Technical staff of LA s Releasing installment to contractor based on the As per the

milestones and agreement recommendation of Social Audit Committee Review progress of activities From June.2010 with communities monthly

179

Submit monthly physical and financial progress to From June.2010 ACLG Proposal for second installment appraised by 2nd week PAT and Approved by the Aug.2010 Council Submitting the proposal to 3rd week

ACLG by LA s Aug.2010

Receiving the proposal by CLG from ACLG and 4th week review with PC Aug.2010

Releasing second installment to LAs 1st week Sep.2010

Continue constructions from 2nd week according to the action plan Sep.2010 Monitoring milestones of constructions by Social Monthly Audit Committee Review progress Monthly Preparation of construction 1st week

completion report by Nov.2010 contractor and submit to LAs

Preparation of books of 3rd week

accounts and financial Nov.2010 reports

Auditing accounts of Basic 1st week Block Grant by ACLG Dec.2010 Construction completion report and audited accounts 2nd week

approved by council and Dec.2010 submit to ACLG

Receiving completion report 3rd week

and audited accounts by Dec.2010 CLG from ACLG Implementing activities of 4th week

first installment according to Apr.2010 the plan Maintaining books of Monthly Implementation of accounts project proposals from Monitoring activities by Other Grant-Social Social Audit Committee and Monthly Protection report to the Sub Committee Review finance and physical progress monthly against the 4th week Jun.2010 plan and submit a report to Council and ACLG

180

Preparation of proposal for 1st week Jul.09 second installment Appraising proposal for second installment and 2nd week Jul.09 getting approval from Council Submitting the proposal to 3rd week Jul.2010 ACLG by LA s Receiving the proposal by CLG from ACLG and 4th week ju.2010 review with PC Releasing second installment 1st week Aug2010 to LAs Implementing activities of from 1st week second installment Aug.2010 Maintaining books of Monthly accounts Monitoring activities by

Social Audit Committee and Monthly report to the Sub Committee

Preparation of activity 2nd week completion report Nov.2010

Auditing accounts of the 4th week Other Grant by ACLG Nov.2010 Approving the completion report and audited accounts by council and submit to 1st week ACLG Dec.2010

Receiving the completion report and audited accounts of Other grant by CLG from 2nd week ACLG Dec.2010 Review the activity completion report and audited accounts by CLG 3rd week with PC Dec.2010

Reports to LA s' council monthly from

meeting May.2010

Reports to ACLG by LA s monthly from May.2010 Reports implementation status Reports to CLG by ACLG monthly from and financial progress May.2010 Reports to PC and NBM by monthly from CLG May.2010 monthly and Reports to WB by NBM quarterly from May.2010

181

once in six month WB supporting mission from Sep.2010

Monitoring ACLG staff at progress monthly from implementation of review meeting May.2010 activities at least once in CLG staff three month from May.2010 Identification of risk areas at all level and preparing risk mitigation plan Jun.2010 (Governance and Accountability Action Plan- GAAP) Establishing Implementing GAAP From Jun.2010 Accountability system Review progress of the monthly from GAAP Jun.2010 Introducing CAP for CDC, Oct.2010 LA s and ACLG Establishing grievance Jun.2010 redressal system

Second Implementation Phase Year Conducting IEC in eligibility 1st week Jan.2011 2nd week jan2011 LA s Selection of new Inviting applications from LA s 2nd week 3rd week Jan.2011

LA s jan.2011 Evaluating applications of LA s 3rd week Jan2011 4th week Jan.2011 Selecting eligible LA s 4th week jan.2011 4th week Jan.2011

Evaluating quotations and Hiring Contractors 1st week Jan.2011 1st week Feb.2011 selecting suitable contractors Evaluating quotations and 1st week Feb.2011 selecting suitable contractors Awarding contracts and signing 2nd week agreement with selected Feb.2011 contractors Re-assessing LA s' PDP and 1st week Feb.2011 3rd week preparation of CB plan Feb.2011 PDP and CB plan appraised by 4th week 4th week

PAT and approved by Council Feb.2011 Feb.2011 First installment of Preparation of proposal for 1st 4th week 1st week Basic Block Grant installment of BBG Feb.2011 Mar.2011 (BBG)for New LAs Receiving BBG 1st installment 3rd week Feb.2011 Implementing activities of 1st 3rd week 3rd week Jun.2011 installment Feb.2011 Preparation of proposal for 2nd 3rd week 4th week Jun.2011 installment of BBG Jun.2011

182

Implementing activities of 2nd 1st week Jul.2011 1st week dec.2011 installment of BBG Evaluation of BBG results 2nd week 1st week Jan.2011 according to the plan Jan.2011 Second Block grant Qualifying for 2nd BG and 3rd week Jan.2011 to LA s receiving certificate Preparation of proposal for 1st 3rd week Jan,2011 installment of the Grant Appraising the proposal by PAT and approving by Council 4th week Jan.2011 Receiving 1st installment of 2nd week

2nd BG Feb.2011 Implementing activities of 1st 2nd week 2nd week installment of the Grant Feb.2011 Jun.2011 Preparation of proposal for 2nd 2nd week

installment of the Grant Jun.2011 Appraising the proposal by 3rd week 4th week Jun.2011 PAT and approving by Council Jun.2011 Implementing activities of 2nd 1st week Jul.2011 1st week dec.2011 installment of the Grant Auditing accounts of 2nd BG 3rd week 4th week by ACLG Dec.2011 Dec.2011 Completion report and audited 3rd week 4th week accounts approved by Council Dec.2011 Dec.2011 and submission to ACLG Reports and Accounts 1st Week submission to CLG by ACLG Jan.2012 3rd week Jan,2012 and review by CLG with PC Preparation of accounts and 1st week Jan.2011 1st week Feb.2011 Auditing by finance records of first year Auditor General Auditing first year accounts by Mar.2011 AG Receiving audit report from AG Apr.2011

Submission of the audit report Apr.2011 to Council and ACLG assessing performance of LA s Apr.2011 received basic block grant Receiving certificate for Apr.2011 qualifying Performance Grant Performance Grant Preparation of proposal for 1st 1st week 1st week (PG) to LA s got installment of PG May.2011 May.2011 Basic Block Grant Appraising the proposal by 2nd week 2nd week PAT and approving it by May.2011 May2011 Council

Receiving 1st installment of PG 4th week May.2011

183

Implementing activities of the 4th week 4th week 1st installment May.2011 Aug.2011 Preparation of proposal for 2nd 1st week Sep.2011 1st week Sep.2011 installment of the Grant Implementing activities of 2nd 1st week Sep.2011 1st week dec.2011 installment Preparation of completion 2nd week 4th week report and auditing accounts Dec.2011 Dec.2011

Approving the completion 4th week report and audited accounts by Dec.2011 1st week Jan.2012 council and submit to ACLG Receiving completion reports and audited accounts by CLG 2nd week from ACLG and review them Jan.2012 4th week Jan.2012 with PC Preparation of project proposals for identified families / persons with the assistance of service 1st week 2nd week Other Grant -Social providers if required ( After Mar.2011 Mar.2011 Protection to new assessing PDP ) LA s Proposals appraised by PAT 3rd week 4thweek Mar.2011 and approved by council Mar.2011 Releasing funds for identified 2nd week 3rd week families /persons Apr2011 Apr.2011 Continuation of Assessing performance of Other grant - Social Social Protection activities Protection in first implemented in first year by 1st week Jan.2011 3rd week Jan.2011 year LA s ACLG and CLG Selecting LA s qualifying to continue Social protection 4th week Jan.2011 activities by CLG Receiving proposal for 1st 3rd week installment of Other Grant by 1st week Feb.2011 ACLG and submission them to Feb.2011 CLG approval Releasing 1st installment of the 4th week grant Feb.2011 Implement activities of 1st 4th week 1st week Jul.2011 installment Mar.2011 Receiving proposal for 2nd installment of Other Grant by ACLG and submission them to 2nd week Jul.2011 4th week Jul.2011 CLG for approval 1st week Releasing 2nd installment Aug.2011 Implementing activities of 2nd 1st week aug.2011 1st week dec.2011 installment

184

Submission of activity completion report to ACLG and 2nd week 4th week forwarded them to CLG by Dec.2011 Dec.2011 ACLG for approval WB supporting mission s Mar.2011and Monitoring after 6month implementation of ACLG staff at progress Monthly activities review meeting CLG staff Quarterly

Continuation of Implementing from Jan.2011 GAAP monthly from Implementing Review progress of the GAAP Accountability Feb.2011 Assessing risk level of every six month mechanism identified risk areas from Aug.2011 Self assessment by LA s, every six month

ACLG from Aug.2011 Post Implementation Phase Training relevant committee on Jan.2011 operations and maintenance of sub projects with the materials Operations and Review operations and Monthly from sharing from the particular maintenance of Sub maintenance plans of sub Jan.2011 sector projects Maintainingprojects books of accounts every month Auditing accounts and at least once in

operations functions by SAC three month

Developing grading system for June ,2011 Grading LA s LA s Grading LA s by Dec.2011 Third Implementation Phase Year Evaluation of BBG results 2nd week 1st week Jan.2012 according to the plan Jan.2012 Qualifying for 2nd BG and 3rd week Jan.2012 Continuation of receiving certificate Block Grant Preparation of proposal for 1st 3rd week Jan,2012 installment of the Grant Appraising the proposal by 4th week Jan.2012 PAT and approving by Council Receiving 1st installment of 2nd week

2nd BG Feb.2012 Implementing activities of 1st 2nd week 2nd week installment of the Grant Feb.2012 Jun.2012 Preparation of proposal for 2nd 2nd week

installment of the Grant Jun.2012 Appraising the proposal by 3rd week 4th week Jun.2012 PAT and approving by Council Jun.2012

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Implementing activities of 2nd 1st week Jul.2012 1st week dec.2012 installment of the Grant Auditing accounts of 2nd BG 3rd week 4th week by ACLG Dec.2012 Dec.2012 Completion report and audited 3rd week 4th week accounts approved by Council Dec.2012 Dec.2012 and submission to ACLG Reports and Accounts 1st Week submission to CLG by ACLG Jan.2013 3rd week Jan,2013 and review by CLG with PC Preparation of accounts and 1st week Jan.2012 1st week Feb.2012 finance records of second year Auditing second year accounts Mar.2012 Auditing by by AG Auditor General Receiving audit report from AG Apr.2012

Submission of the audit report Apr.2012 to Council and ACLG assessing performance of LA s received basic block grant and Apr.2012 2nd Block Grant Receiving certificate for Apr.2012 qualifying Performance Grant Preparation of proposal for 1st 1st week 1st week installment of PG May.2012 May.2012 Appraising the proposal by 2nd week 2nd week PAT and approving it by May.2012 May2012 Council 4th week Receiving 1st installment of PG Performance Grant May.2012 (PG) to LA s got Implementing activities of the 4th week 4th week Basic Block Grant 1st installment May.2012 Aug.2012 and 2nd block Preparation of proposal for 2nd Grant 1st week Sep.2012 1st week Sep.2012 installment of the Grant Implementing activities of 2nd 1st week Sep.2012 1st week dec.2012 installment Preparation of completion 2nd week 4th week report and auditing accounts Dec.2012 Dec.2012 Approving the completion 4th week report and audited accounts by Dec.2012 1st week Jan.2013 council and submit to ACLG Receiving completion reports and audited accounts by CLG 2nd week from ACLG and review them Jan.2013 4th week Jan.2013 with PC Continuation of Assessing performance of 1st week Jan.2012 3rd week Jan.2012 Other grant - Social Social Protection activities Protection in first implemented in 2nd year by year LA s ACLG and CLG

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Selecting LA s qualifying to 4th week Jan.2012 continue Social protection activities by CLG Receiving proposal for 1st 3rd week installment of Other Grant by 1st week Feb.2012 ACLG and submission them to Feb.2012 CLG approval Releasing 1st installment of the 4th week grant Feb.2012 Implement activities of 1st 4th week 1st week Jul.2012 installment Mar.2012 Receiving proposal for 2nd installment of Other Grant by 2nd week Jul.2012 4th week Jul.2012 ACLG and submission them to CLG for approval

Releasing 2nd installment 1st week Aug.2012 Implementing activities of 2nd 1st week aug.2012 1st week dec.2012 installment Submission of activity 2nd week 4th week completion report to ACLG and Dec.2012 Dec.2012 forwarded them to CLG by ACLG for approval WB supporting missions Mar.2012 and Monitoring after 6 month Midterm evaluation June.2012 implementation of activities ACLG staff at progress review Monthly meeting CLG staff Quarterly Continuation of Implementing from Jan.2012 GAAP Implementing Review progress of the GAAP monthly from Accountability Jan.2012 Assessing risk level of every six month mechanism identified risk areas from July.2012 Self assessment by LA s, every six month ACLG from July.2012 Post Implementation Phase

Refresher training for relevant Jan.2012 committee on operations and maintenance of sub projects Operations and Review operations and Monthly from maintenance of Sub maintenance plans of sub Jan.2012 projects projects Maintaining books of accounts every month

Auditing accounts and at least once in operations functions by SAC three month

Grading LA s Grading LA s Oct-Nov.2012

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Reward to LA s Dec.2012

Fourth Implementation Phase year Evaluation of BBG results 2nd week 1st week Jan.2013 according to the plan Jan.2013 Qualifying for 2nd BG and 3rd week Jan.2013 receiving certificate Preparation of proposal for 1st 3rd week Jan,2013 installment of the Grant Appraising the proposal by 4th week Jan.2013 PAT and approving by Council Continuation of Receiving 1st installment of 2nd week Block Grant 2nd BG Feb.2013 Implementing activities of 1st 2nd week 2nd week installment of the Grant Feb.2013 Jun.2013 Preparation of proposal for 2nd 2nd week

installment of the Grant Jun.2013 Appraising the proposal by 3rd week 4th week Jun.2013 PAT and approving by Council Jun.2013 Implementing activities of 2nd 1st week Jul.2013 1st week dec.2013 installment of the Grant Auditing accounts of 2nd BG 3rd week 4th week by ACLG Dec.2013 Dec.2013 Completion report and audited 3rd week 4th week accounts approved by Council Dec.2013 Dec.2013 and submission to ACLG Reports and Accounts 1st Week submission to CLG by ACLG Jan.2014 3rd week Jan,2014 and review by CLG with PC Preparation of accounts and 1st week Jan.2013 1st week Feb.2013 finance records of second year Auditing second year accounts Auditing by Mar.2013 by AG Auditor General Receiving audit report from AG Apr.2013

Submission of the audit report Apr.2013 to Council and ACLG assessing performance of LA s Apr.2013 received Block Grants Receiving certificate for Apr.2013 Performance Grant qualifying Performance Grant ( PG) to LA s got Preparation of proposal for 1st 1st week 1st week Basic Block Grant installment of PG May.2013 May.2013 and 2nd block Grant Appraising the proposal by PAT and approving it by Council 2nd week 2nd week May.2013 May2013

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4th week Receiving 1st installment of PG May.2013 Implementing activities of the 4th week 4th week 1st installment May.2013 Aug.2013 Preparation of proposal for 2nd 1st week Sep.2013 1st week Sep.2013 installment of the Grant Implementing activities of 2nd 1st week Sep.2013 1st week dec.2013 installment Preparation of completion 2nd week 4th week report and auditing accounts Dec.2013 Dec.2013

Approving the completion 4th week report and audited accounts by Dec.2013 1st week Jan.2014 council and submit to ACLG Receiving completion reports 2nd week 4th week Jan.2014 and audited accounts by CLG Jan.2014 Assessingfrom ACLG performance and review of them 1st week Jan.2013 3rd week Jan.2013 Socialwith PC Protection activities Selectingimplemented LA ins qualifying 3rd year by to 4th week Jan.2013 Continuation of continueACLG and Social CLG protection Other grant - Social Receivingactivities byproposal CLG for 1st 3rd week 1st week Feb.2013 Protection in first installment of Other Grant by Feb.2013 year LA s ACLG and submission them to Releasing 1st installment of the 4th week grantCLG approval Feb.2013 Implement activities of 1st 4th week 1st week Jul.2013 installment Mar.2013 Receiving proposal for 2nd installment of Other Grant by ACLG and submission them to 2nd week Jul.2013 4th week Jul.2013 CLG for approval Releasing 2nd installment 1st week Aug.2013 Implementing activities of 2nd 1st week aug.2013 1st week dec.2013 installment Submission of activity completion report to ACLG and 2nd week 4th week forwarded them to CLG by Dec.2013 Dec.2013 ACLG for approval WB supporting missions Mar.2013 and after 6 month Monitoring ACLG staff at progress review Monthly implementation of meeting activities CLG staff Quarterly Continuation of Implementing from Jan.2013 GAAP Implementing Review progress of the GAAP monthly from Accountability Jan.2013 mechanism Assessing risk level of every six month identified risk areas from July.2013

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Self assessment by LA s, every six month ACLG from july.2013 Post Implementation Phase Refresher training for relevant committee on operations and maintenance of sub projects Jan.2013 Operations and Review operations and Monthly from maintenance of Sub maintenance plans of sub Jan.2013 projects projects Maintaining books of accounts every month

Auditing accounts and at least once in

operations functions by SAC three month Grading LA s Grading LA s Oct.Nov.2013

Rewards to LA s Dec.2013

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Attachment 15: Appraisal Process

A- Appraisal Process for sub-projects A 1- Appraisal Process for community sub projects

Pre Appraisal

Of Indicative sub project Suggestions

For improvements

Developed sub project

A 2 - Appraisal Process for Sub Projects

Sub Project Proposal

Not Accepted Desk Appraisal

Accepted for Field Appraisal

Re-appraisal Field Appraisal

Funds Released

B - Appraisal Process for PS Inter Connectivity

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B 1 Appraisal Process for Local Authority Participatory Development Plan

Village development plans (3-4)

LA Indicative

Development Plan

Suggestions for (Include prioritized sub projects) Improvement Pre Feasibility

Accepted

LA Participatory Development Plan

(Include prioritized sub projects)

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Attachment 16: A Matrix for setting up a Monitoring System

Since monitoring is an integral part of the NELSIP, the project management needs to emphasis on this matter seriously. Hence, from the outset of the project, a well designed simple, but useful monitoring mechanism needs to be developed. For this, the following matrix given below is proposed to be utilsed by the project management.

Matrix for setting up a Monitoring System

Collection of Data Use of data Issues to be Indicators Source of Who Periodicity How does Who Who monitored Information collects? information analyses? takes flow? action?

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Attachment 17: NELSIP Risk Management Matrix (Draft)

Level Project Cycle Activities Identified Risks Mitigation Stage measures

Pre-Planning  Need Assessments  Accuracy of needs assessments data  Selection of PSs  Accuracy of selection criteria  Sharing of resources ( technical staff) between PS and ACLGs Planning  Preparation of  Lack of qualified cadre of estimates engineer s and technical officers  Insufficient data in Rate Bank Provincial Implementation  Selection of Technical  Political interferences

Service Providers  Size of the funds tranches  Infrastructure exceeding  Procurement process original plan and budget tenders Post  Evaluation  Weak capacity for M&E at implementation provincial level  Lack of transportation facilities/Vehicles Pre- Planning  Data Collection  Data may be unreliable  Understanding of  Project guidelines may not project guidelines be understood by the  Institutional stakeholders mechanism  Political interference in  Participation selecting advisory committee members  May be difficult to get 10% contribution as well as community participation District  Technical Facilitation  Shortage of engineers and Level Planning  Appraising Technical technical staff at district

Soundness of identified level projects  Political interference in  Preparation of budget selection of projects estimates Implementation  Approval of projects  Lack of Technical capacity estimates by ACLG  Lack of equipment  Monitoring and  Political interference Supervision  Delay of impress/tranches  Tranche release  Sharing of technical and physical resource

Post  Evaluation  Lack of technical capacity Implementation  Planning for next year  Funding of O&M cost  Operation and maintenance Pre-Planning  Secondary data  Outdated data collection  Most available data are  Primary data collection estimates

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 Translation of  Timeline not sufficient for documents gathering data  Data base management  Format of surveys may be  Needs assessment too complex  Interviewees may not want to report some data (i.e, income etc.)  Transportation  Misunderstanding in Divisional translation and (LA) and interpretation GND  No proper MIS system  Political interference  High expectation at all level Planning  Analysis of current  Duplication as a result of context multi-sector policies  Preparation of  Several regulations estimates covering same sector(Law  Approval and Orders)  Inflation/ price escalation  Lack of technical know- how  Time line Implementation  Procurement  Timeline takes too long  People’s participation  Political interference  Payment  Lack of participation  Lack of qualified contractors  Complex fund flow arrangements Post  Monitoring and  Lack of technical capacity Implementation Evaluation  Lack of interest  Responsibility of assets  Lack of ownership maintenance  Lack of maintenance system

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Attachment 18: Critical risks and possible controversial aspects

Conflict and Reconciliation

Sustainable peace-building in the North and East is intricately connected to the question of legitimacy of the state, representation, voice and empowerment of the different communities in the North and East. With the central state asserting its supremacy over the total territory of Sri Lanka, strengthening local government institutions and their ability to respond to local needs is a precondition for any durable settlement of minority concerns. Decades of conflict has left an institutional vacuum at the provincial and local level in these two provinces. In the Eastern Province, since last two years, following local and provincial elections, there has been an incremental improvement in the situation, with both provincial and local governments slowly connecting with people, providing services, and addressing public grievances.

In the Northern Province, however, matters are different. Following the decades of armed conflict, there is a complete institutional vacuum at the local level and huge displacement with an estimated 300 000 people interned in camps for months. The protracted conflict has affected delivery of local public goods and services, diminished quality of life of citizens, and, importantly, led to highly negative perceptions regarding the ability of the state to address day-to-day public grievances. Reviving elected local governments thus assume a critical role in service delivery, but in a context where the questions of legitimacy of government, voice and empowerment of local communities are acute. Accountable and responsive local institutions, especially those that are directly elected by people, have a frontline role in such fragile post-conflict environments in fostering peace and reconciliation, rebuilding public confidence and improving living conditions.

Soon after the cessation of armed hostilities in the North, the GOSL announced the schedule for local government elections for two Urban and Municipal Councils in Vavuniya and Jaffna districts. The outcomes of these elections have been mixed and illustrate the huge challenges faced by the government in establishing a well-functioning local government and restoring public trust in the state.

In order to address these issues, during the preparation of the proposed project a Social Impact Assessment is being conducted in order to assess (i) the overall direct and indirect social impact of the planned project activities on the different communities in the North and East, and on their internal relationship with a particular view to the past history of conflict, (ii) how local authorities have been placed and functioning during the recent years of armed conflict, and (iii) the perception of the role and function of the local authorities by the various stakeholder groups and their expectations hereof for the future. The findings of the SIA will help guide project implementation and outline approaches which can further reconciliation across communities and contribute to consolidate the public trust in the state through increased empowerment of local communities and transparency in local governance.

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(The SIA will fulfill the CAS requirements of a Reconciliation and Conflict Filter for the planned operation).

Critical Risks

The project design is robust and good governance provisions will be included to mitigate most of the governance and accountability risks. Some of the main risk areas are political interference with project management; weakness in procurement and financial management in LAs; and ineffective grievance handling mechanism. The results of the risk assessment and current & proposed mitigation measures are presented in the Governance and Accountability Action Plan (GAAP) summarized in Annex 9.

Risk Risk Mitigation Residual rating risk Critical risks to project development objectives Political risks: H H

Both North and East are minority The risks associated with armed dominated provinces that have gone conflict have ceased on the through a long period of armed and conclusion of the war in the North. In political conflict. For this reason, the East, armed hostilities have ground conditions continue to be ceased since at least two years. As politically precarious. such, the President Secretariat, MNBEID and NPSC will be used to deal with political ground conditions.

The Sri Lankan Government has At the national level, Government’s reiterated on more than one occasion commitment to devolution, as per the its commitment to address political 13th Amendment to the Constitution, issues related to the conflict. More remains still uncertain. certainty on this is likely to emerge only in the coming months, especially if Presidential, Parliamentary, Provincial and Local Government elections go ahead. However, political risks to strengthening local governments, especially LAs, are limited since there is general political consensus that strengthening LAs is important to address both service delivery issues and strengthening local government institutions and their ability to respond to local needs is a precondition for any durable settlement of minority concerns. As such, The project preparation has involved all levels of governments including politicians, bureaucrats, civil society organizations and the citizens from the inception and this

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consultation will continue till project completion. Critical risks to component results Lack of commitment by central H Upfront guarantees will be sought at H government to devolve more the national level with regard to the responsibilities and concomitantly, extended role of LAs in the two resources to LAs in North and East provinces. LA elections for North are expected around mid 2010. Lack of capacity of provincial H Upfront institutional assessments of M agencies such as the CLG and ACLG the CLG and ACLG offices of the to implement the project two provinces have been undertaken. These assessments reveal a basic degree of institutional capability, especially in the East. Based on the institutional assessment, institutional development plans (IDPs) are being drawn up for comprehensive strengthening of CLG and ACLG offices. Lack of capacity at the LA level to S Upfront institutional assessments of M implement the project effectively LAs in the two provinces have been undertaken. Based on this, institutional development plans for LAs are being drawn up. Further, LAs that are participating in the project and receiving block grants will have to complete a core capacity building program to become eligible for receiving block grants. Emergence of localized conflicts and H The project with support from other S grievances, especially those related development partners will assist the to different minority groups, can GOSL to develop a framework for threaten local level project the NGOs to participate in the implementation development process in a more transparent manner than that at the present moment. The project will also promote the involvement of universities, professional organizations and other national NGOs who have been working in North and East and who enjoy the confidence of local communities and with whom the GOSL has maintained some trust. GOSL has not announced or H established a clear policy, mechanism or guidelines for the participation of Non Governmental Organizations (NGO) Capacity and availability of private S The project will make initial M contractors is uncertain to meet the assessment of the capacity and sudden increase of construction availability of registered contractors demand in North and East at the in the region. Based on the same time. assessment, risk mitigation elements

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will be provided including community contracting, simplified procurement methods, and appropriate contract packaging to attract reputed contractors.

Overall risk rating H

H- High, S- Substantial, M- Moderate, N-Negligible

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Attachment 19: Governance and Accountability Action Plan (GAAP)

1. The overall development effectiveness, reputational risk and fiduciary risk to the Bank financed projects in Sri Lanka are considerable and are relevant for this project as well. The country context has been taken into account when doing the risk assessment and mitigation for this project. Out of all the fiduciary risks facing the Bank in Sri Lanka, the ones relevant to this proposed project are: political interferences may undermine the effectiveness of implementing the project by the LAs as well as professional project management by the provincial government; weaknesses in both financial management and public procurement that give rise to corruption; and limited implementation capacity and governance systems at the local government system in handling the project.

2. A fiduciary Assessment study undertaken in the ten selected Local Authorities (LA) in North and East indicates that the accountability framework is considerably weak. While the systems of accounting, audit etc, are reasonably sound and have been institutionalized, these are essentially designed to provide upward accountability and oversight by the higher tiers of government. The lack of defined procurement systems and procedures has led to procurement ambiguities among LAs. On the overall, the accountability remains limited by the dependence on PC/ GOSL for capital and revenue (reimbursement of salary) grants. The mitigation measures as have been incorporated into the project design have been calibrated to provide greater opportunities to the village communities for participating effectively in all activities relating to the social and economic development of the Local Authority area. The measures of mitigation include: inclusion of the community representatives in the Local Authority standing committees to be the decision makers at the key stages e.g. investment selection, implementation, procurement, social audit etc. An important element will be an agreed Local Authority Capacity Building Plan, which is expected to strengthen its fiduciary capacity and improve governance, and social accountability measures. These measures are based on the principles of both upward and downward accountability, transparency, participation and equity.

3. A project specific assessment of the governance and accountability risks identified five risk areas:

a. malfunctions in governance systems; b. financial management weaknesses; c. irregularities in procurement and assets management; d. weaknesses in disclosure policies and procedures as well as poor communications; and e. ineffective complaint and grievance redressal mechanism.

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The assessment of risks as well as mitigation measures was carried out in a participatory manner with more than 100 participants from the state, provincial, district and local government staff as well as LA members and citizens during three workshops in LA in June and August 2009.

4. To address the risks identified a three level accountability framework has been developed.

a. The beneficiaries are empowered through LA standing committees to hold themselves, government officials as well as the project implementing agencies accountable through the use of social accountability mechanisms;

b. The LAs are held accountable, for compliance with the governance and accountability provisions in the Local Authority Implementation Manual;

c. Independent monitors, provide an additional measure of accountability, by independently monitoring and reporting on the extent to which the LAs and local government staff are adhering to the governance systems and procedures; and

d. The Bank’s Implementation Support Missions and fiduciary post reviews would test check whether all the systems set up under the framework are functioning.

Taken together, these arrangements would provide reasonable assurance that the funds are being used for intended purposes and corruption is minimized. The key measures to ensure oversight and accountability at each level are briefly described below.

5. Embedding good governance and accountability systems at Local Authority level: The downward accountability approach will be applied for ensuring good governance and accountability. The approach involves vesting most powers in the hand of citizens (as opposed to civil servants and elected officials) through their majority in key decision making bodies. This will involve:

a. Local Authority (LA) standing committees, consisting of 70% community leaders from PMs and 30% LA members, to guide the participatory planning process to identify, prepare and implement investments and make final decisions. b. Setting up Procurement and Audit Committees from LA membership to carry out procurement and accountability tasks, in compliance with agreed rules and procedures detailed in the LA Implementation Manual. c. Funds will be transferred to the LA on basis of guidelines and rules described in the PIP and will be disbursed upon compliance certification by the ACLG, CLG and PC. d. Key information on subprojects will be publicly displayed. e. LA activities will be subject to social accountability review using tools to be defined.

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f. A capacity building plan for LA will be supported by the project and include capacity building for the procurement, financial management and participatory planning.

6. Holding the Local Authorities Accountable: A number of tool and procedures will be used for this purpose. These include:

a. Local Authority Implementation Manual and Project Implementation Plan specify rules and checklist for eligibility, record keeping, financial management, benchmarks for disbursements, social accountability, procurement, disclosure, and external audit.

b. The Appraisal and Monitoring Teams - comprising staff skilled in the areas of financial management, engineering, community participation and rural development will be set up at each ACLG office to ensure compliance with prescribed rules and procedures. They will certify achievement of physical and other milestones during implementation of development activities.

c. Internal Auditor - employed by the Provincial Councils will be responsible for ascertaining whether the financial rules and procedures as laid down in the Manuals are followed.

d. External Auditors - Audit of LA is responsibility of the Auditor General and audit scope is defined by the LA act. Competencies and capacity building needs of the Auditor General are being assessed and, if necessary, would be supported under the project.

e. Independent Monitors- one of the proposed Credit conditions is that the Ministry will, beginning not later than December 31, 2010, have regular social and process audits undertaken on a regular basis by external independent agencies.

f. The enhanced Complaints and Grievances Redress Mechanism - would be another tool for downward accountability of community based organizations.

7. Recommended Implementation Arrangements for the GAAP:

a. The Social Audit Committees at the LA level will have primary responsibility for ensuring compliance with the GAAP measures at the LA level.

b. The existing LA Teams include a full time Program Assistant; the title and TOR of this position may be modified to Governance and Accountability Officer.

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c. The Regional ACLG Team will include a Governance and Accountability Officer (Job description and TOR should be included in the PIP).

d. At the CLG Level three arrangements are recommended to ensure implementation of GAAP: (i) the checklist used by the Appraisal and Monitoring Team should include relevant benchmarks from the GAAP; (ii) the Process Monitors should report on compliance with GAAP; and (iii) the CLG will be responsible for overall implementation of the GAAP. He/she would be supported by the Project Coordinator at the national level and will ensure that the GAAP is implemented at all levels, emerging GAAP issues are handled by the relevant levels in the project and lessons are drawn.

8. Recommendations for the Bank Supervision Missions: The Bank supervision mission would focus on ensuring that the three levels of checks and balances systems are working properly. The mission would focus on the following aspects:

a. Summary of Social Audit Committee Findings b. Independent Evaluator (Process Monitor) Reports c. Award System for Good Performers d. Data from the Complaint Handling System e. Mid-term Evaluation f. Internal Audit Report g. External Audit Reports

9. The following information has been requested prior to the appraisal mission and will help complete the appraisal and finalize the attached draft Governance and Accountability Plan:

a. Changes in the Local Authority Implementation Manual that need to be made to reflect the GAAP measures and responsibilities; in particular the roles and responsibilities of the standing committees of the LAs.

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Attachment 20: A guide to sustain a rural drinking water scheme

Activity When Planning and design stage 1 Assess needs through participatory approach Planning and designing stage 2 Identify water sources, monitoring of water quality & flow -Do- measurements 3 Demarcate sub project boundaries (number of needy families etc.) -Do- 4 Select technology (Gravity, Ground water, piped borne, hand -Do- pumps etc. and designing the scheme 5 Prepare and finalise project proposals with appropriate and low cost technologies. This should be a manageable scheme to LA 6 Submit the proposal with the LA development plan, obtaining the Do approval from the project management and receiving funds 7 Establish of Divisional Level Coordinating Committee (DLCC) After signing the MOU with CLG 8 Raise awareness to the local political and administrative authorities about the policies and procedures of the project 9 Assess the capacity of LA staff to monitor the sub projects after During planning stage completion. (For establishment of unit) 10 Arrange training programmes for pump operation, trouble -Do- shooting, general management etc. for selected LA staff and CC members. 11 Introduce suitable tariff structure in consultation with users and LA -Do- advisory committee including replacement cost. 12 Launch of catchment preservation programmes and make the -Do- community aware on importance of that programme. 13 -Do-

Activity When Implementation stage 14 Maintain quality of construction During implementation stage Establish the Unit within LA office to monitor the completed sub -Do- 15 projects and strengthen them Introduce a system to the above Unit for monitoring of completed -Do- sub projects within local government administration set up.

16 17 Arrange training for CCs and LA staff for managing the completed -Do- sub project. 18 Prepare O&M guidelines & manuals -Do- 19 Prepare guidelines for selected caretakers mechanics , operators, -Do- meter readers etc. 20 Select caretakers, pump operators, mechanics etc. -Do- 21 Arrange specific training to selected PM members on O&M -Do- activities (pump operation, chlorinating, repairs in pipelines etc. 22 Arrange On–the-job training to CC members. -Do- 23 Arrange progress review meeting with CC, LA Advisory commitee -Do-

24 Prepare a mechanism to meet CC members in each month to ensure -Do- sustainability of scheme

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25 Provide training to LA on monitoring of sub project activities -Do- (After the completion). 26 Prepare a mechanism to collect tariff from community. -Do- 27 Prepare a MOU on monitoring of sub project with the help of the -Do- LA and Commissioner of Local Government. The MOU to be signed by LA with CLG 28 Continue the catchment preservation programme. During implementation 29 Select of outside agencies/private sector /Individuals for supporting -Do- to O&M activities & train them. A system to be developed within LA to get their service when required. 30 Arrange a mechanism to get the spare parts and urgently required -Do- materials during O&M phase

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Attachment 21:

TOR for Facilitate to develop the Participatory Development Plans for LAs

1. Background

The World Bank is supporting the Government of Sri Lanka (GOSL) in developing a program that will support and strengthen local governments (LAs) in North and East Provinces to deliver basic services more efficiently and responsively. The North-East Local Services Improvement Project (NELSIP) will support the LAs of North and East by increasing fiscal resources available to them, providing them with greater discretion to decide their expenditure priorities, strengthening their core capacities, and by enhancing systems of upward and downward accountability links of LAs. Concurrently, it will also strengthen the capabilities of the central and provincial governments to support and monitor the LAs more effectively, as well as make policies that strengthen local governments nationwide.

It is the generic experience in the local government sector that the concepts of participation, governance etc. are not considered as much important. Though, the LAs are mandatory to prepare a mid term plan, in many LAs, it is just a list of development activities proposed by the elected members or the officials where there are no elected councils. This situation is common to LAs in the East and North too. It has been observed that even though some of the LAs in the East and the North have had undergone training on participatory planning and budgeting, it is very hard to find a LA, which practices the learning they gained.

NELSIP highly concerns on prompting governance practices within LAs and deliver their services more accountable and responsive manner. For this, the LA should have formulated LA Development Plan through participatory approach to which the NELSIP assist to implement the activities to provide local services. Therefore, the LA Participatory Development Plan is of paramount importance for the implementation of the project.

2. Brief Project description

2.1 Project Development Objectives

The overall development objective of the project is to increase rural infrastructure service delivery in LAs in the Northern and Eastern province in order to enhance their access to social service and economic opportunities. The project would also strengthen the local government institutions in delivering their services efficiently and effectively.

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2.2. Project Components

The project has five components and a brief description for each of them is given below to consider for when facilitating LAs to develop their Participatory Development Plans.

Component 1: Infrastructure Service Delivery: This component will have three sub- components: (a) Basic Block Grant (b) Performance Capital Grant, and (c) Other Grant. The component will try to bridge the existing critical gaps in terms of connectivity infrastructure which hinders the economic empowerment of the region. Main activities to be financed include: (i) provision for rehabilitation of economic and social infrastructure facilities where beneficiaries contribute up to 10% depending on the type of the subprojects and LA contribute 10%; (ii) providing incentive fund for better performing LAs in order to improve good governance, equity and transparently; and (iii) provision for pilot programs in order to empower LA.

Component 2: Institutionalizing accountabilities: This component will strengthen upward and downward accountability systems at the local government level and will have three sub- components: (a) Local audits: (b) Local PFM strengthening: and (c) citizen accountability. Component 3: Capacity Building: This component will strengthen a number of institution at local, provincial and central levels and will have three sub-components; (a) Strengthening of Local Government institutions; (b) strengthening Provincial Council institutions such as CLGs, Management Development Training Units and (c) Strengthening National institutions such as Sri Lanka Institute of Local Government, Ministry of Finance, Finance Commission and Auditor General. It will also support an IEC campaign aimed at disseminating project related information to multiple stake holders at all levels. Component 4: Assessments and Evaluation: This component will provide technical assistance for range of analytical and advisory activities such as base line surveys, midterm evaluation, end project evaluation, policy studies and workshops. It will also support activities aimed at monitoring and evaluation of Impacts of the Project and would also assist policy and convergence support cell, within the Ministry of Nation Building. Component 5: Project Management: This component would facilitate overall coordination, planning, implementation, learning and monitoring of the project at CLG at Provincial level and at Gama Neguma Division at Nation level.

3. Objective of the Study

The objectives of the study is to (a) assess (i) the overall participatory nature of the recently completed local authority participatory development plans in the North and East, (ii) how local authorities in the North and East interact with their constituencies, (iii) the various stakeholder groups’ perception of the participatory quality of completed planning process, in North and East; (b) sort out the available plans in to acceptable, rectifiable and rejected

207 groups; (c) guide the LAs to correct and resubmit rectifiable plans; and (d) guide and assist the LAs to re-do the rejected plans.

4. Scope of work

The scope of work is (clearly distinguish between East and North in presentation of findings):

(xv) to assess the level and quality of participation and social inclusion (gender, vulnerable, local minorities) of the recent formulation of local development plans by local authorities in the North and East; this will include frequency and nature of public consultations, level of public participation herein (who and how many), issues debated and the level of impact which public views have had on final plans. (xvi) to assess the functioning of the local authorities with reference to popular participation in implementation- w. particular focus on inclusiveness such as socio-economic, ethnic and gender profile of elected members, of standing committees, and of advisory committees. (xvii) to assess the various stakeholder groups’ perception of the participatory quality of completed planning process, in North and East, as well as of the general functioning of the local authorities. (xviii) to categorize the available local authority participatory development plans in to acceptable, rectifiable and rejected groups using the GOSL norms and guidelines for preparation of such plans (Guide to Participatory Planning and Budgeting for Local Authorities in Sri Lanka – Published by the Ministry of Local Government and Provincial Councils in 2007). (xix) to conduct at least two 3 day refresher training programmes for the members of the two pools of trainers in the Organization Development Units (ODUs) in both the provinces and the resource persons of the Management Development Training Unit of the Northern province and the Management Development Training Department in the eastern province, which have been established under both the provincial councils to assist LAs to build their capacities. (xx) To identify a qualified resource pool, which can work in local languages and facilitate the LAs to assess their existing plans and develop the Mid Term Participatory Development Plan (xxi) to guide the local authorities to review, correct and resubmit the plans that were categorized to rectifiable plans. (xxii) to assist and guide the local authorities to prepare and submit new plans instead of the rejected ones. (xxiii) to facilitate the LAs through resource pool to develop a Logical Frame including realistic indicators for each of the output expected. (xxiv) to monitor the quality of each of the participatory plan developed by the LAs and to maintain the uniformity.

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(xxv) to facilitate and persuade the LAs through CLGs and ACLGs to accept the plan by the council/Advisory committee where appropriate and obtain the consent of the divisional, district and provincial coordination committees (xxvi) to facilitate the LA through resource pool to prepare the first year plan of the Mid Term development plan of LA to be submitted to the CLG

5. Deliverables

1. Inception report where proposed methodology be clearly detailed along with work plans and list of personnel resources (one week) 2. Interim report showing the status of the existing local development plans (three weeks) 3. Draft final report for discussion with WB (ten weeks) with copies of the draft of the LA Development Plans 4. Final report (twelve weeks) with the detailed First Year Plan (2010/2011) of Medium Term Participatory LA Development Plan of at least 50% of the LAs.

6. Consultancy Period.

Four months (4 months)

7. Expertise Required

The consultancy firm should have a pool of multi-disciplinary specialists who are experienced in working in local government sector and providing training and facilitating LAs to formulate participatory development plans involving all relevant stakeholders. The facilitators/recourse persons should be well experienced in reviewing the LA development plans, applying participatory planning tools such as Stakeholder Analysis, Problem Tree, Venn Diagram, Matrix Ranking, Social and Resource Mapping, Conducting Transact Walk, Pair-Wise Ranking etc.

The Consultant should have experience in facilitating the LAs to formulate Medium Term Plans with detailed annual plans for the LAs. The consultant should be competent in facilitating the consultancy process in both the local languages and assist them to formulate the LA development plans utilizing the guidelines mentioned elsewhere and other participatory tools. Consultant should have ability to organize and managing capacity building/training programmes independently, but with assistance from the project staff as and when necessary.

8. Methodology

The consultant will prepare a plan of action and then conduct meetings with Project Coordinator and the relevant staff of the NELSIP Project Coordination Unit and the two

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Commissioners of Local Government in the East and North to understand the nature of Participatory Development Plan needed for LAs to become eligible for participating in the NELSIP. The consultant will also meet the World Bank team decided by the Task Team Leader of the project to gain an understanding of the World Bank requirements in regards to the same. The Consultant in facilitating the planning process in LAs should mainly utilize the guide developed by the Ministry of Local Government and Provincial Councils on Participatory Planning and Budgeting for Local Authorities in Sri Lanka in 2007 with other participatory approaches, which ever appropriate to enrich the quality of the planning process.

The Consultant will work very closely with the Assistant Commissioners of Local Government (ACLGs) in respective districts, Chairpersons, Secretaries and other relevant staff of Local Authorities during the whole consulting and facilitating process. The consultant is expected to ensure that the LAs involve all stakeholders especially all the elected members, the Community Centers, Standing Committees and Advisory committees of LAs to formulate the plan.

At least 75% of the Trainers/Resource persons who will be engaged for the consultancy should be Tamil speaking persons who are well experienced in conducting participatory training tools in formulating development plans. All community level planning processes should be conducted in the mother tong of the participants and when there are occasions where participants come from two ethnic groups and who speak only one local language, parallel interpretation facilities should be provided by engaging professional interprets.

Similarly, the all educational materials should be provided in local languages. The meetings should be conducted in places which have easy access to the participants. When conducting meetings with communities and the LAs in the war affected areas, especially in the Mulativu, Killinochchi and Mannar districts, the consultant needs to closely coordinate with the security forces. Any barriers encounter in working in conflict affected areas and where there are IDP camps, it should be brought to the notice of the MED immediately.

The consultant is expected to engage two teams of experts to facilitate the consultancy process in LAs in two provinces, but should maintain the uniformity and the quality of the final product i.e. the LA Participatory Development Plan. While facilitating the LAs to develop the Medium Term Development Plan, the consultant will emphasis on developing the first year plan of the longer term plan for LAs to become eligible to take part in the project.

The LA development plan should be developed in Tamil or Sinhala languages appropriately. In addition, a copy of the plan of each of the LA should be made available in English too for the use of persons who do not read local languages, for the purpose of midterm reviews, impact monitoring, evaluations etc.

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Attachment: 22: A Guideline for Assessing Training Needs of Staffs

Introduction:

The Ministry of Economic Development is planning to implement the World Bank assisted, North East Local Services Improvement Project (NELSIP) in all UCs and PSs in the Eastern and Northern Provinces from mid June. It is aiming to improve their capacities in various aspects (including human and organization development) to implement a Local Authority Participatory Development Plan formulated through participatory approach consulting all relevant stakeholders including Community leaders and members of Community Centers.

The CLG will be responsible for overall management of the project at the provincial level, while ACLG will be responsible for overall supervising of the project at the district level. The Local Authority will implement the project with its staff and assistance of the Community Centers and other stakeholders. More details of the project will be informed to all parties soon.

All in all, to implement the project effectively to achieve its goal, identifying a group of qualified staff and improve their competence are considered as vital requirements at the outset. Hence, this need assessment.

1. General information

i. Name of the informant:

ii Position:

iii Work place (CLG//ACLG/UC/PS/MC/MDTU office)

iv Province and district

v Do you think that Local Government is the correct place for you to contribute a better service to the citizens Yes/No (Please tick in the correct place)

2. Educational Qualifications

No. Examination Period Institution 01

02 03 04 05

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3. Major responsibility of the present job ( as explained in the job description or as you have perceived)

No. Major Responsibilities 01 02 03 04 05 06 07 08 09 10

4. Difficulties encounter in accomplishing responsibilities and tasks

No Responsibility/Task Difficulty encounter in accomplishing 01 02 03 04 05 06 07

5. Training received relevant to the job

No Training received Institution Period Relevancy to perform the job well (Yes/No) 01 02 03 04 05 06 07 08 09 10

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6. Training you need to perform your job efficiently and effectively. (Please list them in priority order)

Priority Knowledge based training Order 1 2 3 Skills Based Training 1 2 3 Attitude Based Training 1 2 3

Date Signature

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