Bangladesh: Reaching Out-of-School Children Project. Project Appraisal Document

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized FROM: The Acting Corporate Secretary OFFICIAL USE ONLY IDA/R /1 Streamlined Procedure For meeting of Board: Thursday, June 17, 2004 Bangladesh: Reaching Out-of-School Children Project Project Appraisal Document May 28, 2004 Attached is the Project Appraisal Document regarding a proposed grant to the People's Republic of Bangladesh for a Reaching Out-of-School Children Project (IDA/R ). This project will be taken up at a meeting of the Executive Directors on Thursday, June 17, 2004 under the Streamlined Procedure. Distribution: Executive Directors and Alternates President Bank Group Senior Management Vice Presidents, Bank, IFC and MIGA Directors and Department Heads, Bank, IFC and MIGA 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 Group authorization.

2 Document of The World Bank FOR OFFICIAL USE ONLY Report No: BD PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR MILLION (USS5 1 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF BANGLADESH FOR A REACHING OUT-OF-SCHOOL CHILDREN PROJECT May 19,2004 Human Development Sector Unit South Asia 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.

3 CURRENCY EQUIVALENTS (Exchange Rate Effective April 30,2004) CurrencyUnit = Taka Tk = US$l.OO Tk.l.OO = US$0.016 US$l.OO = SDR0.689 FISCAL YEAR July 1 - June30 ABBREVIATIONS AND ACRONYMS ADPEO AUEO CAMPE C&AG CBO CHT CMC CWD DflD DP DPE DPEO EA EFA EMIS EOP ERD ERP ESP ESTEEM EU FFE GER GIS GOB GPS HES HSC ICB I-PRSP LC LGED MDG M&E MoPME Assistant District Primary Education Officer Assistant Upazila Education Officer Campaign for Popular Education Comptroller and Auditor General Community-Based Organization Chittagong Hill Tracts Center Management Committee Children with Disabilities Department for International Development (UK) Development Partners Directorate of Primary Education District Primary Education Officer Education Allowance Education for All Education Management Information system End of Project Economic Relations Division Education Resource Provider Education Service Provider Effective Schools Through Enhanced Education Management European Commission Food for Education Gross Enrolment Ratio Geographic Information System Government of Bangladesh Government Primary Schools Household Expenditure Survey Higher Secondary Certificate International Competitive Bidding Interim Poverty Reduction Strategy Paper Learning Center Local Government Engineering Department Millennium Development Goals Monitoring and Evaluation Ministry of Primary and Mass Education

4 FOR OFFICIAL USE ONLY MTR NAPE NCTB NER NGO NORAD URC PEDPII PCP PPT PD PTA PTI ROSCC ROSCU SDC SIDA SKT ssc UEO UPE UNICEF Mid-Term Review National Academy of Primary Education National Curriculum and Textbook Board Net Enrolment Ratio Non-Government Organization Royal Norwegian Agency for Development Co-operation Upazila Resource Center Primary Education Development Program I1 Project Concept Paper Project Preparation Team Project Director Parent-Teacher Association Primary Training Institute Reaching Out-of-School Children Committee Reaching Out-of-School Children Unit Swiss Agency for Development Cooperation Swedish International Development Association Shishu Kallyan Trust Secondary School Certificate Upazila Education Officer Universal Primary Education United Nations Children s Fund Vice President: Country Managermirector: Sector Manager: Task Team Leader: Praful C. Pate1 Christine I. Wallich Michelle Riboud hit Dar/Hena G. Mukheriee This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.

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6 BANGLADESH Reaching Out-Of-School Children Project CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE Country and sector issues... 1 Rationale for Bank involvement... 3 Higher level objectives to which the project contributes... 3 B. PROJECT DESCRIPTION Project components 4 5. Lessons learned and reflected in the project design Lending instrument... 3 [If Applicable] Program objective and Phases... 3 Project development objective and key indicators Alternatives considered and reasons for rejection... 9 C. IMPLEMENTATION Partnership arrangements (if applicable) Institutional and implementation arrangements Monitoring and evaluation of outcomes/results., Sustainability Critical risks and possible controversial aspects Loadcredit conditions and covenants D. APPRAISAL SUMMARY Economic and financial analyses Technical Fiduciary Social Environment Safeguard policies Policy Exceptions and Readiness Annex 1: Country and Sector or Program Background... 20

7 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies Annex 3: Results Framework and Monitoring Annex 4: Detailed Project Description Annex 5: Project Costs Annex 6: Implementation Arrangements Annex 7: Financial Management and Disbursement Arrangements Annex 8: Procurement Annex 9: Economic and Financial Analysis Annex 10: Safeguard Policy Issues Annex 11: Project Preparation and Supervision Annex 12: Documents in the Project File Annex 13: Statement of Loans and Credits Annex 14: Country at a Glance Map: IBRD

8 Date: May 19, 2004 Country Director: Christine I. Wallich Sector Manger/Director: Michelle Riboud Project ID: PO86791 Lending Instrument: Specific Investment Loan BANGLADESH REACHING OUT OF SCHOOL CHILDREN PROJECT APPRAISAL DOCUMENT SOUTH ASIA SASHD Project Financing Data [ ] Loan [ ] Credit [XI Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 5 1.O Proposed terms: Team Leader: Amit Dar/Hena G. Mukherjee Sectors: Primary education (100%) Themes: Education for all (P) Environmental screening category: B Safeguard screening category: S2 IDA GRANT FOR POOREST COUNTRY Swiss Agency for Development Cooperation Total: OO Borrower: The Government of the People's Republic of Bangladesh Bangladesh Responsible Agency: Ministry of Primary and Mass Education (MoPME) Bangladesh FY Annual Cumulative Does the project depart from the CAS in content or other significant respects? Re$ PAD A.3 [ ]Yes [XINO

9 Does the project require any exceptions from Bank policies? Re$ PAD D. 7 Have these been approved by Bank management? Is approval for any policy exception sought from the Board? Does the project include any critical risks rated substantial or high? Re$ PAD C.5 ~~ ~~ Does the project meet the Regional criteria for readiness forimplementation? Re$ PAD D. 7 [ ]Yes [XINO [ ]Yes [ IN0 [ ]Yes [XINO [XIYes [ ]No [XIYes [ ]No Project development objective Re$ PAD B.2, Technical Annex 3 The key objective of the proposed Project is to reduce the number of out-of-school children through improved access, quality and efficiency in primary education, especially for the disadvantaged children, in support of GOB S national EFA goals. Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 (a) Improving Access to Quality Education for Out-of-School Children to facilitate their completion of primary schooling through: (i) education allowances for eligible students; and (ii) grants to LCs where the students enroll. (b) Communications and Social Awareness to raise awareness about the project, mobilize stakeholders to open new LCs or expand existing LCs, and disseminate information on qualification criteria, resource support, and other operational guidelines to stakeholders. (c) Project Management and Institutional Strengthening to establish a sound structure for project management and implementation, and strengthen the capacity to deliver quality primary education to out-of-school children. (d) Monitoring, Evaluation and Research to provide an effective monitoring and evaluation system to monitor the use of education allowances and grants support, and evaluate the two alternatives. Which safeguard policies are triggered, if any? Re$ PAD 0.6, Technical Annex 10 Two safeguard policies that could be triggered under this project relate to environmental assessment (OPIBPIGP 4.01) and Indigenous People s (OD ). Significant, non-standard conditions, if any, for: Re$ PAD C. 7 Board presentation: NIA Loadcredit effectiveness: NIA Covenants applicable to project implementation: NIA

10 A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues While Bangladesh is one of the poorest countries in the world, its economic performance in the past decade has been relatively strong, and progress towards achieving the MDG goals, particularly in education has been favorable. Bangladesh has made significant progress both at the primary and secondary levels, especially in regard to increasing access and gender equity. With nearly 17.7 million students enrolled in over 78,000 primary level schools in Bangladesh s 480 Upazilas, primary gross enrollment rates rose from 76 percent in 1991 to 96 percent in 2002 while the corresponding net enrollment rates rose from 64 percent to 80 percent. Primary dropout rates fell from nearly 60 percent in 1991 to 30 percent in Gender parity in access to primary education has also been achieved. These achievements are particularly impressive when compared to countries in the South Asia region and other countries at similar levels of per-capita income. For example, Bangladesh s net enrollment rate ranked eighth among ten low-income countries (India, Pakistan, Sri Lanka, Nepal, China, Indonesia, Kenya, Benin and the Republic of Congo) in By 2000, its rank had improved to fourth. Furthermore, in South Asia, only Sri Lanka has matched Bangladesh s feat of achieving gender parity at the primary level. Additionally, the primary education system is also targeted at enhancing equity in access-53 percent of students in the primary education system come from poor households. Significant challenges remain. The I-PRSP states that (i) the widening quality divide in education between the rich and the poor needs to be narrowed; and (ii) access to education for the poor needs to be increased to ensure an efficient and sustainable approach to equitable, quality education. Other fundamental systemic interlockmg issues may be summarized as follows: The net enrollment rate (80 percent in 2001) suggests that well over three million children of the primary school age (6-10 years) were out of school. They include children who have never enrolled in school, those who had enrolled and dropped out from the formal primary education system, street children and children of displaced families who have migrated from rural to urban areas; About one third of children drop out before completing the five-year cycle; Children in remote rural areas have very limited access to education; and High levels of student absenteeism. IDA is committed to helping Bangladesh realize its aspiration to reduce poverty substantially within a generation. To attain this objective, IDA S Country Assistance Strategy (CAS, DB dated February 8,200 1) outlines a three-pronged strategy: (i) consolidating gains in human development and supporting initiatives to address the next generation of development challenges in education, health and nutrition; (ii) implementing an integrated approach to rural development; and (iii) accelerating and broadening private sector-led growth. The CAS discussion on developmental priorities in the education sector resonates with the I-PRSP, stating that notwithstanding the past decade s impressive gains recorded in education, improving quality and providing access to the disadvantaged remain a principal challenge, and would be key areas of support for IDA. Government Agenda: GOB is fully cognizant of these challenges and is taking steps to address them. GOB has recently completed a National Plan of Action for Education for All (EFA) which embraces all of the goals of EFA for making education compulsory, accessible and all-inclusive. The Ministry of Primary and Mass Education (MoPME) has begun implementing (from July 2003) the second Primary Education Development Program (PEDPII), aimed at improving the quality of education, enhancing access to schooling, and ameliorating overall management and oversight of the state s provision of formal primary education. PEDPII, which is being supported by 11 development partners 1

11 including IDA (with the Asian Development Bank as the lead development partner), represents a major step towards operationalizing the Government s EFA and Poverty Reduction agenda. However, non-formal schools providing primary education, also known as Leaming Centers (LCs), which enroll a significant proportion of the school-age population lie outside the ambit of PEDPII. These institutions cater to about 8-10 percent of students (about 1.7 million) at the primary level, and these children are mostly from the poorest segments of society. This represents a substantial increase in enrollments since the beginning of the 1990s, when LCs were catering to about two percent of enrollment. Most of these Centers provide three years of primary education (some provide the full fiveyear cycle) after which many students transition to government-approved primary schools. Studies indicate that many of these institutions have innovative teaching and learning methods and outcomes on student learning achievement, attendance and retention rates, etc. have been positive. Additionally, the Shishu Kallyan Trust (SKT) schools, which also cater to the disadvantaged, focus on providing primary education to workmg children in urban areas. These schools, operated by MoPME, are not covered by PEDPII. While enrollment in these schools is small (about 20,000 students), GOB is keen to expand this system to attract working children into school. However, significant resource constraints inhibit the ability of LCs and SKT schools to grow, attract the most disadvantaged and provide good quality education. As these LCs were not formally recognized by GOB they have not been included in PEDPII. Thus there is a gap that hinders GOB S progress in reaching its EFA goals as stated in the National Plan of Action. Investments in the formal sector alone will not be enough for Bangladesh to move towards its EFA goals. Even if PEDPII, which focuses on supporting the formal primary sector, does achieve its targets, an estimated 1.8 million children would still not be in school by The net enrollment rates would then reach around 88 percent, instead of 93 percent as targeted in the National Plan of Action. To complement what is being done under PEDPII, a transitional arrangement is needed for the next 5-10 years as the Government continues to strengthen its system and enhance its capacity to provide quality primary education to all children in partnership with communities, NGOs, and other providers. To bridge this gap, GOB is now committed to putting in place strategies to increase enrollments and improve the quality of education in LCs, and MoPME has been identified as the implementing agency. Attracting the most disadvantaged children into primary education will be challenging. Supply-side interventions focusing on building more classrooms and schools, and hiring more teachers may not be sufficient to attract these children to school. International experience, as well as the experience from Bangladesh, shows that it is necessary to develop demand-side interventions to get these children to school by compensating the children and their families for the direct and indirect costs of schooling, and to provide them with a teaching and learning environment sufficiently attractive to ensure that they stay in school. Developing such an environment will require community/parent participation and oversight of center management, as well as providing flexibility to the LCs to manage and allocate resources. Thus, this Project complements PEDPII by developing demand-side interventions to: (i) encourage outof-school children to attend LCs; and (ii) improve the quality of education in these Centers. Providing support for children to enroll in good quality LCs has the potential to reduce significantly the number of out-of-school youth, and to ensure that they get quality education. Through testing and rigorously evaluating alternative approaches to enhancing access and improving quality, this strategy will allow the Government the opportunity to learn from alternative practices and methods in the delivery and management of primary education. SKT was established in 1989, with the aim of providing primary and secondary education to working children aged SKT is managed by a Board consisting of 10 members headed by the Minister, MoPME, and is financed by an endowment. Currently SKT runs 45 schools in 37 districts - mainly in urban areas. 2

12 2. Rationale for Bank involvement IDA has gained extensive experience in many countries-including Bangladesh--in developing demandside and community-based interventions aimed at getting children into school and assisting countries in moving towards their EFA targets. Furthermore, IDA has a long history of supporting primary education in Bangladesh. IDA has also maintained a dialogue with the Government, development partners, NGOs and civil society on options to support students who, having no access to the formal system, are left out of PEDPII. The proposed ROSC Project is consistent with the overall PEDPII framework. Aimed at getting children into LCs that provide primary level education, the Project will address the problem of out-of-school children and test approaches to reaching out to them. This would provide GOB with the knowledge and experience about addressing the issue when planning for the next primary education subsector program that is expected to follow PEDPII. IDA S resources for this Project will be made available on a grant basis to GOB. This would permit direct monitoring of the grant resources to show the impact of grant funds in solving a specific problem. The results will provide the justification for the use of more such resources in the future. The value added elements of IDA S support will be to bring experiences from around the world and from Bangladesh: (a) in community management and mobilization; (b) the management and implementation of the education allowances and LC grants; and (c) comprehensive multi-level monitoring and evaluation. 3. Higher level objectives to which the project contributes The Project contributes to Bangladesh s long-term objective of poverty reduction through the development of human capital. This is directly linked to the CAS objective(s) outlined in A.l above. The Project will also contribute to learning through testing new ways in which educational services could be delivered to the poorest and most disadvantaged children while ensuring adequate transparency and accountability. B. PROJECT DESCRIPTION 1. Lending instrument The proposed Bank instrument is a Sector Investment Loan (SIL) financed through an IDA grant. GOB is committed to extending coverage to all out-of-school children and to supporting non-formal LCs. The Project supported by the IDA grant will effectively test a package of demand-side interventions aimed at widening access to primary education and improving the quality of education in LCs and SKT schools. Lessons drawn from these will be critical as GOB moves towards assuming full fiscal responsibility for extending support to the non-formal system in order to achieve its EFA goals. 2. [If Applicable] Program objective and Phases N/A 3

13 3. Project development objective and key indicators The key objective of the Project is to reduce the number of out-of-school children through improved access, quality and efficiency in primary education, especially for the disadvantaged children, in support of GOB S national EFA goals. The key performance indicators (KPIs; for details see Annex 3) by End of Project (EOP) include the following: (1) (2) (3) (4) (5) (6) (7) (8) The number of out-of-school children reduced by about 0.5 million. About 1.4 million student-years supported for new students. Percentage of students reaching expected competency level based on teacher s assessment in Bangla and mathematics not less than 65%. Average annual student attendance rate not less than 75%. Student grade completion rate not less than 80%. Average teacher attendance rate not less than 90%. Students in each grade to have on average, the same number of textbooks as those in corresponding grades in the formal primary education system. Student transition rate to public and NGO schools to Grade 4 (from Grade 3) not less than 80%, or to Grade 6 (from Grade 5) not less than 70%. At completion, the Project will be rated: 0 Highly Satisfactory if it achieves the core KPIs comprising indicators (1) through (5) above and at least one of the remaining KPIs. 0 Satisfactory if it achieves the core KPIs. 0 Moderately Satisfactory if it achieves any five of the KPI s listed above but not all the core KPI s. 0 Unsatisfactory if it achieves only four of the KPIs listed above. 0 Highly Unsatisfactory if it achieves only one to three of the KPIs listed above. 4. Project components This is a learning and evaluation Project that tests alternative approaches aimed at providing access to quality primary education. The Project will assist in the establishment of Learning Centers (LCs) at the local community level by providing LC grants, and enroll students by providing education allowances. In order to achieve this, the Project will strengthen the capacity of communities and local level institutions, and empower them to organize and manage the provision of quality education. Project coverage will commence with targeting 60 Upazilas (out of a total of 484 Upazilas in Bangladesh) based on: (i) net enrollment rates; (ii) the gender gap in enrollment; (iii) the primary cycle completion rate; and (iv) poverty levels. The number of Upazilas covered could be increased over the life of the Project. The Project will be implemented through the following components (see Annex 4 for a detailed description, and Appendix to Annex 4 for list of Upazilas). Component I: Improving Access to Quality Education for Out-of-School Children (US$53.4 million) The objective of this component is two-fold: to support schooling for out-of-school children and to facilitate their completion of primary schooling through: (a) education allowances for eligible students; and (b) grants to LCs where the students enroll. In 60 percent of the selected Upazilas, both education allowances to eligible children and grants to LCs will be provided. In the remaining Upazilas, only grants will be provided to LCs. The project implementation unit, in consultation with IDA, will finalize the choice of upazilas where LCs will receive grants, and those where both education allowances and grants 4

14 will be provided. Regular evaluations will be conducted during the Project to examine the effectiveness of these options, and decision will be made accordingly on modifying the percentages above, An Operations Resources Manual prepared by MoPMEiDPE will specify the procedures and guidelines for distributing education allowances and LC grants. Subcomponent 1. I: Education Allowances to Out-of School Children Financing under this subcomponent will include an education allowance scheme to attract out-of-school children to LCs. The annual education allowance will range from Tk.800 for class 1-3 and Tk.970 for class 4-5 students. Education allowances will be channeled to qualifying children through bank accounts, managed by their mothers or guardians, and will be disbursed twice a year. Subcomponent I.2: Grants to Learning Centers/Schools Each LC will be managed by a Center Management Committee (CMC).* Financing under this subcomponent will include grants based on specific criteria to eligible LCs which enroll new students to deliver quality education. These grants will range from Tk.25,000 for class 1-3 to about Tk.3 1,000 for class 4-5 per annum. Learning Center grants will be disbursed twice a year to qualifying LCs through bank accounts managed by the CMCs. A portion of the grants will be earmarked for quality enhancements and improving school management and the remainder will be used at the discretion of the CMC for teachers salaries, LC maintenance and renovations, improved sanitation and provision of safe drinking water, extra-curricular activities, etc. In Upazilas where LCs receive only grants, the grant per LC will be approximately between Tk.55,000-65,000 per annum (by incorporating the average value of the education allowance into the grant). Students in these LCs will not participate in the ROSC education allowance scheme. Subcomponent 1.3: Shishu Kallyan Trust (SKT) Schools The Project will finance grants to SKT schools and education allowances to working children enrolled in these schools. The education allowance will meet the direct and indirect costs of schooling and compensate for a portion of the opportunity costs for working children. The grant, to be provided on a per-capita basis, will also cover a part of SKT program management expenditures. The annual educational allowances will be around Tk for each student. Grants will be in the range of Tk. 25,000-30,000 per annum. Component 2: Communications and Social Awareness (US$2.7 million) The objectives of this component are to: (a) raise awareness about primary education in general and about the Project in particular, through appropriate media and communication campaigns; (b) mobilize stakeholders to open new LCs or expand existing LCs; (c) disseminate information on qualification criteria, resource support, and other operational guidelines to stakeholders; and (d) assess the effectiveness and reach of the communications and social awareness activities. Subcomponent 2. I: Social Awareness This subcomponent will finance: (a) the development and delivery of effective communication about primary education in general and the Project in particular at the family, community, Upazila and national levels; (b) the development and distribution of concise informational packages of materials, which will be The CMC would be composed of five parentslguardians, one female ward member, one UEO representative, and one Education service provider (see below), with the teacher as the member secretary to the CMC. 5

15 broadly distributed to potential Education Service Pro~iders(ESPs)~/Education Resource Providers (ERPs)~; and (c) logistical support for enhanced communication between the UEOs and the LCs. Subcomponent 2.2: Community Mobilization This subcomponent will finance: (a) the development of community mobilization training modules for the training of trainers (TOT) and other related materials; (b) the initial training of CMC members; and (d) the preparation of community mobilization reports for each Upazila. Component 3: Project Management and Institutional Strengthening (US$2.4 million) The objectives of this component are to: (a) establish a sound structure for managing and implementing the Project; and (b) develop and strengthen the capacity to deliver quality primary education to out-ofschool children. Subcomponent 3.1: Project Management The organization of Project management is illustrated in the Chart in Annex 6. Following is a brief description of the functions and responsibilities of the key units in the management structure. At the national level, MoPME will be responsible for oversight of the Project. DPE will be the implementing agency of MoPME for the Project. GOB will establish a Reaching Out-of-School Children (ROSC) Committee which will oversee overall project implementation, carry out joint annual reviews, and resolve implementation issues. The ROSC Unit, established by MoPME and headed by a Project Director, will be directly responsible for the day-to-day implementation of the Project. Supporting the Project Director will be five Assistant Directors (ADS), each heading a section, who will be responsible for implementing various Project activities. At the Upazila level, the UEO will process applications for establishing LCs, facilitate disbursements of education allowances and grants, and coordinate the monitoring of LCs. At the local community level, the CMCs will be responsible for managing the LCs with support from ESPs of their choice. To support quality improvement of the LCs, the CMCs will seek assistance from ERPs chosen by them. Subcomponent 3.2: Institutional Capacity Building For effective project implementation, the capacity at the central, Upazila and local community levels will be strengthened through regular in-country training, including management, educational development and financial management training. For key personnel in critical areas there may be some overseas training. Institutional capacity building efforts will be extended to ESPs and ERPs based on a needs assessment through appropriate in-country and international training. To develop and enhance local community capacity, the ROSC Unit will prepare a standardized training and dissemination package, incorporating elements of fiduciary responsibilities (resource management, supervision, procurement, etc.) and more broadly, project implementation responsibilities. The training Education Service Providers (ESPs) are those agencies selected by CMC s, in accordance with agreed terms, conditions and criteria, to assist in identify out-of-school and hard-to-reach children, to ensure their enrollment and attendance, and to support the CMC s in running the LCs. Education Resource Providers (ERPs) are NGOs, educational institutions, or agencies, with a multidistricthational presence and extensive experience in primary education, teacher training and curriculum development, selected by CMC s to carry out educational technical services in accordance with agreed terms, conditions and criteria. 6

16 package will be designed on the basis of a pre-implementation study to identify current practices in community organization and management. The package will include guidelines on procurement of services, resource management, and accounting. Subcomponent 3.3: Networking to Improve Quality The ROSC Unit will facilitate the establishment of a network of participating ERPs, supported by a network coordinating body. The purpose of this network will be to provide technical advisory services and equipment to ERPs, and to ensure the quality of educational services provided. Component 4: Monitoring, Evaluation and Research (US$4.3 million) The objective of this component is to provide an effective monitoring and evaluation system to: (a) monitor the use of grants support; (b) monitor the use of education allowances; and (c) evaluate the two programs through action research, thematic studies, and impact assessments. In order to establish a baseline, qualitative and quantitative surveys at the level of the household, community and LCs will be undertaken within the first six months of project implementation. Subcomponent 4.1: Monitoring the use of Grant Support by Learning Centers This subcomponent will comprise monitoring activities relating to LC operations; student information; teacher information; utilization of grants; and annual grant audits. This task will be carried out by a contracted independent agency which will report to the ROSC Monitoring Section. The Upazila Education Office will be the administrative center for the monitoring process. Subcomponent 4.2: Monitoring and Assessing the use of Education Allowances Activities under this subcomponent will comprise monitoring and assessing education allowances to children attending LCs and SKT schools. The task will be carried out by the independent agency mentioned under Subcomponent 4.1 above, with the assistance of CMCs and the UEO. Subcomponent 4.3: Evaluating the Impact of Grants and Education Allowances Activities under this subcomponent will be carried out by a contracted independent agency with relevant experience in the evaluation of education programs, including the design and fielding of nationally representative surveys, and the statistical analysis of data derived from such surveys. Evaluation activities will include baseline surveys, assessment of the operation of recipient LCs, trachng expenditures including the disbursements of grants and education allowances, and the overall management of the Project. The evaluation will help provide information to GOB for any future efforts to institute standardized education criteria for the primary education system at large. Subcomponent 4.4: Analytical Studies of Non-Formal Education GOB has constituted a Task Force which is developing a national non-formal education framework. Reviews and studies to be carried out under this component will be linked up with issues identified by the Task Force. A sector analysis of primary schools that fall under state purview, will be undertaken to complement the work undertaken by the task force. GOB will also be supported in institutionalizing the non-formal education framework and implementing task force recommendations relevant to the primary education sub-sector. 7

17 5. Lessons learned and reflected in the project design Based on the experience of previous Projects in Bangladesh as well as other intemational experience, some key lessons include: Reliance on just one mode ofprovision ofprimary education may not be sufficient, Focusing on investments in the formal primary system, as PEDPII is doing, is extremely important. However, this would not be sufficient for Bangladesh to move towards achieving its EFA goals. By the end of PEDPII, it is estimated that 1.8 million children (most of them coming from the most disadvantaged backgrounds) would still be out of school. Recognizing that the NGO sector in Bangladesh, through their LCs, have the capacity to deliver good quality primary education, this Project focuses on getting primary-aged out-ofschool children into these schools and providing them with good quality education. About 0.5 million children are expected to benefit from the Project. Institutional autonomy and accountability. An important reason why educational institutions do not provide good quality education is that they have little autonomy to make decisions. The Project aims to alter this aspect. First, with regard to autonomy, LCs will be provided grants and will be responsible for making decisions as to how to use them for quality improvements, management, environmental improvements, etc. In terms of accountability, the resources that LCs receive are tied to the number of students enrolled. If LCs provide poor quality education, parents have the option to remove their children from the Centers. Given that financing is tied with performance in this manner, LCs have the incentive to be accountable to parentdchildren. Enhancing community involvement. Community involvement is essential for improving the quality and coverage of services in remote areas, as well as for Project sustainability. International experience suggests that communities become actively engaged when they have meaningful responsibilities, control over resources, and are accountable. These, along with good quality education for their children, are the incentives for community participation. The Project reflects these lessons in seeking to set up CMCs to be responsible for establishing and managing LCs. Enhancing access through demand-side interventions. The Government s strategy to promote education for the poor and girls through demand side interventions has enhanced access. Two programs provided subsidies to selected students and their families. The Food for Education (FFE) program provided grain rations to disadvantaged families if they send their children to primary school (it has been recently replaced by a targeted direct cash-subsidy stipend program and over five million students are expected to receive the stipend annually). The Female Secondary Stipends (FSS) program provides stipends and tuition waivers to female students residing in rural areas attending grades 6-10 (with close to four million girls receiving stipends annually). These programs have been successful in enhancing access, even though there are leakages associated with them, which the Government is trying to minimize. The FFE succeeded in sending poor children to school: it is estimated that participation in the FFE increased the probability of attending school by 20 percent. An additional year of the FSS is estimated to increase female secondary enrollment by as much as eight percent. The Project aims to enhance the access for the most disadvantaged by providing educational allowances to students. Ensuring rigorous project evaluation. The Project is testing the effectiveness of alternative approaches in enhancing access and ensuring quality education for out-of-school children. Given that one of the aims of the Project is to leam about the effectiveness of these approaches, a comprehensive evaluation system, including establishing an agreed baseline, is critical to the Project. This will allow for testing of whether the Project is meeting its systemic goals and also provide informatioddata for real-time corrective action. Extensive emphasis is being placed on these aspects and resources have been provided to enable research, surveys and rigorous impact evaluations to be undertaken. 8

18 6. Alternatives considered and reasons for rejection The Project complements PEDPII. Given the nature (diversity, non-standardized, multiple providers etc.) of non-formal provision in primary education, the design is aimed at being flexible and testing different approaches. Several alternative approaches and design elements were considered: Focus on supply-side interventions. While building schools and classrooms was an option, it was rejected because such interventions are unlikely to attract children into schools, particularly the most disadvantaged. Providing incentives (education allowances) to families to enroll their children into LCs, providing institutions greater autonomy to manage their resources, and making them more accountable to parents were considered to be more effective in enhancing access and improving quality. Hence the approach used in the Project focuses on the demand-side - i.e. providing education allowances to children and grants to LCs. Supporting formal sector institutions. This alternative was rejected as IDA, along with 10 other development partners, and GOB have recently committed to fully financing formal primary education for the next six years. However, LCs, which are not covered under PEDP 11, perform an indispensable educational and social function of reaching out to the poorest and most disadvantaged strata of society. The Project focuses on providing direct assistance to these Centers and to students to encourage enrollment in them. Provision of Education Allowances and grants in all targeted Upazilas. It was originally envisaged that education allowances and grants will be provided in all targeted Upazilas. This option was rejected on the basis of feedback received during extensive stakeholder consultations during the Project preparation process. While some stakeholders felt that it was necessary to provide incentives (education allowances) to families to attract them to send their children to school, others felt that the presence of a high quality teaching/learning environment, which will be enabled through grants, will be enough to attract children to LCs. Hence, the Project is designed so that education allowances and grants are provided in 60 percent of eligible Upazilas, and only grants in the remaining 40 percent of eligible Upazilas. The effectiveness of these alternatives will be tested through rigorous impact evaluation carried out during project implementation. Targeting education allowance payments. Most of the out-of-school children are from poor families-- gross enrollment rates among the poor are 85 percent and are over 100 percent among the non-poor. In addition, most of those who do attend LCs run by NGOs come from the poorest households: 77 percent of these children come from households with a per capita expenditure of less than $0.50 per day, as opposed to 40 percent of such households that send their children to formal primary schools. Given that over 90 percent of all out-of-school children belong to poor households, many of them ultra-poor. Finally, Upazilas where the Project will be initiated are among the poorest in the country. Considering this reality, as a first step, the Project will provide education allowances to all new enrollees in Upazilas where education allowances are being provided. Using alternative institutions (to MoPME) for project implementation, While it is possible to use other agencies to implement the Project (e.g., the private sector, social fund type institutions), this alternative was rejected for two main reasons. First, MoPME has accepted the concept of supporting LCs runs by NGOs, and the Project is an ideal way to engender this approach. Second, a long-term objective for primary education in Bangladesh i s for GOB (through MoPME) to support education for all primary school aged going children. The Project will provide MoPME with the opportunity to implement and test approaches to reach disadvantaged out-of-school children. Through the Project implementation, MoPME 9

19 will enhance its knowledge and experience to address this issue when planning for the next primary education sub-sector program as a follow-up to PEDPII. Contracting directly with NGOs to deliver education. In this Project communities will enter into an agreement with NGOs (or other such service providers) to deliver primary education. This approach has certain advantages over direct contracting of NGOs. First, empowering the communities to choose their education providers (and then in the operation of schools) will lead to greater accountability of the LC to the community/parents. Second, selection of the NGOs by a Government implementing agency has often been subject to political interference in the past. While this can still happen if communities are entering into agreement with service providers, the likelihood is significantly reduced in the case of the current Project, as the Government implementing agency does not have direct control over the choice of the service provider. Finally, while GOB is currently developing transparent criteria and mechanisms to contract NGOs (the NGO Foundation currently being designed by the Ministry of Finance), it is likely that it will be another months before the foundation becomes functional. C. IMPLEMENTATION 1. Partnership arrangements (if applicable) Bangladesh became eligible for IDA grants for fiscal year 2004, presenting an opportunity to utilize grant funds for the poorest primary school-aged children who were not covered under PEDPII. During the preparation of PEDPII, the inclusion of children outside the formal primary system was discussed with GOB and among Development Partners (DPs). It was agreed then that PEDPII will focus on formal primary education, and a follow-up operation to cover children out of school/ in non-formal institutions could be prepared subsequently. MoPME has shown strong ownership of ROSC, and has invited DPs and NGOs to participate in the design and preparation of the Project. While several DPs would prefer a more comprehensive subsectoral approach to primary education in Bangladesh, extensive consultations with DPs revealed that it will take more time to reach consensus on the parameters of such an operation. This is an attractive proposal, however, the additional preparation time required would have made it difficult for GOB to ensure commitment of IDA Grant funds by June 30,2004. In addition, the option of establishing an NGO funding mechanism was also discussed during Project preparation, but as explained in the section above, this was not feasible at this stage. While continuing the dialogue between GOB, DPs and NGOs with the aim of developing a programmatic approach to primary education, GOB decided to proceed with ROSC which has the potential to significantly reduce the number of children who would otherwise not have access to primary education. This would allow Bangladesh to reach its own EFA goals by From a systemic perspective, additional financing would be required to assist GOB to help all out-ofschool children to receive good quality primary education. In this context, DPs would have a crucial role to play. The proposed Project tests some approaches to enhance access to primary education for out-ofschool children. Given that the Project will be operational in only about 60 out of Bangladesh s 484 Upazilas, collaborative efforts with GOB, NGOs, communities and other Development Partners would help to scale up these and other potential approaches. The approaches proposed in the Project are also flexible enough to allow for adjustments in design during implementation. In order to set the stage for scaling up efforts, a sector analysis is built into Component 4 - Monitoring, Evaluation and Research (see component 4.4). The study will examine the non-formal education subsector, identify financing options for DPs, and provide recommendations towards a wider and holistic approach to the primary education sub-sector. This analysis will also provide a forum for initiating and continuing dialogue involving the Government, DPs, and other stakeholders with the aim of developing a fully programmatic approach to primary education in the near future. 10

20 The Swiss Agency for Development Cooperation (SDC) has followed up its interest to participate in ROSC, and will cofinance US$6 million. This funding commitment awaits approval from SDC headquarters in Bern. Discussions and detailed information-sharing with the EC for possible participation are ongoing. 2. Institutional and implementation arrangements At the national level, MoPME will be responsible for oversight of the Project. DPE, under MoPME, will be the implementing agency for the Project. GOB will establish a Reaching Out-of-School Children (ROSC) Committee which will oversee overall Project implementation, carry out joint annual reviews, and resolve implementation issues. A Reaching Out-of-School Children Unit (ROSC Unit), established in DPE by MoPME, and headed by a Project Director (PD), will be directly responsible for day-to-day implementation. Supporting the PD will be five Assistant Directors (ADS), each heading a section, who will be responsible for implementing various Project activities relating to: (a) provision of education allowances and LC grants; (b) training and education development; (c) monitoring, evaluation, and research; (d) communications and social awareness; and (e) finance and administration. The PD and the five ADS, operating as a unified team, will be appropriately supported by a procurement officer, Project officers, computer operators and other required support personnel with relevant skills and experience. The ROSC Unit, in implementing the Project, will follow the policy directives of the ROSC Committee. At the Upazila level, the Upazila Education Office (UEO) will process applications for establishing LCs, facilitate disbursements of education allowances and grants, and coordinate monitoring teacher and student attendance at LCs. The UEO will report directly to the ROSC Unit PD on Project related matters, and will share Project related information with the District Primary Education Officer and DPE. At the local community level, the Center Management Committee (CMC) will be responsible for managing the LCs with support from ESPs. The ESPs appointed by the CMCs will lead community mobilization efforts to identify the target population, encourage it to start a school, and help organize the appropriate LCs. To support quality improvement of the LCs, the CMCs will seek assistance from Education Resource Providers (ERPs). 3. Monitoring and evaluation of outcomes/results The M&E component, as an integral part of the Project, will put in place a system to monitor the implementation of the two main interventions: (a) provision of grant funds to LCs; and (b) education allowances to students. Integral to the M&E system will be measures to evaluate these interventions and their outcomes/results. Monitoring and evaluation will be separate and distinct processes. Details for Project M&E are provided in Annex 3 (Results Framework and Monitoring) and Annex 4 (Detailed Project Description). Monitoring of the operation of the LCs, especially student and teacher attendance, will be carried out by the CMCs and UEOs who will be responsible for collecting data and information on the LCs. Data on SKT schools will be collected by the SKT Director. All Project data and information will be transmitted to a contracted independent agency, which will be working closely with UEOs, for processing and preparation of statistical and other reports to be submitted every six months to the ROSCU. Oversight responsibility for all the above will rest with the ROSCU. 11

21 Evaluation of the interventions and achievement of Project objectives will be carried out by a contracted independent nationalhternational agency which will prepare an evaluation report every six months to be submitted directly to the ROSCC. The evaluation report will be based on special evaluative thematic studies and action research as well as the statistical and other reports prepared by the independent monitoring agency. As the monitoring and the evaluation reports will assess the efficacy of the Project interventions, particularly the LCs compliance with the conditions for Project support, they will provide the basis for the disbursement of grant and education allowance funds. Hence, the agencies responsible for the respective reports will need to be timely in meeting the production deadlines. Annual and Mid-Term Review. Annual reviews will be undertaken jointly by the ROSC Unit and IDA. A mid-term review (MTR) will be held around July Two months prior to the MTR, a comprehensive report on Project progress and achievements will be prepared by the extemal evaluation agency, under Terms of Reference acceptable to IDA, and submitted to the ROSC Unit. The reports would provide the basis for review of the Project by the ROSC Committee which would provide feedback to the ROSC Unit and disseminate the reports to all concerned agencies. 4. Sustainability The sustainability of this Project will ultimately depend on GOB S commitment to supporting the financing of primary education for all. This implies that GOB needs to commit to finance primary education provided in Government schools and in learning centers (or by other potential providers) provided they meet some quality standards. Through PEDP I1 and the current Project, GOB is clearly moving in this direction. The Project complements the development objectives of the Second Primary Education Development Program (PEDPII, ), supports MoPME s strategy to achieve the EFA and Millennium goals, and augments GOB investments to increase access to quality primary education. Learning Centers supported under this Project are essentially transitional institutions which will provide basic education to hard-to-reach children from hard-core poverty groups until MoPME has developed the capacity, in terms of physical facilities, professionally qualified teachers, and administrative support services which would be enhanced under PEDPII to ensure education for all by From a financial perspective, if learning centers are going to be supported through the GOB budget following the end of the Project, the recurrent cost implications are not very significant - an increase of 3-4 percent. Given that the total costs under PEDP I1 (recurrent+development) fall well within the education budget projections for 2009/10, absorbing the additional recurrent costs due to financing of learning centers is likely to be sustainable for GOB. Community mobilization -a key aspect of the Project - will also be critical towards ensuring sustainability. The Project aims to mobilize communities to manage learning centers and financial resources for these centers. In other countries, empowerment of communities along these lines has been shown to lead to enhanced community contributions (in cash or in-kind) towards the operation of schools, thereby augmenting sustainability. 5. Critical risks and possible controversial aspects Risks To project development objective Gove ent itment diminishes with regard to utilizing the IDA grant Risk Mitigation Measures GOB S recent commitment for MoPME, the education line Ministry, to Risk Rating M 12

22 Risks resources to support the provision of education to out-of-school children, in line with its EFA goals and its PRSP objectives. CMCs and communities do not participate actively in Center/school management activities. Access to quality primary education to out-of-school children is not improved to such an extent that this would lead to increased productivity, and therefore increased income, and ultimately to a reduction in poverty. Risk Mitigation Measures implement the Project, and its agreement to contribute towards Project financing are indicators of ownership and commitment. Strategies for Project delivery will be adjusted annually based on overall implementation progress. Project risks will be assessed as well, and if necessary, Project design will be altered to reflect prevailing conditions. Component 4 of the Project provides for (i) raising awareness at community, upazila and national levels on the multi-dimensional benefits of primary education and Project approach; (ii) mobilizing families, communities, and local education service providers to open new LCs or expand existing Centers; and (iii) disseminating information on qualification criteria, resource support, and other operational guidelines to all stakeholders. CMCs will be supported by UEOs and ESP s in school management, and will undergo relevant training. Provision of well-targeted education allowances to poor out-of-school children to ensure retention and increase demand for primary education among poor children/families. Increased awareness campaign will reinforce the importance of quality primary education. Risk Rating M M Dissemination of information and A Communications and Social Awareness plan will be prepared, and does not Occur in a substantial pertinent activities will be frontloaded. timely manner. Component 3 - Project Management and Institutional Development Implementation suffers because of ROSCU will be the focal point for implementation. Additionally, since inadequate attention from DPEj due to delivery of allowances and grants will start at the beginning of 2005, this capacity constraints. will provide adequate lead time. Component 4 - Monitoring, Evaluation and Research There could be leakages in the Rigorous monitoring mechanisms, and independent program evaluation disbursements of educational have been designed to ensure that irregularities are minimized. Annual allowances and grants. impact studies and action research will reinforce these mechanisms. Overall Risk Rating M M S M 13

23 6. Loadcredit conditions and covenants By Grant effectiveness GOB would have fulfilled the following conditions: (a) Approved the Project Proforma; (b) Appointed appropriate persons for the key positions agreed for the ROSC unit, with Terms of Reference satisfactory to IDA; and (c) Finalized the Terms of Reference satisfactory to IDA, for the external evaluation agency. Grant Covenants AccountdAudit. The Borrower shall: (a) maintain separate accounts for the Project in a format acceptable to IDA; (b) furnish to IDA audit reports conducted by independent auditors, acceptable to IDA, within six months from the end of each fiscal year; and (c) furnish quarterly Financial Monitoring Reports (within 45 days from the end of each quarter) commencing from Grant Effectiveness until Project closure. MoPME will maintain throughout the Project s implementation period a computerized financial management system acceptable to IDA. MoPME will appoint private audit firms to audit annually the disbursement of education allowances and grants under the Project. Project Management. The Borrower shall: (a) cause the Directorate of Primary Education (DPE) to carry out project implementation activities in accordance with the annual operational plans and the Operations Resource Manual, as revised and agreed with IDA; (b) cause the Reaching Out-of-School Children Committee (ROSC Committee) to carry out joint annual reviews and provide advice and guidance to DPE; (c) ensure that the established Reaching Out-of-School Children Unit (ROSC Unit) is competently and fully staffed for the entire Project period; and (d) provide adequate annual budget allocations to the ROSC Project including GOB counterpart funding. Monitoring, Evaluation, Research, and Reporting. The Borrower shall establish a monitoring and evaluation scheme to monitor Project progress and achievement of Project objectives, including tracking of expenditures. DPE will maintain a Management Information System (MIS) under terms and conditions satisfactory to IDA. The Borrower shall ensure that the contracted external monitoring agency and the external evaluation agency are in place no later than November Implementation. DPE shall: (a) cause every Learning Center under the Project to establish and maintain until completion of the Project, a Center Management Committee, with Terms of Reference acceptable to IDA; (b) enter into an annually renewable Cooperation Agreement with each Learning Center, satisfactory to IDA; the Cooperation Agreement will be signed by each Learning Center by December 3 1 for that Learning Center to be eligible for the subsequent Academic Year; and (c) enter into a renewable Participation Agreement with Nationalized Commercial Banks which include accountability measures to ensure that they provide quality and timely services as per the disbursement schedule for education allowances and Learning Center grants. Environment and Social Covenants. The Borrower shall apply the agreed guidelines relating to Environment and Tribal Children. 14

24 D. APPRAISAL SUMMARY 1. Economic and financial analyses Disadvantaged children face significant demand-side constraints to go to school. Given the relatively high opportunity costs of schooling, the lack of demand-side incentives implies that parents find it relatively difficult to send children to LCs. These also lack resources to adequately invest in teaching/learning materials. The Project will encompass investments in the form of education allowances to children and grants to LCs to help address the issues outlined above. It is estimated that at least 500,000 students will benefit from the access and quality improvement measures. A cost-benefit analysis was carried out to identify the number of beneficiaries, and the costs of targeting out-of-school children. The Project yields an Economic Internal Rate of Return (ERR) of 15 percent. The real rate of return is likely to be somewhat higher reflecting positive externalities and longer-term intergenerational social benefits that come with increased levels of education, including lower fertility rates and improved health outcomes to which it is difficult to assign monetary values. The investment will promote improvements in access to LCs for out-of-school children, beneficiaries of which will be the incremental students entering the education system. A poverty and benefit incidence analysis was also carried out to assess the extent to which the Project will target the poorest out-of-school children. As of 2000, the number of out-of-school children constituted approximately 2.5 million of total primary school cohort - with almost all belonging to poor households. It is estimated that following PEDPII completion, approximately 1.8 million will still be out-of-school. Through the Project about 30 percent of these children belonging to poor households will be targeted. The recurrent cost implications of PEDPII are about $450 million in 2009/10. The additional annual recurrent cost implications of supporting students attending learning centers will range from about $40-44 million. If learning centers are going to be even partially (50 percent) supported through the GOB budget following the end of the Project, the recurrent cost implications in 2009/10 will not exceed $475 million (an increase of less than 6 percent). Given that total costs under PEDPII fall well within the primary education budget Projections for 2009/10, absorbing the additional recurrent costs envisaged here through partial support for the learning centers should be sustainable for GOB. 2. Technical Implementation Capacity. PEDPII is an undertaking which will challenge the capacity of MoPME and DPE. To ensure that implementing the ROSC Project does not hrther tax the implementation capacity of DPE, the ROSC Unit will be maintained as a relatively small entity. At the Upazila level, while the Upazila Education Office will be involved in program monitoring, a significant part of this responsibility will also be contracted out to ease the burden on the upazila staff. The community, through the Center Management Committee, will play a crucial role in the establishment and management of LCs. Teacher Development. Well-performing teachers will be the fulcrum of quality education in LCs and schools. Many teachers in non-formal teaching positions do not have the pre-requisites in academichowledge content nor pedagogical training. The Project will provide grants, a portion of which will be earmarked for quality-related activities, which will be used, for example, for initial teacher preparation and continuous teacher support aimed at enhancing pedagogical skills, that LCs will contract from ERPs. A network of participating ERPs will be established whose functions will include upgrading teachers knowledge content; supervising teachers classroom performance; and development of classroom-based, formative assessment activities. 15

25 Disbursement of Grants and Educational Allowances. Disbursements will be based on the lessons of experience in Bangladesh. Following the practices adopted in other IDA projects in Bangladesh, a Participation Agreement will be signed with the concerned Nationalized Commercial Banks to disburse funds to the eligible students and LCs. Such banks will receive a service charge of 2.5 percent of disbursed amounts. Monitoring and Evaluation. To facilitate effective use of data for policy formulation, planning and decision-making, a comprehensive M&E scheme will be established to ensure proper program monitoring and accountability at all levels. The M&E Section in the ROSC Unit will be responsible for the internal monitoring of the Project. External monitoring will be required to ensure the validity of data gathered and this activity will be carried out by a contracted independent agency. In addition to regular monitoring and evaluation, a Quantitative Service Delivery Survey (QSDS) will also be undertaken as a diagnostic tool for analyzing data on education and education finance from a governance perspective. 3. Fiduciary Procurement Procurement Environment and Reform Actions: Under the Public Procurement Reform Project (PPRP) currently being implemented, the Government has: (a) established a Central Procurement Technical Unit (CPTU) with adequate staffing funded from its own resources; (b) issued Public Procurement Regulations 2003 in October 2003 and Implementation Procedures in March 2004; and (c) prepared standard bidding documents (at approval stage). Concurrently, a capacity building plan to train 1,600 GOB staff is underway. These actions contribute positively to an enhanced procurement environment. Implementation of Procurement and Cauacitv Assessment: DPE will be responsible for managing the Project. The Project will largely involve education allowances to students, and very small annual grants to eligible learning centers (maximum about US$l,OOO) supported by Education Service Providers (ESPs). The grants will cover distinct firids for establishment, quality, management, training, and discretionary spending. Each learning center will be managed by a Center Management Committee (CMC). CMC may obtain certain specialized services from Education Resource Providers (ERPs). Since each grant will be of very small amount and there are not many ERPs in the relevant field of the locality, in most cases, CMCs will directly obtain services from the qualified ERPs. A list of potential ERPs and a financing agreement will be agreed with DPE depending on the eligibility criteria. In addition, the Project will involve small procurement of goods, and some consultants services. DPE will disburse funds to the community managed learning centers bank accounts directly in two tranches (semi-annually). Considering the inadequate experience of CMCs, a knowledge dissemination scheme by DPE will be undertaken to ensure appropriate use of funds. Given the nature of the Project, based on the procurement capacity assessment and the need for improvement, the procurement associated risk is rated average. One Procurement Officer will assist DPE in handling procurement matters including use of grants and its financing arrangements between the learning centers and ESPs/ERPs. Details are provided in Annex 8. Rules and Guidelines: All local procurement for IDA-financed goods, and services for which the shortlist entirely comprised of national consultants, will follow the Government s Public Procurement Regulations 2003, acceptable to the Bank (goods: < US$300,000 per contract, consultants services- firms: < US$200,000 per contract, individuals: < US$50,000 per contract). Consulting services and training obtained through international advertisement will follow the Bank s Consultants Guidelines. 16

26 Procurement Plan: The draft Procurement Plan has been prepared by DPE. The Plan includes the initial 18 months procurement, which then will be updated annually always covering the next 18 months requirement. All procurement activities shall be undertaken in accordance with this Plan. Use of Standard Documents: DPE will follow IDA S Standard Bidding Documents/Request for Proposals for international consultants, with Government s issued documents under the new procurement regulations for all local procurement. Prior Review Thresholds: IDA will carry out prior review of the following contracts: (i) for goods - contracts estimated to cost US$300,000 equivalent or more and the first one contract regardless of the value and method; and (ii) for consultant s services- contracts estimated to cost US$lOO,OOO equivalent or more for firms and US$50,000 equivalent or more for individuals. Post Review/ Independent Procurement Audit: Procurement review of small valued contracts below the threshold including grants contracts with ERPsESPs will be carried out annually on a sample basis (20 percent) by an independent consulting firm (Chartered Accountants firm with international affiliation). Financial Management (FM) The FM arrangements under the proposed Project will mostly follow existing Government policy and procedures. There are clear guidelines for authorization and approval of financial transactions at the Ministry (MoPME) and Project levels (ROSCU). The existing systems are considered adequate for the Project. In addition, contractual agreements between Banks, Learning Centers and the ROSCU and education allowance criteria to student will indicate expenditure eligibility under Project components and will form the basis for accounting in appropriate heads. Under the direct supervision of the ROSCU Project Director, an Assistant Director will be responsible for financial management activities. IDA funds will be channeled through a special account in a Nationalized Commercial Bank. Participation Agreements between ROSCU and the banks will indicate periodic tranches to be disbursed from the special account to the nationalized commercial bank and the obligation of both parties under the contract. Cooperation Agreements between ROSCU and the learning center will indicate the terms and conditions of fund transfer fi-om the Bank to the learning centers and other statutory obligation of both parties. The Bank will disburse education allowance and grants to eligible guardian and learning centers respectively through its branches on the basis of approved list received from project management. GOB will provide requisite counterpart hnding following the treasury systems and procedures. IDA will disburse funds along with SDC under a joint co-financing agreement. Up to $100,000 in retroactive financing will also be available for eligible expenditures incurred between May 1, 2004 and Grant effectiveness for activities related to procurement of goods, consultant services and training. The Project financial statements will be audited annually by the Comptroller and Auditor General of Bangladesh. The audit report will be submitted to IDA within six months of the end of each fiscal year. 4. Social Poverty is one of the foremost barriers hindering Bangladesh from attaining its EFA goals. Children, especially girls from particularly disadvantaged groups such as the ultra poor, tribal populations, children with disabilities (CWD), children living in disaster prone areas, and urban slums are unable to attend school. The majority of these children are compelled to work for wages. Moreover, a lack of physical facilities and difficult terrain in remote areas create serious barriers for children in accessing education. 17

27 ~ Many of these children from vulnerable groups stand to benefit from LCs or schools outside of the purview of the formal system which contribute a great to deal to increasing the access to primary schooling. The success of these LCs depends in large part on community participation which needs to be strengthened. One way of addressing the issue is to establish Center Management Committees which will function as community bodies that ensure accountability between Project stakeholders/partners, and to ensure that quality primary education is being provided in LCs. Building up on the environment and social assessment for primary education recently carried out under PEDPII, a rapid environment and social assessment has been undertaken with the objective of identifying social and environmental health issues, especially relating to community participation and ownership of LCs and access to safe water and hygienic sanitation facilities. The assessment indicated that the majority (over 80 percent) students and their guardians are highly satisfied with the teaching in the learning centers. Each learning center has a center management committee (CMC) consisting of 7 members, which includes teacher, local promoter and mothers of the students. CMC, together with the community provides security to the center and they visit the center every week for cleaning the premises. This Project will strengthen the CMC, especially for ensuring social mobilization for EFA, improving the environment of learning centers and enhancing quality of education. Social development outcomes will include: (a) increasing enrolment and completion in learning centers of CWD, tribal, street children, child labor and poor children; (b) retaining children from the vulnerable groups in learning centers; and (c) strengthening of social capital as measured by participation of parents of vulnerable groups in CMC's. MoPME will include key indicators on vulnerable groups in the EMIS. 5. Environment The principal environmental concems of the program relate to the need to ensure (i) the safety of school water supplies, particularly from arsenic contamination, and (ii) the provision and maintenance of adequate sanitation. An environmental assessment has been undertaken for developing a Guideline to address these issues, which has been discussed with GOB and other stakeholders, and made publicly available prior to appraisal. The Guideline details a process through which teachers and CMCs will consult communities to establish a mechanism for providing safe water and sanitation to children. 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [I Natural Habitats (OP/BP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, being revised as OP 4.11) [I [XI Involuntary Resettlement (OP/BP 4.12) 11 [XI Indigenous Peoples (OD 4.20, being revised as OP 4.10) [XI [I Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60)* [I [XI Projects on International Waterways (OP/BP/GP 7.50) [I [XI * By supporting theproposedproject, the Bank does not intend to prejudice thefinal determination of the parties' claims on the disputed areas 18

28 Two safeguards have been triggered and MoPME has developed plans for addressing these issues. MoPME has developed an EMP for providing arsenic safe water and sanitation to children and teachers of learning centers. A Macro plan for the overall development of primary education for tribal children has been developed by MoPME in consultation with key stakeholders to address the needs of tribal children within PEDP-11. This plan will be used for ROSC as well, and implemented in the Project Upazilas with tribal populations. 7. Policy Exceptions and Readiness No policy exceptions are sought. 19

29 Annex 1: Country and Sector or Program Background BANGLADESH: Reaching Out-Of-School Children Project Country Context While Bangladesh is one of the poorest countries in the world, its economic performance in the past decade has been relatively strong. Annual GDP growth averaged 5 percent during the 1990s, with relatively high rates of investment (about 22 percent of GDP), increased public spending on social sectors and the emergence of progressive entrepreneurs. While the economy continues to perform below its true potential of 6-7 percent annual growth needed to achieve the country s poverty reduction goal of halving the incidence of poverty from current levels, progress towards achieving the MDG s has been favorable. The main objective of IDA S assistance is to help Bangladesh realize its aspiration to reduce poverty substantially within a generation. To attain this objective, IDA S CAS outlines a three-prong strategy: (i) consolidating gains in human development and supporting initiatives to address the next generation of development challenges in education, health and nutrition; (ii) implementing an integrated approach to rural development; and (iii) accelerating and broadening private sector-led growth. The CAS discussion on developmental priorities in the education sector notes that, notwithstanding the past decade s impressive gains recorded in education, improving quality and providing access to the disadvantaged remain a principal challenge. These themes echo the findings in IDA S most recent analytical work on the Bangladesh education sector (World Bank, Bangladesh Education Sector Review, 2000). The Primary Education Sector Bangladesh has made significant progress in education in the last two decades, especially in regard to increasing access and gender equity. There are nearly 17.7 million students enrolled in over 78,000 primary level schools in 484 Upazilas (these Upazilas are equivalent to sub-districts -there are 64 districts in Bangladesh), gross primary enrollment rates rose from 76 percent in 1991 to 97.5 percent in 2002 while corresponding net enrollment rates rose from 64 percent to 80 percent. Primary dropout rates fell by a third--from nearly 60 percent in to 30 percent in Gender parity in access to primary education has also been achieved. These achievements are particularly impressive when compared to other countries in South Asia and elsewhere at similar levels of per-capita income. For example, in 1980 Bangladesh s net enrollment rate ranked eighth among ten low-income countries (India, Pakistan, Sri Lanka, Nepal, China, Indonesia, Kenya, Benin and the Republic of Congo). Its rank has now improved to fourth. Furthermore, in South Asia, only Sri Lanka has matched Bangladesh s feat o f achieving gender parity at the primary level. Despite this progress, critical problems persist as identified by both the I- PRSP and the National Plan of Action for Education for All ( ). Over three million children still have no access to primary schooling, and the quality of education-especially in public institutions-- remains a major concern. 20

30 In 2003, the Government has embarked on a major Primary Education Development Program (PEDPII) aimed at increasing access and improving quality in formal primary schools. However, even if fully successful-by the end of PEDPII, Bangladesh will fall short of attaining access and quality goals as specified in the I-PRSP and the National Plan of Action. However, there is another sector, not officially recognized by the Government, which is delivering good quality education at the primary level, and, if supported, can help Bangladesh move closer towards attaining the above mentioned goals. Over the past years NGOs have shown that they are able to successfully deliver quality education programs at the primary level--often to children coming from the most disadvantaged groups. However, these institutions are not included under PEDPII. The Growth of Primary Education in NGO LCs Since the late 1980s, a variety of NGO s have been using a range of delivery mechanisms to cater to basic education needs, especially for disadvantaged households. These institutions have played a complementary role alongside the formal primary education schools supported by the Government. Many such institutions provide three years of primary education but some provide a full five-year cycle of primary education. Most non-formal Centers follow the curriculum recommended by the National Curriculum and Textbook Board (NCTB) and receive free textbooks from the Government. There has been a significant growth in the number of non-formal institutions (known as LCs) over the past decade. While exact numbers are not available, at present about eight percent of primary schools enrollment (close to 1.7 million) is provided through these institutions-this is a four-fold increase over the past decade. While the growth of enrollments in these institutions has slowed down somewhat due to various constraints discussed later-enrollments are still growing at approximately five percent annually. Currently, 68 percent of children are in Centers run by BRAC, and 11 percent in schools run by Proshika with other NGOs enrolling the remaining students. Additionally, some NGOs also provide support to working children to enable them to go to school. One of the largest NGOs of this type is the GOB supported Shishu Kallyan Trust, which operates 45 institutions in 37 districts - mainly catering to urban working children. Student Achievement A test to assess the basic competencies of children (Assessment of Basic Competencies-ABC), shows better outcomes for students in LCs as compared to those in formal schools (Table 2). These students do better in terms of being more literate. It should, however, be pointed out that a score of 38 percent on the achievement scale is too low for an effective education system. Type of School Government Private Madrasa L cs Percent of children Percent of children satisfying basic education satisfying literacy criteria criteria To better understand why LCs are doing better, we examine the characteristics of these schools below. 21

31 Establishment of Institutions One of the most important reasons underlying the success of LCs is that they are responding to demand expressed by the community. There is no uniform method through which these Centers are established. What often happens is that communities approach local NGOs to set up a learning Center in their community, and identify a group of primary aged children (often in number) who have either never been to school or are dropouts fkom formal primary schools. Alternatively, NGOs conduct rapid surveys/assessments of primary education needs in a community, and with the assistance of the community, identify a group of children whom they can enroll in primary level institutions. In either instance, the NGO agrees with the community to set up a learning Center-often using rented premises within the community-and using in-kind support from community members for minor repairs and upkeep. Children attending the Centers are provided access to safe drinking water and sanitation facilities within the communities. As shown below, while proportionately fewer LCs have school management committees (which include parents/community members), the proportion of school with active community participation is far higher than in other types of primary schools. Characteristics of Schools LCs are significantly smaller than formal sector schools. They are predominantly single teacher institutions-with teachers being mostly female--and enroll about 30 students on average. The student teacher ratio is significantly lower in the non-formal sector as compared to Government and non- Government primary schools (Table 3). Only 13 percent of Government and 3 1 percent of nongovernment primary schools have a studentteacher ratio below 40, while the corresponding figure for non-formal Centers is 95 percent. Type of School Average Number Percent of Percent of Teachers schools with >2 Female teachers Teachers Government Non-government Madrasa LCS Student: Teacher Ratio N/A Teachers in LCs are as well qualified as teachers in Government schools (measured by years of formal education). Basic training varies across school types with Government-run schools having a one-year course at primary teacher training institutes, and non-formal school teachers undergoing much shorter duration of training. An overwhelming majority of teachers in Government schools and non-formal institutions have undertaken basic training. This contrasts with the small proportion of teachers with basic training in both non-government schools and madrasas. A similar picture emerges when refresher training courses are considered (Table 4). Teacher absenteeism is far less prevalent in LCs as compared to other schools. While rates of teacher absenteeism in LCs is about five percent, absenteeism rates are far higher in madrasas (12 percent), Government schools (13 percent), and non-government schools (21 percent). 22

32 Type of School Mean Education Percent Teachers Level with Basic Training Government Non-government Madrasa LCS Percent Teachers with Refresher Training An interesting feature of LCs as compared to the other types of schools is the active involvement of parents/guardians-especially mothers--in school management committees (SMCs). In contrast to other types of schools where less than one-fifth of members of school management committees are womenover 50 percent of SMCs members in non-formal institutions are women. Even though not all non-formal Centers have SMCs, guardians take a much more active role in participation in SMC meetings and decision making as shown in Table 5. Type of School percent schools percent females in with SMCs SMCs Government Non-government Madrasa LCS Percent schools where guardians participate actively O 64.7 Internal EfJciency By and large, efficiency indicators in LCs are better than those in formal schools. Table 6 provides information on some indicators on all of which non-formal schools are performing better. Attendance and promotion rates are high; dropout and repetition rates are low. The coefficient of efficiency (the ratio of the expected pupil years to complete the cycle and total pupil years actually spent to produce those graduates) is also high because of the relatively few years taken to graduate. Better outcomes in LCs should not come as a surprise given some of the above-mentioned characteristics-low student teacher ratios, high degree of involvement of parentdguardians in SMCs, and low rates of teacher absenteeism. Furthermore, non-formal LCs manage to attain these outcomes in a more cost-effective manner-with per pupil expenditures significantly less than in other schools (Figure 1). Variations in expenditures between rural and urban areas are also relatively small. 23

33 The main reason underlying these low unit costs are teacher salaries-teachers in LCs are paid significantly less than in other types of schools. This also results in these institutions spending a significant proportion of their recurrent expenditures on teaching and learning materials, while most of the expenditures in public schools is on teacher salaries (Table 7). Data also indicate that the unit expenditure/pupil in the non-formal sector is lower than expenditures for the other three types of schools. Constraints to Growth Oa.mmnt 1 NmQw.mmnt, Hdruh. 1 N o n l d 1 TW d Bshool /DRud] Due to resource constraints, LCs face significant challenges to providing quality education and attracting disadvantaged students. Some key ones include: Demand-side. They are unable to provide adequate financial incentives to attract and retain children &om the most disadvantaged households. Given the relatively high opportunity costs of schooling, the lack of demand-side incentives implies that parents find it relatively difficult to send children to these institutions; Infrastructure. State of their physical facilities is poor-often institutions lack such basics as blackboards, decent classrooms and useable toilets; Teacher training. While significant efforts are made to improve teacher quality through teacher training, providing effective training remains a significant challenge; Teacher compensation. Teachers in the sector are committed to providing education to students. However, institutions are finding it increasingly difficult to hire and retain good quality individuals. Type of School Government Non-government Madrasa Non-formal Salaries Materials Rent Others

34 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies BANGLADESH: Reaching Out-Of-School Children Project Sector Issue IDA-financed Increase equitable access to primary and secondary schooling; improve quality of education; strengthen management capacity; and prepare future policies and programs for higher secondary and postsecondary education reforms Improve and expand non-formal education; strengthen capacity to deliver programs through NGOs and district administration Improve access to secondary education and improve opportunities for rural girls Project Latest Supervision (PSR) Ratings (Bank-financed projects only) Implementation Progress (IP) Development Objective (DO) Bangladesh - General Education S S (Credit 2118-BD) - (Closed April 20, 1997) (OED evaluation: Satisfactory) Bangladesh - Non-Formal S S Education (Credit 2822-BD) (Closed June 30,2001) (OED evaluation: Satisfactory) with ADB/SDC Bangladesh - Female Secondary S S School Assistance Project (Credit 25

35 Sector Issue Provide quality basic education to urban working children in six cities and safe and supportive environment to facilitate their movement out of hazardous work. Poverty reduction through access to non-formal primary education for those traditionally outside formal schooling. Project (PEDPQI) (Royal Norwegian Embassy) Non-Formal Education Project (NFE-3, Basic Education for Hard to Reach Urban Children Project) (UNICEF, SIDA and DfID) BRAC Non-Formal Primary Education (NFPE 111) (EC, DfID, DGIS (Netherlands), UNICEF, AKFKIDA) To provide a mix of formal and non-formal Underprivileged Children s education and skills training followed by job Education Program (UCEP) Phase placement services for the urban poor working IV (DflD, Royal Norwegian children, resulting in gainful employment or self- Embassy, DANIDA and Swiss employment Development Corporation) Implementing Agency: UCEP Expand Non-Formal Education in Bangladesh Non-Formal Education I1 Project through post-literacy and continuing education (ADBDfID) IPDO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) Latest Supervision (PSR) Ratings (Bank-financed projects only) Implementation Progress (IP) Development Objective (DO) 26

36 Annex 3: Results Framework and Monitoring BANGLADESH: Reaching Out-of-School Children Project PDO The key objective of the proposed Project is to reduce the number of out-of-school children through improved access, quality and efficiency in primary education, especially for the disadvantaged children, in support of GOB S national EFA goals. Intermediate Results One per Component Component One: Improving access to qualiiy education for out-of-school children. All project classes will have enrolled a minimum of 25 and a maximum of 35 students who have never before enrolled in any school. Component Two: Communications and social awareness Effective information, dissemination and IEC campaign relating to qualification criteria, resource support, and other operational guidelines to parents, Results Framework Outcome Indicators The number of out-of-school children reduced by about 0.5 million. About 1.4 million student years supported for new students. Percentage of students reaching expected competency level based on teacher s assessment in Bangla and mathematics not less than 65%. Average student attendance rate not less than 75%. Student grade completion rate not less than 80%. Average teacher attendance rate not less than 90%. Students in each grade to have on average, the same number of textbooks as those in corresponding grades in the formal primary education system. Student transition rate to public and NGO schools to Grade 4 (from Grade 3) not less than 80%, or to Grade 6 (from Grade 5) not less than 70% Results Indicators for Each ComDonent Component One: Each school will have the basic facilities to provide a conducive learning environment. Student-teacher ratio at 25-35:l. Number of teachers who received training sessions in modern instructional methods and classroom management. Teacher-based assessments of student achievement in Bangla and mathematics are available monthly. Student enrollment in LCs. Bi-annual disbursement of education allowances and grants. Number of LCs assisted. Component Two: Innovative grassroots marketing strategies employed for mobilization and awareness campaigns. Community outreach efforts implemented annually: (i) minimum of two workshops; (ii) minimum of two dissemination campaigns; (iii) Use of Outcome Information Data on outcomes, used in conjunction with the half-yearly implementation progress monitoring reports and evaluation reports, will be the basis for assessing the efficacy of the grants and education allowance programs and the recipient students and schools compliance with eligibility criteria so that any necessary adjustments could be made to the programs. Information on outcomes will also be used to adjust logistical and supervisory support (in-service teacher training, provision of teachingilearning materials, etc.) to schools as needed. Use of Results Monitoring Component One: Results monitoring reports containing quantitative school data (e.g., student and teacher attendance) and qualitative information (e.g., assessments of school facilities, overall environment, availability of textbooks and learning materials, student achievements, etc.) will indicate whether Project progress is on track. If targets of Project activities under specific interventions are lagging, the situation will signal the need for appropriate follow-up action to address emerging issues. Component Two: Effective dissemination information will enable monitoring of education service providers compliance with guidelines established for the Project. Marketing information will provide the basis for assessing the effectiveness of mobilization and awareness campaigns. 27

37 schools/lcs, communities, SchooYCenter Management Committees, Education Resource Service Providers, Education Service Providers, and Upazila Education Offices. Component Three: Project management and institutional strengthening. A Project Management Unit (ROSCU) headed by a Project Director (PD) is operating effectively with five supporting constituent sections, each headed by an Assistant Director (AD) for: (a) Grants and Education Allowance (GEA) programs; (b) Training and Education Development (TED); (c) Monitoring, Evaluation and Research (MER); (d) Information, Education and Communications (IEC); and (e) Finance and Administration (FA), all under the oversight responsibility of the ROSC Committee (ROSCC). Component Four: Monitoring, evaluation and research. An independent local monitoring agency and an independent locallinternational private sector evaluation agency are operating effectively. minimum of two stakeholder training sessions. Component Three: ROSCU fully operational within 3 months of Project effectiveness. ROSCC with MoPME Secretary as Chair. Submission by LCs/ schools of adequate budget statementdinvoices to ROSCU showing appropriate utilization of grant funds. Timely submission of evaluation and annual progress reports by independent evaluation agency directly to ROSCC. Component Four: Baseline survey conducted within 3 months of project effectiveness. Follow-up surveys and evaluations undertaken annually. Research based on follow-up surveys and evaluations undertaken annually. Non-formal education sectoral analysis completed. Regular assessments of the mobilization and social awareness campaigns will support the above activities of monitoring guidelines compliance and marketing effectiveness. Component Three: At the operational level, ROSCU and its supporting sections will be fully apprised by the periodic reports of implementation progress, compliance with grants and education allowance criteria and guidelines, and actual or emerging implementation issues so that appropriate action could be taken. At the policy level, ROSCC will have an overview of progress towards Project objectives and be able to provide effective guidance to ROSCU, including possible policy adjustments in response to implementation issues. At the national level, MoPME will be fully informed of implementation achievements as well as shortfalls so that ROSCC will receive appropriate and timely support in guiding the ROSCU. All the above will help ensure a flexible yet dynamic implementation process focused on problem-solving to achieve the Project objectives. Component Four: The reports by the independent local monitoring agency will enable the ROSCU to verify the efficacy of the Project interventions and whether the performance indicators are on track for disbursements of grant and education allowances. The reports by the independent localhntemational evaluation agency will facilitate the ROSCC s work in overseeing the overall Project progress towards achievement of its objectives. Non-formal sector analysis feeds into dialogue between GOB, DP s, and other stakeholders on developing a wholistic approach to primary education in the near future. 28

38 - x $2 n 8 s 2 n 0 IM v1

39 I I I 0 m -t $ Z 2

40 c I 3 m

41 A. Background Annex 4: Detailed Project Description BANGLADESH: Reaching Out-Of-School Children Project Bangladesh has made significant progress in education in the last two decades, especially with regard to increasing access. Net enrollment rates at the primary level have risen from 64 percent to 80 percent between Gender parity has also been achieved. However, preliminary estimates show that the number of out-of-school children aged 6-10 years in 2002 was over 3.5 million. This number includes children who have never enrolled in school, those who had enrolled and dropped out from the formal primary education system, street children and children of displaced families who have migrated from rural to urban areas. The Government has recently completed a National Plan of Action for Education for All (EFA) which embraces all of the goals of EFA for achieving compulsory primary education. The Ministry of Primary and Mass Education (MoPME), supported by development partners, has begun implementing the second Primary Education Development Program (PEDPII), aimed at improving the quality of and enhancing access to primary schooling in Government supported schools. PEDPII, which is being supported by 1 1 development partners, including IDA, represents a major step towards operationalizing the Government s EFA and Poverty Reduction agenda. While PEDPII targets are ambitious, they will still leave over 1.8 million children aged 6-10 not having access to schooling by This will leave the Government well short of achieving its EFA goals by Primary education is also provided in LCs operated by NGOs. This is an active sector which caters to about eight percent of the primary students, mostly from the poorest segments of society. However, these Centers lie outside the ambit of PEDPII. Providing support to this sector has the potential to reduce the number of out of school children and help Bangladesh in moving towards attaining its EFA goals. B. Project Objective The key objective of the proposed Project is to reduce the number of out-of-school children through improved access, quality and efficiency in primary education, especially for the disadvantaged children, in support of GoB s national EFA goals. C. Project Description To achieve the objective, the Project will assist in the establishment of LCs (LCs), which will be managed by Center Management Committees (CMCs), at the local community level by providing L C grants, and enroll students by providing education allowances. In order to achieve this, the Project will strengthen the capacity of communities and local level institutions, and empower them to organize and manage the provision of quality education. This is a learning and evaluation Project that tests alternative approaches aimed at providing access to quality primary education. Project coverage will commence with targeting 60 Upazilas (see Appendix to this annex) selected on the basis of (a) net enrollment rates; (b) the gender gap in enrollment; (c) the primary cycle completion rate; and (d) poverty levels. The number of Upazilas covered could be increased over the life of the Project. The Project will be implemented through the following components: 32

42 Component 1 : Improving Access to Quality Education for Out-of-School children ($53.4 million) The objective of this component is two-fold: to support schooling for out-of-school children and to facilitate their completion of primary schooling through: (a) education allowances for eligible students; and (b) grants to LCs (LCs) where the students enroll. The allowances will partly offset the opportunity cost of schooling for poor children, thereby attracting them to and keeping them in school. The Learning Center grants will provide support for meeting the operating costs of the LCs and contribute to improving the quality of teaching/learning activities and for building management capacity of the LCs. In 60 percent of the selected Upazilas, both education allowances to eligible children and grants to LCs will be provided. In the remaining Upazilas, only grants are proposed to be provided to LCs (these grants will be larger as they will include the value of the education allowance). The rationale is to test which of the alternative approaches leads to better outcomes in terms of access and quality. An Operations Resources Manual prepared by MoPMELDPE will specify the procedures and guidelines for the distribution of education allowances and LC grants. Sub-component 1.1: Education Allowances to Out-of-School Children This subcomponent will comprise an education allowance scheme to attract out-of-school children to LCs. The education allowance will consist of: (a) a monthly payment of Tk.50 for class 1-3 students and Tk.60 for class 4-5 students; (b) an annual payment of Tk.200 to class 1-3 students and Tk.250 to class 4-5 students to partially cover dress/uniforms costs; and (c) Tk.200 for candidates of the Class V primary scholarship examination. The total annual education allowance per student will amount to Tk.800 for class 1-3 and Tk.970 for class 4-5. Education allowances will be channeled to qualifying children through bank accounts managed by their mothers. If a child is motherless then the bank account will be in the name of the child s guardian, preferably and if applicable, a female. All students enrolled in the eligible LCs/schools will receive the education allowance. Female students will account for preferably 60 percent of children supported under the Project. The education allowances will be disbursed twice a year in March/April for the January-June semester and in September/October for the July-December semester. Eligible children attending qualifying LCs will receive education allowances. Eligibility criteria for participation of children in the program will include the following: (a) In newly established LCs: 0 Enrollment in the Project affiliated LCs; 0 Appropriate age (entry age 7-10 years for class 1); and 0 The child should never have been enrolled in formal schools, or LCs, or had dropped out from school or from LCs for at least one academic year. (b) In existing Centers: 0 Enrollment in the Project affiliated LCs; and 0 Appropriate age (entry age 7-10 years for class 1); Children enrolled in LCs will continue receiving education allowances if they: 0 Maintain an average of at least 75 percent annual attendance in the LCs; and 0 Show evidence of satisfactory achievement level deemed adequate by the classroom teacher. 33

43 Sub-component 1.2: Grants to Learning Centers/Schools This subcomponent will provide grants to eligible LCs (which enroll children receiving the education allowance) to: (a) establish new LCs; and (b) deliver quality education in new and existing LCs. The Project will strengthen the capacity of CMCs to manage LCs, with support from Education Service Providers (ESPs). Three types of schools/centers will be eligible to participate in the program: (a) oneteacher one-class cohort type Centers (new or existing) that enroll all students in class 1 and move them through the higher grades to allow them to complete the primary cycle; (b) multi-grade teaching Centers/schools that also enroll dropout children in class 1 and 3, and (c) existing schools/lcs run by NGOs that will enroll new children targeted under the Project. The LC grants ranging from Tk.25,700 for class 1-3 to about Tk.30,950 for class 4-5 per annum will consist o f 0 Establishment Fund--a one time initial payment in setting up new LCs (Tk.2000); Quality Fund--including (a) an annual payment (Tk.120 per student for class 1-3 and Tk.250 for class 4-5) to procure education materials and supplies; and (b) an annual lump-sum training grant (Tk per annum for initial and continued teacher support). The quality fund could be used for purposes such as: (a) teacher preparation-programs of short initial preparation for classroom teaching (10 to 30 days approximately). The training will focus on knowledge of the curriculum to be taught, lesson structuring, classroom management, teaching and assessment strategies focused on producing understanding. The training will also provide specific instructions on how to prepare reports on leaming achievement of each child in the class; (b) continuous teacher training-these will also be periodic short courses aimed at enhancing pedagogical skills of teachers; (c) formative or academic supervision--teachers will continue to be trained through regular supervision (at least twice a month) in the location of their LCs; (d) purchasing leaming materials-lcs will enter directly into contractual arrangements with Education Resource Providers (ERPs)~ to provide some of the services mentioned under the quality fund. 0 Management Fund-an annual payment of Tk. 100 per student for schools/lcs management suppordtraining; This Fund could be used for building the capacity of the CMCs including teachedhead-teacher to better manage institution. 0 Discretionaiy Fund -an annual grant (Tk.480 per student for class 1-3 level and Tk.600 for class 4-5 level) which could be used for teacher salaries, center maintenance and renovations, co-curricular activities, sanitation and safe drinking water. This discretionary fund will be paid semi-annually based on the number of students in the schools (Tk.40 per month per student for class 1-3 level and Tk.50 for class 4-5 level) and will be utilized based on priorities identified by the CMCs. In Upazilas where only grants will be provided to LCs, and students do not receive education allowances, the value of the grants will be approximately between Tk. 55,000-Tk. 65,000 per annum (the grants are larger, as the average value of education allowances is added on). The eligibility criteria for the participation of LCs in the program will include: Education Service Providers (ESPs) are those agencies selected by CMC s, in accordance with agreed terms, conditions and criteria, to assist in identify out-of-school and hard-to-reach children, to ensure their enrollment and attendance, and to support the CMC s in running the LCs. Education Resource Providers (ERPs) are NGOs, educational institutions, or agencies, with a multidistricdnational presence and extensive experience in primary education, teacher training and curriculum development, selected by CMC s to carry out educational technical services in accordance with agreed terms, conditions and criteria. 34

44 For newly established Centers: 0 Establishment of a Center Management Committee (CMC);7 0 Formal request by the CMC to the UEO for participation in the program; and 0 Student enrollment: minimum of 25 children, maximum of 35 children per class of which 60 percent preferably girls. For existing Centers (and for Centers to continue receiving grants): Existence of a functioning CMC; Formal request by the CMC to UEOs for participation in the program or for renewal; Student enrollment: minimum of 25 children, maximum of 35 children per class of which 60 percent preferably girls; and Existence of appropriate teaching and learning environment (e.g. use of books with supplementary materials, appropriate utilization of grants etc.). Grants to LCs that meet these criteria will be renewed annually. Grants will be withheld for LCs that do not meet the criteria outlined above. Sub-component 1.3: Shishu Kallyan Trust (SKT) Schools Government s SKT schools cater to educating working children in urban areas. This subcomponent will provide support to the SKT program to provide education allowances to working children and grants to SKT schools. The education allowance will not only meet the direct and indirect costs of schooling but also compensate for a portion of the opportunity costs. The grant will be provided on a per-capita basis and will also cover a small part of program management expenditures. The grant disbursements will be based on a detailed plan of action. In the first year, the existing 45 SKT Schools will be eligible for the education allowances and grants. After further evaluation of the program, new SKT schools will be included in the Project. Component 2: Communications and Social Awareness ($2.7 million) The objectives of this component are to: (a) raise awareness about primary education in general and the Project in particular at the family, community, Upazila and national levels through appropriate media and communication campaigns; (b) mobilize families, communities, and local Education Service Providers (ESPs) to open new LCs or expand existing Centers; and (c) disseminate information on qualification criteria, resource support, and other operational guidelines to parents, LCs, CMCs, ERPs, ESPs and UEOs; and (d) assess the effectiveness and reach of the communications and social awareness activities, and mobilization campaigns, and modify them as needed. Communications and awareness campaigns will target particularly disadvantaged groups, and will employ innovative grassroots mobilization strategies such as Participatory Rapid Assessment (PRA), Micro planning, and Reflect. The target groups of this activity at the community level are: (a) more disadvantaged groups/communities (the landless, widow s families, day-laborers, including fishermen, artisans, blacksmiths, cobblers etc), socially disadvantagedstigmatized groups (beda, sweeper, tea gardens laborers), aboriginals, families not living permanently for a year in a particular place; (b) backward areas (mainly areas having no mainstream school within two km, no formal communication by feeder roads within one km, having a teacher-student ratio of more than 1:56, geographically inaccessible The CMC will be composed of five parentdguardians, one female ward member, one UEO representative, one ESP, with the teacher as the member secretary to the CMC. 35

45 areas), and (c) Urban slum areas (parents who have no permanent income, parents whose income is below minimum salary level declared by the Government, parents who live on floatinmas landslums or families who spend maximum Tk.800 for house rent, and working children). Subcomponent 2.1: Social Awareness This subcomponent will finance: (a) the development and delivery of effective communication about the Project at the community, Upazila and national levels, (b) the development and distribution of concise informational packages of materials, which will be broadly distributed to potential ESPdERPs, and (c) logistical support for enhanced communication between the UEOs and the LCs. Specific messages and materials will be designed for each of the target groups and will be delivered through media channels used by each of the target groups. Thus, communications at the national level will involve the use of television and radio technologies, while communications targeted at the community level will rely on drama troupes, small mobile broadcasting units, etc. The initiating process at the community level will be through personal contact with local key persons, guardians, teachers, religious leaders, public meeting; distribution of leaflets, posters etc. Information materialdmessages will be planned, designeddeveloped by relevant non-government agencies having sufficient prior experience. Knowledge of the availability of the informational packages will also be expanded through postal and radio messages and through provision of a telephone hot-line which will provide immediate responses to queries. In order to enhance communication between the UEOs and the LCs, logistic support will provided for: (a) engaging AUEOs in the design and delivery of community level communications and social awareness efforts from the outset; (b) delivering the information packages of materials developed for potential ESPs/ERPs to all relevant AUEOs; (c) providing AUEOs with the resources and support necessary for them to visit communities, encourage communities to identify and work with ESPs to open new LCs or expand student places in existing LCs; and (d) providing AUEOs with participatory training on the special need to reach educationally underserved groups such as working children, girls, disabled children, and children from ethnic/linguistic minority groups. Subcomponent 2.2: Community Mobilization This subcomponent will finance: (a) the development of community mobilization training modules for the training of trainers (TOT) and other materials; (c) the initial training of CMC members; and (c) the preparation of community mobilization reports for each Upazila. Mobilization activities will be carried out to organize communities to increase enrollment of children and ensure access to quality schooling for disadvantaged out-of-school children. The mobilization activities will be initiated prior to the implementation of education allowances and grants. In the case of new centers, the expected outcomes of the community mobilization activities will include: (a) identification of target areas/pockets/community; (b) information of the CMC by parents to establish and operate a learning center and training of the CMC; (c) identification of potential students; (d) identification of teachers; (e) identification of academic supervisors; and (f) arrangements for the LC facilities including classrooms. The ESP involved in community mobilization will provide continuous support to CMCs in LC management of various activities including: (a) selection of location, andor physical facilities to set up new LCs andor increase capacity of existing LCs; (b) identification, selection and appointment of teachers, (c) the proper identification and selection of ERPs for overall quality education; (d) ensuring the 36

46 training of teachers, and the availability of quality educational materials for teachers; and (e) monitoring student and teacher attendance and assuming responsibility for grant utilization. Component 3: Project Management and Institutional Development ($2.4 million) The objectives of this component are to: (a) establish a sound structure for managing and implementing the Project; and (b) develop and strengthen the capacity to deliver quality primary education to out-ofschool children. Sub-component 3.1: Project Management The organization of Project management is illustrated in Chart 1 in Annex 6. Following is a description of the functions and responsibilities of the key units in the management structure. At the national level, MoPME will have oversight responsibility for the Project. The Project implementing agency will be DPE. GOB will establish a Reaching Out-of-School Children (ROSC) Committee which will be composed of a diverse group of stakeholders, including representatives from MoF (Finance Division), Planning Commission, ERD, IMED, Ministry of Social Welfare, Ministry of Women and Children Affairs, two NGOs, DPE, and contributing Development Partners. The ROSC Committee will be chaired by the Secretary, MoPME. The ROSC Committee will: (a) oversee overall project implementation; (b) carry out joint annual reviews; (c) resolve implementation issues; and (d) hold formal semi-annual meetings to review policies governing project implementation and assess Project progress. Annually, one of these Committee meetings will specifically review policy and Project progress with a view to identifying issues and proposing solutions. Review of project implementation will be based on progress and planning reports prepared for this purpose, one set to be done by an independent evaluation agency and the other by the ROSC Unit. The ROSC Unit, established by MoPME and headed by a Project Director (PD), will be directly responsible for the day-to-day implementation of the Project. Supporting the PD will be five Assistant Directors (ADS), each heading a section, who will be responsible for implementing various Project activities relating to: (a) provision of education allowances and LC grants; (b) training and education development; (c) monitoring, evaluation, and research; (d) communications and social awareness; and (e) finance and administration. The PD and the five ADS, operating as a unified team, will be appropriately supported by a procurement officer, Project officers, computer operators and other required support personnel. The ROSC Unit will follow the policy directives of the ROSC Committee. At the Upazila level, the Upazila Education Office (UEO) will process applications for establishing LCs, facilitate disbursements of education allowances and grants, and coordinate monitoring teacher and student attendance at LCs. The UEO will report directly to the ROSC Unit PD on Project related matters, and will share Project related information with the District Primary Education Officer. At the local community level, a Center Management Committee (CMC) will be responsible for managing the LCs with support from ESPs. The ESPs appointed by the CMCs will lead community mobilization efforts to identify the target population, encourage it to start a school, and help organize the appropriate LCs. CMC s will select ESP s which meet the following criteria: (a) a registered NGO or other organization with preferably five years experience in working with the respective community; and (b) at least three years experience in the area of education service provision. To support quality improvement of the LCs, the CMCs will seek assistance from the Education Resource Providers (ERPs). These providers (who will often be NGO institutions) will have to meet the following criteria: (a) about ten years successful experience in the provision of primary education; (b) have 37

47 demonstrated links with the formal system of education through basing the curriculum and leaming activities on the national competency structure; (c) a system of teacher education (initial, refresher, and continuous training) that is organized to provide content knowledge and understanding as well as pedagogical vision and skills for classroom teaching and management, and induction and/or regular supervisory support in the classroom; (d) a quality assurance structure that articulates in a comprehensive manner activities relating to the preparation of trainers, the content and form of the initial teacher preparation and teacher support; (e) a proven well-structured teaching delivery system that allows teachers to use all the available time scheduled for lessons in schools; and (0 good quality resource materials as well as teacher guides. The process of establishing and operating new LCs will involve four steps: (a) community mobilization, supported by communications and social awareness activities, will prepare the way for establishing the CMC, which will include the training of its members; (b) CMCs, through the UEOs, will submit an application to the ROSC Unit for participation in the Project (including list of potential students, teacher(s), location of LC etc.); (c) once established, the CMC will be responsible for setting up new LCs, recruiting teachers, identifying ERPs with the help of ESPs for teacher training and acquisition of other educational services; and (d) CMCs will then open an account with the local Nationalized Commercial Bank and all Project financial transactions will be channeled to LCs (grants) and to parentdguardians (education allowances) through the bank. The SKT system will also receive support from the ROSC Project to strengthen its management capacity. The existing SKT Director will be supported by an Assistant Director located in the SKT Directorate. The Project will provide support for the Assistant Director position on a declining basis over the life of the Project on the agreement that the position be incorporated into the revenue budget as per Government procedures. Although located in the SKT Director s office, the Assistant Director will work and liaise closely with the ROSC Unit team of Assistant Directors on issues pertaining to education allowances and grants, training and educational development, monitoring, evaluation, and research, communications and social awareness, procurement, and finance and administration. Sub-component 3.2: Institutional Capacity Building For effective project implementation, the capacity at the central, Upazila and local community levels will be strengthened through regular in-country training, including management, educational development and financial management training. For key personnel in critical areas there may be some overseas training. Institutional capacity building efforts will be extended to ESPs and ERPs based on a needs assessment through appropriate in-country and international training. Institutional capacity building efforts will be extended to NGOs as Education Service and Resource Providers respectively, in order to ensure management efficiency and accountability. Training in various aspects of managing LCs, including standards for financial management, audit, monitoring and evaluation, and reporting will comprise an integral part of the institutional capacity building efforts. To develop and enhance local community capacity, the ROSC Unit will prepare a standardized training and dissemination package, incorporating elements of fiduciary responsibilities (resource management, supervision, procurement, etc.) and more broadly, project implementation responsibilities. The training package will be designed on the basis of a pre-implementation study to identify current practices in community organization and management (how they manage resources, deal with community level complaints, what types of arbitration options they use, what types of sanctions they impose for misuse of community property, etc.). The training package will be designed on the basis of a pre-implementation study to identify current practices in community organization and management. The package will include guidelines on procurement of services, resource management, and accounting--about how CMCs could 38

48 buy the services most suited to them, how they could manage resources, acquire training in accounting, carry out contracting of services, supervise contractual work, etc. The training package will include a simple cash management system, and incorporate simple rules and procedures. Finally, capacity will also be enhanced at the community level to manage the process of training, learning by doing, more intensive supervision, guidance and advisory services, etc. Sub-component 3.3: Networking to Improve Quality The Assistant Director for Training and Education Development in the ROSC Unit will initiate the establishment of a network of participating ERPs, who will be supported by a coordinating body. The purpose of this network will be to provide technical advisory services and equipment to Ems, and to ensure the provision of quality educational services. The functions of the network will include: (a) ensuring that the teacher training and curriculum content are in line with the NCTB curriculum; (b) developing instruments for initial diagnosis and yearly assessment of student learning achievement; and (c) identifying the list of instructional materials that will be used in teacher training and in the classroom. The network will meet at regular intervals to carry out these and other related tasks. Component 4: Monitoring, Evaluation and Research ($4.3 million) The objectives of this component are to provide an effective monitoring and evaluation system to: (a) monitor the use of grants support; (b) monitor the use of education allowances; and (c) evaluate the two programs through action research, thematic studies, and impact assessments. In order to establish a baseline, qualitative and quantitative surveys at the level of the household, community and LCs will be undertaken within the first six months of project implementation. Data will also be collected from Upazilas where the Project is not currently being implemented. Subcomponent 4.1: Monitoring the use of Grant Support by LCs Monitoring activities under this subcomponent will be carried by a contracted independent agency with facilities for, and experience in, school mapping/construction, monitoring and educational data collection and processing in support of the monitoring of education programs. The ROSC Monitoring Section will be responsible for developing the appropriate TORS for this activity and for tendering. The TORS will specify the functions and responsibilities of the independent agency, including the monitoring activities relating to: (a) LCs (management of resources encompassing organization and implementation of teaching/leaming programs, provision of learning materials, and maintenance of physical facilities and the leaming environment, etc.); (b) students (including enrollment, attendance, idout transfers, grade and cycle completion rates, learning achievement, etc., disaggregated by gender); (c) teachers (including age, gender, academic and professional qualification, teaching experience, etc.); and (d) Grant funds (including usage and breakdown by categories, and unit cost per student, etc.). The TORS will also specify the contracted agency s scope of work and reporting responsibilities, including the timing and coverage of the reports. The UEO will be the administrative center for the monitoring process. Subcomponent 4.2: Monitoring and Assessing the use of Education Allowances Monitoring and assessment of the education allowances scheme to children attending the LCs and SKT schools will be undertaken by the independent agency contracted to monitor the use of grant support by the LCs as mentioned in subcomponent 4.1 above, with the assistance of CMCs and UEOs. Technical assistance will be provided to the contracted agency to develop its capacity to monitor the delivery of education allowances to targeted beneficiaries in the LCs. The technical assistance will include staff training and specialist consultant support for the assessment of targeted programs, in gathering, validating and reporting data from the LCs, in strengthening and updating the MIS, and in developing and 39

49 disseminating informational reports. Appropriate support will also be provided in the form of IT, filing systems, furnishings and other equipment as well as relevant staffing of a monitoring cell in the contracted agency that will work specifically on monitoring the education allowances scheme. Subcomponent 4.3: Evaluating the Impact of Grants and Education Allowances Activities under this subcomponent will be carried out by a contracted independent local/international private sector agency with relevant experience in the evaluation of education programs, including the design and fielding of nationally representative surveys, and the statistical analysis of data derived from such surveys. Evaluation activities will include baseline surveys, assessment of the operation of recipient LCs, tracking expenditures including the disbursements of grants and education allowances, and the overall management of the Project. The evaluation will help to provide information to GOB for any future efforts to institute standardized education criteria for the primary education system at large. The TORs for this activity will specify the functions and responsibilities of the independent agency, including the activities relating to: (a) Project management (including the organization and operation of (i) the ROSC Unit and its executive sections; and (ii) the MIS center; (b) LCs (including organization and implementation of teachinghearning programs, and maintenance of physical facilitiedlearning environment); (c) students (including enrollment, attendance, transfers, and grade and cycle completion rates, differentiated by gender as appropriate; (d) teachers (including age, gender, academic and professional qualification, and teaching experience; (e) grant funds (including usage and breakdown by categories, and unit cost per student); and (f) ERPs and ESPs (including their organization and effectiveness in service delivery). The TORs will also specify the contracted agency s scope of work and reporting responsibilities, including the frequency, timing, and coverage of the periodic reports. It is evident that national expertise is available in several institutions such as IMED, BIDS, and IER to undertake the external evaluation of the ROSC Project. The national capacity could be augmented by an experienced international evaluation agency which will work in collaboration with the national agencies. Given these favorable conditions, it will be useful to explore the formation of a consortium, composed of national agencies, supported by an international agency to undertake the external evaluation. Such a consortium provides the rationale for the procurement of locally-based expertise with an international skill mix at the shortest possible time so that the evaluation work could commence at about the same time as the start of project implementation. The local consortium will also facilitate the institutionalization of local expertise in the evaluation of education projects/programs. Subcomponent 4.4: Analytical Studies of Non-Formal Education GOB has constituted a Task Force to work on developing a national non-formal education framework and support will be provided towards the implementation of the non-formal education strategy. GOB will also be supported in institutionalizing the non-formal education framework and implementing task force recommendations relevant to the primary education sub-sector. Reviews and studies will be carried out under this component will be linked up with issues identified by the Task Force. For example, a comprehensive sectoral analysis could be carried out of the non-formal education system in Bangladesh to: (a) explore modalities for scaling up support to the non-formal education sector; (b) determine the roles of various providers and financiers; (c) explore financing mechanisms that will facilitate the coordination of funding; (d) consider ways and means of operationalizing the most appropriate financing mechanism; (e) explore the development of a wholistic primary education sub-sector program in the future; and (f) address other issues as appropriate. Terms of reference will be prepared in consultation with development partners, GOB, NGOs, and other stakeholders. In addition, thematic reviewdstudies, linked to the sectoral analysis, will also be carried out during the course of the Project, e.g. experience on community-managed schools, and expenditure review for non-formal education. 40

50 Appendix: Selection of Upazilas in which Project will Commence Initially, the Project is going to be operational in 60 Upazilas that have been chosen based on the following variables--net enrollment rates, cycle completion rates, gender disparity, and poverty levels. 54 Upazilas which meet the specified criteria have been identified and are listed below (in addition six Upazilas which do not meet all these criteria have been chosen because of their vulnerability to natural disasters and because they are home to specific socially disadvantaged groups). These criteria will be reviewed over the life of the Project and the Project will to be expanded to more Upazilas based on these. The criteria being used are as follows. The key criteria is that Upazilas that have a net enrollment rate of less than 85 percent. If an upazila meets that criteria, then it should meet at least two of the following three criteria: (a) the gender gap in net enrollment should be at least two percentage points (i.e. boys enrollment exceeds girls enrollment by at least two percent); and (b) the cycle completion rate at the primary level should be below 50 percent; and (c) the Upazila headcount poverty level should be at least 30%. The list of 60 identified Upazilas is given in Table 1. 41

51 Note: Upazilas poverty line (%) is taken from WFP Poverty line map of February

52 "N- "N ' b " m d 999F o o m e WW" 9 W 2 a

53

54 Annex 6: Implementation Arrangements BANGLADESH: Reaching Out-Of-School Children Project Chart 1 outlines the proposed organizational structure for management of the Project. The Ministry of Primary and Mass Education (MoPME) will have oversight responsibility for the Project. The Directorate of Primary Education (DPE), its capacity suitably strengthened, will be the executing arm of MoPME. The ROSC Unit (ROSCU), headed by a Project Director (PD), will be directly responsible for the day-to-day implementation of the Project. The ROSCU will follow the policy directives of the ROSC Committee (ROSCC) composed of representative stakeholders: MoPME, MoF, Planning, ERD, IMED, DPE, three NGOs, private sector entities, and contributing Development Partners (DPs). The ROSCC will hold formal meetings every six months to review policies on project implementation and assess Project progress. At one of these meetings the ROSCC will conduct an annual review of policy and Project progress, including identifying bottlenecks and proposing solutions. The annual review will be based on a progress report prepared by an independent evaluation entity, and an implementation plan for the following year prepared by the ROSCU. The ROSCC will be chaired by the Secretary, MoPME. In his absence, an official designated by the Secretary will have authority to call and lead ROSCC meetings. The Project will finance the operational cost, including staff salaries, of the ROSCU. The ROSCU PD will be supported by five Assistant Directors (ADS) who will be responsible for project implementation relating to (i) provision of education allowances and LC grants; (ii) training and education development; (iii) monitoring, evaluation, and research; (iv) communications and social awareness; and (v) finance and administration. The PD and the five ADS, operating as a unified team, will be appropriately supported by various general and specialist staff, including a procurement officer, an accounts officer, project officers, computer operators, and other required support personnel (see Table 1 for responsibilities of staff). Management Strengthening in the LCs (LCs): The presence of a functioning Center Management Committee (CMC) will be a pre-requisite for LCs qualifying for grant support. Support for strengthening the LCs management capacities will come fkom Government and NGO sectors. The LCs will operate with oversight support from their CMCs which will be strengthened by the inclusion of parents, especially mothers, and local education NGO representatives. The LCs will receive support from the NGOs represented on their CMCs through earmarked resources in the LC grants, for their day-to-day functioning, including dealing with issues related to financial planning and management, and general site management. Government support will be provided through Assistant Upazila Education Officers (AUEOs). The AUEOs, with Project financial support, will be responsible for (i) visiting LCs to review their record-keeping functions, especially student and teacher attendance; (ii) collection of Project data and information on the receipt and utilization of grant funds and education allowances; and (iii) hosting periodic refresher courses for LC site managers and CMCs on site management issues. Management Strengthening in the Shishu Kallyan Trust (SKT) Schools: The ROSC Project will also strengthen the management capacity of the public SKT school system through support, on a declining basis over the Project life, for the position of an Assistant Director (AD) who will be located in the SKT Directorate. The SKT AD will work closely with the ROSCU ADS on issues relating to education allowances and grants; training and educational development; monitoring, evaluation and research; communications and social awareness; procurement; and finance and administration. Qualification for, and retention of, ROSC Project support will be contingent upon SKT schools having fully operational CMCs with representation from parents, especially mothers, and teachers. Incentives will be provided for SKT schools to enhance site management, specifically educational planning, general 45

55 site management, and operation of, and liaison with, the CMCs. The incentives are earmarked in the school grants which can be drawn only to address management and capacity-building issues through technical assistance which the SKT schools could contract from NGO, private or public entities. The SKT schools will also receive support for management and capacity building from MoPME through the AUEOs. The AUEOs, who will receive Project financial support, will periodically (i) visit SKT schools to review their record-keeping functions, especially student and teacher attendance; (ii) collect Project data and information on the receipt and utilization of grant funds and education allowances; and (iii) host refresher courses for SKT site managers and CMCs on site management issues. Monitoring and Evaluation The Monitoring and Evaluation component, as an integral part of the Project, will put in place an M&E system to monitor the implementation of the two main interventions-provision of education allowances to students and grant funds to LCs (LCs)-and evaluate the interventions and their outcomes/results. Monitoring and evaluation will be separate and distinct processes. Monitoring of the operation of the LCs, especially student and teacher attendance, will be carried out by the CMCs and AUEOs who will be responsible for collecting data and information on the LCs. Data for SKT schools will be collected by the SKT Project Director. All Project data and information will be transmitted to an independent contracted agency, which will be working closely with AUEOs, for processing and preparation of statistical and other reports to be submitted every six months to the ROSCU. Oversight responsibility for all the above will rest with the ROSCU (Chart 2). Evaluation of the interventions and achievement of Project objectives will be carried out by an independent nationalhtemational agency which will prepare an evaluation report every six months to be submitted directly to the ROSCC. The evaluation report will be based on special evaluative thematic studies and action research as well as the statistical and other reports prepared by the independent monitoring agency. It is evident that national expertise is available in several institutions such as IMED, BIDS, and IER to undertake the extemal evaluation of the ROSC Project. The national capacity could be augmented by an experienced international evaluation agency which will work in collaboration with the national agencies. Given these favorable conditions, the formation of a consortium, composed of national agencies, supported by an intemational agency to undertake the extemal evaluation is being explored. Such a consortium provides the rationale for the procurement of locally-based expertise with an intemational skill mix at the shortest possible time so that the evaluation work could commence at about the same time as the start of project implementation. The additional advantage is that the local consortium will facilitate the institutionalization of local expertise in the evaluation of education projects/programs. As the monitoring and the evaluation reports will assess the efficacy of the Project interventions, particularly the LCs compliance with the conditions for Project support, they will provide the basis for the disbursement of grant and education allowance funds. Hence, the agencies responsible for the respective reports will need to be timely in meeting the production deadlines. 46

56 n 1 u 5 L ~ I I I I I

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58 I 1 Unit Table 1: Key Roles and Responsibilities at Central and Local Levels Key Roles and Responsibilities Central Level MoPME ROSC Committee (ROSCC). Comprised of hgh level representatives from MoPME, DPE, Finance Division, Planning Commission, ERD, IMED, Ministry of Women and Children Affairs, Ministry of Social Welfare, NGOs (two representatives), and participating DPs. The chair will be MoPME s Secretary. Directorate of Primary Education ROSC Unit (ROSCU). Operational structure responsible for day-to-day Project functioning, including education allowances/grants operations, training and education activities communication and awareness campaigns, and M&E, procurement, and finance. Provides overarching policy and operational guidance for the Project Developing a regulatory framework specifying the objectives, composition and core functions of the ROSC Committee 0 During project implementation: issuing guidelines to DPEOs and UPEOs re. collection of data and quality indicators, supervision functions, etc. in NGO LCs, and ensuring compliance with these guidelines Oversee management and implementation of SKT-specific Project activities 0 Sign Memorandum of Understanding with relevant Government agencies Carry out joint annual review on the basis of an annual independent evaluation report and ROSCU s annual report, and following fiscal year s plan 0 Provides advice and guidance on: (a) resolving implementation bottlenecks at interministerial level; and (b) Project financial management Oversee overall Project implementation progress Facilitate ROSCU in its planning and implementation responsibilities Financial oversight on project implementation 0 Liaise with MoPME on project implementation activities Making support available from appropriate DPE line divisions 0 Setting up guidelines and regulations, and developing operations resource manuals for project implementation Plan, implement and manage Project activities, and prepare budget estimates/reports Deliver education allowances/grants to LCs Overseelexecute contracts for goods and services 0 Plan and carry out procurement activities Oversee and manage awarenesslcommunications campaigns undertaken by contracted entities Prepare annual progress report for ROSC Committee Sign Participation Agreements with Nationalized Commercial Banks 49

59 Unit (i) Education allowance and Grants Unit (ii) Training and Educational Development (iii) Monitoring, Evaluation and Research (iv) Information, Education and Communications Research (v) Administration and Finance Key Roles and Responsibilities Prepare semi-annual estimates for education allowances and grants Establish and run system to ensure compliance with eligibility criteria by education allowancelgrant recipients Organize calls for applications for grantsleducation allowances from LCs 0 Establish formal agreements with Learning Center grant recipients Prepare the recipient list of awardees for education allowance and grants Track and maintain records of all transactions on education allowance and grant allocations (linking with M&E and Programmer) Maintain contact with Nationalized Commercial Banks regarding management of grandeducation allowance resources 0 Identify problems and seek solutions to issues arising from grantsleducation allowances programs management 0 Establish the requirements for support institutions (NGOs) to be responsible for training and support of teachers in LCs and preparing lists of eligible institutions 0 Facilitate contacts between LCs and NGO support institutions Facilitate networking among managers of LCs through meetings at the local level 0 Carry out periodic field visits to learn about functioning of LCs and their teaching processes, noting particular problems that should be brought to ROSCU s attention Prepare regular reports on teaching and learning aspects in consultation with managing NGOs Prepare TORS for a mid-term evaluation of Learning Center functioning and achievements Monitoring: Maintain contact with contracted monitoring agency s central data unit Maintain contact with Upazila Education Offices (UEOs) for collecting data on grant and education allowance recipients, and on other key education indicators (key education indicators, quality, access, etc.) Liaise with project implementing entities1cmcs Evaluation: Ensure quality, consistency of data collected Produce/oversee production of semi-annual statistical data reports Produceloversee production of semi-annual analysis of Project progress 0 Oversee production of impact studies of Project effectiveness Research: Conducting special ad hoc studies to assess specific issues under the Project as needed (e.g. changes in quality, changes in girls enrollment rates) Feed datalinformation into annual monitoring and progress reports Prepare annual plans for IEC for dissemination of research findings Prepare annual plans for IEF for SKT, education allowances, and M&E functions in collaboration with respective ADS Feed datalinformation into annual monitoring and progress reports Maintain day-to-day administration of staffing, logistics, personnel management. Maintain close contact with MOF and organize audits and liaise with accounts department Prepare the budget necessary for release of funds 0 Make proposals for fund release semi-annually Channel funds to recipient entities Prepare annual financial reports 0 Ensure that LCs adhere to guidelineslcriteria regarding utilization of grant resources in coordination with M&E Keep financial accounts, reports on financial progress, ensure internal control and auditing Maintain a computerized financial management system Contribute to preparation of progress reports, semi- and annual plans Liaise with relevant units within MoPME, and other Government agencies 50

60 ~ ~~ Unit Nationalized Commercial Banks Upazila Education Office Center Management Committee (CMC) Education Service Provider (ESP) Education Resource Provider (ERP) Key Roles and Responsibilities Ensure timely transfer of funds, including grants and education allowances, upon ROSCU s request Provide timely disbursement statements and other relevant documents Act as focal point for processing applications to establish LCs, facilitating disbursements of grants and education allowances, and monitoring teacher and student attendance at LCs Signs cooperation agreements with Center Education Committee Responsible for managing the Learning Center with support from Education Service Providers selected by the Center Management Committee Education Service Providers (ESPs) are those agencies selected by CMC s, in accordance with agreed terms, conditions and criteria, to assist in identify out-of-school and hard-toreach children, to ensure their enrollment and attendance, and to support the CMC s in running the LCs. Education Resource Providers (ERPs) are NGOs, educational institutions, or agencies, with a multi-districthational presence and extensive experience in primary education, teacher training and curriculum development, selected by CMC s to carry out educational technical services in accordance with agreed terms, conditions and criteria 51

61 Annex 7: Financial Management and Disbursement Arrangements BANGLADESH: Reaching Out-Of-School Children Project Financial Management Assessment The objective of the Financial Management assessment was to determine whether the Directorate of Primary Education (DPE) which is responsible for overall implementation, management and monitoring of the Project has adequate financial management capacity to manage the Project. While carrying out the assessment, weaknesses indicated in the recently approved PEDPII including a financial management improvement plan have been taken into account. The FM arrangements for the proposed Project will mostly follow existing Govemment policy and procedures, and will benefit from the FM improvement plan in terms institutional and technical support that was implemented under PEDP 11. The additional FM requirement will be to provide for any incremental support that might be necessary for the Project. As a detailed assessment of DPE (the Implementing Agency) has recently been completed under PEDPII, the following is a brief summary of the ROSC FM arrangements. Risk System Risk The significant risk flag for the Project is the weak financial monitoring system at the Ministry as well DPE level, which is vital for Project of this nature having key financial operations at the grass root level through multiple interventions. Overall Risk rating Risk Rating M M Mitigation Measures Agreement to hire independent private fm under an agreed TOR and timeframe to review financial and operational progress of the Project. The findings of the review will be key elements of the semi-annual Project supervision mission. Strengths and Weaknesses Strengths: The ROSC Project will have the following strengths in the area of financial management: (a) The same computerized package (MACs) which will undergo further development under PEDPII will be used for the ROSC; current status of the MACs including any additional customization for the proposed Project will be further reviewed during appraisal; and (b) DPE experience in projects financed by donors and their FM requirements and other institutional arrangements will also contribute to the Project. The weaknesses are highlighted in Table 2 below. Weaknesses The Project will have additional finance staff who may not have necessary skills and there could be delay their recruitment. Inadequate monitoring of financial reports and delay in timely reconciliation of field and unit data leading to delays in realistic cash forecast, yearly budget estimates and performance indicators review. Table 2: Weaknesses Resolution (i) Two staff with requisite qualification from Project start up under specific job description and reporting functions are in the process of finalization. (ii) In-house training of project staff by DPE staff or others having sufficient exposure to financial management and donors practice (i) Draft Financial reports will be discussed and cleared bv the ROSCU and other Project units before finalizing and submission to IDA andgob. (ii) ROSCU will ensure no discrepancies in financial figures in the reports. (iii) Detailed service standards indicating processing time for fund releases from ROSCU to commercial banks and to eligible LC s and parents have been prepared. Measures relating to commercial banks will be part of the Participation Agreement. Implementing Entities : MoPME & DPE 0 During implementation, MoPME will have overall responsibility for project implementation and oversight. A ROSC Project Implementation Unit (ROSCU) in DPE will be responsible for project 52

62 implementation. The ROSCU Project Director with the help of two qualified project staff will carry out all FM activities for the Project. A substantial amount of the grant will be to support education allowances to eligible out-of-school children, provide grants to school attended by eligible education allowance students and support to Shishu Kallyan Trust schools (SKT) and monitoring of the use of education allowances and grants. Funds Flow Arrangements IDA funds will be channeled through a special account into a Nationalized Commercial Bank. The Project director of ROSCU will be the authorized person for issuing checks to third parties. In respect of education allowances and grants to Learning Centers, ROSCU will transfer funds on a semester basis, based on the list of eligible students and Learning Centers, to Nationalized Commercial Banks. The Banks will disburse education allowances to motherdguardians and grants to Learning Center CMCs according to specified criteria. ROSCU will disburse funds twice a year (January and June) to a Nationalized Commercial Bank(s) under a Participation Agreement between ROSCU and the Bank(s). The Bank(s) will utilize the fund to disburse education allowance to legal guardian through its branches on the basis of approved list of eligible students received fkom ROSCU. The same Bank(s) will also be responsible to disburse grants to eligible leaming centers based on the terms and conditions of the Cooperation Agreement between ROSCU and eligible learning centers represented by their CMC s. For all approved learning centers, ROSCU will disburse funds to the Commercial Bank(s) for their onward transfer to the eligible LCs. Subsequent fund transfer to LCs will be contingent upon submission of fund utilization statement to ROSCU. The Participation Agreement clearly indicates the obligation of the banks under the contract and remedies in case of non-compliance with the agreed terms and conditions. The Cooperation Agreement indicates LCs statutory obligation under the contract including maintenance of proper books of accounts and conditions for receiving grants and their utilization. GOB Funding Education allowance and grants will be funded 100 percent by IDNSDC. The rest of the Project activities will involve counterpart funding. The counterpart funding will be provided following its treasury system for fund disbursement. Donor Funding: Joint Co-Financing SDC will support the Project through joint co-financing with IDA through a grant agreement under the SDC-IDA co-financing framework agreement. The modalities and details are being finalized. Accounting and Financial Controls The Accounts Code, the Treasury Rules and General Financial Rules of the Government, existing chart of accounts will form the basis for accounting and financial control in ROSCU. Books of accounts will be maintained on a cash basis and using double-entry bookkeeping principles. In ROSCU, separate books of accounts and registers will be maintained so that grant expenditures can be tracked and reported accordingly. The existing systems are considered adequate for the Project. In addition, contractual agreements between the Nationalized Commercial Bank(s), ROSCU and Learning Centers and criteria for education allowance and grants indicate expenditure eligibility under Project components and will form the basis for accounting under appropriate heads. If the existing charts of accounts of the Government are inadequate, additional chart or heads will be maintained to track Project expenditures. The Learning Centers will keep separate books of accounts for grants and will provide a statement of fund utilization before subsequent installments are requested. The LCs commitment under the contract will be closely monitored through the internal audit. 53

63 0 The Project accounts will be initially maintained manually. They will be linked to the existing MACs software within three months of Project effectiveness. All financial reports will be generated from the MACs software. 0 There are clear guidelines for authorization and approval of financial transactions at the Ministry (MoPME) and DPE (ROSCU) levels. The Government s existing financial power, authority and payment responsibility outlined in the Project Accounting Manual and General Financial rules will be followed. ROSCU will execute transactions with procurement process being done by independent staff while finance staff will be responsible for payment, recording and reporting. Staffing Under the direct supervision of ROSCU Project director, an assistant Director (Finance and Administration) and an accountant will be responsible for financial management activities of the Project. The terms of reference of the FM staff will be finalized by April 30,2004. Staff will be in place by July 3 1, Internal Audit and Monitoring Internal audit functions in the Project will be carried out through the monitoring and evaluation component of the Project. It has been agreed that the firm which will be responsible for periodic monitoring and evaluation will also be responsible for reviewing other financial issues, the use of grants to LCs, delivery of cash allowance to targeted beneficiaries, and evaluating the grant and education allowance program. The TOR of the firm have been drafted, and include the internal audit function. External Audit 0 As no separate financial statement is prepared at the DPE level, the Project financial statements will be audited annually by the Comptroller and Auditor General of Bangladesh. The audit report will be submitted to IDA within six months of the end of each fiscal year. 0 Unless any special or additional audit is required, no other audit to will be carried out. Additional audits will be subject to Comptroller and Auditor General concurrence and agreed TOR. 0 All previous audit reports of IDA assisted PEDP I have been received on time. The pending observations under the same ministry and sector mainly relate to non-compliance with GOB rules and policies - e.g. non-deduction of taflat, violation of Project Proforma provisions, and nonacceptance of single-source selection methods. These are in the process of being resolved through an Action Plan agreed during the preparation of PEDP 11. A status report is being prepared and has been submitted. IDA S Audit Report Compliance System (ARCS) will keep track of the following audit for ROSC (Table 3): Implementing I Agency DPEMoPME Table 3: Audit Type and FY I Project Financial Statements for each fiscal year ended on June 30 Auditors Government auditor (C& AG) Completion date December 3 1 in each fiscal year Financial Reporting and Monitoring 0 DPE already has systems in place to capture Project information and specific formats for reporting. ROSCU, with the help of the financial staff, will be responsible for consolidating financial information from all cost centers after scrutiny of financial information, monitoring actual expenditures, and coordinating with Banks, other agencies and the Financial Management Unit of MoPME for financial data reconciliation and reporting. 54

64 0 A set of Ouarterlv Financial Statements (FMRs) will be prepared by ROSCU and will be submitted to the Bank along with the quarterly progress reports. These will include quarterly Sources and Uses of Funds along with Uses of funds by Project component/activities, Dollar Special Accounts Statements, Output Monitorinn Reuorts indicating quarterly financial or physical progress of predetermined indicators of key Project activities, and Procurement Monitoring Reuorts. Financial Management Action Plan Table 4 summarizes the financial management action plan. Actions/ Activities Two staff in the position of Assistant Director and an Accountant with agreed job description. A TOR satisfactory to IDA to carry out periodic review of the use of grant support to learning centers, delivery of cash allowance to targeted beneficiaries and evaluate the grant and education allowance program. Plan to resolve outstanding observations under the Primary Education Development Project Responsibilities MoPMEiDPE MoPMEiDPE MoPMEDPE Completion TOR have been prepared and staff will be appointed by July 3 1,2004 Draft TORS have been prepared Done Disbursement Arrangements Disbursements under the Project will be made as indicated in Table 5 below, which indicates the percentage of financing for different categories of expenditures of the Project. It is expected that IDA funds will be disbursed over a period of five and a half years, with a closing date of June 30, The traditional disbursement method (SOE-based) will be followed, with an option to switch to the reportbased disbursement method at GOB S request for IDA S consideration. Table 5: Allocation of Grant Proceeds Services (excluding Retroactive Financing GOB will also have access to up to US$lOO,OOO in retroactive financing for eligible expenditures incurred between May 1,2004 and Grant effectiveness, for procurement of goods, consultant services, and for training purposes. The documentation requirements for retroactive financing will be the same as those needed for disbursement against payments made under the grant. * IDA Grant only; SDC is financing US$6 million of the total project cost of US$62.8 million. 55

65 Use of Statement of Expenditures (SOEs) IDA will require full documentation for all prior review contracts that exceed the equivalent of: (a) US$300,000 for goods (b) US$lOO,OOO for service contracts with firms; and (c) US$50,000 for individuals. Expenditures below the above thresholds and all expenditures under Operating Costs will be claimed on SOEs. SOEs will be reviewed by the initial supervision mission to ensure that funds are utilized for intended purposes. Special Account For utilization of IDA share of Project expenditures, ROSCU will open and maintain a Convertible Taka Special Account (CONTASA) under terms and conditions acceptable to IDA. The authorized allocation of the special account will be BDT 150 million. 56

66 Annex 8: Procurement BANGLADESH: Reaching Out-Of-School Children Project General: The total cost of the Project is estimated at US$62.8 million, of which the IDA grant will finance US51 million equivalent. The Project will largely involve education allowances to out-of-school children (US$27.3 million) and grants to learning centers (US24.5 million) through Center Management Committees, supported by Education Service Providers (ESP). It will also involve small valued procurement of goods, and some consultancy services. Rules and Guidelines: All IDA financed procurement of goods using international competitive bidding (ICB) will follow procedures outlined in the Bank s Guidelines for Procurement under IBRD Loans and IDA Credits (current edition). Consulting services and training obtained through international advertisement (dgmarketfundb online) will follow the Bank s Guidelines: Selection and Employment of Consultants by World Bank Borrowers (current edition). All local procurement for goods, and services for which the shortlist entirely comprised of national consultants, will follow the Government s new procurement regulations (The Public Procurement Regulations 2003), acceptable to the Bank (goods- < US$300,000 per contract, consultants services- firms: < US$200,000 per contract, individuals: < US$50,000 per contract). Procurement Responsibility. The Ministry of Primary and Mass Education (MoPME) will have oversight responsibility of the Project. The Directorate of Primary Education (DPE), the executing arm of MoPME, will manage the Project through its ROSC Unit, ROSCU, headed by a Project Director, that will be directly responsible for the day-to-day implementation of the Project. The ROSCU will follow the general guidance of a ROSC Committee with representatives from ministries, NGOs, and private sectors. Grants will be provided to learning centers of 60 Upazilas (sub-districts) across the country in phases, each center each managed by a Center Management Committee (CMC). Over the entire Project period about 15,000 eligible learning centers will receive the grants, each not exceeding US$l,OOO per year. Goods (US$0.5 million): Most goods are small valued packages and are unlikely to attract foreign bidders, and as such procurement will not involve international competitive bidding (i) NCB: Goods and equipment contracts estimated to cost less than US%300,000 equivalent per contract may be procured using NCB. This includes office equipment, furniture, vehicles, printing materials, etc. (ii) National Shopping- NS: Goods of very small contracts or individual purchases of off-the-shelf items may be procured, through prudent shopping procedures, in packages with an estimated value less than US$20,000 equivalent per contract. This includes photocopiers, computers, air conditioners, audiovisual equipment, books, etc. (iii) Direct Contracting- DC: Computer software, journals, magazines, etc. with individual contract costs less than US$2,000 equivalent may be procured following DC. Grants (US$24.5 million): This grant will be used in small amounts per annum (not exceeding US$ 1,000) to establish new learning centers, and deliver quality education in new and existing learning centers. The Project will support local level institutions for community mobilization to establish the new learning centers andor strengthen the 57

67 capacity of local communities to manage learning centers in collaboration Education Service Providers (ESPs). The grant of will be provided to each learning center and will consist of: establishmentfund-a one time initial payment in setting up new Learning Centers; qualityfund- to procure education materials and supplies including teacher preparation; training grant; management fund--an annual payment for schools/ learning centers management supportltraining including capacity building of CMCs; discretionalyfund - for teacher salaries, center maintenance and renovations, extra curricular activities, sanitation and safe drinking water etc. In the interest of certain specific social objectives of the Project, it is desirable to call for the participation of local communities and ESPs. It is expected that approximately 15,000 learning centers will be financed under the Project in 60 upazilas (sub-district) in six districts. CMCs will consist of majority of parents including mothers, female ward chair-person, an Assistant Upazila Education Officer (AUEO), and one local ESP representative with the head teacher as membersecretary. Each learning center has to meet some specific eligibility criteria (Annex 4). The CMC will take primary responsibility for hiring teachers and procuring materials. In certain situations, hiring of local contractors may be necessary for sanitation and safe drinking water supply. Since each grant will be of very small amount and there are not many Education Service Providers (ESP) in the relevant field of the locality, in most cases, CMC s will directly obtain services from the qualified ESPs. In some cases, Education Resource Providers (ERP) will be contracted to provide technical assistance to ESPs. Lists of potential ERPs and a financing agreement will be agreed with DPE depending on the eligibility criteria. DPE will disburse funds to the community managed learning centers in two tranches (semi-annually). A Draft sample financing agreement between DPE and the learning center, specifying the mode and triggers for payment, is included in the operational plan prepared by DPE. Consultants Services and Training (US$7 million): IDA will finance consultants services valued about US$2.6 million and training for about US$ 1.1 million. Assignments include: management consultant, external monitoring and evaluation consultant, research and development consultant, etc. (i) Quality- and Cost- Based Selection (QCBS): Consulting services through firms estimated to cost US$300,000 equivalent or more per contract will be procured following QCBS. Major assignments are ROSC management consultant, and external evaluation consultant. (ii) Quality- and Cost- Based Selection (QCBS)/ Fixed Budget Selection (FBS): Services through firms estimated to cost less than US$300,000 equivalent per contract may be procured following either QCBS or FBS. Contracts may include external monitoring and evaluation consultant. (iii) Fixed-Budget selection (FBS)/ Least-Cost Selection (LCS): Services through firms estimated to cost less than US$lOO,OOO equivalent per contract may be procured following FBS/LCS. (iv) Single-Source Selection (SSS): Specific consultants services through firms, satisfying Consultants Guidelines (paragraph 3.8 to 3.1 1) may be procured following SSS. The contract for monitoring and data processing is likely to be outsourced on a single-source basis to the Local Government Engineering Department (LGED). LGED is uniquely qualified to provide the monitoring and data processing service at the community levels because of its extensive MIS/ GIS capacity at the upazila level and its long standing collaboration with MoPMEIDPE. Besides, Shisu Kallyan Trust (SKT) operated schools will also be contracted (v) Individual Consultants (IC): Services for assignments for which teams of personnel are not required and the experience and qualifications of the individual are the paramount requirement will be procured through individuals in accordance with Section V of the Consultants Guidelines when the estimated cost is US$50,000 or more per contract and in accordance with the national rules when the estimated cost is < US$50,000 per contract. Individuals will be selected on the basis of their qualifications for the assignment. 58

68 Provision for training is included. Most training of individuals and staff members concerning capacity strengthening will be implemented through direct contracting. Operating Costs &JS$3.5 million): Incremental operating costs will be financed by IDA on a declining basis. This includes: incremental salaries, operation and maintenance of vehicles, office utilities, supplies & stationeries, and National Commercial Bank charges etc. Procurement and Selection Planning The draft Procurement Plan for goods, and Selection Plan for services has been prepared by DPE. The Plan will covers the initial 18 months of the Project with the provision of adjustments during this period, and thereafter will be updated annually covering always the next 18 months of project implementation. The use of the methods defined in the Plan is mandatory. Prior to issuance of any invitation for bids for procurement of goods and selection of services, the proposed Plan shall be furnished to IDA for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the respective Guidelines. Procurement of goods and selection of all consultants will be undertaken in accordance with Plans approved by IDA. Use of Standard Documents: For ICB procurement of goods, the use of IDA S Standard Bidding Documents (SBD) is mandatory. For NCB procurement, DPE or other implementing agencies will use the Government s Standard Bidding Documents acceptable to IDA. For selection of international consulting firms, the Bank s Standard Request for Proposals (RFP), including standard contract form will be used; for local consultants Government s procedure laid out in the national regulations will apply including its documentation. Depending on the type of procurement, the Bank s or Government s Standard Bid Proposal Evaluation Form will be followed for submission of evaluation reports. Prior Review Thresholds: Goods: During the initial 18 months of the Project, IDA will carry out prior review of the following contracts: all contracts estimated to cost US$300,000 equivalent or more and the first one contract regardless of the value and method. After 18 months, the above thresholds will be reviewed defined / redefined in the revised procurement plan, if necessary. Consultants Services: IDA S prior review will be required for consultants services contracts estimated to cost US$lOO,OOO equivalent or more for firms and US$50,000 equivalent or more for individuals. All single-source contracts will be subject to prior agreement by IDA. Post Review/ Procurement Audit: For compliance with the Bank s procurement procedures, IDA will carry out sample post review of contracts that are below its prior review threshold including contracts for grants provided to the learning centers. The Project also includes funds for carrying out procurement audit by an independent auditor. Such review (ex-post and procurement audit) of contracts below the threshold will constitute a sample of about 20 percent of the contracts. 59

69 Review of Procurement Performance: IDA will monitor the compliance with the requirements of Bank s different procurement methods and performance standards on a continuous basis. As part of the project s planned annual review/ mid-term review, a comprehensive assessment of procurement performance will also be carried out. Based on the review, in consultation with the Government, IDA may revise the prior review threshold including the procurement and selection methods. Reporting: The Project will prepare quarterly Procurement Monitoring Report (PROCMOR) as per specific formats agreed with GOB. Procurement Management Capacity: Procurement Environment: The Country Procurement Assessment Report (CPAR), broadly accepted by the Government in February 200 1, identified inadequate public procurement practices as major impediment affecting Project implementation in Bangladesh. Procurement deficiencies include: absence of a sound legal framework, protracted bureaucratic procedures allowing multi-point rent seeking, lack of critical mass of professionals to manage public procurement, inordinate delays in completing the procurement process and ineffective contract administration and absence of mechanisms for ensuring transparency and accountability in public procurement. Procurement Reform Actions: Following the CPAR recommendations, the Government with IDA S support is implementing the Public Procurement Reform Project (PPRP). As part of the reform under PPRP, the Government has established a Central Procurement Technical Unit (CPTU) with adequate staffing funded from own resources, issued Public Procurement Regulations 2003 in October 2003 and implementation procedures in March 2004, and prepared standard bidding documents/ procurement approval procedures and delegation of financial powers, all are at the approval stage. The new regulations, among others, take into account the multilateral development bank s principles of harmonization of requirements for local procurement in borrowing counties. Concurrently, in order to build procurement management capacity under the overall umbrella of CPTU, ILO, Turin in co-ordination with Bangladesh Institute of Administration and Management (BIAM) has developed a critical mass of 16 local procurement trainers and started training in October 2003 of about 1,600 publidprivate sector staff, to be conducted in phases over the next two years. All these actions are contributing positively in changing/ improving the procurement environment. Capacity Assessment & Strengthening Actions: DPE will be responsible for managing the Project under the guidance of a ROSC Council with representatives from ministries, NGOs, and private sectors. The Project will largely involve small amounts of annual grants (- $1,000) to learning centers. Each learning center will be managed by a Center Management Committee (CMC) included in it representatives of ESPs. For certain technical areas, CMCs/ESPs will obtain services of Education Resource Providers (ERPs). Since each grant will be of very small value and there are not many ERPs in the relevant field of the locality, in most cases, CMC s will directly obtain services from the qualified ERPs; a list of potential ERPs based on the eligibility criteria and a financing agreement will be agreed with DPE. In addition it will involve small procurement of goods, and some consultants services. Given the inadequate experience of CMCs, a knowledge dissemination scheme by DPE will be undertaken to ensure appropriate use of funds. Given the nature of the Project, based on the procurement capacity assessment and the need for improvement, the procurement-associated risk is average. One Procurement 60

70 Officer will assist DPE in handling procurement matters including use of small grants and its arrangements between the learning centers and the ERPs. Given the time constraint and the requirement for fast track processing of this grant; to mitigate procurement associated risks, strengthen procurement management capacity/accountability, as Project preparation moves on, the following arrangements have been made/agreed: (a) MoPME/DPE prepared a draft procurement plans; (b) MoPME/DPE will make available one procurement officer within one month of grant effectiveness for handling procurement planning, advance procurement actions, and all subsequent procurement matters under the Project; (c) DPE, by July 3 1,2004 will send at least one concerned staff to undertake procurement training being organized by CPTU/IMED. Table A: Project Costs by Procurement Arrangements (US$ million equivalent) 1 Procurement Method Expenditure Category 1 Total Cost 1. Goods 2. Consultants' Services (a) Consultants (excluding those covered in (b) below) (b) MIS/Monitoring 3. Training 5. Grants 6. Operating Cost ICB NCB Other' N.B.F (0.10) (0.13) (0.23) (2.39) (2.39) (0.22) (0.22) Education Allowances I I I I 2.46 I I (24.84) (24.84) (21.51) (21.51) (0.75) (0.75) (0.10) (50.93) (51.04) Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies. Includes (i) goods to be procured through national shopping, direct contracting; (ii) consulting services to be procured following: quality- and cost-based selection, selection under fixed-budget, selection based on consultants' qualification, single-source selection, and individual consultants' methods, and training cost; and (iv) incremental operating costs. 31 NBF: Non-Bank financed - Swiss Development Cooperation (SDC). 61

71 Category I Method Review Goods >=US$300,000 ICB All contracts <US$300,000 NCB First one contract irrespective of Services >=300,000 QCBS value All contracts. <US$300,000. QCBS/ FBS All contracts of US$lOO,OOO or more <us$100,000 FBS/LCS Post review >=US$50,000 IC- Qualifications, All contracts references <US$50,000 IC- Qualifications, Post review references Selective contracts (LGED, SKT, sss Prior agreement etc.) - Grants < us$l,ooo Post review Overall Procurement Risk Assessment: Overall procurement risk is average, and mitigation measures are described above. Frequency of procurement supervision missions proposed: Once in every six months. Besides, as part of the fiduciary control, Bank s staff and independent consultant, as deemed appropriate, will carry out post review/procurement audit of contracts. 62

72 I. Background Annex 9: Economic and Financial Analysis BANGLADESH: Reaching Out-Of-School Children Project Bangladesh has a strong national commitment to education and has one of the largest primary education systems in the world. Gains in access have been impressive with total enrollment increasing substantially during the last decade and gross primary enrollment rates rising from 76 percent in 1991 to 97 percent in Dropout rates decreased by nearly half, from nearly 60 percent in 1991 to 30 percent in Completion rates increased significantly from 40.7 percent in 1991 to 67 percent in Gender parity in access to primary education has also been achieved. In 2002, nearly 17.6 million students were enrolled in over 78,000 primary level institutions. Of the total number of students, about 15.7 million (49.9 percent girls) were enrolled in Government funded, formal primary education schools (Table 1). Government primary schools and experimental schools attached to PTIs are fully funded by the Ministry of Primary and Mass Education (MoPME). MoPME funds percent of registered nongovernment primary schools, and provides Tk.500 per teacher for community and satellite schools. GOB funds through MoPME, the construction of some NOG-run full primary schools. The other types of schools are recognized but not funded by the Government. Funded by MoPME MoPME MoPME MoPME MoPME MoPME Table 1: Primary Education by type of school, number of schools, teachers, Gross Enr Ilment,! udent-te cher ratio Pupils koss Enra ments) School TvDe Government Primary School (GPS) Experimental School Attached to PTI Registered Non-Government Primary School (RNGPS) Community School (COM) Satellite School (SAT) High School attached Primary Section Non-Registered Non-Government Primary School (NGPS) Kindergarten Ebtedayee Madrasah High Madrasah attached Ebtedayee Madrasah NGO-run Full Primav School * Schools 37, ,428 3,225 4,823 1,576 1,792 2,477 3,443 3, Teacher 157, ,758 9,759 9,649 10,490 6,380 15,150 13,479 14,806 1,097 Total 0,669, ,711 4,137, , , , , , , ,977 42,427 Girls 5,340,275 4,726 2,054, , , ,319 98, , , ,192 21,510 Boys 5,329,544 5,985 2,082, , , , , , , ,785 20,917 Pupill Teacher Ratio TOTAL , ,841,648 MoPME NGOs and othei 253,653 61,402 15,718,543 1,843,285 7,853, ,864, Source: *imarv Education Statistics in Banglades rectorate o Division, Government of the Peopl2s Republic of Bangladesh. May Notes: * These NGO schools are constructed with GOB hnds from MoPME. Despite the considerable progress made over the past decade, the best estimates of net enrolment rate (NER) suggest that at any one time there are close to 3.5 million children of primary school cohort (6-10 years) who are out-of-school. The high gross enrolment rate (estimated at 97 percent) hides the fact that many young children are not in school and many others enroll at an older age than stipulated by the 63

73 compulsory education legislation. While there is a high level of gender parity in terms of total enrolments (50.3 percent boys and 49.9 percent girls in 2002), there is far less parity in terms of access to education for children in remote rural areas. The Second Primary Education Development Program (PEDPII) is the flagship program which operationalizes Government of Bangladesh s (GOB) strategy to achieve Education for All. The focus of PEDPII is on the formal primary education system. While PEDPII will have significant impact on reducing the number of out-of-school children, by the end of PEDP I1 about 1.8 million out-of-school children will still not have access to primary education. The Reaching Out-of-School Children Project complements PEDPII in that it will target the out-of-school children, support increase in non-formal school enrollment, increase completion rates and transition rates for students enrolled in non-government schools to govemment-supported secondary schools, improve the classroom environment, and ensure that unit costs are no higher than in the formal, Government supported primary institutions. To achieve the objective, access to non-formal primary education for out-of-school children will be facilitated through investments which support demand and supply-side interventions by: (i) providing targeted student allowances to eligible children (including education allowances to children in Shishu Kallyan Trust (SKT);(ii) providing grants to schools attended by eligible education allowance students; and (iii) supporting program management and institutional development to build local capacity for the management of services by institutions catering for pupils who are not enrolled in regular primary education and establishing a sound structure for project management and implementation. The characteristics of the non-formal LCs is provided in detail in Annex 1. I(a) Project Coherently set in ESW Bangladesh s Interim Poverty Reduction Strategy Paper (IPRSP) emphasizes the necessity of providing quality primary education and states that the unsatisfactory performance of the primary education system contributes to a colossal loss in systemic efficiency for the education sector as a whole. The Project Reaching Out-of-School Children incorporates two essential considerations necessary for achieving EFA: (i) addressing the equitable distribution of educational opportunities in-country; and (ii) ensuring that meeting access goals does not come at the cost of enhancing education quality. The Project will complement PEDPII in reflecting the IPRSP s strategy of improving access to education for all and improving the quality of the non-formal primary education system. The Project is also designed within the context of the recent World Bank ESW, Bangladesh Education Sector Review (2000). The analysis revealed that substantial progress has been made in increasing enrolments at the primary level in Bangladesh over the last two decades-from around eight million in the beginning of the 1980s to over 17.5 million by 2002, including over two million students enrolled in a vibrant and active non-govemmental sector. However, the system faces several challenges: 0 About 10 percent of the children do not enter primary school at all. These children are mainly from the hard-to-reach poor families for whom the opportunity cost of attending school is very high; 0 40 percent of those who do enter primary education do not complete five grades; 0 Repetition and dropout rates are high-students take six years to reach the fourth grade; and 0 Those who do complete five grades perform on average at about a third grade achievement level and lack essential problem solving skills. The ESW analysis further states that the poor quality of education arises out of constraints which can be classified into three types: 0 Demand-side factors that prevent children from going to school or from benefiting from the educational services provided by the school. For example, poverty, direct costs of schooling, opportunity costs, the special needs of some children, cultural constraints and prejudices. 64

74 Supply-side factors that limit their capacity to provide adequate quality education opportunities for children living in the area. For example, schools not being accessible, short contact hours, inadequate facilities, untrained and poorly trained teachers often with inadequate knowledge, lack of teaching and learning resources, teacher inertia and absenteeism. A related supply-side issue is the fact that teachers lack adequate incentives to perform well in school and may in fact be getting a proportion of their household income from providing private tuition, from which the poor cannot benefit. Institutional policies and administrative arrangements that can keep children from attending school or performing at an acceptable level or limit the school and classroom s capacity to provide an effective education. For example, the shift system, weak organizational capacity, an organizational culture that does not properly value primary education, the high level of centralized management, staffing policies that create inefficiency, inadequate funding arrangements, inability to make the most effective use of available funds, and lack of easy linkages between the formal and non-formal sectors. The review goes on to say that solutions to these problems require priority attention to improvements in quality aimed at reducing wastage in the system, and leading to increased completion rates. Furthermore, that hard-to-reach children should be targeted through compensatory programs. The Project aims to bring out-of-school and hard-to-reach children into school Le., increasing access to primary education, through various measures aimed at (a) providing incentives for poor families to send children to school, and for schools to attract out-of-school children; and (b) improving the quality of student learning and performance outcomes with the objective of mainstreaming children into the formal primary education system at the secondary level. I@) Project Coherently set in the CAS The problems of access and low quality of primary education are recognized in the latest CAS DB dated February 8,2001, which states that despite impressive gains recorded in education in the past decade, improving quality remains a major challenge. The CAS states that IDA and other donors will continue advocacy and support for improving access to and the quality and efficiency of primary education. The Project which aims to enhance access to education for the disadvantaged directly responds to the CAS recommendation. 11. Rationale for Intervention Primary-level education is universally regarded as a public good with significant externalities. Primary education is strongly correlated with economic development and with increased productivity, and is one of the key solutions to breaking the vicious cycle of poverty. Support to non-formal education will help to bring out-of-school children into LCs. Non-formal LCs serve an important social function in that they help to lay the foundation through good-quality basic education for out-of-school children to help them to become literate, help them to increase their productivity and on the road towards better employment and income-earning possibilities. The enhanced level of education and literacy achieved will be a significant factor in breaking the cycle of poverty in the rural areas in Bangladesh. The main economic arguments for a proactive role for non-formal LCs and the Bank to complement government-supported formal primary education are as follows: Returns to Primary Education. There are high private and social returns to investing in primary education-cost-benefit analysis studies of primary school education show high rates of return (Tiles, 1987; Acharya 1995 for private returns to education and Azariadus and Drazen, 1990 and Psacharopolous, 1994 for social returns to education). 65

75 Primary education and income-generation. Benefits of a good quality primary education system are strongly correlated with economic development and with increased productivity. In the absence of a good quality primary education system the majority of the labor force will continue to lack basic skills that are crucial to increasing efficiency and productivity in the labor market. The Project aims to enhance access to primary education, and to provide a better quality primary education to the disadvantaged children of Bangladesh to enhance their employability and income-earning possibilities. Equity. Primary education spending in Bangladesh is pro-poor [refer PEDPII Economic and Financial Analysis for more detailed assessment and evidence]. While the Government has an important role to play in continuing to ensure that access to education-especially education of good quality-is equitable, its resources are scarce and does not benefit all children. Through the Project, targeted education allowances will be provided to the poorest regions with the greatest number of outof-school children, and grants will be provided to schools for institutional strengthening or quality enhancements in education as an incentive to attract more out-of-school children and to keep them in school. The Government supports primary education for street children through an initiative financed by the Shishu Kallyan Trust (SKT). The Project will support GOB S efforts to target street children. Information. Non-governmental organizations have a crucial role to play in the collection, analysis and dissemination of information on the quality and effectiveness of education provided through nonformal LCs. Organizations such as the Campaign for Popular Education (CAMPE) in Bangladesh perform of this function quite systematically. Non-formal primary education LCs are closely monitored and evaluated by the non-governmental organizations that provide and finance them. However, these LCs have a ceiling on the number of children they enroll. There are still far too many out-of-school children (over 3.5 million) who are unaware of opportunities to schooling, or who just do not have proper access to education. Moreover, there are street children in urban areas who are unaccounted for and who have little opportunity for schooling. It is difficult to assess the magnitude of the number of out-of-school children. Furthermore, the Government has a crucial role play in the collection, analysis and dissemination of information on the quality and effectiveness of education provided in different institutions, and on analyzing how efficiently public and private funds flow through the administrative and budgetary system and ultimately reach communities, teachers and schools; and determining how these resources are combined with other inputs at the school level to generate education outcomes. By putting in place effective monitoring and evaluation mechanisms, the Project will complement the system being put in place under PEDPII, and will aim to ensure that such information is readily available and can feed back into policy formulation both for non-formal as well as formal primary education Cost Benefit Analysis Project cost-benefit analysis has produced an approximate internal rate of return (IRR) of 14.9 percent for the Project investment at a net present value of US$0.52 million using a discount rate of 12 percent. Increase in earnings for children who have received at least primary education has been used as a proxy for estimating Project benefits. Benefits Stream: The investment will promote improvements in access to LCs for out-of-school children, beneficiaries of which will be the incremental students entering the education system. An annual education allowance of Tk.800 per student for Classes I-111 and Tk.970 per student for Classes SV- V will be provided to encourage students to attend primary education classes in the LCs. In addition, LCs will receive between Tk.25,000 and Tk.30,000 for establishment, quality, management and discretionary grants (for details refer Annex 4). It is estimated that around 500,000 students will benefit from the education allowance and Learning Center grants. The earnings differential for children with a quality 66

76 primary education is double the earnings for children without primary education. Without the Project, outof-school children s eamings of students as of 2003 is estimated to be Tk.12,000 p.a. Following the Project, it is estimated that children with a primary education will earn Tk. 11,945 more than those without primary education. Economic benefits are estimated in accordance with the following assumptions: Population growth rate is based on projections reported in the Bangladesh Bureau of Statistics Report on National Child Labor Survey : 1.5 percent ( ). Improved access to primary education overall (in both formal schools and non-formal LCs) i s achieved for educationally disadvantaged children, especially children of minority groups, through the Government s primary education stipend program (PESP) under PEDPII as well as the education allowances through the Reaching Out-of-School Children Project, enhanced school facilities and resources, and improved classroom resources and teaching. Number of out-of-school children of age 6-14 years as of is 3.5 million. The percentage of out-of-school children who will receive education allowance and benefit indirectly from Learning Center grants will be approximately 21 percent. The Project will support the increasing numbers of cohorts through the five years of primary education, thereby enabling demonstration effect of targeted support to improve access to schooling. The net enrollments as of in NFPE LCs is estimated to be 1.22 million. Attendance and promotion rates are high in NFPE Centers at 96.4 percent. Dropout rate as of is estimated at 3.0 percent. This level is maintained throughout the life of the Project-until 2008/9. Repetition rate is low at 0.4 percent as of This level is maintained throughout the life of the Project--until2008/9. No increase is assumed for additional years of schooling if the full five years of primary schooling are not completed. At present time to graduate is estimated to be 5.7 years. The benefits are estimated for completion of the primary cycle only. No allowance is made for the fact that the improvements in primary education will allow more children to attend secondary school and thereby have access to even greater earning power. Incremental eamings benefits are calculated on the basis of increased earning with each additional year of primary schooling. Quality improvements include improvements in teaching due to increased teacher training, increase in the number of textbooks and supplementary materials, better physical facilities, and increase in number of student-teacher contact hours for teaching and learning activities. It is assumed that a better quality education leads to higher returns to primary education. Cost Stream: The estimated direct costs of the Project comprise the Project investment, the public and private cost of each additional pupil year, and the opportunity cost of retaining each student in schools for an additional year. Costs for LCs are estimated to be equal to US$lOO for a 12 month period (the school year). This assumption is based on the fact that NFPE LCs typically have a lower unit cost per student than public primary schools. Private costs are those incurred by the families of each pupil on possibly school supplies and books. This is estimated to be around US$5 per child per month for a 12 month period (the school year). The opportunity cost of retaining each student in school for an additional year is estimated to be equal to the wage of that the child will get if (s)he works in the labor market. Finally, average student-teacher ratio is maintained at 35: 1 until end-of-project. Using these assumptions, the Project yields an hternal Economic Rate of Return (EIRR) of 14.9 percent (Table 2). Net present value has been calculated based on a discount rate of 12 percent. It is assumed that the economic and financial rates of return to be the same. 67

77 Table 2: Economic Internal Rate of Return Benefit stream Cost stream Net benefit stream US$3.02 billion US$2.50 billion US$0.52 billion The real rate of return is likely to be somewhat higher reflecting positive externalities and longer-term intergenerational social benefits that come with increased levels of education, including lower fertility rates and improved health outcomes to which it is difficult to assign monetary values. III(a) Sensitivity Analysis Rates of return are calculated on the basis of alternative assumptions regarding the internal and external efficiency of the system. For the purpose of this analysis, (a) dropout and repetition rates are utilized as proxies and changes in internal efficiency are assumed to be captured by changes in dropout and repetition rates (and hence completion rates); and (b) potential wage growth rate is utilized as proxy for changes in external efficiency. While these distinctions are somewhat artificial, they nonetheless provide us with some interesting information about the changes in rates of return based on different assumptions regarding system efficiency. The rates of returns under different assumptions are summarized in Table 3. The low case for the internal efficiency is based on dropouts and repetitions rising by 15 percent as compared to the base case, while the high case is based on dropouts and repetitions falling by 15 percent as compared to the base case. With respect to external efficiency the low case is based on a decrease in wage rate by 15 percent compared to the base case, while the high case is based on a wage growth of 15 percent more as compared to the base case. Table 3: Sensitivit Anal sis External Efficienc Internal Efficiency Medium Medium Hi h The analysis demonstrates that the rates of return are highly sensitive to changes in assumptions regarding external efficiency of the system. For example, controlling for changes in internal efficiency, a 15 percent increase in external efficiency roughly corresponds to a 67 percent change in the rates of return for the high scenario. On the other hand, controlling for changes in external efficiency, a 15 percent change in the internal efficiency corresponds to just a 0.16 percent change in the rate of return for the high scenario. IV. Poverty Analysis Poverty is cited as a significant constraint to children enrolling in school, for low attendance, low attainment, and poor performance among children of primary school age population. Ranked as one of the poorest countries in the world, Bangladesh has a GDP per capita of US$350 p.a. About 50 percent of the total population (1 34 million) are poor, and 37 percent are defined to be hard-core poor living in dire circumstances (Bangladesh Human Development Report 2000, BIDS). Approximately 55 percent of primary education pupils come from poor households. Many households are unable to bear the indirect 68

78 cost of sending children to school, are most likely to need children s labor for income-producing or costsaving activities, and therefore, have high opportunity cost of sending children to school. Frequent absenteeism and/or early withdrawal from school. Other reasons for include poor health and nutritional status among young and school-aged children resulting in illness andor physical and cognitive impairment or delays, leading to late enrollment, dropping out of school, absenteeism and low learning outcomes. In 1990, GOB enacted the Primary Education (Compulsory) Act to ensure that no child is deprived of a primary education due to inadequate school places, instructional quality, and discrimination arising from gender, income, ethnicity and residence. This Act has led to the elimination of official school fees, the provision of textbooks for free, and incentives to encourage the participation of vulnerable children. Analytical estimates for the Second Primary Education Development Program (PEDPII) point to Government spending for primary education being pro-poor-an estimated 56 percent of all Government subsidies on primary education going to the poor. The monetization of the Food For Education (FFE) program and the targeted primary education stipends for the poorest forty percent of children enrolled in primary schools through PEDPII are envisaged to bring more out-of-school children into the formal (Government provided and financed) primary education system. While GOB S is committed to ensuring education for all, resource limitations prevent the formal primary education system from reaching all children. It is estimated that following PEDPII implementation in 2009, approximately 9 percent (1.8 million) will still be out-of-school. Through the Reaching Out-of-School Children Project it is anticipated that at least 20 percent of these out-of-school children will be targeted. As of year 2000, the number of out-of-school children constituted approximately 25 percent (3.5 million) of total primary school cohort (6-10 years age). This number includes children who have never enrolled in school, those who had enrolled and dropped out from the formal primary education system, street children and migration of displaced families from rural to urban areas. It was estimated that over six million (19 percent) children between the ages of 5-14 were economically active, with more than 80 percent engaged in agricultural a~tivities.~ It is estimated that the earnings per worhng child is around Tk. 12,000 p.a. (Child Labor Survey 2003). The opportunity cost of bringing all these children into school will be Tk.72 billion. A proportion of these children will be absorbed into the formal primary education system with the stipends that the Government is providing through PEDPII. If the remaining children are enrolled in NFPE Centers, the cost implication will be Tk.21.6 billion (1.8 million x Tk.12,000). Poverty Targeting In the context of non-formal primary education, the majority of children enrolled in NFPE LCs are from poor households. The poor account for nearly 50 percent of the total population. About 27 percent of all children 6-10 years old belong to the 20 percent poorest population, while only 12 percent belong to the richest 20 percent (Government s Poverty Reduction Strategy and the Bangladesh Public Expenditure Review (2001)). Overall, 3 out of 5 children in this age group come from poor households and 2 out of 5 come from non-poor households. The enrollment rate is lower among the poor. In 2000 on average parents had an out-of-pocket expense of about Tk. 1,000 per child in FPE schools. This was approximately 2 percent of average household income in Bangladesh. It is reported that while Government schools did not charge any tuition, over 90 percent of NFPE Centers charged some tuition - roughly Tk per annum. World Bank Education Sector Review (2000). Volume 1, pages lo Eleven expenditure heads constitute private expenditure for schooling: admissionheadmission fee, monthly tuition, buyinglcollecting textbooks, buyinglcollecting supplementary books, stationery, school dress, examination 69

79 ~ Education allowances under the Reaching Out-of-School Children Project will essentially be pro-poor. An estimated 500,000 students are expected to benefit from education allowances in the form of demandside financing through stipends and supply-side support through grants to LCs for improvements in educational quality. This constitutes approximately 9 percent of out-of-school children as of year While the amount per student might not entirely cover the opportunity cost of attending school, it is envisaged that it will compensate students for attending a certain number of hours of school annually. Considering that LCs are more often than not operating at maximum capacity, the grant through the Project will help to set up new LCs. The quality improvements encouraged through the Project will benefit the wider NFPE population. Part 11. Financial Analysis Long-term sustainability of the benefits of the Reaching Out-of-School Children Project will be dependant on two key factors: (i) the availability of revenue to meet the additional recurrent costs that will inevitably arise as a result of adopting the strategy of providing demand-side education allowances and supply-side grants; and (ii) the willingness of Government, partner development agencies, and NGOs to meet those new recurrent costs at possibly the expense of other budget claims. The Govemment has indicated its commitment to continue long-term support for the non-formal primary education sector, recognizing the growing value of altemative methods of education service delivery towards supporting the achievement of the EFA goal. GOB has made it clear that it regards the successful development and continuance of high-quality primary education as one of the highest priorities. During the course of implementing the Reaching Out-of-School Children Project, Govemment commitment to gradually absorb NFPE costs will be sought. In the context of PEDPII a detailed fiscal analysis was carried out. Using the PEDPII estimated GDP growth and education budget projections, the additional budgetary implications for mainstreaming NFPE and the remaining out-of-school children have been estimated and analyzed for a base-case scenario. The results of the base-case scenario show that total Govemment budget as a percentage of GDP could increase by about 41 percent over the period , i.e., from $6.78 billion in to $9.57 billion in As a result of the increase in overall Government budget, the allocation for education is similarly projected to increase by approximately 40 percent over the period (from $1.02 billion in to $1.43 billion in ), with the allocation for primary education following the same trend, i.e., rising by about 41 percent over the same period (from $452.5 million in to $665.9 million in ). The additional annual recurrent cost implications of supporting students attending leaming centers will range from about $40-44 million (as between 2,000,000-2,200,000 students will be enrolled in these centers at any one point in time). The recurrent cost implications of PEDP I1 are $450.2 in 2009/10. If leaming centers are going to be even partially (50 percent) supported through the GOB budget following the end of the Project, the recurrent cost implications for GOB in 2009/10 will not exceed $475 million (an increase of less than 6 percent). Given that the total costs under PEDP I1 (recurrent+development) fall well within the education budget projections for 2009/10, absorbing the additional recurrent costs envisaged here through partial support for the leaming centers should be sustainable for GOB. fees, various other fees (e.g., fees for religious festivals, social functions, amusements, etc.) transport for schooling, honorarium for private tutors, and transport for private tutoring. 70

80 Social Assessment Annex 10: Safeguard Policy Issues BANGLADESH: Reaching Out-0f-School Children Project Poverty is one of the major barriers hindering progress towards Education For All (EFA). Currently around 25 percent children between age 6-10 are out of school (Education Watch, 1999 and HIES 2000), and among these children, 79 percent are poor. Children, especially girls from vulnerable groups such as poorest families, tribal population, children with disabilities (CWD), children living in disaster prone areas - such as coastal islands, river erosion and drought areas, and urban slum are not able to attend school. Majority of these children start working at an early age. Lack of physical facilities and difficult terrain in remote areas create serious barriers for children in accessing education. An estimated 6.5 million children (19 percent of total) are working. Research indicate that only 4 percent of children with disabilities (CWD) are able to attend school. Non-formal education LCs are able to increase access to many children from vulnerable groups. Community participation need to be strengthened by establishing Center management Committee (CMC) for ensuring social mobilization for EFA and improving quality of education for children. LCs, mainly operated by NGO s are able to increase access to primary education to many children from vulnerable groups. As can be seen from Table 1, children going to these schools come fiom poorer families (77 percent of households with a per capita income of less than 50 cents per day as compared to 46 of households overall), and families in which the education level of parents is lower as compared to the norm. Household characteristics NGO households Household size (person) 5.1 Years of schooling, father 1.o Per capita monthly total expenditure (taka) 830 Percent of households with per capita expenditure less than $1 a day 96.7 Percent of households with per capita expenditure less than $0.50 a day 76.7 Principal occupation of household head (percent): Salaried 0.0 Day labor 46.7 Farmer 36.7 Businessltrade 10.0 Rickshawltricycle van puller 6.7 Other 0.0 All survey households First tercile (LOW income) All , The overall costs of education for children in these centers are also significantly lower than they are in formal primary schools, making them more attractive to poor households. 71

81 Direct Costs Indirect Costs Boys Girls Boys Girls NGO LCs Formal Primary Schools Total Costs Boys Girls Given that LCs are geared towards reaching the most disadvantaged, the key objective of this Project is to provide access to quality primary education to out-of-school children to enroll in LCs, and support GOB towards achieving its national EFA goals. Community participation need to be strengthened in these LCs by establishing Center Management Committees (CMC) for ensuring social mobilization for EFA and improving quality of education for children. Social development outcomes of the Project will include (a) increasing enrolment and completion in LCs of CWD, tribal, street children, child labor and poor children, (b) retaining children from the vulnerable groups in LCs, (c) strengthening of social capital as measured by participation of parents of vulnerable groups in CMC. A rapid social and environmental assessment carried out for this Project indicated that the majority (over 80 percent) students and their guardians are highly satisfied with the teaching in the learning centers. Each learning center has a CMC including teacher, local promoter and mothers of the students. CMC, together with the community provides security to the center and they visit the center every week for cleaning the premises. This Project will strengthen the CMC, especially for ensuring social mobilization for EFA, improving the healthy environment of learning centers and enhancing quality of education for children. MoPME will carry out a baseline survey on the existing education situation of vulnerable groups during the first year of implementation, include key indicators in EMIS and conduct annual assessment for monitoring their progress. Tribal strategy. It is estimated that at present nearly half of tribal children (0.15 million) in the primary school age group (6-10) are out of school. The tribal strategy proposes to improve access of the tribal children using the following intervention and monitoring their progress. In the context of preparing the Second Primary Education Development Program (PEDPII), a Macro plan for the overall development of tribal children was developed by MoPME in consultation with tribal population, local Government, NGOs and MoPME officials to address the needs of tribal children. The plan, developed in 2003, will be used for ROSC as well, and implemented in the Project Upazilas with tribal populations. Environmental Guidelines A healthy environment is the prerequisite for better education. To ensure a healthy environment in the learning centers, this Guideline has been prepared in consultation with the community and students. The CMC, together with community will follow this Guideline for ensuring provision of healthy school environment, safe water and hygienic sanitation for students. Arsenic contamination in groundwater in Bangladesh has emerged as a major public health issue. Therefore, it is essential that no school going students are exposed to high level of arsenic or bacteria by drinking water from contaminated sources. Sanitation facilities are required to stop environmental degradation. Any potential construction and use of latrines by the community will need to adopt appropriate construction and maintenance practices, taking into account proper water supply, ventilation, safety and hygiene. 72

82 An environmental assessment was carried out for identifying environmental health concerns of children attending non-formal learning centers. The findings include that most learning centers, both in urban and rural areas have relatively poor infrastructure - usually a 25 ft by 15 ft room with 8 ft ceiling, made of CI sheet, wood, bamboo and other local low cost materials. The centers do not have proper ventilation for light and air. Due to this problem, learners suffer from extreme heat in summer and in the rainy season room becomes dark. Most of the centers do not have electricity. The learning centers do not have tube well of their own. Similarly, the schools do not have sanitation facilities of their own. Learners are often using tube wells and the toilets of the house owner that are often unhygienic. The water and sanitation facilities availed by the students are also unsafe. A majority of the tubewells are painted red, which means arsenic levels are over the permissible limit. Learning centers have earthen floor and the floor is usually covered by thin jute mats. Most of the students opined that the earthen floor remains damp and dusty, and due to this children sometime become sick. Many students had skin diseases, which could be caused by improper ventilation, dust from the earthen floor, etc. The CMC will develop a proposal based on the following actions for improved safety and healthy condition for the learning centers: (a) Schools having earthen floor should use plastic sheets and mats. (b) Safe drinking water could be supplied to the students by providing a water jar, and low cost water filter (available in local markets) in the schools or giving easy access to nearby safe water sources. Locally developed Pitcher column could be installed in every learning center for drinking water and this will cost tk (c) Low cost hygienic toilets should be installed in the school premises. Awareness programs should include issues environmental issues including safe water and hygienic sanitation. (d) Students should be given lessons on hygienic practices, such as washing hands with soap, drinking of safe water and use of proper sanitation facilities. (e) Monthly primary health care programs should be introduced in the schools. (0 School-houses should be more spacious with two doors and sufficient lighting. Community participation needs to be ensured for a healthy school environment, safe water and sanitation. A variety of mechanism have been adopted in Bangladesh for the provision of safe water, which includes deep tube well (DTW), dug well (DW), pond sand filters (PSF), rain water harvesting and arsenic removal filters. Under the Total Sanitation Movement, cost effective and safe sanitation facilities are being provided in all households in rural and urban areas. The CMC, in consultation with the community, should decide on the mechanism for providing safe water and sanitation to the students, possibly using a portion of the grants allocation to do so. Monitoring of Project implementation will include regular assessment of water and sanitation facilities by the project implementation unit. Monitoring reports will include the following information: (a) (b) (c) (d) (e) Is safe water available in learning centers? Are students drinking safe water? Are sanitation facilities available to students? Are these sanitation facilities functioning hygienically? Is the health condition of children improved? 73