DOCUMENT OF THE WORLD BANK IDF GRANT FOR COMBATING CORRUPTION: STRENGTHENING ANTI-CORRUPTION CAPACITY IN THE OFFICE OF THE PROSECUTOR GENERAL

DOCUMENT OF THE WORLD BANK IMPLEMENTATION COMPLETION AND RESULTS MEMORANDUM (IDF GRANT TF-58170) REPUBLIC OF BULGARIA IDF GRANT FOR COMBATING CORRUPTION: STRENGTHENING ANTI-CORRUPTION CAPACITY IN THE OFFICE OF THE PROSECUTOR GENERAL JUNE 28, 2011 Poverty Reduction and Economic Management Department Central Europe and the Baltic Countries Department Europe and Central Asia Region

Contents Data Sheet... 3 Implementation Completion and Results Memorandum... 7 1. Grant Description, Development Objective and Design... 7 2. Key Factors Affecting Implementation and Outcomes... 11 3. Assessment of Outcomes (Ratings are available in ICM Data Sheet)... 12 4. Risk to Development Outcome: Moderate... 17 5. Bank and Recipient Performance... 17 6. Lessons Learned... 19 7. Follow up Activities.... 19 8. Other Comments... 19 Annex 1. Grant Costs and Financing by Category, Disbursement profile... 20 Annex 2. Outputs by Component... 21 Annex 3. List of Supporting Documents... 23 2

IMPLEMENTATION COMPLETION AND RESULTS MEMORANDUM Bulgaria IDF Grant TF-58170 for REPUBLIC OF BULGARIA: IDF GRANT FOR COMBATING CORRUPTION: STRENGTHENING ANTI-CORRUPTION CAPACITY IN THE OFFICE OF THE P ROSECUTOR GEN P103835 Data Sheet A. Basic Information ICM Date: 06/28/2011 Region : Country: Trust Fund Name: Project ID: TF Number: Europe and Central Asia Bulgaria Republic of Bulgaria: IDF Grant for Combating Corruption: Strengthening Anti- Corruption Capacity in the Office of the Prosecutor General P103835 TF-58170 Grant Amount: USD 475,000.00 Disbursed Amount: USD 421,543.76 Cancellation Amount: USD 53,456.24 Recipient: Implementing Agency (ies): Other Donors/External Partners: B. Key Dates Republic of Bulgaria Office of the Prosecutor General Process Original Date Revised / Actual Date(s) Approval: 12/20/2006 01/29/2007 Effectiveness: 03/16/2007 05/08/2007 Restructuring(s): Operational Closing: 05/08/2010 10/08/2010 C. Project Team Members Title At ICM At Approval Country Director: Sereen Juma Anand K. Seth Sector Manager: William Leslie Dorotinsky Ronald E. Myers Project Team Leader: Stella Ilieva Kathy Lalazarian ICM Regional Coordinator: Michael G. Nelson Procurement Specialist : Blaga Djourdjin Blaga Djourdjin Financial Management Specialist : Bogdan Constantinescu Mirela Mart 3

LOA Specialist : Egli Ilic Nicholay Chistyakov Legal Counsel : Ruxandra Costache Jean-Charles De Daruvar D. Ratings Summary D.1 Performance Rating (ICM) Overall Grant Performance Relevance Efficacy Efficiency Overall Outcome Performance: Risk to Development Outcome (Sustainability): Overall Outcome Performance Bank Performance Satisfactory Satisfactory Satisfactory Satisfactory Moderate Satisfactory Recipient Performance Satisfactory D.2 Bank and Recipient Performance Rating Bank Ratings Recipient Ratings Ensuring Quality at Entry: Quality of Supervision: Satisfactory Moderately Satisfactory Government: Implementing Agency/Agencies: See Overall Outcome Performance See Overall Outcome Performance E. Results Framework Analysis Program Development Objective (from Program Document): The development objective of the Grant was to strengthen the capacity and effectiveness of the Office of the Prosecutor-General of Bulgaria (OPG) to track and combat corruption, especially among prosecutors. Corruption among prosecutors in the OPG was considered to be a serious issue. The Prosecutor-General was committed to reduce corruption within the ranks of the OPG, with suspension or initiation of dismissal of prosecutors who do not demonstrate a high level of integrity. The proposed IDF grant played an important role in spearheading this initiative. In particular, the grant supported the OPG in: (i) implementing its anti-corruption reform program through provision of expert advice and international best practices to strengthen accountability, professionalism and institutional capacity in a strategic manner; (ii) building administrative and technical capacity for anti-corruption program implementation by improving the IT systems such as the case management system and a module for prosecutors' declarations of income and assets; and (iii) expanding its existing cooperation with civil society to increase the external transparency, public accountability and credibility of its institutional integrity and anti-corruption work. Monitoring by civil society organizations provided an external check to ensure that the OPG's anti-corruption efforts are not formalistic. Increased scrutiny by civil society and the media helped the OPG improve public perceptions of its integrity. Revised Program Development Objective (if any, as approved by the original approving authority): PDO Indicator(s) PDO Indicator 1 1. Visible cases of suspension and / or initiation of criminal proceedings against allegedly corrupt prosecutors. Measurements (Number or Text) Date 4

Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Comments (incl. % achievement) PDO Indicator 2 No prosecutor has been dismissed or prosecuted for corruption to date. Seven cases against prosecutors are currently pending. All existing cases (pre-idf activity) against allegedly corrupt prosecutors will have been concluded. Where evidence of wrong doing has been found, prosecutors will have been dismissed. 10/02/2006 05/04/2009 All existing cases (pre-idf activity) 06/30/2010 against allegedly corrupt prosecutors have been concluded. Where evidence of wrongdoing has been found, prosecutors have been dismissed. The number of concluded disciplinary sanctions against prosecutors more than tripled between 2007 and 2009-from 14 to 46 wit h the highest disciplinary sanctions (dismissal and salary reduction) imposed on 6 prosecutors in 2009 up from 3 in 2007. Rate of completion of prosecutorial work in corruption cases (in days) Measurements (Number or Text) Date Baseline Value 300-330 days 04/02/2007 Original Target Values (from approval documents) The average duration of open cases will be shortened by 100 days. 03/02/2010 Formally Revised Target Values Actual Value Achieved at Completion or Target Years 150-180 days 06/01/2010 Comments (incl. % achievement) The target was overachieved by close to 50%. PDO Indicator 3 Public confidence in the anti-corruption work of the OPG. Measurements (Number or Text) Date Baseline Value 11.9% 07/31/2009 Original Target Values (from approval documents) 05/31/2010 Formally Revised Target Values Public confidence in the institutional integrity of the OPG and in the effectiveness in fighting corruption will have increased by 10 percentage points respectively. 5

Actual Value Achieved 20.8% 09/30/2010 at Completion or Target Years Comments (incl. % achievement) Confidence in the effectiveness of prosecution work grew in line with the target under the Grant. F. Ratings of Project Performance in Progress Reports: No. Date Archived DO IP Actual Disbursements (USD) 1 10/18/2007 Moderately Satisfactory Moderately Satisfactory 0.00 2 10/18/2007 Moderately Satisfactory Moderately Satisfactory 0.00 3 07/31/2008 Moderately Satisfactory Moderately Satisfactory 50000.00 4 07/29/2009 Moderately Unsatisfactory Moderately Satisfactory 73532.77 5 02/26/2010 Moderately Satisfactory Moderately Satisfactory 128804.64 6 12/21/2010 Satisfactory Satisfactory 421543.76 G. Restructuring (if any) H. Disbursement Graph 6

Implementation Completion and Results Memorandum IDF Grant TF-58170 for IDF GRANT FOR COMBATING CORRUPTION: STRENGTHENING ANTI-CORRUPTION CAPACITY IN THE OFFICE OF THE PROSECUTOR GENERAL P103835 1. Grant Description, Development Objective and Design The IDF grant was designed to strengthen the capacity and effectiveness of the Prosecution Office of the Republic of Bulgaria (PORB) to track and combat corruption. In particular, the grant supported the PORB in: (i) implementing its anticorruption reform program through provision of expert advice and international best practices to strengthen accountability, professionalism and institutional capacity in a strategic manner; (ii) building administrative and technical capacity for anticorruption program implementation by improving the business processes and IT system for case management system and introducing a system for management of incomes and assets declarations of prosecutors and PORB management; and (iii) expanding its existing cooperation with civil society to increase the external transparency, public accountability and credibility of its institutional integrity and anti-corruption work. 1.1 Original Development Objective (DO) (as approved) The development objective of the Grant is to strengthen the capacity and effectiveness of the Prosecution Office of the Republic of Bulgaria (PORB) to track and combat corruption, especially among prosecutors. 1.2 Revised Development Objective (as approved by RIC) and reasons/justification The development objective was not revised. 1.3 Link to Country Partnership Strategy The FY07-09 Country Partnership Strategy (CPS) built on Bulgaria's considerable achievements over the previous eight years which helped create the conditions for the country to accede to the European Union (EU). The CPS sought to help Bulgaria meet the EU accession challenges and facilitated Bulgaria's economic and social integration into the EU. Accelerated judicial reform to ensure a transparent, honest and efficient judiciary was a key area highlighted in the EU Monitoring Report of October 2005 and referred to in the CPS which also stressed that judicial reform remained a serious challenge in improving Bulgaria's institutional framework and its readiness for EU membership. This IDF grant was in line with the CPS outline identifying judicial reform as a top priority for World Bank support. Also, the grant was consistent with the second and third Programmatic Adjustment Loans (PAL2 and PAL3, both closed) for Bulgaria which focused on improving public sector 7

governance including judicial reform and anti-corruption initiatives. The objective of the judicial reforms in the PALs was to enhance the enforceability of contracts and strengthen the administrative justice system, which together served to promote private sector development and improve the investment climate. 1.4 Main Beneficiaries (Original and revised, briefly describe the primary target group, as well as any other individuals and organizations who benefited from the Grant) The main direct beneficiary of the Grant is the Prosecution Office of the Republic of Bulgaria, which is part of the judiciary in Bulgaria. The Grant supported the PORB's own anti-corruption reform program. It provided expert advice to strengthen accountability, professionalism and institutional capacity. It assisted the PORB in getting to know international best practices on organizational models, investigation procedures, and transparent prosecution of corruption cases and made possible the enhancement of its information system, and helped improve the monitoring of the prosecutorial work both internally and externally. The effective fight against corruption is one of the key commitments of the Government of Bulgaria under the Cooperation and Verification Mechanism agreed with the European Council upon Bulgaria s accession to the European Union. The activities implemented under the Grant have been an integral part of the Government s anti-corruption reform program. Increased transparency and accountability targeted under the Grant benefit the society as a whole. Better understanding of the anti-corruption work of the PORB is key to ensure effective public support for the prosecution. 1.5 Grant Components The Grant consisted of two components: COMPONENT 1: Strengthening of PORB strategic focus, accountability, professionalism and institutional capacity, through formulation of a strategy document, provision of training and development of case tracking and management system and automated income and asset declaration system in PORB. The activities under this component included: (i) review of national legal framework and ethical norms in place for combating and preventing corruption among prosecutors and assessment of training needs of prosecutors for fighting high-level corruption. (ii) review of anti-corruption legislation, regulation and Ethics Codes to identify best practices in the EU, U.S. and other countries in combating and preventing corruption. In addition to the analysis of international best practices, four focus groups consisting of prosecutors and investigators (80 participants in total) discussed candidly key bottlenecks 8

in effective resolution of corruption cases, analyzed inconsistencies in dealing with such cases at regional level and results of the surveys carried out among prosecutors and citizens. (iii) carrying out three two-day training sessions/workshops with curricula developed based on the training needs analysis and focused on best practices in other countries in combating and preventing corruption, internal control mechanisms in place, partnerships with civil society, methodology for investigation and prosecution of corruption crimes, and effective implementation of the Code of Ethics. The seminars took place in Plovdiv, Veliko Tarnovo, and Bankia, and one closing workshop in Sofia with 284 participants from all over the country, including close to 200 prosecutors and investigators and 84 participants from other law enforcement institutions (Ministry of Interior, State Agency for National Security, National Revenue Agency, Customs Agency, Commission for Establishing of Property Acquired from Criminal Activity), and media and civil society. All training materials were posted on the PORB intranet for subsequent reference and use by all prosecutors and investigators. (iv) development of a catalogue of best practices from EU, U.S. and other countries in combating corruption. On the basis of the discussions organized during the training sessions and the catalogue of good practices, the PORB developed a set of proposals for amendments to existing legislation and submitted these recommendations to the Legislative Council Directorate of the Ministry of Justice. (v) development of a system for tracking and management of income and assets declarations of prosecutors; development of a Data Warehouse that allows production of various reports which were previously prepared on the basis of paper records which was costly and inefficient; and, development of an optimized business model and technical specifications for enhancement of the Unified Information System (UIS) of the PORB. The enhancement of the UIS would create the technical conditions for automatically feeding with statuary data the Integrated Information System for Combating Crime (IISCC) which is the IT system for the judiciary. The enhancement of the IT system is expected to be financed by EU funds under the Operation Program Administrative Capacity. The PORB is currently preparing the application for financing of this activity. COMPONENT 2: Improvement of transparency and accountability of PORB functions though forming partnership between the PORB and civil society in monitoring progress of anti-corruption efforts, and public information campaign with regard to PORB s anti-corruption efforts. Two major activities were included under this component: (i) Two surveys of public opinion and of prosecutors about the effectiveness of prosecution in combating and preventing corruption which allowed analysis over time of changes in perceptions about the integrity and commitment of prosecutors to fight corruption. The results of the survey were presented and discussed publicly at the closing workshop in Sofia and posted on the PORB s website. The surveys provide a good basis for understanding the attitudes and concerns of society and of prosecutors about bottlenecks in the fight against corruption and for designing measures to improve 9

effectiveness of anti-corruption work. The candid discussions of the results of the surveys helped strengthen transparency and accountability of the PORB work. (ii) A short documentary was developed to present to society the work of the PORB. The documentary was broadcast at the closing workshop in Sofia and is posted on PORB s website. 1.6 Revised Components (if restructured) The grant components were not revised. 1.7 Other significant changes (In design, scope and scale, implementation arrangements, schedule, and funding allocations) No significant changes were made to the design and scope of the grant. Several changes were made to the implementation arrangements, schedule and funding allocations that did not affect the achievement of the intended development objective. These included: (i) The Grant implementation was extended by 5 months to October 8, 2010 to ensure the completion of the enhancement of the IT system, which is the key activity under the Grant, constituting more than half of Grant s funds and with significant impact on intended development objectives. (ii) A consultant was selected to facilitate the preparation of bidding documents, speed up project implementation, and upgrade capacity of the PORB to execute the procurement under the project, including complex procurement of information system. The consultancy was financed by the Grant representing 0.8 percent of original Grant proceeds and with contribution from PORB s budget amounting to 17 percent of the total value of the services. It was the first time the PORB was executing a project financed by the World Bank and it, therefore, lacked experience with the Bank s methodology for procurement of goods and consultants. It was particularly difficult for the PORB to prepare terms of reference for the numerous activities of the grant, and impossible for the PORB to execute by themselves the complex procurement of information systems. (iii) One activity was cancelled during project implementation translation and interpretation services. This activity was directly related to the selection of consultants for the training seminars. With no foreign consultants there was no need of interpretation services while all translation services under the Grant were financed by PORB. (iv) two activities were implemented with financing from PORB or EU funds the preparation of the strategy and action plan for fighting corruption and twinning programs with equivalent institutions in the EU. (v) The final change included small reallocation of proceeds (approved in September 2010) from consultant services to the Goods Category to reflect the separation of the printing of the Catalogue of Best Practices from its production. 10

2. Key Factors Affecting Implementation and Outcomes The preparation of the Grant built on the technical assistance provided to the judiciary by the Governments of the Netherlands and Spain financed under EU Phare, and U.S. under the USAID program. This technical assistance was targeted mainly at the courts system and provision of technical assistance on strengthening the judiciary as a whole. The Grant was unique of its kind in Bulgaria and in the ECA region as it provided support to the prosecution which in Bulgaria is independent from the Government. The grant suffered from an initial slow pace of implementation as the PORB and the World Bank teams had to address a number of challenges. The PORB staff had no prior experience in managing the procurement under World Bank projects and in developing terms of reference for complex projects, including IT system development. In addition, the team members tasked to manage the implementation of Grant activities were changed several times as a result of high turnover of staff and significant overload as the same staff was also working on EU funded projects in addition to their day-to-day responsibilities in the PORB. Two PORB staff attended training on World Bank procurement rules and procedures to help build capacity for project management at PORB. In addition, PORB staff collaborated with Project Management Unit staff from other agencies in Bulgaria with experience in management of World Bank projects. Finally, a consultant experienced in World Bank projects was hired to facilitate speeding up the preparation of the terms of reference and procurement for the Grant activities and build capacity for procurement of complex activities such as enhancements of the IT system. Changes in World Bank teams and limited resources for supervision of complex IT system development project led to delays in processing of no objections. To ensure day-to-day support on project management issues, the Bank task team leader was changed with leadership responsibilities transferred to the field. Project outcomes have been achieved through diligent implementation of the grant by the PORB, with a strong effort during the last 18 months of implementation when practically most of the activities were procured and executed, including the procurement of a complex information system. Key factors for the acceleration of project implementation and achievement of the intended results were: build-up of experience in managing projects at PORB, stabilization of project management staff both at PORB and the Bank. The PORB allocated more resources than committed at the start of the Grant to provide financing for licenses for the IT system and ensure implementation of the system in all regional offices. The achievement of the development objectives was positively affected by key initiatives undertaken by PORB as well as important legislative changes aimed at improving the effectiveness of the prosecution and of the judiciary. These include: (i) approval of a Strategy for Development of the Prosecution, 2007-2009 and adoption of the Integrated Strategy and Action Plan for Counteracting Organized Crime and Corruption in November 2009; (ii) modernization of the organizational structure of the Prosecution, including the establishment of an Inspectorate tasked to strengthen supervisory and 11

control activities over prosecutors at lower levels and check signals for disciplinary violations by prosecutors. Units of this inspectorate were established in all appellate prosecution offices; (ii) roll-out of the Unified Information System to (UIS) to all regional prosecution offices; (iii) enhanced collaboration with other institutions including Ministry of Interior, the State Agency for National Security, through a signing of Memorandum of Understanding for the establishment of specialized inter-agency investigative units; (iv) amendments to the penal procedures and administrative procedures, and others. Amendments to the Judiciary Act and strengthening the role of the Supreme Judiciary Council in preventing corruption in the judiciary also had a positive effect on the performance of the Prosecution and on perception of society about the effectiveness of the PORB in combating and preventing corruption. The exceptional anti-corruption focus of the new government, sworn in July 2009, helped magnify the achievement of the Grant s objectives and contributed to increased trust in the work of the prosecution as evidenced from the results of the surveys conducted under the Grant. The July 2010 EC report under the Cooperation and Verification Mechanism acknowledges the strong reform momentum and results achieved in Bulgaria: approval of a new strategy for judicial reform and anti-corruption, improvements in penal procedures, higher numbers of indictments for organized crime, and high-level corruption cases. The report also points to the need for tangible results in removing deficiencies in judicial practice, prevention of corruption, and protection against conflict of interest. 3. Assessment of Outcomes (Ratings are available in ICM Data Sheet) Key performance indicators of the Grant show that intended outcomes have been substantially achieved and, in some cases exceeded to a great extent: All existing cases (pre-idf activity) against allegedly corrupt prosecutors have been concluded. All pre-trial cases against prosecutors (and other magistrates) are being monitored by the Inspectorate under a special supervision mechanism. In 2009 the PORB Inspectorate supervised 1742 cases with nearly two-thirds of the cases concluded within one month, the rest within six months. Of the total number of supervised cases, 51 are cases against prosecutors and 16 against investigators 1. Between 2007 and June 2010 ten indictments on corruption cases were issued against 12 prosecutors. While the annual number of new corruption cases among prosecutors remained almost unchanged throughout the years, administrative actions against allegedly corrupt prosecutors increased substantially. The number of concluded disciplinary sanctions against prosecutors more than tripled between 2007 and 2009-from 14 to 46 with the highest disciplinary measures (dismissal and salary reduction) imposed on 6 prosecutors in 2009 up from 3 in 2007 (Table 1). 1 Since 2009 in compliance with amendments to the Judicial Power Act the National Investigation Service had been transferred to the Public Prosecution Office. 12

The shortening of the duration of corruption cases is much higher than the target of 100 days defined under the grant. The average length of prosecutorial cases for corruption was reduced from approximately 300-330 days in 2007 to 180-210 days in 2009 and 150-180 days in the first half of 2010, which is an overachievement of close to 50% of the target. Public confidence in the anti-corruption work of the prosecution improved substantially as shown by the two surveys conducted under the Grant by Transparency International in July 2009 and September 2010. The approval rating for the prosecution improved by 11.2 percentage points in a year s time and is fully in line with the target under the grant. In addition, corruption among prosecutors is seen as less of a reason for the low effectiveness of PORB-- according to 41% of the respondents in 2010 compared to 65% of the respondents in 2009. Table 1. Key Performance Indicators Visible cases of suspension or initiation of criminal proceedings against allegedly corrupt prosecutors Rate of completion of prosecutorial work in corruption cases Public confidence in anti-corruption work of the Public Persecution (see Annex III for more details) 2007 2008 2009 Jan-Jun 2010 Target 3 indictments 3 cases 2 indictments 2 indictments number of (against 4 indictments (against 3 (against 2 cases prosecutors); (against 3 prosecutors) prosecutors) 14 disciplinary prosecutors) 46 25 disciplinary sanctions 32 disciplinary sanctions against disciplinary sanctions against prosecutors, of sanctions against prosecutors, of which 3 against prosecutors, which 5 dismissals or prosecutors, of which 6 dismissals or paycheck of which 3 dismissals or paycheck reduction dismissals or paycheck reduction paycheck reduction reduction 300-330 210-240 180-210 150-180 shortened by 100 days 11.9% 2 20.8% higher by 10 percentag e points Source: PORB Note: Every indictment issued and brought to court or action undertaken for arrest at the time of corruption perpetration by prosecutors and by other magistrates is publicly announced to the media and on the web site of the PPO www.prb.bg. The same is done also in all cases of public interest. According to the July 2010 EC report 3 under the Cooperation and Verification Mechanism Bulgaria has made further efforts to fight high-level corruption. Since 2 The indicators are from the two Public Opinion Surveys done under the Grant in July 2009 and in September 2010 and refer to the share of respondents that answered Yes and Rather Yes to the question Do you think the prosecution makes every effort to effectively fight corruption? 13

July 2009 a number of indictments were registered against Members of Parliament, former ministers and deputy minister, and against an acting minister. Overall, the registered new cases for corruption crimes increased in 2009 compared to 2008 (to 595 from 490) as well as the number of sentences on corruption cases (to 192 from 140). It is important to note that further gains in effectiveness are expected to take place once the enhancements of the IT system are fully deployed. The Data Warehouse is expected to be rolled over to all regional offices in the second quarter of 2011 and would provide valuable information to decision making in PORB in real time. The technical specification for the development of the Unified Information System defines improvements of the system that would take place in the next 5 years and that are key for the enhancement of the IISCC. Finally, the income and assets declaration application software awaits the approval of internal rules on its implementation as an internal management tool to monitor and in real time changes in incomes and assets of prosecutors and identify risks for corruption among prosecutors. 3.1 Relevance of Objectives: Satisfactory (Relevance of grant objectives in relation to country needs/priorities and Bank strategies) Comments: Strengthening the anti-corruption capacity of the PORB is a key element of the judicial reform in Bulgaria and of Bulgaria s convergence to EU standards. While Bulgaria s legislation was to a large extent harmonized prior to EU accession by 2007 important challenges remained in aligning enforcement of legislation and practices to EU norms and standards. To help Bulgaria improve the effectiveness of its judiciary and track progress achieved in the fight against corruption and organized crime, the European Commission (EC) agreed with Bulgaria (and Romania) a Cooperation and Verification Mechanism. Each year the EC publishes two progress reports identifying achievements against agreed benchmarks. The last two reports 4 acknowledge the strong reform momentum since July 2009 and commitment of Bulgaria to implement its judicial reform strategy and identified steps to improve the functioning of the judiciary. Key recommendations regarding the fight against corruption going forward included: (i) aligning judicial practices in high-level fraud and corruption cases with best practices in EU member states; (ii) strengthening the law on the prevention of conflicts of interest; and, (iii) strengthen the implementation of public procurement legislation. In its Strategy to Continue the Judicial Reform in the Conditions of Full EU Membership adopted in 2010, the Government recognized the fight against corruption in the judiciary 3 Report from the Commission to the European Parliament and the Council on Progress in Bulgaria under the Cooperation and Verification Mechanism, Brussels, July 2010 4 Report from the Commission to the European Parliament and the Council on Progress in Bulgaria under the Cooperation and Verification Mechanism, Brussels, July 2010, and Interim Report From the European Commission to the European Parliament and the Council On Progress in Bulgaria under the Co-operation and Verification Mechanism, Brussels, February 18, 2011. 14

as a key strategic goal of the judicial reform in Bulgaria and identified measures to implement this goal. 3.2 Efficacy: Satisfactory (Extent to which the development objectives have been achieved) Comments: The Development Objective of the Grant was achieved. The PORB s capacity and effectiveness to track and combat corruption was enhanced due to: (i) The technical assistance provided in identifying best practices in countering and preventing corruption, review of internal control mechanism, identifying effective partnerships with Government bodies, business associations, media, and civil society; methodology for investigation and criminal prosecution of corruption related offences; strengthening the ethical norms and standards of behavior of prosecutors in the prevention of and fight against corruption. (ii) Training of PORB staff and staff of law enforcement or revenue collection agencies on best practices in combating corruption in the EU, U.S. and other countries. (iii)development of a catalogue of best practices and distributed among prosecutors and investigators in the country and representatives of other agencies participating in the training seminars. Proposals for amendments to the national legislation were drafted based on the findings in the catalogue and submitted to the Ministry of Justice for consideration. (iv) Expanding PORB s cooperation with civil society and media through the three seminars attended by civil society and business associations and media, thus the way for increased transparency, public accountability and credibility of its institutional integrity and anti-corruption work. (v) Surveys of public opinion regarding the effectiveness and constraints of the anticorruption efforts of the prosecution and similar surveys among prosecutors. The results of the survey were widely discussed and provided important insights to address existing bottlenecks. (vi) Implementation of improved business processes and information systems for case management system and the management of income and assets declarations for prosecutors and PORB management. 3.3 Efficiency: Satisfactory (Cost effectiveness, e.g. benefits and costs compare with the expectations when grant was made, to what extent the grant is adding value to the client country and other partners work programs in the country/region) Comments: The grant suffered from an initial slow pace of disbursement because the PORB lacked the terms of reference and procurement experience to efficiently execute the grant activities. As it gained experience the PORB accelerated the pace of implementation and was able to execute all planned activities within the extended grant period. Project funds have been adequately targeted and efficiently used, resulting in successful achievement of the agreed objectives, within the foreseen budget. Strengthening of the local currency in 15

relation to the dollar and cancellation of one activity (translation services) made possible for PORB to generate a small savings of about 12% of the grant funds. With a relatively small budget and in a short period of time two systems have been developed and implemented a pilot Data Warehouse and a system for tracking and management of incomes and assets declarations of prosecutors. In addition technical specifications were developed for the enhancement of the UIS involving a new business model for the prosecution. According to PORB similar IT development projects take longer to implement and with a larger budget. The contract was managed diligently under a very tight schedule and in a cost effective manner. The valuable experience gained by PORB staff in managing this complex IT contract would be useful in preparation and implementation of the enhancement of the Integrated Information System for Combating Crime (IISCC) using funds from Operational Program Administrative Capacity. As expected during grant preparation, the PORB contributed a significant amount of resources to the execution of the grant. The counterpart funding to the Grant accounted for close to $90,000 instead of $50,000 initially planned which shows the high commitment of the PORB to the development objectives of the Grant. 3.4 Overall Outcome Performance Rating: Satisfactory The IDF Grant made quite an important contribution in strengthening the anti-corruption capacity of the prosecution and in increasing transparency and accountability of its work. Despite initial delays the intended results were to a large extent achieved within the extended period of the Grant. Ten indictments on corruption cases were issued against 12 prosecutors between 2007 and mid-2010. The number of concluded disciplinary sanctions against prosecutors more than tripled between 2007 and 2009 from 14 to 46 with the highest disciplinary measures (dismissal and salary reduction) imposed on 6 prosecutors in 2009 up from 3 in 2007. The duration of pre-trial corruption cases was shortened significantly by close to 150 days between 2007 and mid-2010, beyond the target of the Grant (of 100 days). Close to 68% of the cases were completed within a year in 2009 and 72% in the first half of 2010 compared to only 54% in 2007. Public confidence in the anti-corruption work of the public prosecution, albeit low, improved by 10 percentage points between 2009 and 2010 while public approval for prosecution grew by 11.2 percentage points to 22.8%. While in 2009 nearly 65% of the respondents in the survey perceived corruption among prosecutors as the second largest constraint to the effective fight against corruption (the first constraint being political pressures), in 2010 this share declined to 40.5%. Imperfections of the legal framework and low public pressure for dealing with corruption have received higher weight in the list of constraints to effective anti-corruption work the share of respondents pointing legal framework as constraint increased from 54% of respondents in 2009 to 57% in 2010 while low pressure from society was viewed as a problem by close to 60% of the respondents in 2010 compared to 50% in 2009. The full implementation of the enhanced information system, including the roll-out of the Data Warehouse and the system for tracking incomes and assets of prosecutors declaration, are expected to lead to further gains in effectiveness of anti-corruption work of the prosecution. 16

4. Risk to Development Outcome: Moderate Comments: Overall sustainability of grant outcomes is likely, with moderate risks of gains being reversed. The information systems delivered under the project for tracking incomes and assets of prosecutors and the Data Warehouse are key elements of the action plan of the Ministry of Justice and the Judiciary in the implementation of the measures agreed with the EC under the Cooperation and Verification Mechanism. This suggests that internal and external pressures are high to maintain those systems in operation. The enhancements in PORB s interaction with civil society at large are equally difficult to be reversed and actual expectation is that they will have to be enhanced further as society demands a much more efficient, transparent and honest Judiciary in the country. 5. Bank and Recipient Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry: Moderately Satisfactory The Grant was technically well designed in close consultations with the PORB and other interested partners, the Supreme Judicial Council, the Ministry of Justice as well as other international partners providing technical assistance to the PORB and judiciary as a whole. This ensured the relevance of the Grant and its objectives to the overall anticorruption strategy of the Government and reform strategy of the judiciary. All Grant activities were important and contributed to the development objective of the grant and to the PORB s own reform agenda. The PORB appreciated highly the World Bank s assistance and fully shared the vision encapsulated in the Grant. The PORB requested technical assistance from the World Bank for the preparation of terms of reference and procurement for the Grant activities, including the complex contract for the enhancement of the IT system, which were beyond the level of internal resources commonly allocated for the preparation of grants. The technical assistance provided by the Bank at the preparation stage on the procurement of the information system proved insufficient to ensure quick implementation of this activity which comprised 60 percent of the Grant. As a result, there was a need to extend the Grant closing date. Successful remedial actions were undertaken (hiring of a procurement consultant knowledgeable in Bank procurement and closer interaction with PORB) which helped implement this important activity within the extended Grant period. (b) Quality of Supervision: Satisfactory Overall quality of Bank s supervision during the implementation of the Grant was satisfactory, although in the early stages of implementation the performance was moderately satisfactory. The grant was adequately supervised and closely monitored with a balanced approach giving equal focus on the accomplishment of the development 17

objective and implementation issues. Procurement included two contracts for goods and six contracts for technical assistance, one of which was a complex contract for the enhancement of the IT system and required specialized skills. Advice on procurement and disbursement was frequently sought and provided in a timely manner with Bank procurement specialist based in Sofia and the disbursement support provided both by staff in Sofia and regional office in Zagreb. Financial management of the Grant was assessed as satisfactory in all supervision missions conducted at least once a year. Changes of the Grant TTLs (2 TTLs within the 3 years of grant design and implementation) and team members, while not affecting visibly the implementation quality, did create certain temporary inefficiencies. Supervision required access to technical skills beyond the level that can be commonly supported by grant supervision funds. Transferring of task team leadership to the field as well as day-to-day guidance and support from the procurement and disbursement teams based in Sofia and Zagreb helped accelerate processing of no-objections and project implementation. (c) Rating for Overall Bank Performance: Satisfactory The overall performance of the Bank team has been satisfactory the grant design was well developed and highly relevant to country priorities. Collaboration with the implementing agency was excellent even when implementation was not proceeding at a desirable pace. Risks to Grant implementation were proactively managed. Fiduciary supervision was carried out adequately and flexibility of Bank staff helped to better adjust implementation with specific circumstances. 5.2 Recipient (a) Recipient Performance: Satisfactory The Grant recipient was also the implementing agency. See (b) (b) Implementing Agency or Agencies Performance: Satisfactory The PORB has preserved its commitment to the Grant throughout its implementation. This commitment was visible both at senior level the increased counterpart funding for the Grant and assignment of the then Deputy Prosecutor General for Project Manager, but also at the staff of PORB involved in implementation of key activities f the project, such as the enhancement of the IT system and the training seminars. Preparation of the tender document for the main IT activity under the grant Enhancement of the Unified Information System under World Bank guidelines was a significant challenge. The small IT team of PORB managed well and with high professional standards the procurement and the implementation of this complex IT development activity and succeeded to make up for the initial delays and finalized the project within a tight schedule. Despite some changes in staff due to turnover of staff in PORB, the project manager of the Grant remained throughout project implementation ensuring overall continuity. Financial management arrangements, including the audit of the Grant were satisfactory. 18

(c) Rating for Overall Recipient Performance: Satisfactory Overall the PORB executed the project in a satisfactory way, assessed by the success in achieving the Grant s objectives and in fulfillment of its fiduciary duties. Effective measures were taken to address delays in implementation and achieve the intended results. 6. Lessons Learned (Both project-specific and of wide general application) (i) Preparing a Client new to World Bank processes and procedures. Project preparation teams need to pay extraordinary attention to the preparation of clients who are new to World Bank processes and procedures beyond the preparation of the grant management unit. Terms of reference for all work planned under the grant should be developed, discussed, and cleared prior to starting execution of the grant. (ii) Procuring complex information systems. Procurement of complex information systems is a well-known source of implementation problems and delays. Grants including such procurement must include sufficient resources to finance technical assistance for the preparation of the bidding document, evaluation of bids, and management of the contract, as well as for the supervision team to supervise the activity. 7. Follow up Activities. The Grant has provided the technical specifications and a design of an optimized business model for the UIS and its link with the Integrated ISCC of the judiciary. The application for financing of the enhancement of the UIS is currently being prepared by PORB to be financed under the Operational Program Administrative Capacity. 8. Other Comments 19

Annex 1. Grant Costs and Financing by Category, Disbursement profile (a) Project Cost by Expense Category (in USD) Category Estimate at Actual (USD) approval (USD) TF58170 GOODS 15,300.00 10,814.37 TF58170 CS, AUDIT 377,900.00 347,376.36 TF58170 TRAINING 81,800.00 63,319.23 Designated account 0.00 33.80 20

Annex 2. Outputs by Component (Please describe the outputs for each activity under the grant) COMPONENT 1: Strengthening of PORB strategic focus, accountability, professionalism and institutional capacity, through formulation of a strategy document, provision of training and development of case tracking and management system and automated income and asset declaration system in PORB. The activities under this component included: Activity A. Consultations/Training Seminars/Workshops focused on improvements in legal framework and ethical norms for combating and preventing corruption among prosecutors. A1. Review of national, EU and other countries anti-corruption legislation and practices in fighting and preventing corruption; assessment of training needs of prosecutors and development of a training agenda for the training seminars. Outputs: Training needs analysis and six modules for the training seminars developed. A2. Three two-day seminars on the legal framework and ethical standards for combating and preventing corruption, taking place in Veliko Turnovo, Plovdiv, and Bankia, and a closing workshop in Sofia to present summary of training seminars and results from the surveys among prosecutors and citizens. Outputs: 161 prosecutors and 45 investigators trained, 63 representatives of other agencies trained, and 15 representatives from media; improved cooperation with other agencies involved in anti-corruption work and increased transparency and accountability. A3. Development of a Catalogue of Best Practices in the EU, U.S. and other states in counteracting corruption. Outputs: Proposals for improvements to legislation submitted to Ministry of Justice. Activity B. Activity B. Enhancement of the Case Management and Tracking System and development a system for income and assets declarations of prosecutors B1. Development of a Data Warehouse Outputs: The Data Warehouse developed and currently rolled out to regional offices. It makes possible the production of various reports to track and manage cases, workload analysis and others. These reports were previously prepared on the basis of paper records which was costly and inefficient. B2. Development of an optimized business model and technical specifications for enhancement of the Unified Information System (UIS) of the PORB. Outputs: The enhancement of the UIS would create the technical conditions for automatically feeding with statuary data the Integrated Information System for Combating Crime (IISCC) which is the IT system for the judiciary as a whole. 21

B3. Development of a system for tracking incomes and asses declarations of prosecutors. Outputs: The system is developed and awaits approval of procedure for its use by the Supreme Judicial Council. The system maintains up-to-date information about the incomes and properties of prosecutors and would be used by the Inspectorate of the SJC when inspecting magistrates. The system facilitates prosecutors by automatically generating the declarations to be submitted to the National Audit office annually. B4. Development of terms of reference for B1, B2, B3. Activity C. Purchase of equipment, computer configurations and consumables for provision of training seminars under Activity A and closing workshop presenting summary of training and results of surveys implemented under Activity C. Outputs: Laptop, a copy machine and portable audio equipment purchased and used in the seminars under the Grant and in other events presentations organized by OPG aimed at increasing transparency and accountability of the PORB. Activity D. Printing of Catalogue of Best Practices Outputs: 3,200 copies printed and distributed among prosecutors and investigators as well to participants in the three training seminars from other agencies. Activity E. Procurement Consultancy Outputs: Terms of references prepared on time and procurement accelerated. COMPONENT 2: Improvement of transparency and accountability of PORB functions though forming partnership between the PORB and civil society in monitoring progress of anti-corruption efforts, and public information campaign with regard to PORB s anti-corruption efforts. Two major activities were included under this component: Activity F. Public opinion surveys and a documentary on PORB s work F1. Two surveys of public opinion and of prosecutors about the effectiveness of prosecution in combating and preventing corruption. Output: Analysis over time of changes in perceptions about the integrity and commitment of prosecutors to fight corruption. The results of the two surveys were presented and discussed publicly, and posted on the PORB s website. F2. Development of a short documentary to present to society the work of the PORB. Output: The documentary was broadcast at the closing seminar in Sofia and is posted on PORB s website. Activity G. Audit of the grant Outputs: Clean opinion issued on the use of Grant funds. Activity H. Interpretation and translation services- cancelled. 22