Finally, there is a lack of coordination amongst existing activities to strengthen local govemance and support local development with raises issues about the sustainability of such initiatives within the context of an overall framework for local govemance reform.
3. Strategies, including lessons learned, and the proposed

joint project

Background/context:
The Local Governance Support Project is a joint LINDP/UNCDF Project designed to support the Government of Yemen formulate, manage and implement the National Programme which will be the vehicle for implementation of the Local Governance Strategy.
The process for developing the National Programme has already begun and is considered a high political priority. Direction and oversight bodies for the National Programme have already been established by Ministerial decree. These include an Inter-Ministerial Committee chaired by the Prime Minister with ten members to provide overall policy guidance, oversee implementation of local govemment agenda in the country, and ensure proper coordination and alignment of line ministries and other players. A Technical Committee under the chairmanship of the Minister of Local Administration is in the process of being established. Finally, a Technical Team has been charged with the development of the framework for the National Programme followed by the formulation of a detailed work plan. Five working groups have been set up to develop the framework for each of the key pillars of the strategy. By the l't quarter of 2010 a clear process for the development of the National Programme should be in place, and the formulation of the full National Programme in a participatory manner involving all stakeholders is expected to take place during the 2nd quarter of 2010. In addition an executive management body is currently being designed that will take responsibility for coordinating the implementation of the National Programme across all agencies.
The project will provide support at three levels: - to the National Programme Management Structure to formulate and coordinate implementation of the full National Programme, and to central government institutions, particularly the Ministry of Local Administration as undertakes it role in supporting and supervising local governments and to Local Government Units to support them in undertaking specific reforms and on introducing and performing their newly introduced functions as part of the implementation of the overall National Programme agenda. The LGSP will apply speciflrc attention to the variation in the level of capacity which that exists at govemorates and districts and will support the rollout of a capacity development and function deployment process which takes that into consideration to ensure that LG absorptive capacity is given a chance to evolve.

The proposed joint project and sustainability of results:
The LGSP will provide responsive support to the implementation of the GoY's National Programme to implement local governance reform through the outputs described below. More detailed explanation of the outputs with their corresponding activities is given in the Section 5 - Results Framework.
Output 1: Policy and Legal Development
Enhanced Government efforts to develop comprehensive institutional, legal and regulatory framework for local Governance
This component of the LGSP aims to provide support to the Govemment of Yemen in its efforts to articulate and implement the policy, legal and regulatory reforms recommended by the NSTLG to create the enabling environment for transforming the current local authority system to a local Governance system. The Project will provide support to MoLA and relevant National Programme Management Bodies to identify and amend relevant articles of the Constitution and formulate new Local Government Legislation to provide the legal framework for an effective and responsive local governance system. This will include the development of a participatory mechanism to ensure broad stakeholder participation and ownership in the legal reform process. It will also support relevant agencies to achieve the alignment of key sectoral legislation with the legal framework for local
governance. LGSP will also actively support Yemeni institutions to learn from the experience of other countries in developing the policy and legal frameworks necessary to support the transition to a local governance system. In this regard the project will give particular emphasis in fostering linkages with countries that have faced similar contextual challenges in implementing decentralization reforms, such as high levels of poverty, high percentage of remote rural populations, strong tribal or clan based social structures and localized armed conflict. LGSP will particularly support the development of SouthSouth cooperation (including twining arrangements) as a means for developing ongoing exchanges of contextually relevant information and experience.
Output 2: Institutional Development
Enhanced Govemment efforts functionins local Governance

to develop required

capacities
at central and local levels for
This component of the LGSP will provide direct support to the National Programme management body and its relevant direction and oversight bodies to support the development, management and monitoring of the National Programme for Local Governance. This will include support for a broad based communications strategy, a resource mobilization strategy and the establishment of a donor forum to ensure harmonization of support for decentralization and local governance.

$408,000

UNCDF and UNDP Actvty 3

Activitv 3:

lnstitutional and capacity development of LGUs supported at Govemorate and Distric lvel to fulfill their functions under the new Local Government Svstem

s1,799,000

Activitv Result:

ln 2009,48 districrs in

8 governorates benefit

from DFTs to suppon

local planning and
basic administrative systems

r I I l.

Standardized bic operating systems and procedures are developed and implemented in Local government units at Governorate and District levels Capacity at Govemorate level to suppon and train district level LCUs is enhanced through the extension of District facilirarion teams to all govemorates and districts Capacity at Govemorate level to moritor, evaluate and follow up performance of district level LGUs is increed Local govemment capacity to lead inclusive, participatory processes and foster social dialogue is enhanced Local accountabiliw svslems are develoned and srrenprhened Finalize the development of the full package of base operating systems and procedures of Local Govemment in target LCUs focusing on the Govemorate level & Govemorate training of District levels, to include o Core administrative procedures o Public Expenditure management. Asset management o Revenue mobilization
o LC MIS o Public participation, and inclusive dialogue processes o Local accountability systems and processes $
Indctors: No of districts and
governorates with established District Facilitation teams to suppon locl planning and basic administrative systems in LGUs.

Action

l,3 r 6,000
. Local Council functions 2. Extend District Facilitation Teams (DFls) to all Governorares and

Districts

$ 100,000
3. Suppon Covemor's oflices ro undenake Monitoring, Evaluation
and Follow-up of districr LGUS through MEF Crants

$383,000

Activity 4
Baseline: Project team under

UNCDFand UNDP

Actvtv 4:
Establish project team to manage activities and to enquire resul

s1,958,000

DIDIM modality

Indicator:

Activitv result:
Technical and administrative team established under the
Eflicient and effective LGSP project management which contributes to building project management cpacity in Mot A Stren$henng ofproject management systems and processes within MoLA,

NIM modality

Number ofquanerly project board meetings and other groups established under this
Establish Project Board, Project Management Team and oDerationl mechanisms 2. Form Panners Group and conduct quarterly meetings and reviews 3. Monitorng and evaluaton

$1,638,000

s20,000

$300,000

project UN oryanization I UN organization 2

TOTAL BUDGET OUTPUT 2

Project Cost

$6,674000

rnorec suppon ost++
Proiect Cost Indired Support Cost Project Cost
JP Outputs (Give corresponding indicators end baselinc) Proiect lD:fi)0xxx

ranlclpatlng

Participating tJN

organization corporate

Indicaive activities for each Output

orgoization,lu vuPuu

organizationa
Resouce allocation and indicative time famer
nrioritv UNCDF and UNDP UNCDF and UNDP

Activitv

Output 3:
lmproved Local Govemments capable of equitably and srrategically investing public resources
and elfectively promoting
Broaden suppon for participatory local development planning processes including institutionalization of he Local Economic Development (LED) & Narural Resource Managemenr (NRM) promotion function at target LGUs

r30,000

00,000

(uNcDF)

r40,000

$2,755,000

local development and

contributing to the

achievement of the MDGs Baseline: Fund Flows:
Resources Mobilized and managed by
Target (Pilot) LGs (Current level)

Development Outcomes:

Service Coverage in Target LGs in
Define and introduce the LED & NRM functions at target LGs. Support he development and implementation of more comprehensive and sustainable Local Development Plans including LED and NRM components. lncreed capacity of Govemorates to perform their own integrative and strategic planning and local development function and coordinate inter-district local development lmproved efliciency and effectiveness of local development resources for LDPs through coordination and algnment of local development initiatives and targeted resource mobilization. Improved availability of local developmenr information systems to suppon development planning Increased capacity ofLGUs to manage their natural resources to suppon sustainable development lncreased capacity ofLGUs to support local econornic development and create a business enablins environment Suppon the definirion and introduction of LED promotion and NR management funcrions at the district and governorate LGs and launch in target localities Suppon improved Local Development Planning including stronger local accountability arrangements and integration of LED and NRM components in Local Development plans Support the development and launch ofintegration and coordination ofdevelopment planning at the Governorate Ievel in target govemorates Support coordination and alignmenr of Local Development initiatives with LDPs Support resource mobilization for local development at |ocal level Develop data collection methodologies for local developmet infonnation at Governorate & District levels

services.

The Ministry of Local Administration as the Executing Agent / Implementing Partner will have full programmatic and financial oversight of the project. This includes responsibility for:
Planning and overall management of project Reporting, accounting, monitoring and evaluation of the project, Supervision of any other agencies involved in implementing activities; Management and audit of the use of UNDP/LINCDF resources.

activities,

Project activities will be implemented through Implementng Agents which may be Government entities, LINDP, UNCDF or other bodies whose role is to provide services and carry out activities such as the procurement and delivery of inputs to achieve the agreed project outputs and objectives. The Ministry of Local Administration will be the lead implementing agent. In addition, in its role as Executing Agent / Implementing Partner MoLA will be responsible for identifying and contracting with other agencies as required to implement agreed project activities.
The Local Development Fund to be set up by UNCDF shall be governed by a separate Memorandum Understanding, to be signed between the parties concerned.
Support from UNDP and UNCDF for Project Administration
While under the National Implementation modality the Govemment of Yemen assumes overall
management and accountability for the project, this modality provides for support from UN agencies in order to ensure: (a) Capacity-building, self-rel iance and sustainability; (b) Ownership and internalization of external inputs; and (c) Relevance and impact, particularly when used in the conjunction approach.

with the programme

Under National Implementation, government rules, procedures and systems will be used for core project management activities including:

a) b) c) d)

Management and Administration of project activities Recruitment of Project staff and national and international experts Training Procurement of goods and services through subcontracts
However, the Capacity Assessment (Annex III) reveals that MoLA is facing critical capacity challenges in many of these areas. Project output number 2 on capacity development will address many of these identified challenges.
In addition a project support unit comprising a Finance Manager and Admin Assistant (to be recruited amongst resident Yemeni nationals) will be established as part of the LSGP to assist in building the capacity MoLA in project related resource management, budgeting and procuremedt of goods and
Where Government mechanisms do not meet intemational standards, operating rules and procedures will be agreed between UNDP and MoLA based on the National Implementation Manualr Yemen which is currently being developed by the LINDP Country Offrce. In the interim, the UNDP Procedures for National Execution (1998) guidance will serve as the reference for establishing the project's operating mechanisms.

regulations. Under these rules Civil servants government employees assigned to work on the project or who participate in the implementation of a [INDP-supported project, including the national project director or coordinator, cannot receive any remuneration from the UNDP project budget. Once the detailed work plan for the project has been developed a schedule of quarterly advances will be established based on the forecast of expenditures identified in the work plan.
The joint programme will be financed by contributions from UNDP TRAC and UNCDF core contributions, as specified in the budget. These funds will be utilized using the parallel fund management option. LINCDF core funds will be subject to a 5Yo Management Fee. TINDP will apply its own policies and procedures for the TRAC funds. In addition, development partners will be invited to contribute to the joint programme to cover remaining funding requirements, as specified in the SRF and budget. The financial contributions of each organization identified at the time of signature of this
programme document are reflected on the signature page of this document.
The funding arrangements for contributions from development partners consist of a pass-through funding modality. This implies that development partners wishing to contribute to the programme are requested to channel their contributions through one of the participating UN organizations acting as Administrative Agent (AA). It is agreed that UNDP will act as AA in joint programme and as such will transfer a share of the donors' contribution to UNCDF in accordance to the terms of the Memorandum of Understanding that will be signed for such purpose.
programme management arrangements for these funding options-are based on the United Nations Development Group Guidance on Joint Programming December 2003).
UNDP will act as Administrative Agent (AA) to this Joint Programme taking into consideration UNDP's country presence and its financial and administrative capacity and ability to interface between the Government of Yemen, development partners and UNCDF. With UNDP acting as the AA it is also
5 UNDG Guidance on Joint Programming.
envisioned that transaction costs to the [JN.
will be reduced to Government of Yemen, development partners
As Administrative Agent of the Joint Program, UNDP will sign a Memorandum of Understanding with LI-NCDF and will enter into Standard Administration Agreements (SAAs) for the purpose of receiving and administering contributions from donor development partners and applying them to the financing of the Joint Programme. The Local Development Fund to be set up by UNCDF shall be governed by a separate Memorandum Understanding, to be signed between the parties concerned.

Accounting The funds received from the development partners as per the SAAs will be recorded by the AA in a joint programme account. The AA records as income only those funds for which it is programmatically and financially accountable (i.e. for its part of the joint programme as a participating organization).
MoLA will maintaining an accounting system that contains regularly updated records or advances received and disbursed, expenditure records by implementing agents and direct payments made by LJNDP/ UNCDF. MoLA will also maintain an inventory recording the acquisition and disposition of property and equipment purchased with project funds. MoLA, assisted by the Finance Manager will ensure that the receipt and disbursement of UNDP/UNCDF funds is properly identified and that
budgetary categories approved are not exceeded. Each UN organization participating in the joint programme will account for the funds distributed by the AA in respect of its components in the joint programme in accordance with its frnancial regulations and rules.

Reportng

MoLA will submit financial reports to UNDP on a quarterly basis using a standard financial reporting format in accordance with UNDP rules and regulations.
Each participating UN organization will prepare reports in accordance with its financial regulations and rules and operational policy guidance. Reports will be shared with the Joint Oversight Committee of PGSP. To the extent possible, reporting formats will be harmonized.
The AA shall prepare consolidated narrative progress and hnancial reports consisting of the reports submitted by UNDP and UNCDF, and shall provide those consolidated reports to development partners, in accordance with the timetable established in the SAAs. Administrative Fee and Indirect Costs Administratve Agent: The AA shall be entitled to allocate one percent (l%) of the amount contributed by donor(s), for its costs of performing the AA's functions. This will be subject however to a floor of US$ 20,000 and a ceiling of US$ 100,000. In cases where the participating UN organizations and the AA agree that the AA's responsibilities are more complex than the 'standard' responsibilities, a higher percentage for the AA fee may be agreed by the participating LJN organizations or included as direct cost in the budget directly managed by the AA as appropriate.
Participating UN Organizations: Each UN organization participating in the joint programme will recover indirect costs in accordance with its financial regulations and rules and as documented in the Memorandum of Understanding signed with the AA. The rate of recovery may vary between UN organizations participating in the joint programme, based on their applicable regulations and rules.

Interest

Interest, if any, will be administered in accordance with the financial regulations and rules of each tIN organization participating in the joint programme. The AA should not accrue interest on the funds received from the donor(s) because they are expected to flow through almost immediately.
Balance of Funds Particpating UN Organizations: Any funds remaining after the financial closure of the programme will be returned to the AA. Administrative Agent: Any un-programmed funds remaining in the joint progrmme account after the financial closure of the Joint Programme will be returned to the donor(s) or utilized in a manner agreed upon between the AA and the donor(s), and approval of the joint programme coordination mechanism. Trnsfer of Cash to Natonal Implementng Partners This joint Project will be implemented by the Ministry modality.
of Local Administration using the NIM

Autlit

All nationally
implemented projects must be audited at least once during the project lifespan at a minimum. The audit must conftrm and certify that:
(a) The disbursements are made in accordance with the activities and budgets of the project
document; (b) The disbursements are supported by adequate documentation; (c) The financial reports are fairly and accurately presented; (d) An appropriate management structure, internal controls and record-keeping systems are maintained; (e) The executing agent and the TINDP country office have undertaken and have prepared reports for monitoring and evaluation of the substantive activities and of the management systems of the programmeroject; and ( The procurement, use, control and disposal of non-expendable equipment are in accordance with the Government's or UNDP requirements.
Consistent with current practice, each UN organization will be responsible for auditing its own contribution to the programme as part of its existing regulations and rules. Audit opinions of the individual UN organizations should be aceepted by the other UN organizations. Qualty Assurnce
AUNDP/UNCDFProgrammeofficerwillbeinchargeof@TheProjectAssurance
role supports the Project Board by canying out objective and independent project oversight and monitoring functions. This role ensures appropriate project management milestones are properly
managed and completed. Project Assurance must be independent from the Project Manager; therefore the Project Board cannot delegate any of its assurance responsibilities to the Project Manager.

UNDP and UNCDF, in consultation with MoLA, shall take appropriate measures to publicize the joint programme and to give due credit to the other participating UN organizations. Information given to the press, to the beneficiaries of the joint programme, all related publicity material, official notices, reports and publications, shall acknowledge the role of the GOY, IJNDP, UNCDF and any other relevant parties. In particular, the Administrative Agent will include and ensure due recognition of the role of LJNDP, UNCDF and GOY partners in all external communications relating to the joint project.
Reso urce Mo bilizaton needs
The Project has a substantial unfunded budget in the amount of US$ 5,545,000. The GoY and development partners must work collectively in order to mobilize the additional needed resources. The
LGSP - through its regular planning exercise - should take into account the resources that are required to effectively mobilize strategic partners and donors.
8. Monitoring, Evaluation and Reporting
Montorng nd Evluton: In accordance with the programming policies and procedures outlined in the UNDP User Guide and UNCDF procedures, the project will be monitored through the following joint project monitoring framework:
Table 2: Joint Project Monitoring Framework (JPMF)
OUTPUT I (Project ID: 000xxxxx): Enhanced Government efforts to develop comprehensive institutional, legal and regulatory framework for local

Government.

Activity Result
Short title to be used for Atlas Activity ID: Legal Reform
Start Date: I May2010 End Date: 3l Dec 201 I

(Atlas Activity ID)

Purpose
Respective Articles in the Constitution and replacing the current local administration law # with new local government law as part of transformation from localauthority to local government with wider responsibilities for achieving development results at sustainable mnner

Description

Conduct participatory mechanism for legal reform
Ensure gender balance in the legal reform process Ensure human-rights based approach is applied Ensure public is informed of the coming legal changes

Quality Criteria How/with what indicators the quality of the activity result

be measured?

Quality Method Means of verification. What method will be used to determine if quality criteria

has been met?

Date of Assessment When will the assessment of quality be performed?
Amendments to the current Constitution
Referendum on the amended articles of the Constitution
Issuance of Local Government Law Issuance of revised Bylaws

April20l April20l

New Local Government Laws
Revised (respective) Bylaws

December 201

OUTPUT 2 (Project ID: 000xxxxx): Enhanced Government efforts to develop required capacities at central and local levels for a functioning local Government
Short title to be used for Atlas Activity ID: Institutional Bui lding &. Capacity Development
Start Date: May 2010 End Date: Dec20l4
Implementation of National Strategy for Transition to Local Covernment and introduction of MoLA, roles and responsibilities of different departments and individuals in MoLA; and implementation of capacity development packages at central and local levels
systems and tools at central and local levels; define the mandate of
Roll-out of a comprehensive institutionalreform of MoLA including functional review and organizational redesign at Central, Covernorate and District levels
2. M&E Guidelines and establishment of M&E system 3. Communication strategy 4. Formation of Partners Group 5. Launchirrg of LocalGovernment Forum 6. Decentralizatiort sub-sector ODA system (linked to national ODA system at MoPIC) 7. Prepare Resources Mobilization Strategy 8. Support functional design of local-level administrative and executive systems, processes

and procedures

Participatory preparation of a comprehensive capacity development plan and implement
Functional review and organizational redesign at Central, Governorate and District Ievels Local Government Forum
Approval on the revised structures and ToRs and its implemerrtation Number of issues discussed and number of Journals

oreoared

End 2010

End 2010 and end 201 I

Resources Mobi I ization

Stratesv

Approvalof the RMS and arnount resources mobilized

Annually

OUTPUT 3 (Project ID: 000xxxxx): hnproved Local Governments capable of equitably and strategically investing public resources and effectively promoting local development and contributing to the achievement of the MDGs

1.1.2 Unted

Is the institution listed in any reference list?
collecting stories from beneficiaries in an ad hoc

manner.

2.1.2 Reporting and performance track record
Does the institution monitor
progress against well defined indicator and targets, and evaluate its
Reports to donors and other stakeholders

Reporting system

Project/project
achievements? Does the institution report to its stakeholders on a regular

basis?

Regular meetings take place quite frequently but how they are managed, structured or how efficient they are remains unclear MoLA produces its reports including an annual one that is submitted to the government. The reports are compiled from the various sectors within the MoLA. These reports are usually based on achievements and are not necessarily based on base line information, progress, constraints, impact, indicators etc Since MoLA sees itself as an agent of local development, there seems to be lack of coordination or system in setting indicators related to other sectors like health education etc. The reporting in practice currently cannot be seen in isolation from the general lack of technicalskills in M&8. A comprehensive project management with a full cycle of M&E is a gap that needs addressing in the various sectors of MoLA. Systems to monitor staff development and oerformance need to be I olace.

2.2 Technical Canacity

2.2.t Specialization
Does the institution have the technical ski lls required? Does the institutior have the knowledge needed? Does the institution keep informed about the latest techrriques/
com petenc ies/pol ic ies/trerrds
in its area of expertise? Does the institution have the skills and competencies that

complement those

Publications on activities, specific issues, analytical articles, policies Reports frorn participation in international, rcgiona[, national or local meetings and conferences Tools and methodologies Evaluations and

assessments

The institution has a variety of people with long experiences and newer ones with less experience. Generally there is a gap in institutionalizing avai lable skills through skill share benefiting from existing old skills and new ones. A profiling of each sector and where/if necessary restructuring and using of specific job descriptions may be necessary to partiallv address the eaos in

Job descriptions

recruitments are suspended at the moment and MoLA cannot recruit at this stage. There is also a government procedure that involves the civil services office on recruitment of government employees. At the moment no Job Descriptions are used
3.2 Financial Capacity Ability to ensure appropriate management offunds In addition to the following questions, see also the questionnaire provided in the Guidelines on Microassessment of the Framework on Harmonized Approach for Cash Transfer (HACT): http://www.unde.ore/archive docs/71 l0Framework for Cash Transfers to Implementins Partners.doc (AI{NEX 3) The assessment report is reviewed by the UN agencies to select the most suitable cash transfer modality, and establish appropriate cash transfer procedures and assurance activities to be used with the Implementing

Partner.

3.2.1 Financial management and funding resources
Is there a regular budget cycle? Does the institution produce Project and project budgets? What is the maximum amount of money the
institution has managed? Does the institution ensure

physical security

advances, cash and records?
Does the institution disburse funds in a timely and effective manner? Does the institution have procedures on authority, responsibil ity, mon itoring and accountability of handling funds? Does the institution have a record of financial stability and reliability?
Operating budgets and financial reports List of core and noncore donors and years of funding Written procedures ensuring clear records for payable, receivables, stock and inventory Reporting system that tracks all commitments and expenditures against budgets by line
There is a finance department in MoLA established by MoF.
It has a financial manager, an
accountant, a purchasing manager and a cashier all employees of MoF.
They are managed by MoLA on their day to day activities and provide reports as well. They also provide periodic report to MoF. They form the structure for procedures on authority, responsibi I ity, monitoring and accountability of handling funds as wellas ensuring expenditures according to budget lines. They engage in regular annual budgeting cycle. This department runs under the generalsystem of MoF. Once annual budgets are approved by parliament MoF disburses funds to MoLA in two installments with the exception offunds allocated for purchase of equipment and capital items. Physical security of records, cash and advances are in a safe guarded location in the MoLA's building. Advances can go up to YRl5 million at times. Track record of oromot oavment is 59

3.2.2. Accounting System

Support

Civil Society, Community
and other representative groups to
develop organizational structures and processes to ensure full participation in processes of local decision making, resource allocation

and accountability

monitoring. Input by other pcrtners:
Support citizen focused capacity development programmes for activating and strengthening community participation in localdecision making. Input by other partners:
Support the GOY on the Development and launch of Institutional arrangements for donor coord i nation / harmonization (the Support the introduction and deployment of donor harmonization capacities at the Donor Forum.
Donor Partner Initiatives / Donor harmonization & coordination
Support the GOY to define an effective donor harmor ization modality for supporting the implementation of Decentralization
LGUs Costing study offull set of LGUfunctions in target LGIIs lnouf hv oher nnrnprs: Support interventions of community/civil society and private sector that contribute to local development (service delivery, promotion of LED and NRM) to be aligned and integrated with the LD interventions of LGs. Input by otlrcr portners: Support the GOY's initiative to leverage and consolidate donor partner interventions for LD at local the level (service
reform/ll STLG, the strengthening of LGs to perform their assigned functions and the promotion of LD.
t Definition of a mechansmfor
Donor coordination / Donor Forum and necessary internal bylaws t Ensure information on aid to decentralization sector is integrated into National ODA system at MoPIC
Donor Forum) in support'of the Input by LGSP and other implementation of decentral ization partne: reforms and the development and deployment of LGs to deliver on Local development. Input by LGSP wllfocus on: Techncal assistance on the definition and implementation o a Donor Forum Input by other prtners:
delivery, LED & NRM & others) and ensure their alignment with, and direct contribution to, Local Development Plans. Input by LGSP nd other partners: