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Document of

The World Bank

FOR OFFICIAL USE ONLY Report No: PAD2410

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$ 125 MILLION

TO THE

MUNICIPALITY OF SALVADOR

WITH THE GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL

FOR THE

BRAZIL-SALVADOR SOCIAL MULTI-SECTOR SERVICE DELIVERY PROJECT

(Projeto Salvador Social)

November 27, 2017

Social Protection & Labor Global Practice

Latin America And Caribbean Region

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

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CURRENCY EQUIVALENTS

(Exchange Rate Effective {Nov 27, 2017})

Currency Unit = BRR

BRR 3.30 = US$1

US$ = SDR 1

FISCAL YEAR

January 1 - December 31

Regional Vice President: Jorge Familiar

Country Director: Martin Raiser

Senior Global Practice Director: Michal J. Rutkowski

Practice Manager: Pablo Gottret

Task Team Leader(s): Edmundo Murrugarra and Leandro Oliveira Costa

ABBREVIATIONS AND ACRONYMS

ACCS Ambulatory Care Sensitive Conditions BPC Social Pension Program (Beneficios Prestação Continuada de Assistência Social) CadÚnico Social Registry (Cadastro Único) CGM General Controller of the Municipality (Controladoria Geral do Municipio) CEML

Special Multisectoral Procurement Commission (Comissão Especial Mista de Licitação)

CMEI Municipal-run ECE Centers (Centros Municipais de Educação Infantil) CPF Country Partnership Framework CRAS Social Assistance Reference Center (Centros de Referência de Assistêncial Social) DLI Disbursement-linked Indicator DPE Directorate for Strategic Planning (Diretoria de Planejamento Estratégico) DSP Directorate for Strategic Projects (Diretoria de Projetos Estratégicos) ECE Early Childhood Education EEP Eligible Expenditure Programs ESMF Environmental and Social Management Framework FG Federal Government FM Financial Management GDP Gross Domestic Product IBGE

Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística)

IPF Investment Project Financing IPSAS International Public Sector Accounting Standards ISA International Standards on Auditing M&E Monitoring and Evaluation MCASP

Manual of Brazilian Accounting Standards (Manual de Contabilidade Aplicada ao Setor Público)

MDSA MEC MoS

Ministry of Social and Agrarian Development (Ministério do Desenvolvimento Social e Agrário) Ministry of Education (Ministério da Educação) Municipality of Salvador

NBCASP

Brazilian Accounting Rules (Normas Brasileiras de Contabilidade Aplicadas ao Setor Público)

NCD Non-communicable Diseases OGM Ombudsman of Municipality (Ouvidoria Geral do Município) OP/BP Operational Policy/Bank Policy PAIF Integrated Family Assistance Program PBF Cash Transfers Program (Programa Bolsa Família) PDCA POM

Methodology Plan, Do, Check, Act Project Operational Manual

PPSD Project Procurement Strategy for Development PROSA Standardized Assessment of Literacy and Numeracy (Programa Salvador Avalia) RAP Resettlement Action Plan RPF Resettlement Policy Framework SEMGE Municipal Secretariat of Management SEMPS

Municipal Secretariat of Social Promotion and Poverty Reduction (Secretária Municipal de Promoção Social e Combate à Pobreza).

SIGEF SMED

Integrated System for Fiscal Management Planning (Sistema Integrado de Planejamento Gestão Fiscal) Municipal Secretariat of Education

SMS Municipal Secretariat of Health SUAS Unified Social Assistance System (Sistema Único de Assistência Social) TCM Municipal Court of Auditing Accounts (Tribunal de Contas do Município) TOR Terms of Reference UPA Emergency Care Units (Unidade de Pronto Atendimento)

The World Bank Brazil-Salvador Social Multi-Sector Service Delivery Project (P162033)

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BASIC INFORMATION

Is this a regionally tagged project? Country(ies) Financing Instrument

No Investment Project Financing

[ ] Situations of Urgent Need of Assistance or Capacity Constraints

[ ] Financial Intermediaries

[ ] Series of Projects

Approval Date Closing Date Environmental Assessment Category

18-Dec-2017 30-Dec-2022 B - Partial Assessment

Bank/IFC Collaboration

No

Proposed Development Objective(s) The proposed Project's objective is to improve social service delivery in the Municipality of Salvador, emphasizing improvements in health care system efficiency, education quality, and social assistance effectiveness. Components Component Name Cost (US$, millions)

Support for Strategic Actions to Improve Social Service Delivery 120.00

Technical Assistance 4.70

Front end fee 0.30

Organizations Borrower :

Prefeitura Municipal de Salvador

Implementing Agency : Casa Civil


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PROJECT FINANCING DATA (US$, Millions)

[ ✔ ] Counterpart Funding

[ ✔ ] IBRD [ ] IDA Credit

[ ] IDA Grant

[ ] Trust Funds

[ ] Parallel Financing

FIN_COST_OLD

Total Project Cost: Total Financing: Financing Gap:

250.00 250.00 0.00

Of Which Bank Financing (IBRD/IDA):

125.00

Financing (in US$, millions) FIN_SUMM_OLD

Financing Source Amount

Borrower 125.00

IBRD-88180 125.00

Total 250.00

Expected Disbursements (in US$, millions)

Fiscal Year 2018 2019 2020 2021 2022

Annual 29.10 33.85 25.50 22.85 13.70

Cumulative 29.10 62.95 88.45 111.30 125.00

INSTITUTIONAL DATA

Practice Area (Lead)

Social Protection & Labor


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Contributing Practice Areas

Education Health, Nutrition & Population Climate Change and Disaster Screening

This operation has not been screened for short and long-term climate change and disaster risks

Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Substantial

2. Macroeconomic Substantial

3. Sector Strategies and Policies Substantial

4. Technical Design of Project or Program Substantial

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary Substantial

7. Environment and Social Moderate

8. Stakeholders Moderate

9. Other

10. Overall Substantial


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COMPLIANCE

Policy

Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✔] No

Does the project require any waivers of Bank policies?

[ ] Yes [✔] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔

Natural Habitats OP/BP 4.04 ✔

Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔

Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔

Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description Section I.A. Schedule 2 to the Loan Agreement. The Borrower, through Casa Civil, shall maintain a Project

Management Unit at all times during the implementation of the Project, with sufficient resources, competent staff

in adequate numbers and responsibilities, all acceptable to the Bank and as set forth in the Project Operational

Manual.

Sections and Description Section I.C. Schedule 2 to the Loan Agreement. The Borrower, through Casa Civil, shall implement the Project in

accordance with the provisions of the ESMF and the RPF.

Sections and Description Section IV. 5. Schedule 2 to the Loan Agreement. The Borrower shall ensure that the Eligible Expenditure Programs


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shall comply with the eligibility criteria and procedures set forth in the Project Operational Manual and in

Schedule 5 to this Agreement.

Conditions

Type Description Effectiveness Article 4.01 of the Loan Agreement. The Additional Conditions of Effectiveness

consist of the following, namely, that the Borrower, through Casa Civil, has adopted the Project Operational Manual in a manner and with contents acceptable to the Bank.

PROJECT TEAM

Bank Staff

Name Role Specialization Unit

Edmundo Murrugarra Team Leader(ADM Responsible)

Senior Social Protection Economist

GSP04

Leandro Oliveira Costa Team Leader Senior Economist GED04

Sinue Aliram De Souza Procurement Specialist(ADM Responsible)

Senior Procurement Specialist GGO04

Susana Amaral Financial Management Specialist

Sr Financial Management Specialist

GGO22

Adriane Menescal Landwehr

Team Member Team Assistant LCC5C

Alberto Coelho Gomes Costa

Social Safeguards Specialist Senior Social Development Specialist

GSU04

Alexandre Takahashi Team Member Consultant GEE04

Claudia Regina Baddini Curralero

Team Member Sr. Social Protection Specialist GSP04

Daniela Pena De Lima Team Member Operations support GHN04

Ezau Pontes Team Member Senior Health Specialist GHN04

Isabella Micali Drossos Counsel Senior Counsel LEGLE

Karla J. McEvoy Team Member Sr. Social Protection Specialist GSP04

Marcio Cerqueira Batitucci Environmental Safeguards Specialist

Senior Environmental Specialist

GEN04

Maria Pia Cravero Team Member Counsel LEGLE


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Michele Martins Team Member Program Assistant LCC5C

Patricia M. Bernedo Team Member Operations Analyst GSP04

Patricia O. Orna Team Member Language Program Assistant GSP04

Pedro Olinto Team Member Program Leader LCC5C

Renata Pereira De Mello Team Member Program Assistant LCC5C

Tatiana Cristina O. de Abreu Souza

Team Member Finance Officer WFALA

Waleska Magalhaes Pedrosa

Team Member Paralegal LCC5C

Extended Team

Name Title Organization Location


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BRAZIL

BRAZIL-SALVADOR SOCIAL MULTI-SECTOR SERVICE DELIVERY PROJECT

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ...................................................................................................... 9

A. Country Context .................................................................................................................. 9

B. Sectoral and Institutional Context ...................................................................................... 9

C. Higher Level Objectives to which the Project Contributes ............................................... 12

II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 12

A. PDO .................................................................................................................................... 12

B. Project Beneficiaries .......................................................................................................... 12

C. PDO-Level Results Indicators ............................................................................................. 12

III. PROJECT DESCRIPTION .................................................................................................. 13

A. Project Components .......................................................................................................... 13

B. Project Cost and Financing ................................................................................................ 17

C. Lessons Learned and Reflected in the Project Design ...................................................... 18

IV. IMPLEMENTATION ........................................................................................................ 18

A. Institutional and Implementation Arrangements .......................................................... 18

B. Results Monitoring and Evaluation ................................................................................ 19

C. Sustainability .................................................................................................................. 19

V. KEY RISKS ..................................................................................................................... 20

A. Overall Risk Rating and Explanation of Key Risks ........................................................... 20

VI. APPRAISAL SUMMARY .................................................................................................. 20

A. Economic and Financial (if applicable) Analysis ................................................................ 20

B. Technical ............................................................................................................................ 21

C. Financial Management ...................................................................................................... 22

D. Procurement ..................................................................................................................... 22

E. Social (including Safeguards) ............................................................................................. 23

F. Environment (including Safeguards) ................................................................................. 23

G. World Bank Grievance Redress ......................................................................................... 24


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VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 25

ANNEX 1: DETAILED PROJECT DESCRIPTION ......................................................................... 42

ANNEX 2: IMPLEMENTATION ARRANGEMENTS .................................................................... 66

ANNEX 3: IMPLEMENTATION SUPPORT PLAN ...................................................................... 96

ANNEX 4: ECONOMIC ANALYSIS ........................................................................................... 98

ANNEX 5: REFERENCES....................................................................................................... 103

ANNEX 6: MAP .................................................................................................................. 106


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I. STRATEGIC CONTEXT

A. Country Context

1. After growing at 3.6 percent between 2006-2013, Brazil’s social and economic gains are jeopardized by the recent economic slowdown and fiscal tightening. According to the World Bank Strategic Country Diagnostic for Brazil (World Bank, 2016), Brazil’s economy suddenly fell into a deep recession between 2014 and 2016, where an estimated 2.9 million formal jobs were lost with particularly strong impact on youth employment. The crisis has hit subnational government finances hard as federal transfers to states and municipalities dropped by 8.9 percent in real terms between 2014 and 2016. Some subnational governments have been forced to default on their financial obligations given revenue declines and expenditure rigidities due to mandatory expenditures such as salaries and retirement benefits. Strong fiscal consolidation and aggressive structural reforms are deemed necessary for Brazil to regain a sustainable growth trajectory. However, this scenario threatens gains in poverty and inequality reduction that have been made since the early 2000s, unless complementary measures are taken to strengthen those expenditure programs to become more effective and efficient in protecting the poor and the vulnerable.

2. The Municipality of Salvador is the third most populous municipality (estimated 2.9 million people in 2017) in Brazil, and despite important developmental progress, remains one of the poorest and most unequal (IBGE, 2017). Salvador is the twelfth largest municipal economy in Brazil, largely driven by the service sector (70 percent of GDP) through tourism, transport, and construction, in addition to the municipal and state public administrations that operate in the city. Although poverty declined 73 percent between 2001 and 2013 (compared to a national 52 percent reduction), it remains high in 2015 (6.6 percent) compared to cities like Belo Horizonte or Sao Paulo (3.9 percent), although better than other capital cities in the Northeast. Salvador is also the second most unequal city in Brazil in terms of income distribution, with a Gini coefficient of 0.57 in 2012. Addressing poverty and inequality in Salvador requires improved delivery of social services as key factors in human capital accumulation and productivity.

3. The ongoing administration of Salvador is implementing an ambitious plan to accelerate the pace of poverty and inequality reduction in the city. The Salvador Strategic Plan (SSP) “Salvador-Building a new future 2013-2016”1 prioritized investments to expand the supply of basic social services as well as improvements in urban mobility and infrastructure, tourism and public management. While Salvador requires additional investments to ensure adequate service coverage in specific sub-sectors (e.g., pre-primary education, basic social assistance), the administration is now complementing its primary coverage focus with efforts to improve quality and sustainability of these social services.

B. Sectoral and Institutional Context

4. In Brazil, municipalities are tasked with basic social service delivery such as pre-primary and fundamental education (grades 1-9), primary health care as well as some higher-complexity health interventions, and face-to-face social assistance services. Municipalities often follow federal (and

1 See http://www.planejamentoestrategico.salvador.ba.gov.br/imagens/Planejamento_Completo.pdf


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sometimes state) policies and guidelines in delivering these services, and receive fiscal transfers, both tied and untied to specific service responsibilities and performance. Municipalities, therefore, are at the institutional frontline of Brazil’s rights-based social policy system, and capable municipal administrations are fundamental for effective delivery of these social services. In addition to managing networks of health and education facilities, both under their direct administration and through service contracts, municipalities also implement programs and mandates that are legally assigned to the federal government. These include the conditional cash transfers program, Programa Bolsa Família (PBF), and the social pension program, Beneficios Prestação Continuada (BPC) for which municipalities are responsible for maintaining the social registry (Cadastro Único, CadÚnico hereafter) information updated.

5. Until 2012, Salvador’s social service delivery showed low coverage and poor quality due to years of under-investments. In addition to the lack of sufficient basic service facilities, many of the existing facilities, such as early childhood education (ECE) centers, schools, health facilities, or social assistance centers, were in suboptimal physical and functioning conditions. For example, some of the Centros de Referência de Assistência Social (CRAS) failed to meet the Federal Government (FG) standards and, as a result, the Municipal Secretariat of Social Promotion and Fight against Hunger (SEMPS) was at risk of losing some of the fiscal transfers from the FG. Salvador ranked at the bottom of Brazil state capitals in the Basic Education Development Index (IDEB) in both 2011 and 2013, and its infant mortality rate (16.7 percent) was higher than comparable cities in the Northeast like Fortaleza (11.2 percent) and Recife (12.2 percent).

6. Starting in 2013, the Municipal Administration increased investments in the social sectors as part of the SSP. The investments included the construction of twenty-six new schools, eight new Emergency Care Units (Unidade de Pronto Atendimento, UPA), four new secondary health care Multi-centers (Multicentros) for specialized medical consultations, and seven new CRAS, as well as the expansion of mobile Family Health units for primary health care and other improvements in social services. These investments not only expanded Salvador’s physical capacity to offer these social services, but also contributed to their improved quality. This increased coverage. In education, the proportion of children attending daycare centers increased from 12.4 percent for children aged 0-3 in 2012 to 16.7 percent in 2016, and primary health care coverage expanded from 18.6 percent in 2012 to 44.2 percent in 2016. In social assistance, the PBF covered only 62.2 percent of the eligible population in 2012 (estimated by the federal Ministry of Social and Agrarian Development, MDSA), and reached 95.8 percent by 2015. In 2012, only 45 percent of the registries in CadÚnico had updated information, and by 2015 it reached 66 percent thanks to the city’s effort to increase the number of CadÚnico service points from 12 in 2013 to 35 by late 2016.

7. Despite these efforts, Salvador social indicators lag behind other comparable cities. The gaps in social service delivery indicators appear larger on the efficiency and quality front. For example, even though Salvador’s IDEB performance improved between 2013 and 2015, its score (4.7) still compares poorly against Fortaleza (5.4). In health, although Salvador has the 13th lowest infant mortality rate among State capitals, its infant mortality rate at 16 percent is still higher than 11.5 percent in Fortaleza and 12 percent in Recife. In parallel, the demographic and epidemiologic transition resulting from aging and higher life expectancy, has been accompanied by an increase in non-communicable diseases (NCD): about 70 percent of all deaths were attributable to cardiovascular diseases, chronic respiratory diseases, diabetes, cancer, and others. In social assistance, the updating rate of CadÚnico in Salvador (66 percent)


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is lower than those in Fortaleza and Recife (75 and 70 percent respectively). The update of CadÚnico is a critical instrument as it is the gateway that allows poor families to access a range of programs and policies.

8. The new Salvador Strategic Plan 2017-2020 continues the commitment to improve social service delivery.2 The SSP 2017-20 addresses social service delivery under two pillars, Social Development and Quality of Life, and Human Development. The SSP maintains the effort in addressing coverage gaps while placing greater emphasis on improving service delivery quality, efficiency and cost-effectiveness. The proposed operation is aligned to the efforts to close the remaining service coverage gaps and improve service quality in education, health and social assistance. The priority in education focuses on quality of teaching and learning outcomes that require the establishment of quality standards, measurement instruments, and classroom feedback mechanisms as part of an effective monitoring and evaluation (M&E) system to improve the quality of education. Quality assurance and measuring students’ achievement, then, are particularly important in Salvador, where investments in physical infrastructure and recurrent expenditures have increased since 2013.

9. In the health sector, the key objective is to enhance the efficiency of service provision by allowing that the population seeking care be covered at any level of care and referred to the other levels when the complexity exceeds the service level’s capacity. This hinges on a stronger interdependence and referral process across different levels of care to optimize patient flows and improve the quality of care by improving information systems. This interdependence is relevant in the care of patients with chronic conditions that require coordination across different providers. While completing projects for facility improvement and expansion, the Municipal Secretariat of Health (SMS) has developed an information management system (Sistema de Regulação Vida, or Sistema VIDA) to regulate and manage patient flows between the different levels of care, including the facilities outside the municipal network (e.g., state-run facilities) and to modernize some of its management processes. SMS plans to upgrade and expand the use of Sistema VIDA over the next few years. This strategy should improve disease prevention and health promotion activities, clinical quality and users’ satisfaction, while reducing overall healthcare systems costs, due to a higher emphasis on primary health care as the main entry point to the health system.

10. The SEMPS has the largest needs for strengthening its service delivery to ensure effectiveness of services to carry out Federal policies. SEMPS needs to ensure that: i) its network of social assistance centers meets minimum operational and quality standards, ii) the secretariat’s organizational structure is aligned with the enhanced responsibilities and increased workload, iii) qualified professionals are recruited for both policy management and service delivery functions, iv) an effective program of ongoing staff training is in place, and v) its management systems and practices are modernized. This, in turn, would allow Salvador to access additional federal transfers as the Municipality of Salvador (MoS) would meet the minimum federal standards for CRAS, for example.

2 The Salvador Strategic Plan 2017-2020 is expected to be publicly launched by the end of 2017. See Prefeitura Municipal de

Salvador (2017).


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C. Higher Level Objectives to which the Project Contributes

11. The proposed Project is consistent with the Country Partnership Framework (CPF) for FY2018-2023 (Report No. 11329-BR) for the Federative Republic of Brazil, discussed by the Board on July 13, 2017. Its support for improving quality and efficiency of social services is in line with the CPF’s three specific objectives under Focus Area 1: Fiscal consolidation and government effectiveness, namely: (1) strengthen fiscal management at all levels of government; (2) increase fiscal sustainability and fairness of pension system, and effectiveness of social protection system; and (3) increase effectiveness of service delivery in education and health. The three areas of the proposed Project (health, education, social assistance) support these CPF objectives, and while the focus of the second CPF objective is at the federal social protection level, the proposed Project will support local level efforts that are key to achieve Federal level results, such as the improved management of CadÚnico.

12. The Project’s design is aligned with the World Bank Group twin goals of poverty reduction and increasing shared prosperity. Investments in health, education, and social assistance are aimed at improving human capital and welfare of families living in Salvador. Direct benefits to human development of the poor are expected from strengthened early-childhood education, because access to quality services is more limited among the poor, and basic social assistance, which by design targets the poor and the vulnerable. Overall improvements in quality and efficiency of education and health care would benefit the population in general but especially the poor given that they mainly use public services. In addition, sustainability of income gains for the vulnerable (non-poor) relies on access to public services that mitigate against shocks (e.g., catastrophic illnesses) or that loosen constraints for productive participation.

II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

13. The proposed Project's objective is to improve social service delivery in the Municipality of Salvador, emphasizing improvements in health care system efficiency, education quality, and social assistance effectiveness.

B. Project Beneficiaries

14. The proposed Project is expected to benefit the general population of the Salvador Metropolitan area who utilize public education, health and social assistance services. Early childhood education and social assistance will particularly benefit the poor, especially female-headed households. In education, the proposed Project’s direct beneficiaries include 18,672 students currently enrolled in municipal creches and pre-schools as well as 101,202 students in municipal primary schools. In health, the proposed Project will directly benefit about 70 percent of the city’s population who do not have private health insurance. In social assistance, the main target beneficiaries are more than 240,00 families registered as poor or extremely poor in the municipality’s CadÚnico database for whom the SEMPS will reach out through targeted interventions including the Integrated Family Assistance Program (PAIF).

C. PDO-Level Results Indicators

15. The following indicators are proposed to track progress toward the PDO:


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Rate of hospital admissions for Ambulatory Care Sensitive Conditions (ACSC).

Proportion of students at adequate level of literacy and numeracy at the end of the second grade in municipal schools (quality of education).

Number of families supported by the Integrated Family Support Program at CRAS (effectiveness of social assistance services).

III. PROJECT DESCRIPTION

A. Project Components

16. The Federal Government authorized the Municipality of Salvador to request World Bank investment project financing for US$125 million. The proposed Project will have two components, one supporting the implementation of activities to improve social service delivery, and the other to finance technical assistance. The first proposed Project component (US$120 million) will provide support for the implementation of the MoS key strategic actions in health, education, and social assistance.3 Financing for the first component would be triggered by achievements of result targets with specific disbursement-linked indicators (DLIs) and disbursed against verified execution of Eligible Expenditure Programs (EEPs). The second Project component (US$4.7 million) will provide technical assistance to facilitate the MoS efforts to achieve the results supported under the first component, as well as additional measures of institutional strengthening to ensure quality and sustainability of social services.

17. Component 1. Support for Strategic Actions to Improve Social Service Delivery (US$120 million IBRD; US$120 million MoS). This Component will support the achievement of social service results that reflect improvements in social service delivery, with emphasis on efficiency of the health care system, quality services in education, and effectiveness of social assistance. These results will be reflected in a set of DLIs and other intermediate indicators. This Component will be implemented by the municipal secretaries of education, health, and social assistance under the coordination of Casa Civil of the MoS.

18. Sub-component 1.1: Health. This Sub-component would support activities that improve the efficiency of the health care delivery system by financing the: (i) pertinent access to primary, secondary and tertiary care through improved referral system; and (use of technologies to improve efficiency and quality of care management.

19. Pertinent access to primary, secondary and tertiary care. Salvador is expanding health care services at different levels that need to be aligned to adequately address the evolving needs of the population. While primary health coverage increased from 18.6 percent in 2012 to 44.2 percent in 2015, the secondary and tertiary levels emerged as bottlenecks in the population’s access to quality healthcare. Unmet demand for high-complexity care is overwhelming the municipality’s existing secondary care facilities such as the Health Multi-centers and intermediate Emergency Care Units (Unidades de Pronto Atendimento, UPAs). The SMS has been strengthening the existing capacity through physical refurbishing of existing facilities, building a new municipal hospital, and expanding primary care coverage, through expansion of mobile Family Health units.

20. This objective will support additional strengthening of the primary and tertiary levels to alleviate the burden on the secondary level, and a system to regulate patient flows (referral and counter-referral

3 The official name of the Project in Portuguese, for the purposes of the MoS internal purposes, is “Projeto Salvador Social”.


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system) between different health facilities at different levels of care. This Results Area will finance: (i) ongoing and planned refurbishment of the existing facilities; (ii) service fee payments to privately-run facilities; and (iii) the implementation of the SMS’s management information system, Sistema Vida+, to reorganize patient flows. The use of the Sistema Vida+ will optimize the use of private healthcare providers who constitute a complementary network of care as well as the use of secondary and tertiary care through higher emphasis on primary care as entry point.

21. Use of technologies to improve efficiency and quality of care management. To address the quality of care challenge, SMS will introduce an electronic medical records system and the use of patient biometric registrations. A new electronic system of medical records would allow SMS to connect patient data from all the facilities in the municipal network, identify patients who are due for preventive visits and screenings, and monitor patients under certain protocols, enhancing efficiency and effectiveness in the system. These changes will manage patient information more reliably, facilitate audits, and improve patient care, by ensuring each patient is accurately identified and tracked regardless of where in the municipal network they show up for care. The proposed Project will support SMS’ plan to gradually increase the number of health facilities that make use of the electronic medical records system and the biometric patient registration system. Health sector DLIs will include: coverage of primary health care (DLI1), number of municipal health facilities with electronic record management system installed (DLI2), and patient identities registered with biometric data (DLI3).

22. Sub-component 1.2: Education. This Sub-component would support the Municipal Secretariat of Education (SMED) in adopting measures that enhance quality of early childhood education and fundamental education, and attaining improved learning outcomes through the provision of quality education hinges on developing quality standards, monitoring and evaluation systems, and an accountability system that ensure feedback is received by service providers.

23. To achieve these results, this Sub-component would focus on two areas: ensuring quality of ECE, and improving quality of fundamental education. The expected result is to improve student learning, measured as the proportion of students at adequate level of literacy and numeracy at the end of the second grade in municipal schools. DLIs 4 and 5 measure the fraction of municipal and covenant ECE schools monitored and the provision of regular monitoring and evaluation feedback to ECE centers, respectively, to reflect the implementation of quality assurance instruments. DLI6 measures the adequate implementation of an external assessment that will serve to revise management, pedagogical, and training activities that will lead to quality improvements.

24. Enhancing quality of early childhood education. In Salvador, free public ECE is provided by municipal-run centers (Centros Municipais de Educação Infantil, CMEI) and covenant ECE centers.4 Salvador has invested in expanding and improving the quality of early childhood education, mainly through the opening of new centers, the development of an early childhood curriculum and the development of monitoring and evaluation programs. The objective of this results area is to increase the number of ECE centers subject to an enhanced quality assurance system. To do so, the proposed Project will support the: (i) establishment and implementation of the ECE M&E system; and (ii) development of an ECE quality assurance program. Specific activities will include: (i) the design and implementation of a quality monitoring instrument for both the physical facilities of the ECE centers and pedagogical practices of

4 Covenant schools are non-for-profit non-governmental schools that are eligible to receive funds from the government.


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teachers, (ii) the development of measurement tools for child development and learning, (iii) setting minimum quality standards such as schooling input standards, and (iv) the design and implementation of feedback mechanisms, among other activities. During the early phase of the M&E system development, SMED’s efforts will be focused on ensuring that an increasing share of the municipal-run ECE centers will be monitored. Therefore, the DLI4 will capture the implementation of the M&E system and its subsequent application to an increasing share of municipal-run ECE centers. The outputs of the M&E system will then be used to provide regular M&E feedback to individual centers. This feedback process entails the training of ECE personnel in identifying areas for improvements that are followed up by M&E instruments. Given the content of the implementation of the feedback mechanism, the proposed Project will use the percentage of ECE centers receiving M&E feedback following a standard protocol developed by SMED as DLI5. The resulting M&E system and the resulting actions will also support the Municipality in developing specific interventions to improve the quality of ECE centers like improving ECE facilities and teacher training, and restructuring of ECE curriculum.

25. Enhancing quality of fundamental education. The proposed Project will support improvements in quality assurance of early grades of fundamental education through integrated actions for students, teachers, and schools. These activities include: (i) strengthening the student assessment system (external and formative evaluation), (ii) expansion of scripted pedagogical materials, and (iii) implementation of a results-based management model for schools, among others.

26. The strengthening of the student assessment system will combine: (i) an external annual standardized assessment of literacy and numeracy skills called PROSA (Programa Salvador Avalia); and (ii) a formative and online quarterly assessment of literacy and numeracy skills for students in grades 2, 3, and 5. The proposed Project includes the fraction of schools with adequate implementation of PROSA as DLI6 to ensure that the coverage of the external assessment provides an accurate description of the learning outcomes at the school level. The formative assessment, on the other hand, will allow SMED to check the utilization of the curriculum and to provide feedback on low performing students and schools. SMED will also develop targeted-training for low performing teachers and provide support for students with low-test scores. The expansion of scripted pedagogical materials will complement and support the materials for literacy and numeracy skills for grades 1 through 3. The additional scripted pedagogical materials will cover subjects of science, history, and geography and will reinforce the literacy and numeracy materials on both the booklets for students and teachers and in the written literacy formative assessment used to provide support for students. The proposed Project will also support SMED’s plans to introduce a results-based management model for schools by: (i) creating a training program for school management staff; (ii) improving the current certification program for candidates to School Principal positions; and (iii) creating a school rewards program, among others.

27. The proposed Project will also monitor intermediate indicators such as: (i) percentage of schools in on-line formative/classroom assessments; (ii) percentage of teachers in the teachers’ professional development; (iii) launch of the meritocratic certification system of school principals; (iv) percentage of schools monitored under the new results-based management system; and (v) percentage of schools with signed results agreement.

28. Sub-component 1.3. Social Assistance. This Sub-component will support SEMPS in: (i) the strengthening of the basic social assistance network; (ii) the improvement of Cadastro Único’s data quality; and (iii) the enhancement of SEMPS’ organizational capacity.


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29. Strengthening basic social assistance network. The basic social assistance network in Salvador consists of the CRAS network, through which the MoS offers a range of services following the Unified Social Assistance System (Sistema Único de Assistência Social, SUAS). A critical service offered through CRAS is the Integrated Family Support Program (Programa de Atenção Integral a Família, PAIF), a face-to-face social work service responsible for coordinating interventions for the vulnerable population and for providing case management for extremely poor families. PAIF services include home visits to monitor sources of vulnerability, referral to appropriate interventions, if needed, and facilitating the family’s access to other services and programs. CRAS also serve as CadÚnico registration points and provide implementation support for federal cash transfer programs such as PBF and BPC. CRAS coordination will be key in the integration of the BPC and CadÚnico information systems.

30. Under this objective, the proposed Project will support SEMPS’ plan to upgrade the 28 CRAS so that they will meet the minimum standard of adequate operational functionality in line with federal guidelines. The definition of the minimum standard includes specific parameters of a CRAS’ physical space, internet connectivity and information technology equipment, as well as specific professional staff at each center. The DLI for this objective is the number of CRAS that meets the minimum standard of operational functionality (DLI7). The target is to have all 28 CRAS meet the minimum standard.

31. Improvement of CadÚnico’s data quality. CadÚnico is a potent tool to ensure the poor across municipalities are identified and included in appropriate social assistance programs, while relevant information is made available for other targeted programs. Accurate and updated CadÚnico data, then, could be used to improve targeting of a range of social programs within Salvador. As of 2016, SEMPS has kept 65 percent of the data up-to date but, because CadÚnico relies on self-reporting by families, it is necessary to conduct regular verification of data to ensure accuracy. Salvador is still behind with only 0.3 percent of data verified every year against the national average of 6 percent. The plan of adding BPC beneficiaries to CadÚnico in 2017 will also require household visits to register, audit and verify data.

32. The proposed Project will support quality improvements of CadÚnico data through enhanced capacity for data collection and verification through CRAS, mobile services, and household visits. SEMPS currently manage 120,000 transactions a year and CadÚnico has 328,253 registered families. SEMPS plans to expand the registration capacity to 165,000 families per year through more registration points and acquisition of equipment to expand mobile services. SEMPS also plans to expand the outreach of household visits by mobile teams for both initial registrations and verification of household data. The Project will monitor SEMPS’ increase of the number of household visits by the CadÚnico team (DLI8) as a measure of effective data quality assurance.

33. Enhancement of SEMPS’ organizational capacity. Strengthening the basic social assistance services and improvements in CadÚnico’s data quality, requires continued investments in strengthening SEMPS’ organizational capacity. In addition, SEMPS will need to build capacity to manage the federal social pension program, BPC, as some of the implementation responsibilities will be transferred to municipalities (e.g., beneficiary identification). The proposed Project will support the: (i) hiring of an additional cadre of public policy analysts (gestores) for policy management functions; (ii) recurrent training for skills upgrading of all staff both at SEMPS; (iii) reorganization of SEMPS’ structure to ensure adequate organizational basis for each of the major functions; and (iv) adequate allocation of technical personnel to ensure minimum quality of services through the network. The Project will measure results


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in this area through the recruitment of up to 190 professionals to strengthen SEMPS’ various core mandates (DLI9).

34. Component 2. Technical Assistance (US$4.7 million IBRD; US$5 million MoS). This Component will provide technical assistance to strengthen the capacity of the municipal secretariats in charge of health, education and social assistance, as well as Casa Civil’s capacity to coordinate and lead the MoS administration’s cross-cutting policy agenda and support the achievement of the Project objective by including actions and measures that are complementary to DLIs. The technical assistance to SMS, SMED and SEMPS will build necessary capacity deliver the agreed targets under Component 1, hence supporting the achievement of PDO objectives. This Component will finance goods, works, non-consulting services, consulting services and trainings.

35. This Component will also support other cross-cutting priorities of the municipal administration on areas related to the proposed Project objectives including the coordination of different policy actors through the development of multi-sectoral protocols. First, the MoS will develop an intersectoral protocol to identify and address family obstacles affecting their participation in PBF or PAIF programs. This activity will be developed in a pilot area, selected on the basis of the existence of social assistance, education and health facilities, in addition to a strong presence of PBF beneficiaries. Second, this Component will also support activities to strengthen the identification, analysis and actions towards reduction of critical gender gaps in Salvador. The World Bank’s Regional Gender Action Plan FY16-19 (World Bank, 2016a) identified key gender gaps for Brazil (high dropout/retention rates, high teenage pregnancy rates, and gender based violence). Bahia has a pregnancy rate of 20.1 percent among females aged 10 to 19, above the Brazil average (18.1 percent) (Ministerio da Saude, 2015). In addition, the fraction of teenagers that are not in school nor working is 29.4 percent among females in Salvador, compared to 15.5 percent among males, partly reflecting higher employment among males and child bearing among females (IBGE, 2015). The complexity of gender gaps increases as Salvador is one of the capital cities with highest homicide rates and gender based violence in Brazil. This Component will support technical assistance to establish the monitoring of key gender differentiated indicators like injuries due to external causes (health), teen pregnancy (health), and school dropout and non-enrolment among teens and youth (education), among others. A special focus will be given to poor and vulnerable families participating in PBF or PAIF. The proposed Project will support the establishment of an intersectoral committee that will: (i) monitor the social indicators mentioned before; (ii) analyze patterns of social service delivery gaps and gender based violence to identify critical points where measures could be taken; and (iii) design and pilot specific measures to address social service delivery gaps. These activities will be initially implemented in territories where social service provision can facilitate the establishment of reference protocols for CRAS and other social sectors centers and with other MoS agencies.

B. Project Cost and Financing

Project Components Project cost IBRD Financing Trust Funds

Counterpart Funding

1. Support for Strategic Actions to Improve Social Service Delivery

2. Technical Assistance 3. Front end fee

240,000,000

10,000,000

120,000,000

4,687,500 312,500

120,000,000

5,000,000


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Total Costs

Total Project Costs 249,687,500 124,687,500 125,000,000

Front End Fees 312,500 312,500

Total Financing Required 250,000,000 125,000,000 125,000,000

C. Lessons Learned and Reflected in the Project Design

36. The design of this proposed Project follows several sub-national DLI-based operations in Brazil that the Bank has financed since the mid-2000s.5 For the proposed Project, the MoS and the World Bank have agreed on a common thematic argument across sectors, consistent with the MoS priorities to improve social service delivery given Salvador’s relatively high poverty rates and serious social problems. The proposed Project design excludes other priorities set in the SSP 2013-16 such as urban mobility because of its weak connection with the overall proposed Project objective and increased complexity. Limiting the number of sectors involved also has the advantage of minimizing the cost of coordination by the MoS and implementation support by the Bank. A common lesson that emerges from the previous operations is the importance of keeping the indicators design simple, even if those are differentiated at the sectoral level.

37. Another generic lesson from previous multi-sector operations is the tendency to under-execute technical assistance (TA) components. The TA component of this proposed Project was already revised to a smaller value in terms of financing, while keeping flexibility for the MoS to determine the specific TA activities for Bank financing. This proposed Project has identified a list of activities and prepared preliminary procurement plans to facilitate an early implementation of the TA Component. This proposed Project is the first Bank-financed municipal level project in Brazil that includes social assistance activities. As such, the design focuses on supporting the development of basic capacities and institutional set-up for the MoS to fulfill its priority mandates as delegated by the FG.

38. This proposed Project also draws on lessons of supporting reform processes that require constant adaptation and refinement. The structured and participatory approach in identifying key problems and defining priorities through the Salvador Strategic Plan 2017-20, shows the involvement of all policy stake-holders and demonstrates the capacity to recurrently review implementation and targets, and modify activities to achieve the SSP objectives. This proposed Project builds on the MoS capacity to monitor the implementation of SSP and aligns the Project objective and indicators with SSP targets supporting a dynamic implementation.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

39. The overall proposed Project implementation will be coordinated by Casa Civil, the institution responsible for policy advice, management of intersectoral projects, monitoring of the implementation of the Strategic Plan, and management of external financing. Specifically, the MoS has set up a Project

5 For example, the Ceara Inclusive Growth Project (SWAP II, P106765), Recife Swap Education and Public Management

(P126372), and the SWAp for Parana Multi-sector Development Project (P126343).


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Management Unit (PMU) exclusively for the implementation of the proposed Project (Unidade Gestora do Projeto) in Casa Civil (Decree 28.919, September 26, 2017). The PMU will be headed by a General Director and will include specialists to handle financial management, procurement, social and environmental issues, and monitoring and evaluation - including DLI verification. The PMU will work with the Directorate for Strategic Projects (DSP) and the Directorate for Strategic Planning (DPE) to exploit the capacity for policy coordination and sectoral monitoring of implementation of the Strategic Plan. DPE has a strong experience in coordination of sectoral policies, verification and monitoring of sectoral policy targets, and revision of policies and targets. As the proposed Project objective and indicators are aligned with the SSP 2017-2020, the implementation will use the existing capacity in Casa Civil.

40. Component 1 (DLI related activities) will be implemented by the Municipal Secretariats of health, education, and social assistance which are the entities responsible for the execution of sectoral Eligible Expenditure Programs (EEPs). Casa Civil will oversee the technical monitoring of Component 1 indicators and ensure verification of DLIs. Component 2 will be implemented by the PMU while SMS, SMED, and SEMPS will provide inputs for technical assistance activities (e.g. technical specifications). The MoS has also created a Special Multi-sectoral Procurement Commission (Comissão Especial Mista de Licitação, CEML) in Casa Civil to carry out procurement activities of Component 2 (Decree 28.933, September 28, 2017). The CEML will also contribute to increase the harmonization of procurement processes across sectors as the MoS increasingly uses external financing in different sectors.

B. Results Monitoring and Evaluation

41. The proposed Project will utilize MoS’ systems for monitoring and evaluation of Project indicators. The DPE currently monitors the implementation of the SSP 2013-16 and relies on sectoral Secretariats reporting on their specific activities. The SSP 2017-2020 includes indicators to monitor key Project indicators such as PDO and DLI indicators, as part of the alignment of the proposed Project and the MoS policy directions. The PMU will be responsible for monitoring on multi-sectoral integrated initiatives.

42. Citizen engagement. The proposed Project will engage citizens in two ways: sectoral citizen engagement instruments, and the Municipal General Ombudsman (Ouvidoria Geral do Município, OGM). Regarding the first, all Brazilian municipalities have sectoral entities that involve stakeholders where sectoral complaints and other issues are raised, such as the Municipal Health Commission or the Municipal School Boards. Second, the OGM has a range of instruments to facilitate the submission of complaints and other concerns both at the individual and community levels, including Sectoral Ombudsmen directly placed in sectoral Secretariats. These sectoral Ombudsman Offices are responsible, among other things, for receiving claims, complaints, positive feedback, and suggestions from citizens, and then bringing them to the attention of the responsible bodies.

C. Sustainability

43. The proposed Project builds on the policy directions established in the Salvador Strategic Plan 2017-2020 and the MoS demonstrated capacity to monitor the implementation of sectoral activities through DPE and DPS. Moreover, the staffing of the PMU includes existing MoS administrative, fiduciary, and safeguards specialists and the contracting of additional personnel as regular positions in the MoS,


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reducing the risk of personnel rotation. The proposed Project will also strengthen existing capacity to articulate social policies and activities across sectors, aiming to establish operational processes that can be maintained and replicated after Project activities.

V. KEY RISKS

A. Overall Risk Rating and Explanation of Key Risks

44. The overall risk rating for the proposed Project is assessed as Substantial due to: (a) the complex implementation arrangements consisting of a Project Management Unit in charge of the overall coordination and three separate Municipal Secretariats (Health, Education and Social Assistance) with uneven capacity in charge of implementation of respective sectoral activities (Technical Design); (b) implementing agency’s relative lack of familiarity with World Bank procurement and financial management procedures (Fiduciary and Institutional Capacity for Implementation); and (c) potential changes in the MoS senior staff following the November 2018 State elections (Political and Governance, Sector Strategies and Policies). These risks would be managed through: (a) the provision of technical and coordination support by the Project Management Unit to the Secretariats to carry out their respective Project activities; (b) the hiring of dedicated procurement and financial management specialists and providing additional capacity building on fiduciary processes; and, (c) the fact that most of the MoS administration will maintain their Municipal responsibilities even if some staff take up State level responsibilities and through the monitoring of the Salvador Strategic Plan 2017-2020 as a medium term policy commitment. The macroeconomic risk is also assessed as Substantial but the MoS is implementing a prudent fiscal policy.

VI. APPRAISAL SUMMARY

A. Economic and Financial (if applicable) Analysis

45. The achievement of the PDO, to improve social service delivery in the Municipality of Salvador, is expected to provide substantial economic and social benefits through more efficient health care resource allocation, improved educational quality, and more effective social assistance services. The Education Sub-Component aims at improving quality of pre-primary and primary education in a sustainable manner. The Health Sub-Component aims at enhancing efficiency by increasing the access to primary care and optimizing the use of specialized and hospital care with improved information systems, and enhanced governance and management of the municipal network. The Social Assistance Sub-component will increase the access to a strengthened basic social assistance network. The proposed Project will have a direct positive impact on lifetime earnings of the beneficiaries through an increase in their labor productivity and labor market participation, and from allocative gains in health care through increased primary (and less expensive) care while rationalizing the use of secondary and tertiary care.

46. This economic analysis summarizes the value of improvements social service delivery, mainly from the activities in education and health Sub-Components of the proposed Project. The estimates are based on impact evaluations of similar programs on household outcomes and a detailed discussion can be found in Annex 4. The Education Sub-Component is expected to increase primary school achievement by 0.13 standard deviations and result in additional 0.16 standard deviations in learning outcomes. These results will, in turn, increase labor market incomes during 30 years with a net present value (NPV)


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of US$113 million, and an internal rate of return (IRR) of 16 percent. An alternative, more modest scenario where only the minimum improvements to school outcomes are realized shows a NPV of US$93 million and an IRR of 14 percent, underscoring the cost-effectiveness of the intervention.

47. The fiscal savings of the health SuComponent are based on the use of Sistema Vida+, the SMS’ management information system to optimize patient flows and greater use of primary health care. Using evidence from U.S.-based electronic referral system that showed substantial decreases in wait times for routine new patient appointments and acceleration of urgent care, and the implementation of the Telehealth Network in Minas Gerais, this Sub-Component would result in average annual savings to the healthcare system of US$7.2 million. These gains are based on the gradual increase in the number of health facilities that make use of the electronic medical records system and the biometric patient registration system, that will reduce costs by preventing process errors, increasing adherence to guideline-based care, enhancing surveillance and monitoring, and decreasing medication errors. It is estimated that between 8 and 24 percent unnecessary health care appointments will be reduced.

B. Technical

48. Public sector financing is justified based on the high social returns of the investment and the reduction in poverty and inequality associated with it. Social services in Salvador are predominantly public and the proposed Project aims to support systemic improvements in quality assurance mechanisms in social services for all. In addition, other factors provide an economic rationale for public sector financing of social services because they generate positive externalities and efficiency gains. For example, healthier individuals acquiring better education would contribute to society because they are more likely to be engaged, responsible citizens and better parents. Quality childcare not only improves the human capital of the child, but also benefits parents and businesses through greater labor market participation of mothers and lower absenteeism from work – factors which might increase the overall level of productivity and growth in the economy. In addition, there is imperfect information that makes the population unaware of the benefits of basic health care, returns of investments in education, and the social assistance support to vulnerable families. Even if they are aware, financial constraints might prevent them from financing these investments in the credit market. Also, public social investments that improve the poor’s access to quality services have the potential to promote equality of opportunities because vulnerable groups benefit more from the public service provision.

49. The World Bank has global experience in supporting government efforts to improve the poor’s access to quality social services through efficient, fiscally sustainable measures. Having carried out considerable increases in investments to strengthen the social sector’s basic capacities for service delivery and in revenue collection, Salvador would need to adopt qualitatively different measures to continue its efforts in the next phase. These include much more explicit focus on evidence-based decision-making in education and more efficient and strategic ways of organizing service delivery through the municipal health and social assistance networks. The Bank’s technical support can strengthen the culture of evidence-based decision making and encourage adoption of new ways of organizing service delivery in the Municipality of Salvador. The Bank’s involvement will also come in the form of sharing good practices in education, health, social assistance, from elsewhere in Brazil as well as outside.


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C. Financial Management

50. The Bank performed a Financial Management (FM) Assessment to determine whether the implementing agency, Casa Civil, has acceptable financial management and disbursement arrangements in place to adequately control, manage, account for and report on Project funds. Based on the FM Casa Civil assessment, the financial management arrangements as set out for this proposed Project meet the Bank’s minimum fiduciary requirements and are considered acceptable. 51. Overall, the evaluation found that: (a) at the country level, the Federal FM laws and regulations applicable to sub-nationals provide a strong FM framework for sub-nationals executing agencies, (b) at the Municipality level, the fiscal transparency, accounting, reporting, internal controls and external audit in the MoS are considerate adequate, but require improvement in specific areas. The assessment also identified the following FM risks: (a) Casa Civil staff do not have previous experience with Bank-financed Projects, (b) the Integrated System for Fiscal Management Planning (SIGEF), will need to be adjusted to generate IFRs; (c) the Project design, with complex FM and disbursements arrangements, will need to strengthen internal control procedures specially related to review of health and education sector activities, and (d) the General Controller of the Municipality (CGM) and the Municipal Court of Auditing Accounts (TCM) will require institutional strengthening and capacity building. The activities under the technical assistance Component and the implementation support strategy include a number of actions to address these limitations.

D. Procurement

52. Procurement for the proposed Project will be conducted per the “World Bank Procurement Regulations for Borrowers under Investment Project Financing” dated July 1, 2016, for the supply of goods, works, non-consulting and consulting services under the Project. Each participating Secretariat is responsible for the procurement aspects of their respective EEPs and for managing the contracts of Component 1. Procurement activities under Technical Assistance Component - TA will be carried out by the PMU in Casa Civil with support from the CEML Procurement Commission. The Secretariats will provide the necessary technical inputs (e.g., terms of reference) to allow PMU to carry out the procurement process with due diligence. PMU will be responsible for coordinating and consolidating all procurement actions pertaining to the proposed Project, with the ability to have information and reports that reflect the status of each bid conducted separately.

53. A procurement assessment of the capacity of each Secretariat to implement procurement actions was carried out to review the organizational structure for implementing the proposed Project and the interaction between the PMU and Secretariats. All Secretariats have well-functioning procurement teams, with experience in procuring goods and services, but no experience with World Bank regulations. Civil works have been handled by a well-qualified procurement staff and technical assistants, but without experience with World Bank procedures. Also, there is no experience on selecting consulting services. The MoS’ team has developed a draft Project Procurement Strategy for Development (PPSD), and based on the PPSD, a procurement plan for the TA Component has been prepared and submitted to the Bank. Both the PPSD and the Procurement Plan for Component 2 have been found acceptable to the World Bank.


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E. Social (including Safeguards)

54. OP/BP 4.12 Involuntary Resettlement will be triggered for two reasons. First, some construction works will be supported by the proposed Project under Component 1. These construction works may require land acquisition, tend to be site-specific, and their impacts tend to be limited in scope and magnitude. The specific locations of these construction works have not been chosen yet and will not be defined before the proposed Project approval. Therefore, the MoS prepared a Resettlement Policy Framework (RPF) that was publicly consulted between August 16 and September 5, including a public audience. The comments were incorporated into a final RPF version that was published in the MoS website on September 18, 2017.6 The RPF describes the principles, guidelines and procedures, which would be followed when activities supported by the proposed Project need land acquisition and may have adverse impacts related to involuntary resettlement. This RPF was submitted to the Bank and found acceptable per Bank regulations. The RPF was publicly disclosed by the Bank on September 25, 2017. 55. Second, the proposed Project will also provide retroactive financing for facilities already under construction, hence substantive aspects of OP/BP 4.12 apply retroactively as these activities could have required previous land acquisition. Consequently, the RPF includes guidance on conducting the inventory and assessment of prior resettlement and the MoS will carry out an audit of the procedures followed for: (i) acquiring the land plots needed for these infrastructures; and (ii) addressing adverse impacts related with involuntary resettlement as well as their implementation. The inventory shows that most works were made in facilities that belonged to the MoS and that no direct social impact was identified.

F. Environment (including Safeguards)

56. The proposed Project foresees the construction, rehabilitation, expansion or repair of small buildings, which may cause negative environmental impact. Although these impacts are expected to be minor, and mostly related to civil works' execution, the Environmental Assessment Safeguard Policy (OP/BP 4.01) is triggered and a Category B has been approved for this Project. The MoS has prepared and submitted to the Bank an Environmental and Social Management Framework (ESMF) that: (i) provides screening criteria for natural habitats and appropriate measures to avoid, mitigate, or compensate any possible impacts on them; (ii) evaluates and provides acceptable measures for pest management; and (iii) defines guidelines for Physical Cultural Resources Plans, if needed. The ESMF was publicly consulted between August 16 and September 5, 2017, including a public audience,7 and the comments received were incorporated into the revised ESMF. This version was published by the MoS on September 18, 2017, submitted to the Bank, found acceptable as per Bank regulations and published by the Bank on September 26, 2017.

57. The proposed Project may improve Government response to climate change events through improvements in service delivery systems, capacity building, and training in health and social protection. Specifically, improved health care facilities and increasing the number of roving Family Health units will facilitate better care of populations physically affected by natural disasters, and an updated CadÚnico

6 The MoS website is: http://projetosalvadorsocial.salvador.ba.gov.br/layout/pdf/marco.pdf

7 The ESMF is available at http://projetosalvadorsocial.salvador.ba.gov.br/layout/pdf/RELATORIO_MarcoGSA_15SET2017.pdf

http://projetosalvadorsocial.salvador.ba.gov.br/layout/pdf/marco.pdf


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will facilitate quicker response.

G. World Bank Grievance Redress

58. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

.

http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service

http://www.inspectionpanel.org/


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VII. RESULTS FRAMEWORK AND MONITORING

Results Framework COUNTRY : Brazil

Brazil-Salvador Social Multi-Sector Service Delivery Project Project Development Objectives

The proposed Project's objective is to improve social service delivery in the Municipality of Salvador, emphasizing improvements in health care system efficiency, education quality, and social assistance effectiveness. Project Development Objective Indicators

Indicator Name Core Unit of Measure

Baseline End Target Frequency Data Source/Methodology Responsibility for Data Collection

Name: Rate of hospital admissions for Ambulatory Care Sensitive Conditions

Percentage 23.50 23.03 Annual

Hospital Information System (SIH)

Municipal Secretariat of Health (SMS)

Description: Calculation method: Number of hospital admissions for Ambulatory Care Sensitive Conditions (ACCS)/Total number of hospital admissions x 100

Name: Proportion of students at adequate level of literacy and numeracy at the end of the second grade in

Percentage 0.00 45.00 Annual.

Diretoria Pedagógica

SMED


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municipal schools

Description: Percentage of students in the second year with adequate literacy level – ratio between number of students in 2nd year of fundamental education who can write using alphabets with regular spelling and number of second-grade fundamental education students assessed in writing.

Name: Number of families supported by the Integrated Family Support Program (PAIF) at CRAS

Number 0.00 28500.00 Annual

Diretoria de Proteção Social Básica

SEMPS

Description: Number of families supported by CRAS, following the guidelines of the PAIF and MDSA, monitored through the SUAS online form

Intermediate Results Indicators



Name: Percentage of Primary Health Care Coverage (DLI)


Primary Care Information System (e-SUS), Brazilian Institute of Geography and Statistics (IBGE) and National Health Facilities Census (CNES).

SMS


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Proportion of Injuries due to External Causes among females


"Notificações de Violência Interpessoal e Autoprovocada" in the Sistema de Informações sobre Mortalidade (SIM) and the Sistema de Informação de Agravos de Notificação (Sinan).

SMS

Description: Calculation method: Number of primary health care teams implemented X 3,450 / Total number of resident population X 100 Source: Primary Care Information System (e-SUS), Brazilian Institute of Geography and Statistics (IBGE) and National Health Facilities Census (CNES)

Name: Number of municipal health facilities with electronic record management system installed and operational(DLI)


Source: Public Report and Management Information System (Sistema Vida+)

SMS

Description: Calculation method: Number of municipal health facilities with electronic record management system installed and operating / Total number of municipal health facilities x 100

Name: Percentage of Health Units with health services provision available within the Municipal Regulation



SMS


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System (DLI)

Description: Calculation method: Number of municipal health facilities with health services provision available within the Municipal Regulation System / Total number of municipal health facilities x 100

Name: Percentage of diagnostic and therapeutic health services provided by the multi-centers


Management Information System (Sistema Vida+).

SMS

Description: Calculation method: Number of diagnostic and therapeutic health services provided by the multi-centers / Total number of diagnostic and therapeutic health services x 100

Name: Percentage of out-patient procedures (high complexity) in relation to the resident population


Ambulatory Information System (SIA) and Brazilian Institute of Geography and Statistics (IBGE)

SMS

Description: Calculation method: Number of out-patient procedures (high complexity) / Total number of resident population x 100

Name: Percentage of patients cared in the UPAs with low-risk (green) or no-risk (blue)


Progress Report and Management Information System (Sistema Vida+)

SMS


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Description: Calculation method: Number of patients cared in the UPAs with low-risk (green) and/or no-risk (blue) / Total number of patients cared in the UPAs x 100

Name: Number of municipal health facilities with patient identities registered with biometric data



SMS

Description: Calculation method: Number of municipal health facilities with patient identities registered with biometric data / Total number of municipal health facilities x 100

Name: Number of municipal primary care units with financial management system installed



SMS

Description: Calculation method: Number of municipal primary care units with financial management system installed / Total number of municipal primary care units x 100

Name: Percentage of municipal and covenant centers ("conveniados") monitored by SMED that deliver Early Childhood

Percentage 0.00 62.00 Semester

SMED

Diretoria Pedagogica


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Education (DLI)

Description: Ratio between number of units monitored and the number of municipal units which offer partial early childhood education. Cumulative indicator with a minimum of 7% for the calculation of the scalable disbursement.

Name: Percentage of Early Childhood Education centers with regular monitoring and evaluation feedback by SMED (DLI)

Percentage 0.00 40.00 Semester

SMED


Description: Ratio between the number of school units that received M&E feedback (format to be defined during the development of the system) and the number of school units that offer ECE (cumulative). Cumulative indicator with a minimum of 10% for the calculation of the scalable disbursement.

Name: Percentage of Fundamental Education schools with minimum 80% take-up of students in PROSA (DLI)

Percentage 32.80 72.00 Bi-annual. PROSA takes place in odd years. Results are available the first semester of even years.

SMED


Description: Percentage of schools where the ratio between number of students evaluated externally and number of students enrolled in the evaluated series is higher than 80%. Cumulative indicator with a minimum of 10% for the calculation of the scalable disbursement.

Name: Institutionalization and implementation of the

Yes/No N Y Once SMED Diretoria


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M&E system for ECE Pedagogica

Description: Publication of decree on use of M&E system and dissemination of methodology and instruments to be used by Diretoria Pedagógica

Name: Percentage of SMED personel trained in the use of ECE M&E system


SMED

SMED

Description: Percentage of school managers, education coordinators and regional team members trained in the methodology of the ECE M&E system up to the calculation date (cumulative for the period)

Name: ECE units offering adequate services following quality assurance standards


SMED


Description: Percentage of school units monitored by the ECE M&E system with adequate quality level: Ratio between the number of units assessed as being at the appropriate quality level (to be defined during the development of the M & E system) and the number of school units offering ECE under regular monitoring (cumulative for the period)

Name: Participation rate of schools in the internal student assessment of municipal education

Percentage 0.00 45.70 Annual (March)

SMED


Description: Percentage of fundamental schools assessed in the internal assessment – Ratio between number of school units assessed and total number of school units


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that offer grades that are assessed

Name: Rate of teachers trained in in-service teacher training

Percentage 54.20 94.20 Annual (March)


SMED

Description: Percentage of early-year fundamental education teachers trained in in-service teacher training - ratio of the number of early-year fundamental education teachers participating in-service teacher training program of the municipal education network with a minimum work load of 30 hours of training and the total number of teachers assigned to classes of early-year fundamental education

Name: Certification system of candidates for school leadership positions implemented

Yes/No N Y Once

SMED


Description: Implementation of the certification system with dissemination of the methodology and instruments to be used, as well as deadlines to be fulfilled: Publication of the Decree until December 2019, training and certification by December 2020

Name: Percentage of schools with new results based management model

Percentage 0.00 43.00 Annual (January)

SMED

Diretoria de Suporte à Rede Escolar

Description: Percentage of schools with new results based management model–-ratio between number of school units with results agreements signed and results released and total number of eligible schools

Name: Percentage of schools with management

Percentage 0.00 74.00 Annual SMED Diretoria de Gestao


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contract signed

Description: Ratio of school with management contract signed and schools with early-year fundamental education

Name: CRAS units that meet SEMPS’ minimum standard of operational functionality (DLI)



SEMPS

Description: Total number of CRAS units working according to SEMPS minimum standard of operational functionality

Name: Number of household visits performed by Cadastro Único team to update socio-economic information (DLI)


Coordenação do Cadastro Úníco

SEMPS

Description: Total number of households visited to complete the Cadastro Único form or verification/validation of self-reported information

Name: Enhancing management capacity of the SEMPS through the recruitment of staff (DLI)

Number 0.00 190.00 Bi-Annual

SEMPS

Diretoria Administrativa

Description: Number of professional hired through the simplified procedure. Implies compliance with several steps related to hiring staff for SEMPS


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Name: Number of families attended by CRAS mobile teams

Number 0.00 2400.00 Annual (December)


SEMPS

Description: Number of families attended by CRAS mobile teams, following the guidelines of MDSA, monitored through the SUAS online form

Name: Rate of registry update of extremely poor families


Coordenação do Cadastro Único

SEMPS

Description: Rate of registry update in up to two years between the extremely poor families at Cadastro Único

Name: Mobile registration units of Cadastro Unico in operation


Coordenação do Cadastro Único

SEMPS

Description:

Name: Number of training sessions held for SEMPS workers


The SEMPS will produce a report with the training activities and other project activities. The report will consider the total number of training sessions (all kind) held for SEMPS professionals (which

SEMPS


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includes SEMPS as a whole and not only CRAS)

Description: Definition of Multi Annual Training Plan and total of groups trained in different modalities

Name: Percentage of the development and implementation of SEMPS management information system


Includes the Publication of a notice to hire professionals for SEMPS through selection process

SEMPS

Description: Design, development and implementation of the SEMPS management information system

Name: Beneficiaries of social safety net programs

✔ Number 191593.00 191593.00 Quarterly

SEMPS. http://semps.salvador.ba.gov.br/index.php/nossos-servicos/62-bolsa-familia

The number of PBF beneficiaries is included as a corporate indicator, as its evolution will depend on economic dynamics in the Municipio.

SEMPS


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Beneficiaries of social safety net programs - Female

✔ Number 187761.00 187761.00 Annual

SEMPS.

SEMPS

Description:

Name: Grievance Redress Mechanism. Rate of complaints on Project related sectors that are addressed within the OGM normatives.

Percentage 0.00 20.00 Semestral

OGM

OGM

Description: The indicator is measured as the number of complaints on health, education and social assistance sectors addressed on time according to the OGM normative divided by the total number of complaints in those sectors expressed as a percentage. This indicator has not been estimated as of November, 2017 so a baseline of zero and a target of 20 percent have been placed. These estimates will be revised during implementation.

Name: Students benefiting from direct interventions to enhance learning

✔ Number 20764.00 35937.00 Annual

School Census

SMED

Students benefiting from direct interventions to enhance learning - Female

✔ Number 10006.00 17318.00 Annual

School Census

SMED

Description:


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Target Values Project Development Objective Indicators FY

Indicator Name Baseline YR1 YR2 YR3 YR4 End Target

Rate of hospital admissions for Ambulatory Care Sensitive Conditions

23.50 23.50 23.38 23.26 23.03 23.03

Proportion of students at adequate level of literacy and numeracy at the end of the second grade in municipal schools

0.00 38.00 40.00 45.00 45.00

Number of families supported by the Integrated Family Support Program (PAIF) at CRAS

0.00 0.00 7600.00 17100.00 28500.00 28500.00

Intermediate Results Indicators FY


Percentage of Primary Health Care Coverage (DLI)

45.50 46.00 48.50 51.20 54.10 54.10

Proportion of Injuries due to External Causes among females

67.10 65.00 65.00

Number of municipal health facilities with electronic record management system installed and operational(DLI)

0.00 7.00 41.00 92.00 126.00 126.00


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Percentage of Health Units with health services provision available within the Municipal Regulation System (DLI)

22.00 26.00 49.00 70.00 100.00 100.00

Percentage of diagnostic and therapeutic health services provided by the multi-centers

50.00 60.00 70.00 85.00 90.00 90.00

Percentage of out-patient procedures (high complexity) in relation to the resident population

2.84 2.85 2.86 2.88 2.91 2.91

Percentage of patients cared in the UPAs with low-risk (green) or no-risk (blue)

85.00 83.00 81.00 79.00 77.00 77.00

Number of municipal health facilities with patient identities registered with biometric data

0.00 28.00 84.00 140.00 196.00 196.00

Number of municipal primary care units with financial management system installed

30.00 36.00 67.00 95.00 136.00 136.00

Percentage of municipal and covenant centers ("conveniados") monitored by SMED that deliver Early Childhood Education (DLI)

0.00 0.00 7.00 24.00 62.00 62.00

Percentage of Early Childhood Education centers with regular monitoring and evaluation feedback by SMED (DLI)

0.00 0.00 0.00 17.00 40.00 40.00

Percentage of Fundamental Education schools with minimum 80% take-up of students in

32.80 68.00 70.00 72.00 75.00 72.00


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PROSA (DLI)

Institutionalization and implementation of the M&E system for ECE

N N Y Y Y Y

Percentage of SMED personel trained in the use of ECE M&E system

0.00 0.00 4.00 21.00 62.00 62.00

ECE units offering adequate services following quality assurance standards

0.00 10.00 25.00 25.00

Participation rate of schools in the internal student assessment of municipal education

0.00 0.00 7.50 24.40 45.70 45.70

Rate of teachers trained in in-service teacher training

54.20 94.20 94.20

Certification system of candidates for school leadership positions implemented

N N N Y Y Y

Percentage of schools with new results based management model

0.00 0.00 21.00 34.00 43.00 43.00

Percentage of schools with management contract signed

0.00 0.00 21.00 60.00 74.00 74.00

CRAS units that meet SEMPS’ minimum standard of operational functionality (DLI)

0.00 0.00 9.00 15.00 28.00 28.00

Number of household visits performed by Cadastro Único team to update socio-economic

993.00 3200.00 9000.00 19600.00 32660.00 32660.00


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information (DLI)

Enhancing management capacity of the SEMPS through the recruitment of staff (DLI)

0.00 0.00 50.00 0.00 190.00 190.00

Number of families attended by CRAS mobile teams

0.00 0.00 800.00 1600.00 2400.00 2400.00

Rate of registry update of extremely poor families

68.00 69.00 70.00 72.00 73.00 73.00

Mobile registration units of Cadastro Unico in operation

0.00 2.00 4.00 4.00

Number of training sessions held for SEMPS workers

0.00 0.00 300.00 650.00 1000.00 1000.00

Percentage of the development and implementation of SEMPS management information system

0.00 0.00 30.00 65.00 100.00 100.00

Beneficiaries of social safety net programs 191593.00 191593.00 191593.00 191593.00 191593.00 191593.00

Beneficiaries of social safety net programs - Female

187761.00 187761.00

Grievance Redress Mechanism. Rate of complaints on Project related sectors that are addressed within the OGM normatives.

0.00 5.00 10.00 15.00 20.00 20.00

Students benefiting from direct interventions 20764.00 35937.00


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to enhance learning

Students benefiting from direct interventions to enhance learning - Female

10006.00 17318.00


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ANNEX 1: DETAILED PROJECT DESCRIPTION

COUNTRY: Brazil Brazil-Salvador Social Multi-Sector Service Delivery Project

Component 1: Support for Strategic Actions to Improve Social Service Delivery (US$120 million)

1. This Component with a total of US$240 million (US$120 million financed by the World Bank) will provide results-based support for the implementation of Eligible Expenditures Programs (EEPs) as defined in Table A2.3 and key reform actions to improve social service delivery in health, education, and social assistance. The EEPs will consist of priority public expenditure programs social sectors and constitute a set of defined investments and selected recurrent expenditures to be incurred under the budget lines agreed with the Municipality of Salvador including works, goods, non-consulting services, consultants’ services, operating costs, training and cash transfers under two social program lines: Primeiro Passo and Aluguel Social. The key performance targets and reform actions will be captured both in disbursement-linked indicators (DLIs) and in secondary indicators not linked to disbursement of the Bank financing. Three municipal secretariats, Health, Education, and Social Assistance, will be responsible for delivering the agreed performance targets to be captured as DLIs.

Sub-component 1.1: Health

Background

2. According to various indicators, especially the maternal and infant mortality rates, the health condition in Salvador has apparently improved since the 1990s. Besides other factors, the average life expectancy among the Salvador population has improved mainly due to the decline in mortality amenable to health care (avoidable mortality), including mortality from heart diseases, although in the last 5 years the contribution of avoidable mortality was somewhat smaller. 3. Traditionally, Salvador showed a low coverage of primary health care. As part of the implementation of the local's Unified Health System, the municipality of Salvador has invested substantially in expansion of the primary healthcare level to organize and guarantee all individuals access to comprehensive care with adequate clinical and collective health services, including secondary and tertiary care. In 2002, the Municipal Secretariat of Health implemented the Family Health Strategy (FHS) to reorganize the primary health care network in connection with the secondary and tertiary care. During the period between 2002 and 2013, the coverage of FHS in Salvador has increased from 3 percent to 23 percent, currently reaching 44.2 percent of primary health care coverage in the municipality. 4. From the beginning of the 2000s, the Infant Mortality Rate – IMR dropped 34 percent, stabilizing in 16 infant deaths per 1000 live births as of 2009. The Maternal Mortality Rate –MMR decreased 31.4 percent between 2008 and 2012 and mortality of women in reproductive age increased 4 percentage points from 2008 to 2012. However, the contribution of maternal mortality reduction (stratified by age group) on improving women's life expectancy, especially to reproductive age period (10 to 49 years of age) is not well known. In addition, reproductive health challenges are observed as teenage pregnancy


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in Bahia (20.1 percent of females aged 10 to 19) is more than the Brazil average (18.1 percent).8

5. In Salvador, as well as in Brazil, infant mortality rates have shown important declines in the last decade but are still higher than expected when compared with other municipalities with similar economies and epidemiological condition. Concerning the principal determinants of the observed downward trends, studies have pointed to the importance of implementing public policies in basic sanitation and nutrition; the sharp drop in fertility, especially in the 1980s; and the expansion of primary care services, especially maternal and child health programs.

Figure A1.1. Infant and Maternal Mortality rates

Infant Mortality Rate – IMR (By sanitary district) Maternal Mortality Ratio – IMR (By sanitary district)

Source: Ministerio da Saude (2015)

6. In parallel, the demographic and epidemiologic transition found in Salvador, resulting from aging and the life expectation increase, meant increasing increment related to the chronic conditions as well. In Salvador, about 70 percent of all deaths were attributable to NCDs (cardiovascular diseases, chronic respiratory diseases, diabetes, cancer, and others), while unfavorable trends in most major risk factors show the need for additional and timely action (see Figure A1.2). 7. According to recent data (2013) from the Brazilian Ministry of Health program “Surveillance of Risk Factors for Chronic Non-Communicable Diseases by Telephone Survey (VIGITEL)” shows critical indicators for Salvador when compared to others state capitals in Brazil. This nationwide survey has been conducted annually since 2006 in all the State capitals plus the Federal District (Figure A1.3).

8 See Ministerio da Saude - Sistema de Informações sobre Nascidos Vivos – SINASC (2015).


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Figure A1.2. Percentage of mortality in Salvador by primary causes

Source: Ministry of Health (2013)

Figure A1.3. NCD Risk factors in Salvador

Percentage of overweight in adults Percentage of obesity in adults

Percentage of healthy diet consumption Percentage of physical activity practice

Source: Ministry of Health (2013)


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8. In Salvador, the most significant public health problems are currently circulatory diseases, malignant tumors (neoplasia), and mental health problems. Emerging problems are obesity, chronic lung diseases and diabetes, particularly type 2-diabetes. There are still significant differences in mortality and health between groups with different socioeconomic status, education, marital status, gender and geographical regions. Differences between socioeconomic groups and marital status groups are increasing while differences between genders are decreasing. 9. In contrast with the situation in which chronic diseases are emerging, in the context of the Salvador, the emerging and re‐emerging infectious diseases mean an addition to an epidemiological profile in which infectious diseases still had great importance in the morbidity and mortality rates of the population. Varicella and tuberculosis are the main remaining (or persistent) infectious diseases in the municipality. However, dengue fever, schistosomiasis and meningitis have been frequently reported by physicians through the compulsory notification data for infectious diseases and epidemiologic ones recorded at the Center for Strategic Information and Health Surveillance (CIEVS). 10. The expected solution for the local Unified Health System – SUS (Sistema Único de Saúde), at all levels of decision-making, is to restore the consistence between the diseases triple load on the healthcare situation and the current system of healthcare practice, with the implementation of healthcare networks to address NCDs, particularly. The adopted principle is that each level should operate under the cooperative and interdependent form, following its constitution elements such as: the population, the operational structure and the health care model. This strategy aims at improving the prevention and health promotion activities, clinical quality, the sanitation results and the users’ satisfaction and the reduction of the healthcare systems costs, based on primary health care as the main entry point to the health system. 11. This health status poses a challenge for the municipal health system, since trends for key diseases and risk factors are not favorable. The local health system needs to be strengthened for the care of chronic conditions through the development of a chronic-care model based on local experiences; expansion and qualification of the primary health care, amplified access to cost-effective drugs, greater communication between primary and other levels of care; integration of chronic disease programmatic actions; and a scaling up of prompt detection and treatment of NCDs. 12. Facing these challenges, the implementation of health activities in Salvador has prioritized three lines of interventions: (1) the expansion of the primary health care coverage, through the structuring of primary health care units and in-service training of health professionals, as an entry point for organizing access and adequate care to most of health needs; (2) the consolidation of secondary and tertiary care under municipal’s governance including: (i) increasing the provision of ambulatory specialized care, diagnostic procedures and tests, through the construction of multi-centers in a regional basis; and (ii) organizing the local emergency care system to address NCDs with focus in cardiovascular diseases and diabetes; (3) the strengthening of the program's linkages with a comprehensive network of health services, through development and implementation of a robust referral and counter-referral system as well as the incorporation of new management practices into the local health system. 13. As of 2012, the health sector in Salvador had lagged far behind other state capitals in some of the basic measures of the adequacy of service delivery. For example, the estimated coverage of primary


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care was at mere 18.6 percent, nearly half of the level achieved in the nearby Fortaleza (34.5 percent). By 2016, however, SMS’ investments increased the numbers of the Family Health Units and the Family Health teams. Thus, the estimated coverage rate jumped up to 44.2 percent, close to the 50-percent

mark recommended by the Federal Ministry of Health.9

Figure A1.4: Basic Health Coverage in Selected State Capitals, 2012-2015

Source: DATASUS/DAS/SMS,2016.

14. In the area of emergency care, SMS ran 10 urgent care units (PAs) including one psychiatric unit, but these units operated without support for diagnostics and without being part of the municipal system of health facility regulation. To alleviate congestion in these units, SMS constructed eight new intermediate Emergency Care Units (UPAs). In medium to high complexity care, Salvador also relied on a complementary network of privately-run outpatient and hospital facilities. Facilities in this network provide services following clinical protocols and regulation of access by the Municipal Center for Regulation. The Municipality lacks its own hospital to make up for insufficient bed space, intensive care units, capacities for certain specialized surgical procedures, etc., which negatively affects clinical evolution of some patients and UPAs’ resolution capacity and has begun constructing one. The new municipal hospital is expected to be ready to start operation in 2018. SMS also added four multi-centers, designed to offer specialized outpatient care, together capable of processing 500 consultations a day.

15. While the limited supply of health facilities has created bottlenecks to service access in some cases, another constraint is the limited coverage of private health insurance among Salvador’s resident. The low level of insurance coverage increases the residents’ dependence on the public system.

9 Once a municipality reaches 50-percent coverage, the federal transfers linked to the Family Health program stop.

18,6

34.52

51.21

82.87

44.43 44.08 44.2 49.43

56.53

93.66

56.88 51.21

0

10

20

30

40

50

60

70

80

90

100

Salvador Fortaleza Recife BeloHorizonte

São Paulo Rio deJaneiro

2012 2013 2014 2015


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Figure A1.5: Percentage of the Population with Private Health Insurance Coverage, 2015.

Source: SIB/ANS/MS – 12/2015 e IBGE, dados extraídos em 16.05.2016).

16. While expanding its capacity for service delivery by increasing the number of health facilities under its direct administration, SMS also invested in modernizing its network management capabilities, especially through adoption of information technology. In particular, the Sistema Vida+ integrates all information sources of the facilities within the municipal network. Among its functions is the registration module. Users can register themselves on the system and receive a Municipal Health Card. The system is also capable of capturing biometric data of each user for more reliable identification of each patient and tracking/managing his/her records across facilities. The regulation module is designed to optimize the process of appointments for consultations and examinations and manage requests/referrals for medium and high complexity procedures for which case-by-case referrals and authorizations are necessary. This module has already been installed in the existing health facilities for processing appointments on-line, including for patients from surrounding municipalities that have an agreement with Salvador.

Sub-component objectives and key results

17. This sub-component would support activities that improve the efficiency of health care delivery system by optimizing patient access to healthcare within the health facility network that operates within the municipality, including state- and privately-run facilities and improve quality and efficiency of care through progressive adoption of modern information technology. The results chain is shown in the Figure below. This Sub-Component will support two main outcomes: (i) pertinent access to primary, secondary and tertiary care through improved referral systems; and (ii) the use of technologies to improve efficiency and quality of care management. These outcomes would be reflected in the PDO indicator of Proportion of admissions for Ambulatory Care Services Conditions, that reflect the fraction of hospital admissions that should have been treated through ambulatory services, rather than the more

25.62

28.63

32.06

36.32

39.59

48.08

50.53

51.31

54.11

54.35

0.00 10.00 20.00 30.00 40.00 50.00 60.00

Manuas

Salvador

Brasília

Fortaleza

Recife

Porto Alegre

Belo Horizonte

Rio de Janeiro

São Paulo

Curitiba


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costly hospital care.

18. Pertinent access to primary, secondary and tertiary care. As of 2012, Salvador lagged far behind other state capitals in primary health coverage (18.6 percent) but since then investments in strengthening both the Family Health teams and the regular primary healthcare units have brought Salvador’s performance to 44.2 percent, close to a recommended level for a large metropolitan city.10 In the meantime, the secondary level has emerged as a priority bottleneck in the population’s access to quality healthcare. Unmet demand for high-complexity care is overwhelming the municipality’s existing secondary care facilities such as the Health Multi-centers and intermediate Emergency Care Units (Unidades de Pronto Atendimento, UPAs). SMS has ongoing projects to complete physical refurbishment of numerous health care facilities to continue strengthening the existing facilities’ capacity to receive patients and is constructing a new municipal hospital. Furthermore, SMS plans to continue expanding primary care coverage, both by increasing the number of roving Family Health units/teams, and also upgrading the capacities of the facility-based primary care units. Further expansion in the primary level’s capacity to handle lower-complexity cases would alleviate some of the high demands currently overwhelming the secondary-level facilities. The ongoing construction of a hospital constitutes another, complementary strategy to alleviate excess demand on the existing secondary facilities and optimize distribution of demands within the municipal health network. Currently the city relies entirely on state

10

The primary health coverage is an estimate of the number of households covered by an existing number of primary health teams, based on the assumed number of households to be covered by each team.


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and private hospitals for higher-complexity care. Having its own hospital would allow SMS to direct some of the patients from Health Multi-centers and UPAs.

19. While strengthening the primary and the tertiary levels would alleviate the burden on the secondary level, a key intervention that could contribute to this outcome is a better system to regulate patient flows between different health facilities at different levels of care. Under this Results Area the proposed Project will support additional strengthening of the primary and tertiary levels by financing relevant eligible expenditure programs (mostly related to ongoing/planned refurbishment of the existing facilities and the construction of the new hospitals as well as service fee payments to privately-run facilities). It will also support a specific measure to reorganize patient flows through the use of the regulation module in the SMS’s management information system, Sistema Vida+. A rigorous use of the module is expected to allow SMS to maximize the use of private healthcare providers who constitute a complementary network of care. Currently, SMS has little control or leverage to make full use of the capacity offered by these private providers. Pro-active management of patient flows using Sistema Vida+’s regulation module is expected to lead to gradual increase in the actual number of procedures performed in the complementary network as a share of the total number of procedures contemplated in the original service agreements (DLI).

20. Use of technologies to improve efficiency and quality of care management. To address the challenge related to the quality of care, SMS plans to introduce: (i) an electronic medical records system; and (ii) biometric registrations of the patients. A new electronic system of medical records would allow SMS to connect patient data from all the facilities in the municipal network, identify patients who are due for preventive visits and screenings, and monitor patients under certain parameters, aiming at aggregating efficiency and effectiveness in the system. The system is expected to capture patient information systematically. Use of structured clinical records is expected to result in more succinct and complete records, facilitate audits, and improve patient care. The biometric system would ensure each and every patient is accurately identified and tracked regardless of where in the municipal network they show up for care. Under this Results Area, the proposed Project will support SMS’ plan to gradually increase the number of health facilities that make use of the electronic medical records system and the biometric patient registration system.

Results Area Disbursement Link Indicator

1. Optimizing access to primary, secondary and tertiary care

DLI1. Percentage of primary health care coverage

2. Using Technologies to Improve Efficiency and Quality of Care Management

DLI2. Number of municipal health facilities with electronic record management system installed and operational

DLI3. Percentage of health units with health services provision available within the Municipal Regulation System


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Sub-component 1.2: Education

Background

21. In the education sector, the objective of the Municipality of Salvador is to enhance ensure access to quality early childhood education and fundamental education in its municipal network. The Municipal Secretariat of Education (SMED) is responsible for crèches (for children aged 0-3), pre-schools (ages 4-5) and fundamental education (grades 1-5 and 6-9, ages 6 to 14), as well as adult education. The MoS shares the responsibility with the state government for the later grades of fundamental education and adult education. In Salvador, SMED runs a total of 434 education centers consisting of 376 municipal fundamental schools and 91 municipal centers of early childhood education (CMEI, crèches and pre-schools) through its 11 regional departments of education (CRE). The staff of the municipal system consists of 434 school directors, 769 pedagogical coordinators, and 6,200 teachers. This system delivers education services to 7,729 children in crèches, 16,035 in pre-schools, 98,889 in fundamental schools (83% in early grades), and 19,468 students in youth and adult education. Additionally, the Secretariat has an agreement with 99 community schools to offer crèche and pre-school services for 8,779 children.

22. Despite concerted efforts since 2012, the municipality still lags behind both the region and the country in early childhood education (ECE) coverage. In 2012, 12.4 percent (14,350) of children aged 0-3 years were enrolled in daycare centers in Salvador, with 3.9 percent (4,567) in the municipal system. For pre-schools, the overall coverage was 64.1 percent (42,600) of children aged 4-5 years but only 19.2% (12,773) in the municipal system, implying more limited access among the poor who are less likely to be able to afford private pre-schools.11 In 2016, the total daycare center coverage was 16.7 percent, below the national average of 29.6 percent and the Northeast regional average of 26.3 percent. Children attending public schools belong to the most vulnerable strata of the population. In Salvador, 56 percent of the students aged 0-3 and 66 percent of the students aged 4-5 attending public school are from the bottom 40%. The share of ECE attendance for PBF recipients is 53 percent. This shows that the ECE interventions might be complementary to the CCT programs to mitigate vulnerability in Salvador (liquidity constraints). Education results also reflect a range of socioeconomic factors as teen pregnancy seems a key driver of school attendance and drop-out. The 2015 national survey of health in schools showed that the rate of pregnancy among 9th grade female students in public schools in the state of Bahia (3.1 percent) was more than twice the national rate (1.3 percent) and the highest among Northeastern states.12 While Salvador (1.4 percent) has a lower pregnancy rate compared to the rest of the state of Bahia, still ranks between Fortaleza (1.2 percent) and Recife (1.6 percent). This last measure of teen pregnancy among those that are attending school, however, misses those that have already abandoned school because of teen pregnancy: in Salvador, more than half of the females aged 15 to 17-years that do not attend school have had children (PNAD, 2015), a rate 15 percentage point higher the national rate. School dropout, then, is closely associated with socioeconomic problems like teen pregnancy that the proposed Project could monitor through PBF conditionalities, for example.

23. In fundamental education, Salvador has lagged behind other state capitals in key quality indicators but has begun to improve its relative performance in the last few years.13 While Salvador was

11

Community or covenant schools are considered as part of private provision in Brazil, even though they are partially, sometimes completely, financed through public funding. 12

See IBGE, Pesquisa Nacional de Saúde do Escolar, 2015. 13

Federal Ministry of Education and Culture (MEC) has conducted the Assessment System of Basic education (SAEB) to monitor


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ranked as the worst capital in the Basic Education Development Index (IDEB), both in early and upper grades, in both 2011 and 2013, its ranking moved up somewhat in 2015 (Figure A1.6). More is necessary as Salvador is still ranked among the 10 worst-performing capitals. Salvador also began to improve its performance in other aspects of education quality. For example, its worst age-grade distortion among the state capitals in 2013 (40 percent) improved to 33 percent in 2016. To overcome these challenges SMED adopted a scripted pedagogical strategy for literacy in kindergartens and elementary schools, and the acceleration program in fundamental schools (in partnership with the Ayrton Senna Institute).14

Figure A1.6: IDEB of municipal-run schools for early grades (1-5) and upper grades (6-9) in Salvador and other capitals, 2015

Early grades (1-5) Upper grades (6-9)

Source: Federal Ministry of Education and Culture (MEC).

24. Recognizing the lack of an M&E system and an effective policy to hold schools and teachers accountable, as key constraints to improving the quality of service delivery, SMED has begun to develop a comprehensive M&E system since 2014. It has conducted a first wave of the early grade student assessments in literacy and numeracy skills as well as external assessments in math and Portuguese in 5th and 9th grades. SMED plans to incorporate the results of these assessments in the decision-making process and to institutionalize them over the next two years. The initial results show high rates of

the quality performance since 2005 and the National Pact for Literacy at the Right Age (PNAIC) to provide teacher training and pedagogical materials since 2013. 14

The scripted training is one of the most suitable to prepare teachers in low‐capacity environments because they will use specific teaching strategies and accompanying materials in the delivery of a well‐defined daily curriculum (Bruns and Luque, 2016). Bruns, B. and Luque, L. (2014). Great Teachers: How to Raise Student Learning in Latin America and the Caribbean. World Bank Publications.

4.44.44.4

4.54.64.64.64.6

4.74.7

4.85.45.45.4

5.55.5

5.65.65.6

5.85.8

6.16.16.1

6.26.3

0 2 4 6IDEB

AracajuMacapáMaceió

São LuísBelém

João PessoaPorto Alegre

RecifeNatal

SalvadorPorto Velho

Campo GrandeFortaleza

ManausBoa Vista

CuiabáGoiânia

Rio de JaneiroVitória

Rio BrancoSão Paulo

Belo HorizonteFlorianópolis

TeresinaPalmasCuritiba

3.4

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3.4

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4.0

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4.9

5.0

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0 2 4 6IDEB

AracajuMaceió

SalvadorPorto Velho

RecifeNatal

João PessoaPorto Alegre

São LuísBelém

ManausRio de Janeiro

São PauloVitória

FortalezaCuiabáGoiâniaMacapá

Belo HorizonteFlorianópolis

Campo GrandeTeresinaCuritibaPalmas


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illiteracy in the early years of fundamental schools, with only 12 percent of the students in the 3rd grade demonstrating adequate literacy skills in 2013.15


25. This Sub-component would support the Municipal Secretariat of Education (SMED) objectives by implementing measures that enhance quality of early childhood education and fundamental education, and by improving learning outcomes through the provision of quality education which hinges on developing quality standards, a monitoring and evaluation system, and an accountability system that ensure feedback is received by service providers. The Figure below describes the chain of results that will lead into the proposed Project objective measured as the Proportion of students at adequate level of literacy and numeracy at the end of the second grade in municipal schools (PDO indicator).

Theory of Change of the Education Result Area

26. This Sub-Component would focus on two results areas (Outcomes): ensuring quality assurance of ECE and improving quality of fundamental education. In these two areas, the proposed Project will accompany the MoS in activities that affect student learning and acquisition of skills such as: (i) early childhood education; (ii) monitoring and evaluation systems; and (iii) teacher and school accountability.

15

This result is from the Salvador literacy students’ assessment (Programa Salvador Avalia – PROSA). “Adequate” means alphabetic writing with regular orthography.


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27. Cross-country evidence shows that quality early childhood education helps children’s intellectual and social development. It also has a positive impact in the early grades of fundamental education (Heckman, 2006) as well a life-long impact, especially for disadvantaged children (Elango, Luis Garcia, Heckman and Hojman, 2015). The strategy to develop early childhood interventions has the potential to promote equitable opportunities and better educational outcomes (Sayre, Devercelli, Neuman and Wodon, 2015). The evidence also shows that monitoring student leaning is a relevant factor to increase the quality of fundamental education because it permits the education system to identify groups of students and schools that are not achieving adequate results, so that corrective action can be taken. By monitoring student learning it is also possible to provide a formative feedback to support teachers to improve instruction. Finally, evidence shows that the investment in training programs for principals in areas of school leadership and results-based management is related to student learning improvement. Moreover, studies emphasize the importance of developing interventions to hold teachers and schools accountable for their performance (Allen and Burgess, 2012).

28. Ensuring quality of early childhood education. In 2016, Salvador developed the Our Early Childhood System (Nossa Rede Educação Infantil), an M&E system based on an organizational self-assessment that includes three dimensions: pedagogical, facilities, and school management. The Salvador ECE M&E system is based on both the Brazilian ECE quality indicators developed by the federal government and the ECE quality indicator developed by Salvador.16 As a way to continue the investment in key activities to ensure the quality of service delivery, the proposed Project will support the restructuring of the ECE M&E system. SMED will revise the existing instrument to make it more quantitative and focused on evaluating the quality of teaching practices and teacher-student interaction. SMED is considering using the Measuring Early Learning Quality and Outcomes (MELQO) tool that is being developed jointly by the World Bank, UNESCO, and the Brookings Institution. The key aspect will be to incorporate child development and learning for children between the ages of four and five into the ECE M&E system.

29. Since 2012, Salvador has been increasing the requirements for covenant ECE schools. Currently, SMED has 89 covenant ECE schools. The current process of covenant occurs twice a year and it is centered on evaluating school compliance with legal norms and the physical facilities of the ECE schools. It does not evaluate pedagogical dimensions, especially the measurement of child development and learning. In order to promote the quality and equity of ECE centers in Salvador, the proposed Project will support a quality assurance program for municipal-run and covenant ECE centers. The proposed Project also plans to support actions to integrate the covenant ECE schools into the M&E system.

30. The activities under this result area are aligned to the most recent evidences that quality services provided in early childhood education centers is determinant of the overall child development, especially of high-quality centers on children from disadvantaged socio-emotional backgrounds in Latin America (e.g., Behrman, Cheng, and Todd, 2004, for Bolivia and, Bernal and Fernandez, 2013, for Colombia).

16

Brazilian ECE quality indicators document see on http://ndi.ufsc.br/files/2012/02/Diretrizes-Curriculares-para-a-E-I.pdf, and for Salvador’s document see https://issuu.com/ongavante/docs/indique_salvador_vers__o_final_2016.

https://issuu.com/ongavante/docs/indique_salvador_vers__o_final_2016


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31. Improving the Quality of Fundamental Education. The proportion of students at adequate level of literacy and numeracy at the end of the second grade in municipal schools will be used to monitor improvements in the quality of fundamental education. This indicator is calculated in the external student assessments of Salvador (PROSA) which will be held in even years of the proposed Project and the results of which are available the first semester of the following year. The DLI indicator for tracking progress in actions supported under this Results Area is the take-up rate of students in the external and standardized student assessment of municipal education (PROSA). In addition to this external assessment, SMED will implement a strategy to improve teaching quality through scripted pedagogical materials and teachers’ professional development, and through enhanced measures of teacher and school accountably.

32. The quality of primary education might be achieved by improving the education M&E system if it is used to improve teaching practices. SMED has already developed a structured curriculum following the scripted pedagogical material intended to yield adequate literacy and numeracy skills at the right age for students in 1st, 2nd and 3rd grades. Scripted teaching or scripted instruction refers to the pedagogical approach that has highly structured lessons, often with specific time allotments for teaching specific skills. Scripted instruction has often been recommended to schools with teachers with inadequate training to sustain consistency in teaching strategies and standardize the quality of instruction. Although the evidence for changes to structured curricula on learning outcomes in the short term are limited (Bassi and Meghir, 2016), the proposed Project plans to support a structured multilayers strategy with three actions to improve teaching including not only the change in the scripted curriculum, but also scripted teacher training and pedagogical materials. A positive effect has been found in a program with a similar strategy in the State of Ceará in Brazil (Costa and Carnoy, 2015).

33. The proposed Project will support SMED to develop: (i) an external assessment system that measures literacy and numeracy skills (Programa Salvador Avalia, PROSA) for 2nd, 3rd, 5th, and 9th grade students, and (ii) a formative assessment of literacy and numeracy skills for students in 2nd, 3rd, and 5th grades. The M&E system will allow SMED to identify factors that improve effective teaching and learning. SMED will also use the results from the student assessments to develop targeted teacher professional development interventions for teachers that show poor results in the classroom, and also provide support for low performing students. The expansion of scripted pedagogical materials will be constructed from the disciplines of science, history, and geography as a way to incorporate these subjects into the M&E system in the future.

34. The proposed Project will also support the implementation of results-based management to improve learning outcomes by holding schools accountable for results, while promoting school autonomy. SMED will create a results-based management model for schools focusing on training activities for principals, vice-principals, and pedagogical coordinators using the so-called PDCA methodolgy (Plan, Do, Check, Act). SMED plans to progressively introduce the new model.

35. In Salvador, the process to fill principal vacancies requires the candidates to complete a training-program. SMED will develop a new certification program for school principal candidates that includes the components from the results-based management model and school accountability dimensions. The set of activities will include the definition of a minimum standard of knowledge and skills among the school leaders; the creation of a training course for the candidates that include a final exam that they must pass to be eligible to apply for a principal position. The SMED actions will also


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incorporate the following school accountability dimensions: (i) the principals will be required to sign an agreement related to the results-based management model; and (ii) the creation of a school rewards program.


1. Ensuring quality of early childhood education

DLI4. Percentage of municipal and covenant centers (“conveniados”) monitored by SMED that deliver early childhood education.

DLI5. Provision Early Childhood Education centers with regular monitoring and evaluation feedback by SMED.

3. Improving quality of fundamental education

DLI6. Percentage of Fundamental Education schools with minimum 80% take-up of students in PROSA.

Sub-component 1.3: Social Assistance

Background

36. The Municipality of Salvador formally joined SUAS in 2006 and has since expanded its network of services through its Social Assistance Reference Centers (Centros de Referência da Assistência Social; CRAS). However, social assistance remained a lower priority of the successive municipal administrations and the municipality’s social assistance network never developed to a minimally adequate level according to the federal guidelines established by the MDSA. The instability in the organizational forms of the secretariat in charge reflected the institutional weakness of Salvador’s social assistance sector. Between 2013 and 2017, the secretariat in charge of social assistance went through several organizational adjustments, sometimes incorporating portfolios like employment and sports, without definitively addressing the fundamental institutional weaknesses of the sector.17

37. The SUAS is a public system established in 2005, which organizes and finances social assistance services in Brazil, based on a participatory and decentralized management model. Its main objective is to guarantee social protection of families and individuals in situations of vulnerability or social risk, through services, programs, projects and socio-welfare benefits. In parallel, and in partnership with the PBF, SUAS has been structuring and creating local government networks for the care of vulnerable families. The creation of the National Social Assistance Policy in 2004 was followed by several advances in its institutionalization: approval of the Basic Operational Norm (NOB-SUAS), which established the concrete basis for the federative construction of this policy; Creation of Social Assistance Councils at the three levels of government; Multi-year Plans; Social Assistance Funds (National, State and Municipal); and a fund-to-fund transfer institution with agreed goals and expected results. In addition, an important

17

It is estimated that more than 80 percent of the Secretariat personel are contracted on short term contracts, without the technical requirements generating a high staff turnover and low quality of services. The last public call for staff positions in the Secretariat took place in 2001. Since 2010, the contracting of short term personnel has increased as the service provision increased.


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process of monitoring and evaluating social policies was instituted through the annual SUAS Census, which allows monitoring the entire structure of the social assistance network, the coordination of its operation and the services provided. With the expansion of the service network, there has been a large increase in social assistance facilities throughout the country. The number of CRAS increased from 4,195 in 2007 to 8,088 in 2014, reaching a territorial coverage of more than 98.4 percent. The number of CRAS went from 1,200 in 2009 to 2,372 in 2014. According to Census SUAS 2014, 60 percent of CRAS in Brazil also carry out operations to register and update the CadÚnico.

38. As of 2013, Salvador’s social assistance service network consisted of 21 CRAS which failed to meet the minimum standards set by MDSA in terms of the physical structure and services offered. According to the MDSA data in 2014, Salvador’s CRAS as a network had limited service coverage and inadequate physical structures and operational capabilities. For example, many families’ CadÚnico data were also out of date. As a result, the PBF coverage in Salvador was only 62.2 percent of the potentially eligible population. Because of Salvador’s poor performance in monitoring PBF conditionalities, especially in health, MDSA had suspended the municipality’s access to the federal financial incentive for supporting PBF implementation, the Decentralized Management Index (IDG). An MDSA estimate suggested that to reach an adequate level of service coverage and operational capabilities for the number of poor and extremely poor families registered in CadÚnico, Salvador might need as many as 60 or 70 CRAS as opposed to 21.

39. Since 2015, however, the municipality has increased its investments in social assistance to expand service coverage and improve the quality of these services and efficiency of the service delivery units. By 2016, Salvador brought the total number of CRAS to 28, located in areas with large concentration of the poor although these CRAS still face shortcomings in terms of physical installations and the presence of qualified personnel. The municipality also increased registration points for CadÚnico from 12 in 2013 to 35 in 2016, with a plan to further expand the network to 47 registration points. The updating rate of CadÚnico data improved from 45 percent in 2013 to 66 percent, close to the average level of 70 percent expected according to the MDSA standards for a municipality like Salvador.

40. Thanks to the improved quality of the CadÚnico data, the PBF coverage in Salvador increased from 62.2 percent in 2013 to 95.8 percent in 2016.18 A key innovation was the creation of an inter-sectoral commission coordinated by Casa Civil and composed of representatives from education, health and social assistance to monitor beneficiaries’ compliance with the PBF conditionalities. The cases of the education conditionalities being monitored by the municipality increased from 60 percent in 2013 to 90.1 percent for the 6-15 year olds and 86.4 percent for the 16-17 year olds. The number of PBF beneficiaries who were not found at the schools dropped from 75,000 in 2013 to 44,000 in 2016. The compliance with the health conditionalities rose from mere 25 percent in 2013 to 76 percent in 2016.

41. Despite improvements since 2013, SEMPS still has some ways to go before reaching the minimum performance level set by MDSA. SEMPS’ human resources are still weak, its business

18

Note, however, that MDSA’s use of the 2010 census as a base to estimate the number of poor/extremely poor families (i.e., without taking into account the population growth since 2010) led to an under-estimation of the total number of poor/extremely poor families in Salvador by more than 30,000. As a result, these families had been excluded from accessing programs such as PBF despite meeting the eligibility criteria.


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processes leave much room for improvements, and its information systems need to be enhanced. In short, sustainable institutional strengthening is the primary challenge facing SEMPS as it attempts to continue to improve coverage and quality of social assistance services in Salvador.


42. This Sub-component would provide support for efforts by the Municipal Secretariat of Social Promotion (SEMPS) in: (i) strengthening the basic social assistance network to further expand effective coverage and improve the services; (ii) improving data quality of CadÚnico; and (iii) enhancing SEMPS’ organizational capacity. The first two Results Areas support further strengthening of two of SEMPS principal tools to deliver social assistance services while the third Results Area directly supports its institutional strengthening to ensure gains from the first two Results Areas can be obtained with efficiency and sustainability.

43. A fully functional CRAS network would enhance SEMPS’ effectiveness in reaching out to the poor/extremely poor and facilitate their access to relevant social services and benefits, primarily through the Integrated Family Support Program (Programa de Atenção Integral às Famílias, PAIF). PAIF is a face-to-face social work services offered to families in vulnerable situations. Services encompass home visits to monitor sources of vulnerability or intra-familial problems, refer specific family members to appropriate interventions, if warranted, and facilitate the family’s access to other available services and programs including cash transfers. CRAS, along with other available facilities run by SEMPS or its institutional partners, also serve as points for CadÚnico registrations and implementation support for federal cash transfer programs such as PBF and BPC. Strengthened capability for managing CadÚnico should lead to better data quality, which in turn should complement the upgraded CRAS network and increase the poor’s access to social programs as well as facilitate SEMPS’ work to identify potential beneficiaries of PAIF. Improved data quality, if combined with enhanced capacity by SEMPS to monitor and analyze these data, would translate to greater use of evidence-based decision-making and ever more efficient delivery of targeted social assistance to the municipal population in need.


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Results Area 3.1: Strengthening the Basic Social Assistance Network

44. There are currently 191,593 families in Salvador who are beneficiaries of PBF. There are, however, additional 32,500 families who meet the program’s eligibility criteria and yet are not included because of the MDSA ceiling for Salvador based on the 2010 Census. This means that Salvador’s CRAS network has to be able to support more than 240,000 poor/extremely poor families. Salvador will not build additional CRAS beyond the 28 that it currently operates. Instead, the municipality intends to support these poor/extremely poor families by upgrading the existing CRAS’ basic capabilities and operational efficiency.

45. As a first step toward upgrading CRAS’ operational capabilities, SEMPS will prepare an organizational gap analysis of each CRAS to determine what specific forms of investments are needed to bring it to the minimally adequate level of operational functionality. The measures to strengthen individual CRAS include: physical refurbishment of existing CRAS; development of technological infrastructure to enable internet access and hence use of information systems including an on-line case management system; recruitment/assignment of qualified professionals such as psychologists, social workers as well as administrators. The proposed DLI to support this action is the number of CRAS that meet SEMPS’ minimum standard of operational functionality.

46. The investments to upgrade individual CRAS will be supplemented with a set of CRAS-wide measures including a program of continued skill upgrading for staff assigned at CRAS; adoption of a strategy for active search to identify families in particular need of help; and development of protocols for the different types of services. Given that Salvador includes some hard-to-reach locations such as island neighborhoods, SEMPS also plans to acquire mobile units (e.g., a boat fitted to serve as a mobile CRAS). SEMPS will finalize the CRAS gap analysis and the tailored upgrade plan during the first year of the proposed Project implementation. Some of these complementary measures will be supported under the Component 2 (Technical Assistance).

Results Area 3.2: Improving the Data Quality of CadÚnico

47. The data from CadÚnico would be a potent tool to ensure that all the poor in the municipality are identified and relevant information is made available for analysis for targeted programs in the municipality. The currently operational registration points are capable of handling 120,000 transactions (both capturing new data and updating existing data).19 CadÚnico currently holds data for 328,253 families in Salvador. Assuming half of these should be updated and a few thousands are added each year, the registration points need to be able to process at least 165,000/year. SEMPS plans to reach this desired level of processing capacity through operationalization of additional 12 CRAS which currently do not handle CadÚnico, and acquisition of two buses and two vans for mobile services. Furthermore, covering the additional 60,000 BPC beneficiaries within 2 to 3 years, following the 2016 federal decision to transfer some of the key implementation responsibilities (e.g., beneficiary identification/intake) to municipalities, would require further expansion by additional six new registration points. SEMPS also plans to extend the reach of household visits by a mobile team of specialists for both initial registrations

19

Currently the Cadastro Unico registration points in Salvador consist of 16 CRAS with trained interviewers, ten “prefeituras bairro” (the municipality’s neighborhood outreach offices), four COELBA (electricity distribution company) agencies, the central service point CUIDAR at the SEMPS central office, the NGO Lar Harmonia, the Municipal Secretariat of Education, and NAJ (Núcleo de Assistência Jurídica).


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of new entrants and subsequent verification of household data.

48. Of equal importance to coverage of the CadÚnico data is its quality (i.e., accuracy). Because CadÚnico gathers household data through voluntary reporting by household members themselves, a secondary check on the data quality becomes necessary. Recent studies by SEMPS show that the problems of outdated data are more serious among the extremely poor than the poor, which in turn could result in more of these extremely poor families being excluded from social programs for which they may be eligible. The primary means by which the municipalities are expected to ensure data accuracy is data audit through direct household visits. Under MDSA guidance, each municipality is supposed to dispatch mobile teams of professionals to a sample of households to verify the accuracy/veracity of the household data. An MDSA ministerial decree requires at least 20 percent of the CadÚnico registries in each municipality should be audited by way of household visits.20 In reality, only around 6 percent of the registries are verified through household visits nationwide. Salvador’s performance lags this low national average as it has only verified mere 0.3 percent of its CadÚnico registries.

49. SEMPS plans to improve its management of CadÚnico by: (i) increasing the registration points to 47 (supported under the first Results Area described above); and (ii) increasing the number of mobile teams for household visits for data audit/verification based on a data-driven sampling methodology. Under this Results Area, the proposed Project will support the measures to increase the number of household visits for data audit/verification as a DLI.

Results Area 3.3: Enhancing SEMPS’ Organizational Capacity

50. Both strengthening the basic social assistance services through improved functionality of the CRAS and sustained improvement in CadÚnico’s data quality, along with SEMPS’ other goals, would require continued investments in strengthening SEMPS’ organizational capacity. SEMPS’ current organizational structure is not adequately set up to discharge certain key functions such as analysis of household data to plan front-line service provision (e.g., PAIF) and constantly improve CadÚnico data quality. Its current staffing level falls short of the minimum level required for its range of functions, and its limited capacity, if not enhanced, would also be stretched further with the new mandate to support implementation of the federal social pension program, BPC.

51. SEMPS plans to strengthen its professional human resources by recruiting at least 250 specialists. Given that recruiting tenured civil servants would imply long-term fiscal commitments, SEMPS will use a temporary modality for hiring personnel (Regime Especial de Direito Administrativo, REDA). Over time, SEMPS will benefit from adopting its own career and remuneration plan to attract qualified civil service staff for its core functions that can/should not be outsourced. It would also be beneficial to develop a program of ongoing training for skill upgrading of all its staff both at the Secretariat and the service delivery units. Key actions for SEMPS in this area therefore are to reorganize its own structure to ensure adequate organizational basis for each of the major functions and adapt the supply of technical personnel to ensure minimum quality of services through the network.21 The Sub-

20

MoS Decree 177, article5, paragraph 2. 21

Based on examples from other municipalities, at least the following five functional areas are recommended to manage the social assistance mandates: basic social protection; special (higher-complexity) social protection; SUAS; Cadastro Unico and benefits; and administrative support with particular emphasis on IT, management of contracts and agreements, assets and


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component will support the recruitment of at least 250 professionals under the REDA modality as a DLI. Some of the other complementary measures would be supported under the technical assistance component.


1. Strengthening the basic social assistance network

DLI7. CRAS units that meet SEMPS’ minimum standard of operational functionality

2. Improving data quality of CadÚnico

DLI8. Number of household visits performed by Cadastro Único teams to update socio-economic information

3. Enhancing SEMPS’ organizational capacity

DLI9. Enhanced management capacity of the SEMPS through the recruitment of staff

Component 2: Technical Assistance (US$4.7 million IBRD; US$5 million MoS)

52. This Component will provide technical assistance to the four Municipal Secretariats that are responsible for delivering the agreed targets under the Component 1 (i.e., Education, Health, Social Promotion, and Finance) as well as to Casa Civil, the Municipal Secretariat of Management (SEMGE), TCM, CGM and ombudsman unit, all of which play critical roles in coordinating and leading the municipal administration’s cross-cutting policy and management agenda. Specific activities to be financed will be selected by the municipal administration following pre-agreed criteria that are expected to include the following:

Consistency with the PDO;

Immediate need for the secretariat to meet the agreed DLI targets;

Actions and measures that are complementary to those supported with DLIs for the municipal administration achieve the specific objectives under each of the sub-component Results Areas; and

Other cross-cutting priorities of the municipal administration (e.g., preparation of the next strategic plan, design specification of a management information system).

The following is a preliminary list of activities that can potentially be supported under this component.

53. Regarding the early childhood education result area, the technical assistance component of the proposed Project will support the preparation of a study to identify the demand for early childhood education and, consequently, mapping of schools that need to be built or closed. That would be possible from the analysis of low-income children, out of school children, single parent families, and mothers employed or looking for work. Furthermore, in order to promote sustainable forms of management and funding of schools, the Secretariat will organize a workshop on joint management models and an

logistics. The unit in charge of Cadastro Unico and benefits may require the following sub-units: 1) management of Cadastro Unico (information management and identification of the population’s needs) and Bolsa Família; 2) BPC; and 3) municipal benefits.


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analysis of the feasibility and evaluation of the implementation of this model in CEMEIs and covenant schools. 54. The technical assistance component will also support the quality of primary education result area through the development of the online formative student assessment system. SMED will need to carry out the following actions: i) workshop to deepen on the topic; ii) develop internal evaluation, items, software and logistics; iii) empowerment of the Secretariat and regional technical teams on formative internal assessment methodology; iv) empowerment of teaching teams of school units; and v) technical support to develop the terms of reference and make evaluation of the initiation of the proceeding. Also, the proposed Project will support the development of a training on democratic management in school communities to strengthen the role of the School Board in the principals’ selection consultation and social control. In addition, the proposed Project will support the development of a school award to motivate schools to achieve the targets agreed in the management for results. Finally, the proposed Project will support the development of a management system of school costs and an efficiency analysis of schools to compare the efficiency of different models of schools. Please find below a table with the description of the technical assistance activities of the education sector.

Education

1. Study to identify and to map the demand and supply for early childhood education. The study will collect geographic information system (GIS) data and use administrative data to examine the supply and demand of municipal, covenant, and other ECE providers in Salvador. We will also analyze the take-up of enrollments of ECE. The objective of the study is to identify locations with excess supply and demand to formulate recommendations on where the government may need to build centers and where they can increase take up.

2. Support the development of the ECE M&E system. The proposed Project will contract consulting service to support the drawing up the reference mark of early childhood education and align the supervision activities with the existing legislation on ECE of SMED. This reference frame will be the basis for quality assurance program. The key deliverables will be the preparation of operating manuals, guidelines and protocols on the frame of references, as well as the formation of teams of SMED and the GRs about the use of the materials. Also, the proposed Project will hire experts to guide the preparation of instruments and tools of the monitoring system of early childhood education. The deliverables will be the assessment matrix, data collection instruments, the design of the evaluation process, and the training of SMED and regional teams.

3. Workshop on Schools Joint Management models. The workshop will explore the topics related to joint management models as such: (i) alternative models and international evidence of public subsidies for private centers; (ii) quality assurance systems for mixed ECE systems, which includes setting standards, regulating quality, supporting underperforming centers, and holding centers accountable for outcomes; and (iv) sharing best practices across public and private centers.

4. Analysis of the feasibility and evaluation of the implementation of the joint management model. The objective of this study is to examine the viability of public-private partnerships in the education sector of Salvador. We will analyze the quality of the covenant centers compared to municipal centers and the demand for these centers. The study will also explore the budgetary and personnel capacity and the current institutional structures of SMED to support an effective public-private partnership model in Salvador.


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5. Development of formative student assessment system. The Technical Assistance will support the SMED team to set up the best solution for all the technical components to create a classroom (formative) assessment in Salvador. The technical component is related to: (i) train the SMED team and teachers in designing cognitive items; (ii) design assessment frameworks; (iii) develop the IT solution to organize the assessment online; and (iv) develop the forms/reports to give formative feedback to teachers and schools. The TA is part of the Results Area 2: Improving the quality of Fundamental Education.

Health

6. Training on healthcare management for local health professionals. This training, which is designed for managerial staff, starts by exploring the main healthcare networks concepts/attributes and how they relate to management of the municipal health system. Moreover, the practical integration of levels of care in all dimensions of (local) governance, including participation, accountability and transparency as well as the role of health workers, managers and users in equitable service delivery.

7. Improvement of municipal health information systems. Updating of the current health information systems to add the following functionalities: (i) improvement of patient care: make patient information from other facilities available where the patient is currently being treated; (ii) improvement of the accessibility of patient related information to healthcare professionals through improved handling of medical records and getting results of investigations more quickly; (iii) improvement of patient administration procedures, resulting in shorter waiting times and better service; (iv) standardization of patient administration and management procedures across health units; and (v) provision of information to evaluate performance and audit health care.

8. Design/installation of a “situation room” (analytics control center for enhanced situational awareness on health). Development and implementation of a networked health-monitoring system configured to collect and process epidemiological issues and patient health-related information to support the decision-making process; to validate, analyze and disseminate information on the regional health situation and trends; to enhance local capacity and capability in health planning and management by strengthening municipal health information systems, and to make sound evidence available for use in developing efficient and effective health policies.

9. Design and implementation of a system for cost management. Development and implementation of cost management system aiming at contributing to the investigation into health costs, by analyzing the evolution of the cost of medical care, health administration, health prices, unit’s maintenance, etc., considering the marked difference between the categories of contract available and health services provided.

Social Protection

10. Development of protocols differentiated for different types of services, beneficiaries and vulnerabilities identified. Technical advice for definition of all services offered and implemented in the CRAS and also implemented by the mobile team, designing and carrying out the protocols for each service and procedure.

11. Conduct technical studies to develop the social protection sector. The key studies are: i) carry out a survey with a sample of households in Salvador to identify critical cadastral information to the definition of criteria for the performance of registration/verification of household information for registration Only. The key output is the definition of parameters/strategy for conducting home visits, ii) study on access to programs that use the Cadastro Único (profile of the beneficiaries of the programs users), iii) Study consolidate all data of programs and services


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offered by the social protection secretary: population (poor, extremely poor, vulnerable, attended by various benefits, attended by various services), iv) qualitative assessment with staff of different areas of social assistance for identifying weaknesses, bottlenecks and potential solutions in 2017 and 2019; and v) study to support the structuring of the information management unit of the CadÚnico.

12. Design of a management information system with interfaces with other municipal databases. Design and support the implementation of an integrated software. The initial outline of the proposed Project foresees three major groups of modules whose detail will be defined during project implementation.

CGM

13. Adopt a Risk-based Management Internal Control following IA-CM (Internal Audit Capability Module, COSO and COSO II). The Risk Management Policy is based on the more preventive view of internal control as an element of added value to the government's management and with the promotion of integrity in public administration. To make public expenditure control more efficient, anticipating situations of nonconformity, for forwarding preventive of solutions, according to the greater probability of risk.

14. Expansion of actions to promote Transparency and Social Control. The Salvador Transparency Portal needs to be updated in order to contemplate demands and create alternative tools to access municipal public information (mobile application), with the aim of facilitating the monitoring of the management of public resources by the citizen.

TCM

15. Training on International Standards of Supreme Audit Institutions (ISSAIs), internal control/audit and technology systems to be used to improve the preventive audit during budget execution, and use of public proceeds.

OGM

16. Improvement and coverage expansion of Grievance Redress Mechanisms. The objective is to provide support for mapping and standardization of the internal processes of the municipal Ombudsman services (Ouviduria Geral do Município), structuring and strengthening of the Sectorial Ombudsman's Offices and the optimization of feedback to citizens, thus improving the rate and quality of the service and the overall citizen satisfaction. Activities will include: i) diagnostic study to identify the current situation of processes, procedures, flows, routines and tools of relationship with citizens; ii) proposition of new processes and procedures, according to the specificities of each sector; iii) survey with citizens to identify requirements for improvements; and iv) workshops and trainings for the implementation of the enhanced mechanism.

55. This Component will also support activities that require a multisectoral coordination in design, or implementation. First, the MoS will develop an intersectoral protocol to identify family obstacles affecting their participation in PBF and PAIF programs. The integrated action will be developed in a pilot area, and defined based on criteria such as the existence of social assistance, education and health facilities, in addition to a strong presence of PBF beneficiaries. The Component will finance consulting, non-consulting services, and equipment to implement the guidelines of the multisectoral protocol to address PBF and PAFI participation constraints. 56. Gender gaps. Second, the MoS will develop a protocol for identifying gender gaps associated with social service delivery, with especial attention to gender-based violence. The World Bank’s Regional


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Gender Action Plan FY16-19 identified key gender gaps for Brazil (high dropout/retention rates, high teenage pregnancy rates, and gender based violence) and during the preparation of the proposed Project, the MoS established an intersectoral committee that identified gender gaps that reflected social service delivery challenges related to the proposed Project and that could be also proxies for gender based. The description of gender gaps discussed in the sectoral context (e.g., school dropout, teen pregnancy) can be monitored in the proposed Project and even more detailed reports (by gender) could be monitored on indicators like number of injuries reported in the health care system (and monitored in this proposed Project). As a result of this monitoring and a focused attention to families participating in PBF, the multisectoral committee would design strategies for establishing a protocol to manage high risk cases and establish referral processes with other agencies. The attention to gender-based violence is critical as it crosscuts the functioning of social sectors, especially in Salvador which is one of the capital cities with the highest homicide rates in Brazil. Specific monitoring will focus initially on injuries due to external causes, school dropout and non-enrolment among teens and youth, and teen pregnancy. The development of a protocol for CRAS visits, especially among PBF beneficiary families, will inform of potential cases to be followed up, reported and referred to relevant services for violence cases.


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ANNEX 2: IMPLEMENTATION ARRANGEMENTS

COUNTRY : Brazil

Brazil-Salvador Social Multi-Sector Service Delivery Project

Project Institutional and Implementation Arrangements

1. The proposed Project will be implemented by Casa Civil, and will have three Municipal secretariats as executing partners (SMS, SMED, SEMPS). Casa Civil will be responsible for the overall coordination through a Project Management Unit (Unidade de Gestão do Projeto, PMU) that will oversee the management, coordination, monitoring and evaluation of all the proposed Project activities, and will undertake the primary fiduciary responsibilities for the proposed Project. Casa Civil is the institution responsible for policy advice, management of intersectoral projects, monitoring of the implementation of the Strategic Plan, and management of external financing. The PMU will coordinate with the Directorate for Strategic Projects (DSP, Diretoria de Projetos Estratégicos) and the Directorate for Strategic Planning (DPE, Diretoria de Planejamento Estratégico) to utilize the Casa Civil capacity for policy coordination and sectoral monitoring of implementation of the Strategic Plan. DPE has a strong experience in coordination of sectoral policies, verification of sectoral compliance with MoS’ Strategic Plan 2013-2016, monitoring of sectoral policy targets, and revision of policies and targets. As the proposed Project objectives and indicators are aligned with the Strategic Plan 2017-2020, under preparation, the implementation will exploit this operating capacity in Casa Civil. 2. The PMU is headed by a General Director, responsible for official communications with the Bank, and includes dedicated specialists to handle financial management, procurement, social and environmental safeguards, and monitoring and evaluation - including DLI verification. The Director General is responsible for coordination with sectoral Secretariats participating in the proposed Project. Component 1 will be implemented under the coordination of the PMU while the proposed activities will be carried out by the sectoral Secretariats (SEMPS, SMS, SMED) and other agencies involved (like OGM), through their own sectoral Procurement Commissions (CL) already functioning. Each Secretariat will be responsible for the execution of the sectoral eligible expenditure programs (EEPs) following MoS processes and Bank regulations. Sectoral Secretariats will receive technical support from PMU to ensure compliance with World Bank procurement rules across CLs. Some of the DLI verifications may involve a third-party agent to review evidence and report on the extent of compliance. 3. The technical assistance under the Component 2 will be implemented by the PMU with technical inputs from sectoral Secretariats, and will include the Municipal Secretariat of Management (SEMGE, Secretaria de Gestão) to support activities that involve personnel management and strengthening of management of public resources. The MoS has also created a Casa Civil Procurement Commission (Comissão de Licitação da Casa Civil, CLCS) to facilitate the implementation of Component 2. The PMU will provide technical support to sectoral Secretariats in the fiduciary processes required to implement the proposed Project activities. The CLCS will also contribute to increase the harmonization of procurement processes across sectors as the MoS increasingly uses external financing in different sectors. Sectoral CLs and the CLCS will be subject to fiduciary training to align and adapt procurement processes in order to be compliant with Bank rules.


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4. The MoS will also utilize its own systems for administrative, budgetary, and financial management to support the implementation of the proposed Project. For instance, the Integrated System for Fisal Management Planning (SIGEF, Sistema Integrado de Planejamento Gestão Fiscal) will support the monitoring of budgetary and financial execution, and includes modules for monitoring procurement activities. The MoS also has a Price Registry System (Sistema de registro de preços) to control audit, and evaluate procurement of recurrent services (serviços sistêmicos).

Financial Management

5. The Bank performed a Financial Management (FM) Assessment (in accordance with OP/BP 10.00 and the Financial Management Manual for World Bank-Financed Investment Operations (effective March 1, 2010 and revised February 10, 2017) of the Casa Civil of the Municipality of Salvador, the implementation unit of the Salvador Social Project. The scope of the assessment included: (i) an evaluation of existing financial management systems in place to be used for program monitoring, accounting and reporting; (ii) a review of staffing requirements; (iii) a review of the flow of funds arrangements and disbursement methodology; (iv) a review of internal control mechanisms in place; (v) a discussion in regard to reporting requirements, including the format and content of Interim Financial Reports (IFRs); and (vi) a review of internal and external audit arrangements. FM arrangements should place emphasis on governance controls applicable to the proposed Project components. This approach considers current procedures, norms and the institutional capacity, and emphasizes simple procedures, with a high degree of transparency and accountability, and decision making and management responsibilities at the direct administration level. 6. Overall, the evaluation found that: (a) at the country level, the Federal FM laws and regulations applicable to sub-nationals provide a strong FM framework for sub-nationals executing agencies, and (b) at the Municipality level, the fiscal transparency, accounting, reporting, internal controls and external audit in the Municipality are considerate adequate, but require improvement in specific areas.

7. The assessment also identified the following Project risks to the achievement of the PDO: (a) Casa Civil staff do not have previous experience with Bank financed Projects, (b) the SIGEF information system, will need to be adjusted to generate IFRs; (c) Project design, with complex FM and disbursements arrangements and the need to strengthen internal control procedures specially related to review of health and education sector activities. The overall conclusion of the FM assessment is that: (i) the FM arrangements for the proposed Project are considered adequate; (ii) the funds flow, disbursements, monitoring, auditing and supervision arrangements have been designed in a way to respond to the proposed Project’s implementation arrangements; and (iii) the overall residual FM risk associated with the proposed Project is rated as Substantial. 8. Implementing Agency: Three Municipal secretariats (Health, Education, Social Protection) and Casa Civil will be involved in the implementation of the proposed Project’s activities. Casa Civil will be responsible for the overall coordination through a PMU. Casa Civil would therefore oversee the management, coordination, monitoring and evaluation of all the proposed Project activities, and will undertake the primary fiduciary responsibilities for the proposed Project. These responsibilities include: (i) preparing and obtaining approval of the proposed Project FM arrangements; (ii) coordinating and supervising the proposed Project implementation; (iii) submitting disbursement requests and


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documentation of expenditures to the Bank; (iv) preparing and submitting the proposed Project interim unaudited financial reports (IFRs) to the Bank; (v) preparing and providing all financial documentation and Project reports requested by external auditors and Bank staff; and (vi) preparing, updating and ensuring that all Project executors follow the Project Operational Manual (POM).

9. Staffing: Staff are municipal civil servants, under the respective statutory law. Although this will be the first Bank financed Project in the Municipality, the proposed Project’s FM staff do have previous experience in executing other external financed operations. Proper training and close supervision by the Bank during first years of the proposed Project implementation is planned.

10. Planning, Budgeting and Accounting: The Municipality of Salvador follows: (i) Brazilian Accounting Rules (Normas Brasileiras de Contabilidade Aplicadas ao Setor Público) (NBCASP); (ii) Law 4320/64 that establishes certain high-level accounting principles; and (iii) the Manual of Brazilian Accounting Standards (Manual de Contabilidade Aplicada ao Setor Público) (MCASP), issued under Law 10180 of February 6, 2001 and Decree 3589 of September 6, 2001. The proposed Project requires adherence to the NBCASP and the revised MCASP, issued under Portaria STN 467 of August 6, 2009. The Municipality is following STN’s schedule to adopt MCASP. It is expected that IPSAS will be fully adopted by 2024.

11. The budget cycle includes planning and implementation of all government activities, which are

to be reflected in the PPA, LDO, and LOA.22 The Finance Secretariat-SEFAZ has the responsibility to maintain the Municipality’s accounting records, including those of the proposed Project. Casa Civil has a financing unit subordinated to SEFAZ that will be responsible for making the respective payments within the limits of the authority provided by the LOA.

12. The proposed Project’s budgeting and accounting transactions will be processed through the Municipality’s public municipal accounting system Sistema Integrado de Planejamento e Gestão Fiscal-SIGEF. All payments will follow the official commitment (empenho), verification (liquidação) and payment (pagamento) routine. All Project costs will be recorded according to the Federal and Municipal Chart of Accounts. The use of SIGEF, will also facilitate the consolidation of information on Project transactions. SIGEF information will be the basis for the preparation of Project’s Interim Unaudited Financial Reports (IFRs) and for monitoring physical Project progress and contract management. 13. Reconciliations of all government accounting records with commercial bank account statements are performed at least once every month. The Financial Management Unit (Coordenadoria de Administração Financeira – CAF) in SEFAZ calculates and consolidates daily cash balances in the treasury single account system. This unit also conducts reconciliation and clearance of suspense accounts and advances at least quarterly. Other Municipality agencies/enterprises, through their financial and administrative sectors, perform similar tasks at the sector level. No balance is left out SIGEF. 14. The EEPs that will be supported by the Bank (and those that will be accounted as counterpart funds) can be tracked/identified by SIGEF, using accounting codes, that can be used to keep track of all sources and uses of funds. Reports will be formatted and generated in SIGEF for that purpose. The Bank

22 PPA–Plano Pluri-Anual, LDO-Lei de Diretrizes Orçamentárias, LOA–Lei Orçamentária Anual which includes the government’s goals and programs that are approved by Congress every five years, 18 months, and 12 months, respectively.

Component 2 ( TA ):

Designated Account SEFAZ

WB Washington , D

C Vendors , Contractors , Suppliers

( Goods , Works and Services ) BRL

SIREM WB ( Brasilia )

WB +

Counterpart ( Quarterly )

IFR

/ SOEs

Casa Civil ( PIU )

$ Funds Flow ( Currency ) Reporting Contracts

IFRs / SOEs

Payment Listings / Approvals

BRL

Secretaries BRL

SIREM

SOEs

Component 1 ( EEP ):

Municipality Treasury Single Account

SEFAZ BRL

BRL

entity

system

PIU


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evaluated the robustness of SIGEF and concluded that it can provide financial information for the purposes of supporting the Bank-financed Project. 15. Internal Controls: The CGM’s main objective is to support the Municipality’s direct and indirect agencies on legal procedural compliance for contracting public expenditures and complying with the public information access law. The CGM is focused on ex-ante actions. The CGM has the mandate to audit all the Municipality’s thirty-one agencies belonging to the executive branch. It also examines the agencies' annual accounts and certifies them SEFAZ. Furthermore, the CGM is responsible for maintaining a transparency portal that was designed to facilitate citizens' access to information regarding state officials' management of public resources. www.portaldatransparencia.salvador.ba.br. 16. Due to staffing constraints, the internal audit reviews performed by CGM are currently limited in amount, relevance and risk (vulnerability). They mostly encompass compliance, performance and financial audits based on national and international practices. However, 7 new civil servants are planned to be hired in 2018.

17. Given that CGM will undertake the relevant proposed Project internal control activities, through reviewing bidding processes and financial execution of medium risk value contracts, additional institutional strengthening and capacity building activities, covering for example, the Bank’s procurement rules, IPSAS and International Standards of Supreme Audit Institutions (ISSAIs), internal control/audit standards and practices will be programmed (as technical assistance activities) and up to $400,000 are programmed to be financed out as part of the proposed Project’s technical assistance component.

18. The SIGEF system features inbuilt controls that help to ensure that transactions are properly authorized and that payments are made only for due circumstances (i.e., where goods or service are confirmed as delivered). All transaction processing uses the Municipality’s institutions, processes and systems, that provide for segregation of duties, supervision, quality control reviews, and reconciliations. The process flows appear to be clear and well understood by personnel. 19. Funds Flow: The proposed funds flow and disbursement arrangements are streamlined within the proposed Project, to facilitate execution, avoid unnecessary incremental operational arrangements, and rely as much as possible on existing Country and Municipality Public Financial Management (PFM) systems. All payments, for both components, will be made by SEFAZ using the SIGEF, once payment obligations have been incurred, verified and properly documented. To make payments, the system requires that funds be committed by source, making possible the tracking of loan disbursements to the proposed Project expenditures.

20. The following disbursement methods may be used to withdraw funds from the loan for Component 2: (a) reimbursement, (b) advance, and (c) direct payment, being the advance the primary method. The flow of funds will be made through Advances to the Designated Account to be opened in R$ (Reais) at Banco do Brasil, in Salvador – BA, in the name of the Municipality of Salvador (PMS). The PMU will report on the use of Advances also through IFRs.

21. Under the EEPs component there will be two cash transfers program lines: Primeiro Passo and Aluguel Social implemented by SEMPS, which follow similar concept and flow of funds procedures as for the PBF cash transfer. Primeiro Passo and Aluguel Social rules and procedures where reviewed, found

http://www.portaldatransparencia.salvador.ba.br/


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adequate, clearly defined, and details will be included in the POM.

22. Routines include:

For Component 1: Each Secretariat prepares the annual budget proposal, which is formally approved through the LOA – Lei Orçamentária Annual and for Component 1 it is executed following current rules and procedures. In order to claim loan funds, each Secretariat has to prove the achievement of its’ DLIs, and report the paid eligible expenditures (not ‘liquidadas’) under the agreed program.

For Component 2: Upon the same budget approval and execution process, and upon suppliers providing the goods and services, and related invoices, Casa Civil submits payment requests to SEFAZ who will then process the payments direct to supplier’s bank account.

Casa Civil, submits to the Bank consolidated IFRs (generated by SIGEF) for: a) Component 1 - EEPs, attaching reports achievement of applicable DLIs (after reviewed and approved by the Bank) and b) Component 2 - Technical Assistance, attaching bank reconciliation for the Designated Account and the respective Bank Statement; c) counterpart funds (1:1) will be accounted and reported, as the amounts executed under the EEPs but not claimed for reimbursement under the proposed Project.

Bank Reimburses to an account managed by the SEFAZ the amount related to Component 1 (EEPs) and advances to the Designated Account (Reais) the amount related to Component 2 (Technical Assistance).


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23. The flow of funds for the cash transfers, related Primeiro Passo and Aluguel Social are as follows:

SEMPS (through the respective programs coordination unit) is responsible to include or exclude the

beneficiaries into both program systems.

Each month SEMPS prepares and sends a Program Financing Proposal (PFP), through NTI (Information Technology Unit) containing the name of the beneficiaries (payroll) to the to Caixa Econômica Federal (CEF) for processing.

FMAS – the Municipality Social Assistance Fund (responsible for the execution of for the respective programs budgets) reviews and authorized SEFAZ to transfers funds to CEF.

Once the PFP is approved by SEFAZ, an ordem bancaria is issued and funds are committed at SIGEF to a specific related programs account in the Caixa (CEF).

SEMPS/FMAS monitors the balance of the respective account in the Caixa (CEF) and the eligible beneficiaries (on the payroll) then withdraw their monthly benefits from each program account using electronic benefit cards (EBCs).

The EBCs are distributed to eligible beneficiaries according to the list established by the SEMPS.

Upon entering the program, beneficiaries must pick up these cards at the nearest CEF agency (or lottery).

They are notified through SEMPS and must pick up their cards and withdraw funds within a 90-day period of time.

Once this transfer is made from SEFAZ to the beneficiaries’ accounts at CEF is considered as expensed.


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Only the amounts claimed by the beneficiaries will be eligible for loan reimbursements, for financing loan purposes.

The contract between the SEMPS and Caixa (CEF) states the reporting requirements, as well as penalties, will be clearly spelled out, and CEF will provide a payroll-type list of disbursements made to beneficiaries under the programs.

Funds that are not withdrawn by the beneficiary within a 90-day period should be called back FMAS respective programs accounts.

Disbursement Arrangements:

24. The disbursement arrangements for this proposed Project will take into consideration the FM and procurement assessments of Casa Civil, the proposed Project’s flow of funds, the cash flow needs of the proposed Project and MoS’ experience with Bank operations. The disbursement of proposed Project funds will be processed in accordance with Bank’s procedures as stipulated in the Legal Agreement and Disbursement and Financial Information Letter. Withdrawal Applications and necessary supporting documentation will be submitted to the Bank electronically through the Client Connection website. 25. Retroactive financing will be allowed to this proposed Project up to US$25,000,000 equivalent of the loan amount for payments made for eligible expenditures under the EEPs on or after January 18, 2017 but in no case, more than one year prior to the signing date of the loan agreement. 26. The Minimum Application Size for Direct Payments and Reimbursements will be US$500,000 equivalent. The proposed Project will also have a four-month after the closing date to document expenditures incurred prior to the Closing Date.

Component 1. EEP: 27. For the EEP component, disbursements will be made through the Reimbursement method, based on the achievement of agreed DLIs defined in Table A2.2. and documentation of expenditures made under the agreed EEPs in the period, as detailed in the EEP Table A2.3. Funds will be disbursed to the Municipality of Salvador Single Treasury Account. The Bank may finance up to 100 percent of eligible expenditures under the EEPs, procured in accordance with Bank’s Procurement Regulations and applicable Anti- Corruption guidelines for this proposed Project. 28. Disbursements would be report-based (i.e., based on IFRs), which would include a EEP Spending report stating spending status of the EEPs, and DLI compliance which will follow the methodology described in Table A2.4 and verified by the Bank every semester in accordance with the verification protocols, as detailed in Table A2.5, and included in the proposed POM. Casa Civil will submit to the Bank a withdrawal application for reimbursement in the amount correspondent to the allocation of the DLIs achieved per semester as show in Disbursement Schedule (Table A2.1).

29. All DLIs in this proposed Project are scalable and the World Bank will disburse the amount corresponding to the degree of achievement of at least minimum target defined for respective DLI targets in case of underperformance. 30. The amounts reduced due to under performance of DLIs, can be attained by achieving the DLIs


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targets in future years. The undisbursed amount allocated to the correspondent DLI, in the previous period, will be added to the next planned disbursed amount, and disbursement authorized only in case of achievement of the DLI for the subsequent period.

31. If the MoS fails to provide enough eligible expenditures under the EEPs in respect to all disbursements for a DLI that has been met, (or that has been partially met), then the undisbursed amount due to lack of eligible expenditures will be available to be requested by Casa Civil in the subsequent application when enough eligible expenditures are presented to the Bank. 32. Financial Reporting: Casa Civil, with the support of the financial coordinator, will ensure the timely production of semester interim unaudited financial monitoring reports (IFRs) to be submitted within 45 days after the end of each reporting period. These IFRs prepared in the currency of the MoS, will be produced from the SIGEF system, following the proposed Project design, and will consolidate the proposed Project’s financial data for all components. Accordingly, the format and content of the IFRs, on a cash accounting basis, agreed with the MoS will cover the following items: • IFR 1-A: EEP and TA Statement of Sources and Uses of Funds, by the proposed Project component

and category, respectively (Project-to-date, year-to-date and for the period), actual vs. budgeted expenditures, including a variance analysis;

• IFR 1-B: Disbursement Linked Indicators (DLI); • IFR 1-C: Designated Account Activity Statement for TA-Component 2. 33. The POM would document these processes, and serve as an important source for processing steps to be followed during the proposed Project implementation. It would contain detailed procedures and guidelines for disbursements, payments, approvals, commitments, payments and reporting. A draft POM was received by the Bank on November 21, 2017, and was found acceptable to the Bank. 34. External Auditing: The external audit will be undertaken by State Supreme Audit Institution responsible for auditing municipalities accounts – TCM-BA, following agreed Terms of Reference (TOR) acceptable to the Bank, and in accordance with International Standards on Auditing (ISAs) (issued by The International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC)) (or national auditing standards if, as determined by the Bank, these do not significantly depart from international standards). The audited financial statements will also be prepared in accordance with accounting standards acceptable to the Bank (i.e., IPSAS issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants (IFAC-IPSASB) or national accounting standards where, as determined by the Bank, they do not significantly depart from international standards). The auditors will be required to issue an opinion on the proposed Project’s IFRs, and produce a management letter, where any internal control weaknesses will be identified, contributing to the strengthening of the control environment. The auditor’s report will be submitted to the Bank no later than six months after the end of the fiscal year. The Bank will review the audit report and will periodically determine whether the audit recommendations are satisfactorily implemented. The Bank also requires that the MoS disclose the audited financial statements in a manner acceptable to the Bank and following the Bank’s formal receipt of these statements from the MoS, the Bank will also make them available to the public in accordance with The World Bank Policy on Access to Information. The scope of the audit TOR will include, but not be limited to: (i) fully reviewing the IFRs and use of the Designated Account; (ii) reviewing the appropriate observance of the financial


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management arrangements included in the POM, the PAD, the Loan Agreement, as well as any other official Bank documentation; (iii) reviewing the use of SIGEF and other FM monitoring systems; (iv) ensuring internal control arrangements are adequate; (v) observing agreed disbursement arrangements; and (vi) ensure that amounts disbursed were used for good, works and services eligible under the agreed EEPs which are supported by the disbursement of loan proceeds. 35. Strengthening and institutional capacity activities up to $200,000 to support TCM-BA are programmed as part of the proposed Project’s technical assistance component.

36. All supporting records will be maintained at the PMU for at least: (i) two years after the Closing Date; or (ii) one year after the Bank has received the Audited Financial Statements covering the period during which the last withdrawal from the Loan Account was made, whichever is later.

37. Conditions or Nonstandard/Significant Financial Covenants (i.e. Relevant issues to be included in the Legal Documents): There are no FM-related conditions for Board and/or Effectiveness.

38. Financial Management Supervision during implementation: Financial Management supervision will include, among others, the: (i) review of the IFRs; (ii) review of the auditors’ reports and follow-up of issues raised by auditors in the management letter, as appropriate; (iii) follow up on any financial reporting and disbursement issues; (iv) respond to the proposed Project team’s questions, and (v) update of the FM risk and performance rating in the Implementation Status and Results Report (ISR).


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Table A2.1. Disbursement Schedule for Component 1 (US$120 million)

Sector % Indicators

CY 18 CY 19 CY 20 CY 21 Total

Semester 1 Semester 2 Semester 1 Semester 2 Semester 1 Semester 2 Semester 1 Semester 2

% Amount

(US$) %

Amount (US$)

% Amount

(US$) %

Amount (US$)

% Amount

(US$) %

Amount (US$)

% Amount

(US$) %

Amount (US$)

% Amount

(US$)

Health 34.17

%

DLI 1. Percentage of Primary Health Care Coverage

10.17% 12,200,000

6% 7,200,000

2% 2,400,000

2% 2,400,000 20.17% 24,200,000

DLI 2. Number of municipal health facilities with electronic record management system installed and operational

3% 3,600,000

2% 2,400,000

1% 1,200,000

1% 1,200,000 7% 8,400,000

DLI 3. Percentage of health units with health services provision available within the Municipal Regulation System

3% 3,600,000

2% 2,400,000

1% 1,200,000

1% 1,200,000

7% 8,400,000

Education 25%

DLI 4. Percentage of municipal and covenant centers (“conveniados”) monitored by SMED that deliver early childhood education

3% 3,600,000

2% 2,400,000

5% 6,000,000

DLI 5. Percentage of Early Childhood Education centers with regular monitoring and evaluation feedback by SMED

5% 6,000,000 5% 6,000,000

DLI 6. Percentage of Fundamental Education schools with minimum 80% take-up of students in PROSA

5% 6,000,000

10% 12,000,000

15% 18,000,000

Social Assistance

20%

DLI 7. CRAS units that meet SEMPS’ minimum standard of operational functionality

3% 3,600,000

2% 2,400,000

3% 3,600,000 8% 9,600,000

DLI 8. Number of household visits performed by Cadastro Único team to update socio-economic information

4% 4,800,000

4% 4,800,000

8% 9,600,000

DLI 9. Enhanced management capacity of the SEMPS through the recruitment of staff

3% 3,600,000

1% 1,200,000

4% 4,800,000

Retroactive 20.83

% 20.83% 25,000,000

20.83% 25,000,000

Total per semester 24% 28,600,000 20.17% 24,200,000 7% 8,400,000 19% 22,800,000 1% 1,200,000 7% 8,400,000 11% 13,200,000 11% 13,200,000 100% 120,000,000

Overall Total 52,800,000 31,200,000 9,600,000 26,400,000 120,000,000

Note: The retroactive amount is US$25 million and corresponds to 20% of the Loan amount (US$125 million)


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Table A2.2. Disbursement Linked Indicators and Targets

Disbursement Linked

Indicator Description

Unit of

Measure Baseline

Disbursement Linked Results

CY2018 CY2019 CY2020 CY2021

Health

DLI#1. Percentage of Primary

Health Care coverage Percentage 45.5 46.0 48.5 51.2 54.1

DLI#2. Number of municipal

health facilities with electronic

record management system

installed and operational

Units 0 7 41 92 126

DLI#3. Percentage of Health

Units with health services

provision available within the

Municipal Regulation System

Percentage 22 26 49 70 100

Education

DLI#4. Percentage of municipal

and covenant centers

(“conveniados”) monitored by

SMED that deliver Early

Childhood Education

Percentage 0 N/A 7 24 N/A

DLI#5. Percentage of Early

Childhood Education centers

with regular monitoring and

evaluation feedback by SMED

Percentage 0 N/A N/A N/A 40

DLI#6. Percentage of

Fundamental Education schools

with minimum 80% take-up of

students in PROSA

Percentage 32.8 N/A 68 N/A 72

Social

Assistance

DLI#7. CRAS units that meet

SEMPS’ minimum standard of

operational functionality.

Units 0 N/A 9 15 28

DLI#8. Number of household

visits performed by Cadastro

Único team to update socio-

economic information

Number 993 3,200 9,000 N/A N/A

DLI#9. Enhanced management

capacity of the SEMPS through

the recruitment of staff

Number 0 80 150 N/A N/A


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Table A2.3: List of Eligible Expenditures Programs (EEPs) Budget Code EEP

Health Sector

10.302.0028.209100 Reorganization of the Medium and High Complexity Healthcare Network

10.302.0028.209600 Implementation of the Emergency Healthcare Network

10.302.0011.134500 Construction and Implementation of the Municipal Hospital (only equipment)

10.301.0027.208700 Primary Health Care Services

10.302.0011.110500 Construction of Primary Care Units

10.302.0011.210600 Rehabilitation of Primary Care Units

10.302.0011.111400 Construction and implementation of Multi-centers

Education Sector

12.361.0031.214500 Maintenance of schools

12.365.0031.214600 Support to Religious, Community and Humanitarian Schools

12.365.0010.113200 Construction and Implementation of Municipal Early Childhood Education Centers (CMEI)

12.361.0009.113600 Construction and Implementation of Full-time Education Centers (CEI)

12.361.0031.215100 Development of Basic Education

12.361.0009.112600 Construction and Implementation of New Schools according to SMED Standards

12.361.0009.112300 Implementation of a Structured System for Basic Education I with a focus on Literacy

12.361.0009.212400 Implementation of an External Evaluation System

12.361.0009.212800 Reform and Adaptation of the Municipal Schools

12.361.0031.214400 Equipment for the Municipal Schools

12.366.0031.214800 Development of Early Childhood Education

Social Assistance Sector

08.243.0039.135401 / 08.243.0039.138900

Primeiro Passo Program – Social Assistance Actions for Early Childhood

08.244.0035.232401 Expansion of Social Assistance services and Continued Benefits

27.812.0017.112003 Construction of Sports and Leisure Equipment in the Communities

08.244.0035.232901 Protection of the Rights of Children, Adolescents, Elderly and the Disabled

08.244.0014.233401 Maintenance of the Services of Protection and Care for Families and Individuals

08.244.0014.233901 Vocational Training for the Homeless

08.244.0014.133101 Provision of legal assistance and counseling free of charge

08.244.0014.234001 Maintenance of the services of protection for the vulnerable population

08.122.0015.200142 Maintenance of the technical and administrative services

08.244.0035.232601 Maintenance of the community centers

08.244.0014.137800 Renovation of social assistance equipment

08.244.0035.234101 Maintenance of the social assistance equipment

08.244.0014.138100 Care - inclusion actions, development and welfare


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Table A2.4. Disbursement Linked Indicators. Methodology.

Disbursement targets

Sector Indicator # Unit of Measure

Frequency & Semester

Description/methodology Baseline CY 18 CY 19 CY 20 CY 21

Health

Percentage of Primary Health Care Coverage (DLI)

1 Percentage Annual Semester 2

Calculation method: Number of primary health care teams implemented X 3,450 / Total number of resident population X 100 Source: Primary Care Information System (e-SUS), Brazilian Institute of Geography and Statistics (IBGE) and National Health Facilities Census (CNES) Scalability: Cumulative indicator with a minimum of 46% for the calculation of the scalable disbursement

45.5 46.0 48.5 51.2 54.1

Number of municipal health facilities with electronic record management system installed and operatiional (DLI)

2 Units Annual Semester 2

Calculation method: Number of municipal health facilities with electronic record management system installed and operating / Total number of municipal health facilities x 100 Source: Public Report and Management Information System (Sistema Vida+) (IBGE) and National Health Facilities Census (CNES) Scalability: Cumulative indicator with a minimum of 7 for the calculation of the scalable disbursement

0.0 7.0 41.0 92.0 126.0

Percentage of health units with health services provision available within the Municipal Regulation System (DLI)

3 Percentage Annual Semester 1

Calculation method: Number of municipal health facilities with health services provision available within the Municipal Regulation System / Total number of municipal health facilities x 100 Source: Public Report and Management Information System (Sistema Vida+) Scalability: Cumulative indicator with a minimum of 26% for the calculation of the scalable disbursement

22.0 26.0 49.0 70.0 100.0

Education

Percentage of Municipal and covenant centers (“convenaidos”) monitored by SMED that deliver early childhood education

4 Percentage Semester Semester 2

Calculation method: Ratio between number of units monitored and the number of municipal units which offer partial early childhood education. Source: Public Report Scalability: Cumulative indicator with a minimum of 7% for the calculation of the scalable disbursement

0.0 NA 7.0 24.0 NA

Percentage of Early Childhood Education centers with regular monitoring and evaluation feedback by SMED

5 Percentage Semester Semester 2

Calculation method: Ratio between the number of school units that received M&E feedback and findings (format to be defined during the development of the system for the delivery of feedback report and implementation of action plan) and the number of school units that offer ECE (cumulative). Source: Public Report Scalability: Cumulative indicator with a minimum of 10% for the calculation of the scalable disbursement

0.0 NA NA NA 40.00


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Table A2.4. Disbursement Linked Indicators. Methodology (cont.)

Sector Indicator # Unit of Measure

Frequency & Semester

Description/methodology Baseline CY 18 CY 19 CY 20 CY 21

Education (cont.)

Percentage of Fundamental Education schools with minimum 80% take-up of students in PROSA.

6 Percentage Biannual Semester 1

Calculation method: Ratio between number of students evaluated externally and number of students enrolled in the evaluated series. Source: Public Report Scalability: Cumulative indicator with a minimum of 60% for the calculation of the scalable disbursement

32.8 NA 68.0 NA 72.0

Social Protection

CRAS units that meet SEMPS’ minimum standard of operational functionality

7 Units Annual Semester 2

Calculation method: Total number of CRAS units working according to SEMPS minimum standard of operational functionality Source: Public Report Scalability: Cumulative indicator with a minimum of 9 for the calculation of the scalable disbursement

0.0 NA 9 15 28

Number of household visits performed by Cadastro Único team to update socio-economic informaiton

8 Number Annual Semester 2

Calculation method: Total number of households visited to complete the Cadastro Único form or verification/validation of self-reported information Source: Public Report Scalability: Cumulative indicator with a minimum of 3200 for the calculation of the scalable disbursement

993 3200 9000 NA NA

Enhanced management capacity of the SEMPS through the recruitment of staff

9 Number Annual Semester 2

Calculation method: Total number of higher level employees hired by SEMPS Source: Official Gazette of the municipality Scalability: Cumulative indicator with a minimum of 80 for the calculation of the scalable disbursement

0.0 80 150 NA NA


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Table A.2.5. DLI Verification Protocols

Sector Indicator Data Source Responsibility

Unit Verification

Date Proof of Accomplishment

Health

Disbursement amounts will be determined using the following formula: ([DLI-# amount] x [achieved DLI value - DLI baseline])/ (DLI target value - DU baseline)

DLI 1. Percentage of Primary Health Care Coverage DLI Amount: US$24.2 M Scalable: Yes Time Bound: No Verified by: World Bank

SMS Municipal Secretariat of Health

December of every year

Public Report prepared by SMS using the data from the Primary Care Information System (e-SUS), Brazilian Institute of Geography and Statistics (IBGE) and National Health Facilities Census (CNES)

DLI 2. Number of municipal health facilities with electronic record management system installed and operational DLI Amount: US$8.4 M Scalable: Yes Time Bound: No Verified by: World Bank



Public Report prepared by the SMS using the Management Information System (Sistema Vida+)

DLI 3. Percentage of health units with health services provision available within the Municipal Regulation System DLI Amount: US$8.4 M Scalable: Yes Time Bound: No Verified by: World Bank



Public Report prepared by the SMS using the Management Information System (Sistema Vida+)


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Table A.2.5. DLI Verification Protocols (continuation)

Sector Indicator Data Source Responsibility Unit

Verification Date

Proof of Accomplishment

Education


DLI 4. Percentage of municipal and covenant centers (“conveniados”) monitored by SMED that deliver early childhood education DLI Amount: US$6 M Scalable: Yes Time Bound: No Verified by: World Bank

SMED Diretoria Pedagógica

March of every year

Public Report prepared by SMED using data from the Schools Census and the M&E system of Salvador ECE

DLI 5. Percentage of Early Childhood Education centers with regular monitoring and evaluation feedback by SMED DLI Amount: US$6 M Scalable: Yes Time Bound: No Verified by: World Bank


March and August of every year

Public Report prepared by SMED using data from the Schools Census and the M&E system of Salvador ECE

DLI 6. Percentage of Fundamental Education schools with minimum 80% take-up of students in PROSA DLI Amount: US$18 M Scalable: Yes Time Bound: No Verified by: World Bank


March of odd years (2019, 2021)

Public Report prepared by SMED using data from the Schools Census and the M&E system of Salvador Fundamental Education


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Table A.2.5. DLI Verification Protocols (cont.)

Sector Indicator Data Source Responsibility Unit

Verification Date

Proof of Accomplishment

Social Assistance


DLI 7. CRAS units that meet SEMPS’ minimum standard of operational functionality DLI Amount: US$9.6 M Scalable: Yes Time Bound: No Verified by: World Bank

SEMPS Diretoria de Proteção Social Básica


Public Report prepared by SEMPS describing the operational functionality of each CRAS

DLI 8. Number of household visits performed by Cadastro Único team to update socio-economic information DLI Amount: US$9.6 M Scalable: Yes Time Bound: No Verified by: World Bank

SEMPS Coordenação do Cadastro Úníco


Public Report prepared by SEMPS using administrative data from the visits performed

DLI 9. Enhanced management capacity of the SEMPS through the recruitment of staff DLI Amount: US$4.8 M Scalable: Yes Time Bound: No Verified by: World Bank

SEMPS Diretoria Administrativa


Publication in the Official Gazette of the municipality of Salvador


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Procurement

39. Procurement for the proposed Project will be carried out in accordance with the World Bank Procurement Regulations for IPF Borrowers dated July 2016 and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general terms below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and timeframe will be agreed between the MoS and the Bank in the Procurement Plan. World Bank's Standard Procurement Documents will govern the procurement of World Bank-financed Open International Competitive Procurement. For procurement involving National Open Competitive Procurement, the MoS will use Standard Procurement Documents acceptable to the World Bank that will be included in the POM.

40. Procurement of works. Works procured under the proposed Project will include, among others, small restorations of schools, and investments in health facilities in selected areas of the city.

41. Procurement of goods. Goods procured under the proposed Project will include, among others: software packages, communications services, educational materials, vehicles, IT equipment and other tools required to put in place an integrated client system control. It may be carried out in accordance with the method known as “Pregão Eletrônico”, as set forth in the Brazilian Law No. 10.520, dated July 17, 2002, provided (i) documents are acceptable to the Bank, in accordance with the Procurement Regulations, (ii) documents include anti-corruption clauses, and (iii) the process is carried out under an e-procurement system previously approved by the Bank.

42. Procurement of non-consulting services. Non-consulting services under the proposed Project will include, among others: capacity building support to the implementation and beneficiaries’ agencies; monitoring, reporting and evaluation-related services; events of various natures, among which training, workshops and seminars; logistics, such as hotel services, catering and travel services; printing services, videoconferencing materials, brochures, magazines, intranet, and videos; communication and education campaigns and events, etc. It may be carried out in accordance with the method known as “Pregão Eletrônico”, as set forth in the Brazilian Law No. 10.520, dated July 17, 2002, provided (i) documents are acceptable to the Bank, in accordance with the Procurement Regulations, (ii) documents include anti-corruption clauses, and (iii) the process is carried out under an e-procurement system previously approved by the Bank.

43. Selection of consultants. Consulting services under the proposed Project will include technical assistance and advisory services of various natures and purposes, among which: engineering services; urban and environmental studies, projects, diagnostics and impact assessments; software and system development-related services, etc. The following methods will be used for selecting consulting firms depending on the nature and complexity of assignments, attractiveness to foreign firms and need for international expertise, estimated budget of the services: Quality and Cost Based Selection (QCBS), Least Cost Selection (LCS), Selection under a Fixed Budget (SFB), Selection Based on Consultant’s Qualification (SBCQ), Single-Source Selection (SSS) both for consulting firms and individual consultants, and Selection of Individual Consultants (IC). Contracts estimated to cost US$300,000 equivalent and more will be advertised internationally. Shortlists of consultants for services estimated to cost less than US$1,500,000 equivalent per contract may be composed entirely of national consultants.


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44. Others. The procurement procedures and standard bidding documents to be used for each procurement method, as well as model contracts for works and goods to be procured, are presented in the POM.

45. The assessment determined that the procurement staff to be designated for the PMU bidding committee (to the TA component) be kept on PMU team with exclusivity to assist project implementation.

46. Procurement assessment. The Bank performed a Procurement Assessment to evaluate the

capacity of the agencies involved to implement procurement actions for the proposed Project.

Procurement activities will be carried out by Municipal Secretariats of Health, Education, Social

Assistance and Casa Civil – the PMU’s central unit for execution, coordination and monitoring of

procurement affairs and for the overall coordination and monitoring. The agencies responsibilities will

include, but not limited to: procurement planning, implementation and monitoring, ensuring quality of

bidding documents, and participating in bid evaluations. The Bank reviewed the organizational structure

for the proposed Project implementation and the interaction between the project’s staff responsible for

technical aspects and PMU, staff skills, quality and adequacy of supporting and control systems, and

suitability of the laws, rules and regulations applicable. The assessment determined that the

procurement focal staff designated for the proposed Project should be kept as part of the PMU, as it is

currently proposed, with exclusivity to assist project implementation. In addition, a procurement

consultant with experience in Bank’s procedures should be hired on an ad hoc basis to assist during

critical stages of the procurement processes.


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Table A2-6: Procurement Action Plan

Act Description Action Timeframe

1

Lack of Salvador Municipality experience in projects financed by the World Bank.

Hiring of an ad hoc procurement specialist to support PMU and Agencies staff;

Strengthening the capacity of Agencies, through ongoing Bank support and specific acquisition training.

By effectiveness.

2

Interest of companies in the tendering procedures

Using (i) national media for works, goods and non-consulting services, (ii) international media in the selections of consultancy of higher complexity, and (iii) direct contact with the market.

As defined in the POM.

3

Quality of TORs and Technical Specifications (TEs)

Obtaining expert advice on the definitions of the ToRs and TEs.

Technical no objections to technical documents to be issued by the World Bank.

Before effectiveness, as the ToRs and TEs are prepared, and throughout implementation

Before launching of each Project procurement process.

4 Weak and imprecise cost estimates

Look for budgeting based on data that reflects the market and not just on official tables issued by various spheres of government.

Before effectiveness, as cost estimates are prepared, and throughout implementation.

5

Companies involved in fraud and corruption issues

Maintain a strict control over the companies and individuals that are present in the different control lists in Federal, State, and Municipal scope, and even in lists of international financing institutions.

Before signing the first contract using loan funds, and throughout implementation.

6

Contract management

Members of the team with responsibility for the formal control of the execution of contracts, controlling and monitoring the progress of the contracts, also the milestones for their development, such as deadlines, readjustments (when applicable), etc.

Before signing the first contract using loan funds, and throughout implementation.

47. The procurement arrangements for the proposed Project were set up taking into consideration Municipality of Salvador own systems in place. The agencies are responsibility for elaboration of the Terms of Reference and Technical Specifications. For the TA component, PMU is responsible to elaborate the bidding documents and Requests for Proposals and to conduct the procurement/selection processes. The proposed Project team will count on a focal point from PMU to be responsible for developing the proposed Project’s procurement packages, including among other activities: (i)


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consolidate the procurement packages for consulting services; (ii) issue requests for expressions of interest, requests for proposals and procurement notices; (iii) conduct opening and negotiations sessions, when applicable; and (iv) consolidate evaluations and inputs from the technical evaluation.

48. All bidding documents and respective contracts regardless of the procurement method are required to have the anticorruption (A/C) clause as a condition for eligibility of expenditures.

Procurement Plan

49. Given the nature of the proposed Project, it has been determined that no procurement plan would be required for Component 1, except for works, goods, non-consulting services, and consulting services above the prior review threshold, US$25 million for works, US$5 million for Goods and non-consulting services and US$1.5 million for consulting services.

50. For the TA Component, the MoS has developed a Procurement Plan for the first eighteen months of the proposed Project implementation, which provides the basis for the procurement processes. This plan has been agreed upon between the MoS and the Bank Team on November 22, 2017. The Procurement Plan will be updated in agreement with the Bank on an annual basis or as required to reflect the actual proposed Project implementation needs and improvements in institutional capacity.

Frequency of Procurement Supervision

51. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended yearly supervision missions to visit the field to carry out post review of procurement actions.

Summary of PPSD

52. Based on the strategy developed and low-risk and low-value activities planned so far, it is expected that the activities will be carried out with the following arrangements: (i) Works: carried out through SDO and SDC - National approach; (ii) Goods and non-consulting services: The proposed Project plans to finance the procurement of goods to be acquired through SDO, SDC - National Approach and e-reverse auction, with bidding documents acceptable to the Bank; and (iii) Consulting Services: The proposed Project will finance, inter alia: consulting activities, mainly for planning, construction projects, auditing, monitoring, supervision and data collection. QCBS, LCS, QCS are the most appropriate selection methods, but this approach can be reviewed in the face of the finalized TORs. It should be noted that any change in the conditions described in this strategy must necessarily be reflected in this document and in the Procurement Plan.


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Environmental and Social (including safeguards)

Social 53. During the 21st Century, Salvador has made concerted efforts to reduced poverty and extreme poverty. While extreme poverty felt from 9.9 percent in 2001 to 3.6 percent in 2012, poverty felt from 26.8 to 7.2 percent in the same period, remaining high when compared to more affluent cities in the country. These gains are attributed to both the growth in employment and the expansion and improvement of social service delivery, which showed low coverage and poor quality due to years of under-investments until 2012. 54. Salvador is the second most unequal city in the country in terms of income distribution, with a Gini of 0.57 in 2012. Gender and race have a strong correlation with poverty and determine individuals’ ability to climb the social ladder. The incidence of moderate and extreme poverty in households led by women is 10 percent higher than those led by men. Poverty among Afro-descendants – who comprise most of the city’s population – is 35 percent higher than among whites. Space and social segregation is a characteristic feature of the city of Salvador (see Figures A2.1-3). Better economic and living standards are found at the eastern coastline, whereas low-income families occupy mostly the west side of the city, largely living in informal settlements characterized by low achievements in social indicators. Although the proposed Project is expected to benefit the general population of Salvador who utilize public health, education, and social assistance services, most of the social facilities that are being considered for receiving project support are located at this low-income “informal city” and are expected to benefit the most the poor population, among which female-headed households and Afro-Descendant people are over-represented.

Figure A2.1: Territorial Distribution of the Population by Race

Source: IBGE (2010)


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Figure A2.2: Territorial Distribution of the Population by School Education of the Household Head

Source: IBGE (2010)

Figure A2.3: Territorial Distribution of Homicide Rates

Source: IBGE (2010)


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Figure A2.4: Territorial Distribution of the Population by Strata of

Monthly Family Income and location of Social Facilities

Source: IBGE (2010)

55. The MoS carried out an assessment of potential social and environmental impacts in the areas directly affected and the areas of direct and indirect influence (i.e., circles with radius of 0.5 and 3 km, respectively) of fifty social facilities, which are being considered for support under this operation. This assessment includes demographic and socioeconomic profiles as well as environmental features. This assessment shows that socioeconomic indicators, early childhood education and primary health coverages lag in these targeted poor neighborhoods (as evidenced by the map of interventions by location presented in Figure A2.4, above).

56. OP/BP 4.12 Involuntary Resettlement is triggered for two reasons. The first reason is that some construction works that are being considered to be supported by the proposed Project under Component 1, may require land acquisition that may lead to adverse impacts related with involuntary resettlement. These investments tend to be site-specific, and their impacts tend to be limited in scope and magnitude. Not only the specific locations and project design of some of these works have not been chosen, but also the final list of eligible expenditures has not been completed yet and will not be defined before the proposed Project’s appraisal. As land acquisition may be required for some of these works, The MoS has prepared and submitted to the Bank and publicly consulted a Resettlement Policy Framework (RPF), in which the MoS describes the principles, guidelines and procedures to be followed for addressing the adverse impacts of both previous and future land acquisitions required for the site-specific construction works of social facilities. The second reason for triggering OP/BP 4.12 Involuntary Resettlement is that the proposed Project may also consider some social facilities already built or under construction by the MoS as eligible expenditure either for retroactive financing or as counterpart. Land acquisition for these works have occurred before the beginning of the proposed Project preparation. In such situations, the substantive aspects of OP 4.12 apply retroactively based on an inventory of the processes of land acquisition and an assessment of the acceptability and/or equivalence of the


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procedures followed by the MoS with regards to the requirements of the Bank policy. Thus, the Resettlement Policy Framework includes the criteria, principles and procedures to be followed to conclude this inventory and identify the situations in which there was no adverse impacts related with involuntary resettlement, or land acquisition processes and involuntary resettlement impacts have been addressed in a manner acceptable and/or equivalent to Bank requirements. The Resettlement Policy Framework requires this inventory: (i) takes into consideration how potentially adverse impacts related with land acquisition leading to involuntary resettlement have been addressed, (ii) identifies the number of affected people and the adverse impacts they faced, (iii) assesses the degree of acceptability/equivalence of the measures taken to avoid, minimize and/or mitigate these adverse impacts and adequately compensate the affected population, and (iv) identifies (a) the situations without adverse impacts related with involuntary resettlement and (b) the ones in which these adverse impacts have been treated in a manner acceptable and/or equivalent to Bank policies. The social facilities already built or under construction that does not fit the conditions under (iv.a) and (iv.b) will be screened out of the list of eligible expenditures. The preliminary results of the inventory show that most of the areas are owned by the municipality of Salvador for many years before the beginning of the proposed Project Preparation. 57. The MoS has some experience with involuntary resettlement due to a project supported by the Inter-American Development Bank that affected 1,002 families. A Resettlement Action Plan was prepared by the MoS and is under implementation. The assessment of its institutional capacity for the management of social and environmental risks pointed out the need to integrate a senior safeguard specialist on the proposed Project’s Management Unit and the carrying out of training for staff on the three implementing agencies. The Term of Reference for this senior safeguard specialist has been discussed with the MoS. The proposed Project will include specific capacity building activities related to the management of social and environmental risks.

Environmental

58. The proposed Project foresees the construction, rehabilitation, expansion or repair of small buildings (education centers, health units and social assistance centers), which may cause negative environmental impacts. Although these impacts are expected to be minor, and mostly related to civil works' execution, the Environmental Assessment Safeguard Policy (OP/BP 4.01) is triggered and the MoS is conducting an environmental and social assessment process. Therefore, a Category B is proposed for this proposed Project. The MoS prepared an Environmental and Social Management Framework (ESMF) to outline the set of guidelines to be used for the construction, rehabilitation or expansion works. An Environmental Management Plan (EMP) for works identified at appraisal will be prepared, specifying guidelines and procedures to be followed by the construction contractors. Compliance with the practices outlined in the EMP would be a contractual obligation of the contractors. 59. The city of Salvador is one of the oldest cities in Brazil with a growth pattern that followed economic activities like agricultural and livestock activities. Over time, the city growth did not respect places improper to human occupation (slopes) and the lack of capacity to plan and organize space’s use and occupation led to a variety of situations that resulted in the current situation where higher environmental fragility follows the same division observed along income level differences (see picture below). At the left portion, the poorer, and at the right, the better off. This outline has oriented the MoS


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to focus the investments of this operation, aiming to assist the demands of the low-income segments of the city.

60. The proposed activities may have some overlap with legal protected areas, although none of them would cause any potential large-scale, significant, or irreversible negative impact to them. So, the Natural Habitats Safeguard Policy (OP/BP 4.04) is triggered. Interventions previously completed that the MoS may use as eligible expenditures for reimbursement by the proposed Project will also be screened and, if there is evidence they have been built in or interfere with any sensitive area, the ESMF includes the corrective or compensatory measures needed. When none of these measures are feasible, the intervention will not be considered in the proposed Project’s scope. It is also important to consider that the appearance of urban pests during the rehabilitation, repairs, maintenance and expansion works proposed is usual and always requires the use of chemicals. Therefore, the Pest Management Safeguard Policy (OP 4.09) is triggered. The ESMF evaluates the proposed Project interventions in the context of this policy and propose acceptable measures for pest management.

61. Negative impacts on physical cultural resources are not expected during project implementation, due the envisaged location of the social facilities to be built. But, considering the richness of historical sites in Salvador, the construction, rehabilitation, repairs, maintenance and expansion works planned may affect physical cultural resources – PCR (historical and archeological), which implies triggering Physical Cultural Resources Safeguard Policy (OP/BP 4.11). It was also reported, during preparation, that there are sites around some of the proposed Project proposed interventions that are used by the population as sacred places, where religious cults occur and deities are honored, another important aspect that justify this policy triggering.

Figure A2.5. Salvador social and geographic distribution


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Source: IBGE (2010)

Monitoring and evaluation

62. The proposed Project will utilize MoS’ systems for monitoring and evaluation of activities and the proposed Project indicators. The DPE currently monitors the implementation of the Strategic Plan and relies on sectoral Secretariats reporting on their specific activities. The PMU will be responsible for monitoring on integrated initiatives across sectors discussed in this proposed Project such as the piloting of integrated social delivery services at the territorial level, or the collaboration among sectors to enhance verification of conditionalities of PBF. 63. The MDSA, for example, has developed a robust internal system to manage and monitor programs and CadÚnico for each municipality through three instruments: (i) SUAS Census; (ii) CadÚnico Information Consultation, Selection and Extraction Tool (CECAD); and (iii) the Social Information Matrix (MI Social). The SUAS Census contains data on social assistance management, physical structures, human resources and the services and benefits provided by the various social assistance outlets in Brazil and it will allow the monitoring of the improvement and of SEMPS’s strengthening by using indicators. The CECAD provides information related to individuals and families registered in CadÚnico and makes it possible to tabulate the data of enrolled families based on a single variable or on cross-referencing two variables entered in the CadÚnico forms (e.g., details of income, education, family members). This tool will allow the monitoring of CadÚnico data. The MI Social allows queries to be entered in pre-selected spaces (e.g. Brazil, regions, states, municipalities or special areas) in different formats (charts, graphs or maps). It is a source of information related to all social programs of the MDSA and includes the Social Information Reports (RI Social), which provides specific data on the programs, activities and services related to cash transfer policies, social assistance, food and nutrition security, and productive inclusion in the municipalities and states. The proposed Project will take advantage of these tools to monitor SEMPS’s structure, PBF and BPC programs and the CadÚnico of Salvador. 64. While evaluation of sectoral activities is already planned under sectoral Secretariats, this proposed Project will closely monitor and evaluate initiatives that include integrated efforts among two or more Secretariats, policy, implementation and complaints. For example, the Municipal Social Assistance Council (MSAC) is made up of workers, government representatives and policy users, that discusses and approves the actions and programs to be implemented in Salvador. In this way, all actions implemented within the scope of CRAS, CadÚnico and SEMPS contained in this proposed Project, will be discussed and approved in the MSAC. In the health sector, community participation occurs in the local committees that have a deliberative character, and are based on parity of membership (members of mentioned below. Citizen Engagement. This proposed Project will utilize existing MoS systems to seek active citizen engagement during Project implementation. This will be based on two sources: sectoral Secretariats citizen engagement instruments, and the Municipal General Ombudsman (Ouvidoria Geral do Município,

OGM).23 All Brazilian municipalities have sectoral structures to involve stakeholders on discussions the state and municipal governments and of society, including users and providers of health services). The OGM, established in 2004, has a range of instruments to facilitates the submission of complaints and

23

The OGM was established in 2004 by the Law Nº 6.588/04, and regulations were established in Decree 15.628/05.


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other concerns both at the individual and community levels, including Sectoral Ombudsmen directly placed in sectoral Secretariats. These sectoral Ombudsman Office are responsible, among other things, for receiving claims, complaints, positive feedback, and suggestions from citizens, and then bringing them to the attention of the responsible bodies. The community can access the service through various channels such as: (i) personally; (ii) customer service call center (Fala Salvador – 156); (iii) web form; (iv) official correspondence; and (v) users’ opinion boxes installed in service delivery centers such as schools and health centers. The municipality will develop a tool with a view to systematizing the collection of

the related pertinent data on a more regular basis for statistical purposes and public disclosure.


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ANNEX 3: IMPLEMENTATION SUPPORT PLAN

COUNTRY : Brazil

Brazil-Salvador Social Multi-Sector Service Delivery Project

Strategy and Approach for Implementation Support 1. Implementation of the proposed Project will require a close implementation support in the first 12 months, especially on fiduciary areas and to ensure the MoS is familiar with other Bank processes and reporting mechanisms. Implementation support for technical components (health, education, social assistance) will vary mainly depending on the volume and content of the technical assistance component. This implementation support plan will be discussed with MoS during appraisal to identify differing views on specific sectors and during the proposed Project lifetime.

Implementation Support Plan and Resource Requirements 2. The implementation support plan emphasizes fiduciary capacity building in the first 12 months and follow up and capacity maintenance in the remaining years.

Time Focus Skills Needed Resource Estimate Partner Role

First twelve months

Establishing Financial Management Environment and procedures, including training to TCM and CGM.

FM expertise

Included in project annual operating plan (US$ TBD).

CGM and TCM to provide staff, space and equipment.

First twelve months

Establishing Procurement Management, including training in the PMU and other executing agencies.

Procurement expertise


Casa Civil to provide staff, space and equipment.

12-48 months

Establishing capacity to design, implement, and monitor technical assistance.

Sectoral expertise


Casa Civil and participating agencies to facilitate space during supervision.


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Skills Mix Required

Skills Needed Number of Staff Weeks Number of Trips Comments

FM Institutional Capacity strengthening

3SW per FY (Senior Specialist)

Two trips per FY

Procurement Institutional Capacity strengthening

3SW per FY (Senior Specialist)

Two trips per FY

Strengthening design of technical assistance

4 SW per FY, per sector (16 SW total)

Three trips per FY

Supervision of environmental and social safeguards

4 SW per FY Two trips per FY


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ANNEX 4: ECONOMIC ANALYSIS

1. The economic analysis of the proposed Project assesses: (i) the development impact in terms of expected net benefits, (ii) rationale for public sector financing, and (iii) World Bank value added. Achieving the PDO— to improve social service delvioery in the Municipality of Salvador—is expected to provide substantial economic and social benefits through improved educational quality, as well as better health and social assistance services. The Education sub-component supports the strengthening of quality pre-primary and primary education through quality monitoring and management. The Health sub-component aims to increase the access to primary, specialized, and hospital care by improving systemic efficiency in the governance and management of the municipal health network. The objective of the Social Assistance sub-component is to strengthen the basic social assistance network.

Development Impact of the Project 2. The economic analysis estimates the total improvement in quality of social services from the first three sub-components of the proposed Project. These estimates are based on results of rigorous impact evaluations of similar programs on social household outcomes. From an economic point of view, the proposed Project is expected to have a direct positive impact on lifetime earnings of the beneficiaries through an increase in their labor productivity. From a social perspective, the proposed Project will raise human capital endowment having a positive impact on growth and therefore reducing poverty rates. Sub-Component 1.1: Education

3. This component aims to improve the quality of education through better monitoring and management at the pre-primary and primary levels. The proposed Project interventions in Early Childhood Education (ECE) entail the restructuring of the monitoring system and the implementation of a quality assurance system for daycare centers and pre-schools. At the elementary school level, the proposed Project actions comprise the implementation of the results-based management model, expansion of scripted pedagogical materials, and the expansion of the existing evaluation system in Salvador. The economic benefits of these interventions rely on the assumption that improvements in education quality and quality assurance result in better student learning outcomes, which will then translate into higher earning potential throughout the lifecycle.

4. There is ample evidence on the benefits to the child of quality early childhood education with respect to development of cognitive skills, better school readiness, higher primary school completion rates, lower repetition rates and better overall academic performance (Myers 1995, Malmberg 2011, Berlinski et al 2009). Some studies show higher impact for children from disadvantaged backgrounds so that the interventions have the potential to reduce inequality (Berlinski et al 2008). There is also evidence that the benefits extend to other family members, as well as the wider society. A growing body of experimental and quasi-experimental studies on the impact of public early childhood care points to substantial positive impact of high quality, reliable programs on mothers’ labor market outcomes such as participation, employment, number of hours worked and income (Mateo Diaz and Rodriguez-Chamussy 2013). Businesses also gain now and in the future through less worker absenteeism, better retention of quality talent in the workforce and greater productivity (IFC 2016).


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5. In terms of the effect of quality ECE on children’s academic performance, impact evaluations indicate long-lasting advantages for children’s achievement at the primary level. Evaluation of an enriched ECE program in rural Bangladesh, covering 30 pre-primary schools and 180 graduates, showed differences in first and second grade school achievement between graduates of the program and comparison students who did not attend pre-primary schools. The effect of participation in the program on student test scores ranged from 0.36 to 0.67 standard deviations in Grade 1 and 0.19 to 0.58 in Grade 2 (Aboud and Hossain, 2011). Another study on the expansion of universal ECE in Argentina estimated that one year of ECE increased average third grade test scores by 0.23 standard deviations of the distribution of test scores (Berlanski et al, 2009). Even attendance in low quality ECE programs has been shown to improve children’s academic performance, albeit at lower rates. Experimental evaluation

of the impact of access to the low-quality24 Rio de Janeiro publicly provided daycare shows a 0.1 standard deviation increase in cognitive test scores four to five years later (Attanasio et al n.d.). The economic analysis therefore uses the difference between estimates on impacts of high and low quality ECE programs to reflect improvements in quality from the project interventions. 6. At the primary school level, the strengthening of the management model is based on evidence that school principals, district superintendents, and other system managers are important determinants of student outcomes, and that the practices they institute are critical for policy effectiveness (Branch, Hanushek, and Rivkin 2012; Hitt and Tucker 2015). Drawing on the fields of education and business, Bloom et al (2005) show that best practices in school management have a strong correlation with student outcomes. Recent estimates from a randomized control trial indicate that providing principals with management training increases student achievement in all subjects in the first year by 0.10 and 0.19 standard deviations on high- and low-stake exams, respectively (Fryer, 2017). These findings were consistent with results from a previous randomized experiment which demonstrated that introducing best management practices from U.S. charter schools to lower performing schools led to gains in student math achievement of between 0.15 and 0.18 standard deviations per year (Fryer, 2014). 7. This economic analysis estimates the total improvement in education quality due to the proposed Project activities under the education sub-component for participating children. Based on the results of the foregoing studies, the analysis assumes that student learning outcomes in Salvador will increase by between 0.10 and 0.0.19 standard deviations for project interventions at the primary school level. The baseline scenario assumes an average effect of 0.16 standard deviations. The proposed Project interventions in ECE are assumed to amplify this effect. For the 18,672 beneficiaries in pre-primary school, we assume that better monitoring and management techniques will further improve primary achievement by 0.13 standard deviations. Additionally, evidence from the Program for the International Assessment of Adult Competencies (PIAAC) shows that, on average, a one-standard deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers (Hanushek et al 2015). The analysis thus uses these estimates to calculate the monetary benefit of the policy interventions in terms of gains in lifetime income to the participants. 8. The calculations show a net benefit and positive return to investment for the Education sub-component. Assuming that the proposed Project costs are disbursed evenly over the five year period,

24

The majority of crèches and preschools were rated as either inadequate or basic quality (Attanasio et al n.d.)


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the improved monitoring and management practices will last for 30 years, one-eighth of the current primary school beneficiaries will graduate each year with the option to enter the labor market, the first

ECE cohort enters the labor market in 203925 and a discount rate of 10 percent, the Education sub-component is expected to have a net present value (NPV) of US$113 million, with an internal rate of return (IRR) of 16 percent. Sensitivity analysis using an alternative scenario whereby only the minimum improvements to school outcomes are realized shows a NPV of US$93 million and an IRR of 14 percent,

underscoring the cost-effectiveness of the intervention.26 9. These estimated benefits reflect a lower bound of the expected economic and social benefits. The quantified individual returns to increased educational attainment do not capture the potential dynamic effects of an overall increase in productivity, resulting in improved economic growth. For instance, economic benefits to working mothers and businesses from the availability of quality ECE have not been captured in the analysis. Also, not quantified are the cost aversion benefits to governments and households from the positive effects of quality pre-primary education on primary completion and lower repetition rates. Additionally, educational attainment is correlated with several social benefits such as longer life expectancy and higher civic engagement, that have not been quantified in the analysis. Sub-Component 1.2: Health

10. This Sub-component supports improvements in health service delivery by revamping the referral system to optimize access to primary, secondary and tertiary care and using technologies to improve the quality of care management. Poor communication and coordination of care between primary care and specialty care providers leads to major inefficiencies in health care delivery. The proposed Project supports a specific measure to reorganize patient flows using the regulation module in the SMS’s management information system, Sistema Vida+. Rigorous use of the module is expected to allow SMS to maximize the use of private healthcare providers who constitute a complementary network of care. Proactive management of patient flows using Sistema Vida’s regulation module is expected to lead to gradual increase in the actual number of procedures performed in the complementary network as a share of the total number of procedures contemplated in the original service agreements. 11. Total benefits in monetary terms are difficult to quantify ex ante. Benefits are expected to accrue to both patients and service providers through improved access to primary and specialty care, better quality of care, and administrative efficiencies. Results from a U.S.-based electronic referral system showed substantial decreases in wait times for routine new patient appointments and acceleration of urgent care (Bell et al 2012). In the State of Minas Gerais, Brazil, a comparable electronic referral system, Telehealth Network, resulted in savings to the healthcare system of US$20.1 million between June 2006 and October 2011. With an original investment of US$9 million, the cost-benefit ratio was estimated at 2.24 to 1 (Alkmin et al 2012). If we assume the revamped referral system in Salvador will experience comparable levels of performance to the system in Minas Gerais, we can

25

The available evidence indicates that ECE should lead to increased high school completion and higher probability of going to college. The analysis therefore assumes that gains to ECE materialize from age 24 onwards. 26

The alternative scenario assumed that student learning outcomes at the primary level increased by 0.10 standard deviations and the effect of the improved ECE monitoring is reduced to 0.065 standard deviations.


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project average annual savings to the healthcare system of US$7.2 million.27 Potential savings would be even greater when one accounts for the overall cost savings from optimal assignment of patient cases across primary, secondary and tertiary health care systems. For instance, greater access to primary care units would enable more usage of preventive health care services, especially by the elderly, resulting in earlier detection of noncommunicable diseases and less costly treatment of complex cases at the secondary and tertiary levels of care. 12. To improve the quality of care management, the proposed Project will support SMS’s plan to gradually increase the number of health facilities that make use of the electronic medical records system and the biometric patient registration system. These kinds of health information technology systems have the potential to improve quality while reducing costs. Furthermore, these technologies facilitate the implementation of care guidelines and decision support tools which may be critical in preventing process errors (McCollough et al, 2010). An early review of evidence on health information technology systems revealed three major benefits on quality: increased adherence to guideline-based care, enhanced surveillance and monitoring, and decreased medication errors. The primary domain of improvement was preventive health, while the major efficiency benefit shown was decreased utilization of care (Chaudhry et al, 2006). Improvements in processes of care delivery ranged from absolute increases of 5 to 66 percentage points, with most increases clustering in the range of 12 to 20 percentage points. Absolute decreases in utilization rates ranged from 8.5 to 24 percentage points.

Sub-Component 1.3: Social Assistance

13. This Sub-component supports SEMPS in strengthening the basic social assistance network, improving data quality of Cadastro Único, and enhancing SEMPS’ organizational capacity. Interventions include upgrading the 28 CRAS to minimum standards of operational functionality, supporting SEMPS in increasing the number of household visits for data verification, and enhancing management capacity through staff recruitment. The economic benefits of these interventions, though not quantified in this analysis, are assumed to arise from the organizational and cost efficiencies resulting in better targeting and service delivery to the poor.

27

The analysis assumes approximately 300,000 activities per year passing through the referral system (based on a 10 percent activity to population ratio experienced in Minas Gerais); 80% activity efficiency rate (i.e., 80 percent of consultations redirected to appropriate private healthcare providers in the complementary network rather than being prematurely referred to secondary and tertiary specialists); variable referral costs of $36 and unitary activity costs of $6.


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Rationale for public sector financing

14. Public sector financing is justified based on the high social returns of the investment and the reduction in poverty and inequality associated with it. Social services in Salvador are predominantly public and the proposed Project aims to support systemic improvements in delivery of quality social services for all. In addition, other factors provide an economic rationale for public sector financing of social services because they generate positive externalities and likely efficiency gains. For example, healthier individuals acquiring better education would contribute to the society because they are more likely to be engaged, responsible citizens and better parents. Quality childcare not only improves the human capital of the child, but also benefits parents and businesses through greater labor market participation of mothers and lower absenteeism from work – factors which might increase the overall level of productivity and growth in the economy. In addition, there is imperfect information that makes the population unaware of the benefits of basic health care, returns of investments in education, and the social assistance support to vulnerable families. Even if they are aware, financial constraints might prevent them from financing these investments in the credit market. Also, public social investments that improve the poor’s access to quality services have the potential to promote equality of opportunities because vulnerable groups benefit more from the public service provision.


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ANNEX 5: REFERENCES

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ANNEX 6: MAP