Component 4: Disbursement Linked Indicators (DLI)


Introduction

Unlike ISGPP-I, ISGPP-II will be PfR under which disbursement from the World Bank Bank will be based on achievements of results. There will be Disbursement Linked Indicators (DLIs) which will be assessed before disbursement. The results/achievements of the Program would be measured through a set of clearly defined Disbursement Linked Indicators (DLIs). There are seven DLIs (DLI1-7) for the disbursement.

Structure of DLI section:

There is a detailed description of DLIs, the process of DLI verification that is recommended for the third party verification agency to follow, the information that will be verified including the database of GPs, the questionnaires used etc. and the means of verification that will be used by the third party verification agency and the disbursement structure.

Description of DLIs

DLI Matrix: The DLIs and the disbursement amount are summarized in the matrix below

Table 7: DLI Summary with financing amounts under ISGPP-II

Narratives
Total Allocated Financing (INR crore) As Percentage of Total Financing amount
DLI 1: Number of phase II Gram Panchayats that have qualified Basic Mandatory Conditions (BMCs) in Annual Performance Assessment 291.651 20.78%
DLI 2: Number of phase II Gram Panchayats that have qualified Expanded Mandatory Conditions (EMCs) and got access to performance rewards in Annual Performance Assessment 641.659 45.72%
DLI 3: Percentage of activities implemented as per P&RDD’s annual learning and training plan 76.8825 5.48%
DLI 4: Average number of annual mentoring input days per Gram Panchayat with performance assessment 174.2 12.41%
DLI 5: Core institutional systems implemented by P&RDD across all GPs ; of which 64.99 4.63%
           (a) Gram Panchayat Management System (GPMS), Web-Based Monitoring                  System (WBMS) & GIS 46.9 0.50%
           (b) Grievance Redressal Management System (GRMS) 18.09 0.19%
DLI 6: Annual Performance Assessments (APA) conducted by P&RDD 107.2 7.64%
DLI 7: Targeted number of vacant core Gram Panchayat positions filled           (Executive Assistant, GP Secretary, Nirman Sahayak) 16.75 1.19%
Total DLI based financing 1,373.33 97.85%
Program Preparation Advance 30.15 2.15%
Total financing allocated 1,403.48 100.00%

* Source: Program Appraisal Document (January, 2017)

DLI verification Protocol

This section would give an understanding in regards to the DLI verification approach and methodology. This section has been hence divided in two segments viz. DLI verification mechanism and DLI verification timeline.

During preparatory phase of the PforR operation, the third party verification agency would work with the ISGPP PMU to develop and agree upon the DLI Verification Protocol that would substantiate the achievement of DLIs. Verification Protocol should include, at a minimum, the following:

► Clear definition of the DLI and how it will be measured

► Objective, detailed definition of what is required to consider the DLI as achieved

► Definition of the data sources that will be used to measure the DLIs achievement, including reporting frequency.

DLIs Verification Mechanism

The DLI Verification Protocol should be an integral part of the monitoring and reporting arrangements for the PforR operation, and third party agency would agree upon the process through which the achievement of each of the DLIs will be verified. The DLI verification protocol has been annexed in Annexure 7 of Volume II of POM. The third party agency would work with the ISGPP PMU to review the Program’s experience with internal and external verification and reporting, and agree upon appropriate arrangements that will ensure credible verification of achievement of DLIs. The TOR for hiring DLI agency has been attached as Annexure 14 in Volume II of POM. Verification arrangements are DLI specific, as the verification methodology should take into account the nature of the indicator, type of data that can be used to verify the specific achievements, and the institutional arrangements needed to provide the needed verification. The DLI verification protocol also includes the scalability of disbursements which is formula based illustrating the disbursement of financing proceeds are proportional to the progress towards achieving the DLI. Scalability (disbursements against partially achieved DLIs) facilitates predictability of fund flow.

Below table describes the Data Source and Verification mechanism for each DLI followed by dedicated DLI (I-VII) details in B.1.a:

Table: Data Source and Description of Procedure for DLI verification


No.
DLI Data Source
Procedure
I
No. of phase II GPs that have qualified Basic Mandatory Conditions (BMCs) in Annual Performance Assessment

APA report, which is based on field-visits to all GPs reviewing the compliance with the BMCs and verification by the IVA, based on sampled check of the APA results.

Annual PBG announcements to GPs.

Allocations to GPs for previous FY.

Refer to the B.1.a for detailed information and data sources for each BMC to be verified.

Every year:

ISGPP-II cell under the P&RD hires an independent firm to conduct the APA as per the procedure prescribed in POM

The APA firm submits the draft and final report to the independent verification agent for quality assurance and DLI verification.

The verification agent will review the APA report to verify that the correct procedure was followed, and that the allocations are budgeted accordingly. The APA team may be asked to review and rectify results.

The final APA report and DLI verification report along with PBG allocations is submitted by ISGPP Cell to the PSC for approval. The PSC will review the APA report, PBG allocations and the DLI verification report to verify that they have conformed to Program entitlement.

Note: The WB will receive a copy of the draft and final reports from the APA and results from the verification exercise and reserves the right to review the results and the quality of the assessments.

II
No. of phase II GPs that have qualified Basic Mandatory Conditions (BMCs) in Annual Performance Assessment Number of phase II GPs that have qualified Expanded Mandatory Conditions (EMCs) and got access to performance rewards in Annual Performance Assessment

APA report which is based on field-visits to all GPs reviewing the compliance with the BMCs and verification by the IVA based on sample checks of the APA results.

Annual PBG announcements to GPs.

Allocations to GPs for previous FY.

Refer to the B.1.a for detailed information and data sources for each EMC to be verified.

Every year:

ISGPP-II cell under the P&RD hires an independent firm to conduct the APA as per the procedure prescribed in POM.

The APA firm submits the draft and final report to the independent verification agent for quality assurance and DLI verification.

The verification agent will review the APA report to verify that the correct procedure was followed, and that the allocations are budgeted accordingly. The APA team may be asked to review and rectify results.

The final APA report and DLI verification report along with PBG allocations is submitted by ISGPP Cell to the PSC for approval. The PSC will review the APA report, PBG allocations and the DLI verification report to verify that they have conformed to Program entitlement.

Note: The WB will receive a copy of the draft and final reports from the APA and results from the verification exercise and reserves the right to review the results and the quality of the assessments.

III
Percentage of activities implemented as per P&RD’s annual learning and training plan

Review of:

Annual consolidated District-based learning and training plan.

Annual consolidated District-based learning and training implementation report.

Annual summary of participant evaluations of learning events and training sessions.

Refer to the B.1.a for detailed information and data sources for verification

P&RD submits all required documentation to the verification agent via the ISGPP Cell. The verification agent checks that all documents are consistent with POM formats and guidelines.

The verification agent submits its report to the PSC for final endorsement.

IV
Average number of annual mentoring input days per GP with performance assessment.

Annual mentor deployment plan.

Annual mentor deployment report with mentor’s performance assessment summary.

ISGPP MIS reports:

- Semi-annual mentoring format

- GP wise information on mentoring support

Refer to the B.1.a for detailed information and data sources for verification

P&RD submits all required documentation to the verification agent via the ISGPP Cell. The verification agent checks that all documents are consistent with POM formats and guidelines.

The verification agent submits its report to the PSC for final endorsement.

V
Core institutional systems implemented by P&RD across all GPs (A and B)

Annual implementation report and MIS reports on use of systems by GPs, which encompass clear description of the achievement level of the roll-out of defined systems.

Field testing in selected GPs of the actual functionality of the defined systems GPMS, GRM etc.

P&RD submits annual implementation report on the system development to the verification agent. The verification agent verifies that the targets have been achieved.

The verification agent submits the verification to the PSC for final endorsement.

VI
Annual Performance Assessments (APA) conducted by P&RD

Documentation showing that

APA has been completed on time.

Quality assurance of APA results and DLI verification is completed by IVA.

APA results are included in the annual PBG announcements.

The ISGPP-II cell will submit the final APA report and proposed grant allocations, along with DLI verification to the PSC. The PSC will verify that the APA procedure was correctly followed, have been verified by the verification agent and that the final budget announcements match the allocations contained in the final report on the APA. Variations are tested and reviewed to reconcile.

The Bank retains the right to join the APA in the field as part of its implementation support, and to review the quality of the APA process.

VII
Targeted number of vacant core GP positions filled

Year one:

HR recruitment plan for filling in of vacant positions and budget with costing of this available.

Future years:

Documentation of positions filled and vacancies. Check of reports and sample check at field level of the validity of the plans and documentation.

Year 1:

The ISGPP-II cell submit the HR recruitment plan and budget to filling up of positions to the verification agent for verification. The verification agent reviews the report and verifies the DLI achievement.

Year 2 and Year 4:

The ISGPP-II submits documentation of filled positions and overview of vacant positions to the verification agency. The verification agent reviews the reports and make sample spot checks of data in minimum 10 GPs. After verification results are sent to PSC for final review.

*Phase II GPs refers to the GPs which are being included in ISGPP-II but were not covered in ISGPP-I.


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