local governance support in east timor

7/29/2019 Local Governance Support in East Timor

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Consolidated Annual Report on Activities Implemented under the

Joint Programme Local Governance Support (LGSP)

Report of the Administrative Agent for the LGSP

for the period 1 January - 31 December 2011

Multi-Partner Trust Fund Office

Bureau of Management

United Nations Development Programme

http://mptf.undp.org

31 May 2012
http://mptf.undp.org/http://mptf.undp.org/http://mptf.undp.org/


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PARTICIPATING UN ORGANIZATIONS

United Nations Capital Development Fund (UNCDF)

United Nations Development Programme (UNDP)

CONTRIBUTING DONOR

Irish Aid


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Joint Programme: Local governance Support Programme (LGSP)

REPORTING PERIOD: 1 JANUARY31 DECEMBER 2011

Programme Title & NumberCountry, Locality(s), Thematic Area(s)

Programme Title: Local Governance Support Programme

(LGSP)

Programme Number UNDP-BU: 45604 (Award ID), 53898

(Project ID), UNCDF-BU (Irish): 45923 (Award ID), 54392

(Project ID), UNCDF-BU (UNCDF core): 45924 (Award

ID), 54393 (Project ID)MPTF Office Atlas Number: 00055656 (Award ID)

Timor-Leste

Local Governance & Decentralization, Poverty

Reduction

Participating Organization(s) Implementing Partners

UNCDF and UNDP

Ministry of State Administration and Territorial

Management (MSATM)

Programme/Project Cost (US$) Programme Duration (months)

Agency Contribution

UNDP: US$ 1,060,000

UNCDF:US$ 650,000

Overall Duration: 7 years

Government Contribution

US$ 9,768,515 (in-kind contribution: 2008-2011)Start Date: 01/2007

Other Contribution (donors)

Irish Aid:US$1,968,873(Pass-through funding)

Irish Aid: US$ 838,795 (Cost-sharing)

Norwegian Government: US$ 119,327 (Cost-sharing)

End Date or Revised End Date: 12/2013

TOTAL: US$ 13,820,510

Operational Closure Date: N/A

Expect Financial Closure Date: Project extension

agreed by Project Steering Committee

Programme Assessments/Mid-Term Evaluation Submitted By

Assessment Completed - if applicable

Two consultation missions regarding a two-year project

extension (2012-2013) were carried out respectively in May

and June 2011.

Mid-Evaluation Report

Y Yes No Date: 05/2010

o Name: Alessandro Righetti, Chief Technical

Advisor

o Participating Organization (Lead): UNCDF

o Email address: [email protected]


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LIST OF ABBREVATIONS AND ACRONYMS

AusAid Australian Aid

CD Community Development

CoM Council of Ministers

DA District AssemblyDDC District Development Committee

DNAF National Directorate for Administration and Finance

DNAL National Directorate for Local Administration

DNDLOT National Directorate for Local Development and Territorial Management

DSF Decentralisation Strategic Framework

GoTL Government of Timor-Leste

IEC Information for Education and Communication

ISD Infrastructure and Service Delivery

LA Local Assembly

LDF Local Development Fund

LDP Local Development ProgramLG Local Governance

LGOS Local Government Options Study

LGSP Local Governance Support Program

LGWG Local Governance Working Group

LoA Letter of Agreement

LPP Local Planning Process

MC Minimum Condition

MoF Ministry of Finance

MSA Ministry of State Administration

MSATM Ministry of State Administration and Territorial Management

MTWGs Ministerial Technical Working Groups

NGO Non-Governmental Organization

NIM National Implementation Modality

NP National Parliament

PBGS Performance Base Grant System

PDD/DDP Decentralised Development Programme

PDID District Integrated Development Planning

PEM Public Expenditure Management

PFM Public Financial Management

PIC Planning and Implementation Committee

PSC Program Steering Committee

SDA Sub-District Assembly

SDDC Sub-District Development Committees

SDP Suco Development Plan (also acronym for Strategic Development Plan 2011-2030)

TL Timor-Leste

ToT Training of Training

TWG Technical Working Group

UN United Nations

UNCDF United Nations Capital Development Fund

UNDAF United Nations Development Assistance Framework

UNDP United Nations Development Program

WG Working Group


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TABLE OF CONTENTS

Cover Page ................................................................................................................................ 1

Summary of Project Title and Cost ........................................................................................ 3

List of Abbreviations & Acronyms ....................................................................................... 4Table of Contents .................................................................................................................... 5

List of Table .............................................................................................................................. 6

List of Annexes ........................................................................................................................ 6

PART I: NARRATIVE REPORTI. EXECUTIVE SUMMARY ................................................................................................ 7

II. PROGRAMME OVERVIEW ......................................................................................... 9

III. IMPLEMENTATION AND MONITORING ARRANGEMENTS ......................... 10

IV. FINANCIAL AND HUMAN RESOURCES ............................................................... 12

V. RECENT DEVELOPMENTS RELATED TO LOCAL GOVERNANCE IN

TIMOR-LESTE ........................................................................................................... 12VI. ACTIVITIES, ACHIEVEMENTS AND CHALLENGES ........................................ 14

Output 1: Local Development Programme ........................................................................ 14

1.1.Support to Activities of Local Assemblies ........................................................................ 141.1.1 Support to Local Assemblies ...................................................................................... 14

1.1.2 Minimum Condition Evaluation ............................................................................... 14

1.1.3 Allocation of the LDF Budget and Recurrent Costs ................................................. 16

1.1.4 Meeting of Local Assemblies ................................................................................... 16

1.2.Finance ................................................................................................................................. 181.2.1. Transfer of LDF Allocation ................................................................................... 18

1.2.2. Recurrent Costs ...................................................................................................... 19

1.2.3. Letter of Agreement (LoA) between MSATM and LGSP .................................... 19

1.3.Project Implementation ..................................................................................................... 201.3.1. Local Procurement Process and Implementation of LDP Projects ........................ 20

1.4.The Planning Process for FY 2012 .................................................................................... 201.4.1. Project identification and prioritization ................................................................. 20

1.5.Gender Support Activities ................................................................................................. 221.6.Capacity Building ............................................................................................................... 23

1.6.1. Refresher training on local planning, finance and procurement process ............... 23

1.6.2. AutoCad training for District Technical Staff ........................................................ 23

1.6.3. Study tour on the integrated planning for local governance in Indonesia ........... 23Output 2: Policy And Legislation ........................................................................................ 23

2.1Continued Support to Local Government Legislation ......................................................232.2Support the Drafting process and Approval of the PDID Decree Law ......................... 232.3Support the Production of Secondary Legislation .......................................................... 24

2.3.1 Ministerial Dispatch on Planning Process .................................................................. 24

2.3.2 Revision of MSATM Guidelines on Community Contracting ................................. 24

2.4Policy Development ............................................................................................................ 252.4.1 Community Development .......................................................................................... 25

2.4.2 Local Governance Working Group (LGWG) ........................................................... 25

2.4.3 Technical Working Group (TWG) of Fiscal Decentralization ................................. 25Output 3: Support To Implementation Of Local Government Reforms ......................... 25


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3.1Production of Social Communication Materials (SCM) .................................................. 263.1.1 Monthly Radio Programme .................................................................................... 26

3.1.2 Monthly Bulletin ...................................................................................................... 26

3.2Civic Education and Local Governance ............................................................................ 28Output 4: Programme Management ................................................................................... 29

4.1Recruitment Process ........................................................................................................... 294.2Other issues .......................................................................................................................... 29

V SUMMARY OF THE MAIN ACHIEVEMENTS AND LESSONS LEARNED IN

2011 ................................................................................................................................ 29Achievements ............................................................................................................................ 29Lessons Learned ...................................................................................................................... 30

VIII. THE WAY FORWARD: PROJECT EXTENSION & AWP 2012 ....................... 31

PART II: FINANCIAL ERFORMANCE ........................................................................... 33

X. LIST OF ANNEXES ....................................................................................................... 38

LIST OF TABLES

Table 1: LDP Minimum Conditions Indicators ................................................................ 15

Table 2: Result of the Minimum Condition Evaluation for 2010 .................................... 15

Table 3: LDF Capital Fund Allocation and Recurrent Costs for 2011 ........................... 16

Table 4: Result of the first, second and Extra Ordinary Assemblies Meeting Per District

in 2011 ........................................................................................................................... 18

Table 5: Capital Fund Allocation for 2011 ........................................................................ 18Table 6: Allocation and Execution Status of 119,957 USD .............................................. 19

Table 7: Procurement Phases .............................................................................................. 20

Table 8: List of District Integrating Meetings ................................................................... 21

Table 9: Number of Projects and Budget Allocation before and after the Budget Review

Commission ................................................................................................................. 22

Table 10: List of Produced Radio Program during the Report Period .......................... 26

Table 11: List of Monthly Bulletin Topics ......................................................................... 26

Table 12: The summary of views from respondents to Communication Check list for

2011 ............................................................................................................................... 27

LIST OF ANNEXES

Annex 1: Summary of the project budget for MSATM for Fiscal Year 2012 ................ 38

Annex 2: Brief Summary of the Approved Integrated District Development Planning

(PDID) Decree Law ...................................................................................................... 40

Annex 3: Annual Work Plan 2012: Local Governance Support Programme ................ 41

Annex 4: List of LGSP Staff/Posts in 2011...45


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I. Executive SummaryThe decentralization process in Timor-Leste started with the establishment of an Inter-

Ministerial Technical Working Group in 2003, with the objective to study different options

for decentralization in Timor-Leste. The working group involved members of all ministries

under the leadership of the then Ministry of State Administration (MSA).

Decentralization reforms have evolved since, resulting in the approval of a national

decentralization policy and decentralization road map and the submission of a set of three

local government laws to the National Parliament. Throughout this process, lessons learned

from the pilot Local Development Programme have been fed systematically into the policy

process and local capacities have been developed.

The process has benefited from continuous support provided by the joint UNCDF-UNDP

Local Governance Support Programme (LGSP) and its predecessor programs, the Local

Governance Options Study and the Local Development Program (both supported by

UNCDF) both at the policy level and at the local level. The overarching goal of the LGSP is

to contribute towards poverty reduction in Timor-Leste. The LGSP has the primary objective

of supporting the establishment of a fully-fledged local government system in Timor Leste by

(i) providing policy-relevant lessons from pilot activities, (ii) assisting the government in

formulating a comprehensive legal and regulatory framework for local government, and (iii)

supporting implementation of local government reforms. Through achieving its primary

objective, LGSP will thus contribute towards improving local-level infrastructure and service

delivery, and reducing poverty. It is funded by the Government of Timor-Leste (GoTL), IrishAid, the Government of Norway, UNDP and UNCDF. The LGSP I was being implemented

over a 5-year period (2007-2011). To ensure the achievement of this objective, project

activities were implemented under three project outputs: Output 1: Procedures, processes

and systems for effective local-level infrastructure and service delivery (ISD) and public

expenditure and public financial management (PEM/PFM) are piloted in selected Districts,

Sub-Districts and future Municipalities;Output 2: Support is provided to the GoTL for the

establishment of an appropriate and comprehensive institutional, legal, and regulatory

framework for local government; and Output 3: Support is provided to GoTL for the

implementation of local government reforms.

The Government of Timor-Leste requested UNDPUNCDF and other development partners

to continue their support to MSATM and to the overall decentralization and local

development agenda in TimorLeste. An LGSP extensionproject, LGSP II 2012-2013, was

approved in December 2011 which reorients the interventions and strategies of the previous

LGSP (LGSP I) to respond to the new policy environment, the 2012 national elections, and

the still largely undefined local government framework and the current UNDAF cycle (2008

2013). Two expected outputs were formulated for extension project are: Output 1: Improved

capacity for local service delivery (ISD) by subnational bodies with increased citizen

participation; and Output 2: Improved institutional, legal, and regulatory frameworkestablished in support of effective local governance.


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The programme is implemented as an integrated part of the activities of the Ministry of State

Administration and Territorial Management (MSATM). It follows UNDP/UNCDF

procedures and manages all procurement processes through the UNDP Country office or the

UNCDF Regional Centre. The Joint Programme is linked to the UN Development AssistanceFramework 2009-2013 (UNDAF): Outcome 1.1: State organs and institutions are more

efficient, transparent, accountable, equitable, and gender responsive in planning and delivery

of services; Output 1.1.3: The Government has a clear legal framework for decentralisation;

and Output 1.1.4: The established local government institutions have the core capacities to

fulfil their mandates. The project aims at supporting the National Priorities of Timor-Leste,

with particular focus on promoting decentralization and local government reforms

processes.

During 2011 several key results were achieved. In particular, the project provided key

support to the drafting of a decree-law on Integrated District Development Planning (known

by its Tetum acronym PDID), which has been approved in January 2012 while this report is

being drafted. The PDID decree law allows for the harmonization and synchronization of the

different programmes implemented by the MSATM under a single framework, that

incorporates many of the processes and procedures that the LGSP piloted through the LDP.

The project also supported a six-fold expansion of bottom-up planning procedures, which

mark a significant step in the expansion of LDP processes and procedures to the whole range

of infrastructure and service delivery projects implemented by the MSATM. Although

exceptional circumstances (particularly the legislative vacuum created by the delayedapproval of the PDID) caused that planning procedures were rather flexibly adhered to, this

was a significant step forward.

Furthermore, a Letter of Agreement (LoA) signed between UNDP and MSATM marks a

significant step towards aligning with national systems, as it will permit to test the capacity of

the MSATM to carry out activities in accordance with procedures that are previously agreed

with the LGSP: this can be seen as the start of the transition from Direct Implementation

(DIM) to National Implementation modalities (NIMs).

Local government reforms did not take place during the original life span of LGSP and are

not likely to take place during the period of its two-year extension. A new government should

be formed around August 2012, and it is only likely to take its first important decisions

during 2013.


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PART I: NARRATIV EREPORT

II. PROGRAMME OVERVIEWThe Local Governance Support Programme (LGSP) is a joint programme funded by the

Government of Timor-Leste (GoTL), Irish Aid, the Government of Norway, UNDP and

UNCDF; it is being implemented over a 5-year period (2007-2011). The overarching goal of

the LGSP is to contribute towards poverty reduction in Timor-Leste. The Programmes

objective is to support the establishment of accountable and effective local government and

decentralisation, by endowing accountable local government bodies with greater

responsibilities for planning, budgeting, and implementation of infrastructure and service

delivery.

To achieve its purpose, LGSP will deliver three key outputs:

Output 1: Procedures, processes and systems for effective local-level infrastructure and

service delivery (ISD) and public expenditure and public financial management

(PEM/PFM) are piloted in selected Districts, Sub-Districts and future Municipalities.

This output builds on the former Local Development Programme (LDP), which started as a

national pilot programme in 2004 with the objective of testing different models for

decentralization and local governance. The LDP supports capacity development at the local

level through the provision of block grants to local assemblies, which are responsible for

allocating and managing a small capital budget for local infrastructure programs, called the

Local Development Fund (LDF). The first pilots started in 2005; in 2010 the LDP was up-

scaled to all 13 districts, making it a nation-wide local development program. Once

municipalities will be created in the context of decentralization, LGSP plans to support the

establishment of local government systems and procedures in the new municipalities, and the

continued strengthening of local capacities for public service provision.

Output 2: Support is provided to the GoTL for the establishment of an appropriate and

comprehensive institutional, legal, and regulatory framework for local government

Through this output, which continues the work started by the Local Governance Options

Study (LGOS) in 2003, the programme supports the development of a policy framework for

the establishment of a fully-fledged local government system in Timor-Leste. This output

includes the provision of technical support to the drafting, internal discussion and eventually

external consultation of policy and legal instruments that are necessary to establish an

effective and accountable local government in Timor-Leste.


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Output 3: Support is provided to GoTL for the implementation of local government

reforms

This output refers to the actual set up of municipalities. The LGSPs support to the

implementation of local government reforms will depend largely on final decisions about thephasing of this process. Following the postponement of municipal elections LGSP has

focused on communication and civic educations activities for local governance and

decentralization.

The programme is implemented as an integrated part of the activities of the Ministry of State

Administration and Territorial Management (MSATM). It follows UNDP/UNCDF

procedures and manages all procurement processes through the UNDP Country office or the

UNCDF Regional Centre.

The Joint Programme is linked to the UN Development Assistance Framework 2009-2013

(UNDAF) as below:

Outcome 1.1: State organs and institutions are more efficient, transparent, accountable,

equitable, and gender responsive in planning and delivery of services.

Output 1.1.3: The Government has a clear legal framework for decentralisation

Output 1.1.4: The established local government institutions have the core capacities to fulfil

their mandates.

The project aims at supporting the National Priorities of Timor-Leste, with particular focuson promoting decentralization and local government reforms processes.

III. IMPLEMENTATION AND MONITORING ARRANGMENETS

The programme is developed and implemented as an integrated part of the Ministry of State

Administration and Territorial Management (MSATM). Until mid 2010, LGSP worked

directly with and was embedded in the National Directorate for Local Development and

Territorial Management (DNDLOT), which was created in 2008 to oversee the LDP pilot and

the decentralization reform process.

Following a request by the Minister in mid-2010, LGSP adjusted its structure to work with a

broader counterpart structure, including the Director General and five key directorates within

MSATM, depending on the subject concerned. The five directorates are: Directorate for

Local Development (regarding the LDP), Directorate for Local Administration (regarding

decentralization policy issues) Directorate of Finance, Directorate of Sucos, and Institute for

Public Administration Reform (INAP) for capacity development issues. In addition, policy

issues will be closely coordinated with the Minister of State Administration.

As part of the Joint Programme of cooperation with the Government of Timor-Leste as fully


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described in the Joint Programme Document dated 30 January 2012, it was agreed to

establish a coordination mechanism which is called Steering Committee chaired by the

Minister of State Administration and Territorial Management RDTL to facilitate the effective

and efficient collaboration between the Participating UN Organizations and the host

Government for the implementation of the Joint Programme.

A Project Board (PB) was established to provide programme oversight and guidance. The PBmeets twice a year to discuss LGSP progress and endorse programme orientation. It isresponsible for endorsing the annual work plan, the annual progress reports, and provideguidance on project implementation, and adjustment required. The PB consists of: Minister ofMSATM (Chair), a senior MSATM officials directly involved in the programme; a UNCDFrepresentative; a UNDP representative; and one representative from each participatingdevelopment partner organization.

The programme follows UNDP/UNCDF procedures and manages all procurement processes

through the UNDP Country Office in TL or UNCDF Regional Center.

LGSP operates a Monitoring Information System to manage data on project progress in a

systematic manner. LGSP team meetings are being held on a regular basis and there are daily

management meetings to discuss the progress, planned activities and any challenges as well

as follow-up actions to address any area lagging behind. These meetings have proved to be

essential for establishing a regular channel for communication and coordination within the

LGSP team

The Programme reports on a quarterly basis on the progress against assigned outputs andactivities, challenges and issues in the consolidated report. Annual reports are prepared and

shared with the Ministry of State Administration and Territorial Management (MSATM) as

well as donors, reporting on the achievements made and challenges encountered during the

year.

An internal programme review was conducted in August 2008, which had the main objective

to evaluate LGSP design and progress. An external mid-term evaluation was conducted in

March 2010, as part of the UNCDF Special Project Implementation Review Exercise

(SPIRE) 2010-11.

The Administrative AgentParticipating Organizations have appointed the UNDP MPTF Office to serve as theirAdministrative Agent (AA) for this Joint Programme. The AA is responsible for a range offund management services, including: (a) receipt, administration and management of donorcontributions; (b) transfer of funds approved by this Joint Programme to ParticipatingOrganisations; (c) Consolidate statements and reports, based on submissions provided to theAA by each Participating UN Organisation; (d) synthesis and consolidation of the individualannual narrative and financial progress reports submitted by each Participating Organizationfor submission to donors through the Steering Committee. Transparency and accountability

of this Joint Programme operation is made available through Joint Programme web site of theMPTF Office GATEWAY at http://mptf.undp.org/factsheet/fund/JTP00.
http://mptf.undp.org/factsheet/fund/JTP00http://mptf.undp.org/factsheet/fund/JTP00


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IV. FINANCIAL AND HUMAN RESOURCESThe Programme is funded by Irish Aid, the Government of Norway, UNDP and UNCDF. TheGovernment of Timor-Leste also provides funds to the Local Development Programme (LDP),one of the LGSP components.

In terms of Human Resources, the program had 20 posts with a total number of 21 staff

throughout the year, which includes 4 international staff, and 17 national staff (see annex 4).

V. RECENT DEVELOPMENTS RELATED TO LOCAL GOVERNANCE IN TIMOR-

LESTE

The Constitution of Timor-Leste contains an explicit commitment towards decentralization

and local governance. Such commitment has, so far, been reflected in previous and current

governments policies and decisions. While the State remains centralized, the GoTL under

the leadership of MSATM has proceeded with the development of a policy framework for

decentralization since 2003. This process reached a peak in 2009, when a set of three Local

Government bills was submitted to the National Parliament: the Law on Administrative and

Territorial Division, the Local Government Law and the Municipal Election Law.

A year later (April 2010) the GoTL decided to slow the pace of reform and postponed

municipal elections until after the 2012 national elections. Only the first of the three

mentioned bills has been approved, while the other two are unlikely to be discussed by thepresent legislature.

Starting in 2010, there has been a marked shift in focus related to decentralization and local

governance issues. In particular, the government conceived a new programme, called

Decentralized Development Programme (known by its Portuguese acronym PDD), which

was introduced through the 2010 mid-year rectified budget. The PDD allocated a budget of

around 31 million USD to be implemented directly by District Administrations for

infrastructure projects up to a cost of 250,000 USD each.

In 2011, the PDD was replaced by two separate Decentralized Development Programmes

(PDD I and PDD II), the first of which included projects smaller than 150,000 USD (for a

total of 15,520,000 USD), channelled via MSATM, while the second included projects which

cost ranged from 150,000 USD to 500,000 USD (for a total of 28,811,000 USD), channelled

via the Agency for National Development (Prime Ministers office). Additionally, other

major spending programmes were initiated during this period, of which the biggest is the

programme known as MDG-Suco that was channelled via the Agency for National

Development.

Through these programmes, a much bigger number of small and medium sized infrastructure


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projects were delivered in rural areas. District Administration staff were empowered and

trained to manage such projects; there were increased opportunities for employment of local

workers; there were also increased opportunities for local contractors. However, while some

PDD processes and procedures (especially for financial management) were adopted from the

LDP, others (especially for planning and procurement) differed greatly, creating someconfusion and difficulties both at the central and local levels.

Towards the end of 2010, the MSATM tried to overcome these difficulties through the

development of an integrated approach that should effectively link LDP and PDD. Under this

approach, an Integrated District Development Plan (known by its Tetum acronym PDID)

would harmonize all processes and procedures for district-level implementation.

Unfortunately, the conceptualization and the drafting of the PDID have taken longer than was

initially envisaged, and only in September 2011 was the draft decree law presented to the

CoM. Although the final discussion and approval could not take place within 2011, at the

time of drafting this report the PDID had finally been approved by the CoM (11 January

2012) and still only waiting for promulgation by the President of the Republic and subsequent

publication in the official gazette (see section on PDID - 2.2 & Annex 2).

Given the likelihood that future budgets continue to allocate increased spending at the local

level, the attention is presently focused on strengthening the capacity of local structures to

plan and manage infrastructure and service delivery projects. At the same time, discussions

have recently started within the government (particularly MSATM and MoF) regarding the

possibility to initiate a national mechanism to accelerate community development that would

be planned and implemented at the suco level. Initial steps included an AusAid-financedstudy tour to Indonesia, as well as the creation, in October, of a technical WG through which

the two ministries should continue to discuss the elaboration of a comprehensive approach

towards local development. In the meantime, AusAid is supporting the establishment of a

programme to which it would possibly contribute with 2 million USD in 2012 and 35 million

USD during the following four years. UNCDF, UNDP and the WB are also participating in

the debate.

At this early stage it is still unclear in which way this new programme will fit into the

processes to be established by the PDID, which represents the present government policy. At

the time of writing, the CoM has just approved (18 January 2012) a resolution to establish a

national mechanism to accelerate community development, thus giving the go ahead to the

proposed programme.

In 2010 the government also started working on its Strategic Development Plan 2011-2030

(SDP), which is a more visionary exercise through which it aims to transition Timor-Leste

from a low income to upper middle income country, with a healthy, well-educated and safe

population by 2030. In July 2011 the parliament officially endorsed the SDP. Regarding

decentralization, the SDP envisages that by 2015 a pilot program will be established in

between three to five municipal chambers to work towards the gradual decentralisation of theexercise of government. This indicates that although decentralization is still a commitment,


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the full establishment of municipalities throughout the country may require several more

years, making it very important to have a clear interim approach to development and

governance issues.

Among other recent developments, in August 2011 the MoF presented to the CoM a draftdecree law on procurement issues (Omnibus Law). While the overall aim of the new law is

to harmonize procurement procedures that are presently regulated by a vast set of at times

incoherent pieces of legislation, there is fear that the new law might allow for an excessive

simplification of procurement procedures. In particular, the present draft establishes that

simplified procedures (meaning direct sourcing procurement, rather than tendering) would

apply to all projects smaller than 100,000 USD, which would be a major step backward for

the LGSP efforts to develop local capacities for project implementation. MSATM, with the

support from LGSP, has prepared written comments to the present draft, arguing that in the

case of projects smaller than 100,000 USD District Administrators should be empowered to

choose among a range of different procurement procedures, including competitive tendering.

It is unclear if and when the bill will be discussed again by the CoM.

VI. ACTIVITIES, ACHIEVEMENTS AND CHALLENGES DURING THE

REPORTING PERIOD

Output 1: Local Development Programme

Establish procedures, processes and systems for effective local-level infrastructure and

service delivery (ISD) and public expenditure and public financial management (PEM/PFM)

are piloted in selected Districts, Sub-Districts and Municipalities.

1.1. Support to Activities of Local Assemblies1.1.1 Support to Local AssembliesLGSP continued to provide technical support to Local Assemblies in 13 Districts for the

planning and implementation of projects financed through the Local Development Program

(LDP). LGSP also assisted and observed Local Assembly (LA) Planning and ImplementationCommittees (PIC) in the planning process for 2012. During the reporting period all the 13

Districts finalized their annual investment plans for the next project cycle.

1.1.2 Minimum Condition EvaluationThe Minimum Conditions (MC) Evaluation has been conducted on a yearly basis since fiscal

year 2005/2006. Its main objective is to provide recommendations to the MSATM with

regard to the allocation of LDP funds for the following fiscal year: in particular, a positive

assessment is a pre-condition for Districts to receive a new allocation the following year. In

addition, the MC evaluation provides recommendations to the MSATM, Local Assembly

(LA), Planning and Implementation Committee (PIC), Finance teams and LGSP on how to


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improve their performance in the future.

The MC evaluation scheme assesses Local Assemblies performance with regard to 11 basic

governance indicators (see Table 2). This year, in consideration of the length of time in which

they have been implementing LDP projects, eight Districts were fully evaluated, while threeDistricts (Ermera, Oe-cusse and Viqueque) were partially evaluated based on seven indicators

and the two remaining Districts (Dili and Liquia) were evaluated based only on four

indicators. The evaluation was carried out by DNDLOT as regulated by Ministerial Decree

No. 1/2010DNDLOT/MSATM.

Table 1: LDP Minimum Conditions Indicators

Accountability:

1. The Assembly was established according to MSATM regulations

2. The Assembly conducted four meetings during the last year.

3. The Assembly approved the current Investment Plan and Annual Budget.

4. Implementation follows the Financial Regulations of Local Development Fund

(LDF).

5. The budget expenditure report of the last year was submitted to the Assembly.

6. Last years audit report (where available) was submitted to the Assembly

Transparency:

7. Investment Plans and Annual Budgets are published on the public information boards.

8. The minutes of the Assembly meetings are published on the public information

boards.

9. Documents related to the bidding process are published according to the FinancialRegulation.

Local Contribution:

10.A local contribution to projects financed by LDF was made.

11.Operation & Maintenance followed LDF Financial regulations

The MC evaluation was conducted between 7 and 16 February 2011 in each District and two

Districts (Aileu and Lautem) did not fully comply with the set requirements and were

consequently ranked only as sufficient with score inferior to 60 (see Table 2).

The assessment also highlighted some more general weaknesses, particularly with regard to

the transparency and local contribution indicators. More specifically, the assessment

found that Local Assemblies will need to improve their performance with regard to ensuring

that key information, e.g. information on Investment Plans and Annual Budgets and minutes

of Local Assembly meetings, is published on public notice boards and is available to the

public. The evaluation also found that communities did not always contribute to LDP

projects, despite of the fact that LDP regulations require community involvement as a pre-

condition to receive funding.


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Table 2: Results of the Minimum Condition Evaluation for 2010

District Evaluation Result Category

Aileu 50.00 Sufficient

Ainaro 90.07 Satisfactory

Baucau 62.46 Good

Bobonaro 69.14 Good

Covalima 90.23 Satisfactory

Dili 90.00 Satisfactory

Ermera 69.79 Good

Lautem 56.13 Sufficient

Liquia 90.00 Satisfactory

Manatuto 79.00 Good

Manufahi 96.82 Very Satisfactory

Oe-Cusse 70.45 Good

Viqueque 75.00 Good

1.1.3 Allocation of the LDF Budget and Recurrent CostsBased on the results of the MC evaluation for 2010, in February 2011 the MSATM on behalf

of GoTL announced the Local Development Fund (LDF) allocation for 2011. The total

amount is 3.5 million USD, which is allocated among the different districts based on their

respective populations (see Table 3). Eleven districts received an allocation of $3.62 per

capita, while the two districts (Dili and Liquia) which started implementing LDP projects

only in 2010 received an allocation of $2.40 per capita. Following the announcement of the

allocation, Local Assemblies confirmed that a total of 144 projects could be implemented as

per approved by National Parliament in State budget for 2011.

Table 3: LDF Capital Fund Allocation and Recurrent Costs for 2011

District # of Projects Capital Fund (USD)Recurrent

Cost (USD)

Aileu 16 165,000 8,119

Ainaro 9 216,000 7,596

Baucau 18 405,000 11,792

Bobonaro 8 324,000 12,446

Covalima 14 218,000 9,923

Dili 7 565,000 8,078Ermera 7 414,000 10,276

Lautem 9 225,000 9,506

Liquia 8 152,000 6,434

Manatuto 12 157,000 8,674

Manufahi 14 183,000 9,654

Oe-cusse 9 236,000 7,473

Viqueque 13 240,000 9,986

Total 144 3.500.000 119,957

1.1.4 Meetings of Local Assemblies

First and second Local Assemblies meetings were held in all 13 districts. The purpose of thefirst Local Assembly (LA) meeting is to announce the results of the MC evaluation and to


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inform assemblies about their final budget allocation, so that they can revise District

Investment Plans and schedule the LA activities for the year. This year some of the LA

members were disappointed with central-level decisions, as only 144 projects that were

approved by the National Parliament coincided with the project proposals that had been

earlier submitted by District Assemblies.

Between the first and the second LA meetings, the Planning and Implementation Committees

(PICs) proposed to cancel some of the approved projects as they had become unfeasible to be

implemented due to natural disasters, some projects were implemented by NGOs and some

projects were implemented in 2010. This proposal was subsequently approved during the

second LA meeting, thereby reducing the total number of projects from 144 to 133.

The second LA meeting, which was held between the months of July and September,

discussed how to allocate the savings that originate following the bidding process, whenever

contracts are issued for amounts that are lower than those indicated in the original budgets. In

these cases, the savings that were made in each district can be reallocated by the LA to

increase the budget of some of the existing projects, or sometimes to finance entirely new

projects that had been earlier prioritised but not been financed. As a result of this discussion

(see Table 4), eight new projects could be financed while 30 of the existing projects received

some additional funding.

In November, as there were still some small savings that originated from the bidding of the

additional projects, some of the LAs held an extraordinary meeting in order to allocate such

savings. In this way, 11 small projects were approved (mainly involving the rehabilitation ofprojects implemented during previous years). Given the small amounts involved, tendering

processes and implementation could be successfully carried out before the end of the year.

As Ministry Dispatch No. 10/2011 (please see points 1.3.1 and 2.2) only regulated the

planning process up to the submission of proposals by the Sub-District level to the District

level, there was a partial legislative vacuum that hampered the organization of the third and

fourth LA meetings, which normally are organized to present and approve investment plans.

In particular, the third LA meeting should have been conducted after the PIC prioritises all

proposals, which did not happen until December. The prioritized proposals should then have

been approved at the fourth LA meeting, while project proposals had in fact to be approved

by September in order to fit into the regular budget process (please see section of planning

1.3).


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Table 4: Result of the First, Second and Extra Ordinary Assemblies Meeting per District in 2011

[1] Some projects were cancelled due to natural disaster risks, project is implemented by other actors (e.g.NGOs) or some projects were implemented in previous year.

[2] Some of the funds were reallocated to increase the budget of other projects, therefore, these are not

calculated as a new project.

1.2 Finance1.2.1 Transfer of LDF AllocationOn 30 September 2011, the MSATM transferred the capital fund of 3.5 million USD to

district bank accounts. By the end of the year, final commitments and obligations were

3,437,197 USD. The balance of 62,803 USD will be returned to the Banking and PaymentsAuthority (see Table 5).

Table 5: Capital Fund Allocation for 2011

District Allocation (USD) No of ProjectsCommitment and

Obligation (USD)

Balance from

Obligation

Aileu 165,000 8 153,122 11,878

Ainaro 216,000 10 216,000 0

Baucau 405,000 12 403,319 1,681

Bobonaro 324,000 13 323,930 70

Covalima 218,000 9 217,724 276

District

Date of I

LA

Meeting

Approved

projects (as

per budget

law)

Projects

remaining

after

cancellations

proposed byPIC [1]

Decisions taken by II LA

Meeting (July-Sept)

# New

Projects

Decided by

Extraordinary

Assembly

Total

ProjectsReallocated

to existing

projects[2]

New

projects

Aileu 1-Mar 8 8 (3) 0 0 8

Ainaro 16-Mar 9 8 (1) 0 1 9

Baucau 23-Mar 16 11 (0) 1 0 12

Bobonaro 7-Mar 12 12 (1) 0 1 13

Covalima 1-Mar 9 9 (4) 0 1 10

Dili 28-Feb 18 18 (1) 1 0 19

Ermera 21-Mar 14 14 (2) 0 0 14

Lautem 21-Mar 14 14 (3) 0 0 14

Liquia 7-Mar 7 7 (1) 0 0 7

Manatuto 5-Mar 13 12 (7) 0 7 19

Manufahi 23-Mar 9 7 (7) 2 1 10

Oe-cusse 21-Mar 7 7 (0) 3 0 10

Viqueque 18-Mar 8 6 (0) 1 0 7

TOTAL 144 133 (30) 8 11 152


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Dili 565,000 19 565,000 0

Ermera 414,000 14 394,808 19,192

Lautem 225,000 14 225,000 0

Lequia 152,000 7 152,000 0

Manatuto 157,000 19 157,000 0Manufahi 185,000 10 182,950 50

Oe-cusse 236,000 10 229,852 6,148

Viqueque 240,000 7 216,493 23,507

TOTAL 3,500,000 152 3,437,197 62,803

1.2.2 Recurrent CostsAt the end of March 2011, MSATM transferred regular budget of US$119,957 to District

bank accounts in order to finance LDP operational activities (see Table 6).

Table 6: Allocation and Execution Status of 119,957 USD

District Allocation Expenditure Balance

Aileu 8,119 8,119 0

Ainaro 7,596 7,596 0

Baucau 11,792 11,792 0

Bobonaro 12,446 12,446 0

Covalima 9,923 9,923 0

Dili 8,078 8,078 0

Ermera 10,276 10,276 0

Lautem 9,506 9,506 0Lequia 6,434 6,434 0

Manatuto 8,674 8,674 0

Manufahi 9,654 9,654 0

Oe-cusse 7,473 7,473 0

Viqueque 9,986 9,986 0

Total 119,957 119,957 0.00

1.2.3 Letter of Agreement (LoA) between MSATM and LGSPAt the meeting of the Project Steering Committee (PSC) that was held on 25 February 2011,

parties agreed that UNDP will: (a) support the recruitment of thirteen district-based planningofficers and two national engineers, to be paid according to the salary grades and benefits of

the Government of Timor-Leste; and (b) fund part of the operational costs associated with the

LDP. Toward this end, UNDP hired a consultant to conduct a capacity assessment of the

MSATM in May 2011. Based on the consultants recommendations, a Letter of Agreement

(LoA) between MSATM and UNDP was signed on 12 August.

The signature of the LoA allowed LGSP to partially finance the salaries of 42 technical staff

in the districts who had been recruited by Local Assemblies in the past years and for whose

salaries there were no sufficient funds in the State budget. LGSPs contribution has allowedfor the retention of these critical staff, while at the same time the MSATM has undertaken


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actions to ensure that all of them will be again entirely financed through the State budget

starting in January 2012. The signature of the LoA is also permitting the recruitment of 13

additional staff at the district level and two at the national level, which contribution will be

critical given that in 2012 the range of coverage of LGSP will be extended to a much greater

number of projects.

The signature of this LoA is also a valuable opportunity to test the capacities of the MSATM,

in view of the planned shift of UNDPs assistance from Direct Implementation Modality

(DIM) to National Implementation Modality (NIM) during the coming years. The MoF has

already created a specific bank account into which funds can be transferred in conformity

with the LoA. As modalities for such bank transfers and for financial reporting through Free

Balance are still being worked out, it is likely that the first transfer will be done in early 2012.

However, direct payments to 42 technical staff were made to retroactively cover for their

salaries for much of year 2011.

1.3 Project Implementation1.3.1 Local Procurement Processes and Implementation of LDP ProjectsDuring the reporting period, LAs carried out procurement processes according to the current

LDP procedures (see Table 7). It should be noted that projects costing less than 15,000 USD

do not require central approval by the MSATM; therefore, their implementation could

generally start in June. Projects costing more than 15,000 USD were only granted central

approval in July, so that their implementation could only start in August. All projects could

be completely implemented by 31 December.

Table 7: Procurement Phases

Procurement Phase Date (month)

Bid preparation March

Bid Announcement MarchApril

Pre bid Meeting 3th week of March

Site visit 4th week of April1st May

Bid Opening 3th week of May

Bid doc Evaluation 4th week of May4th June

Sign letter of acceptance 3rd week of Maylast week of July

Local awarding and contracting 1st week of June1st week of August

1.4 The planning process for FY 20121.4.1 Project identification and prioritizationIn view of the anticipated approval of the PDID decree law (please see Output II), in

February 2011 the MSATM issued Ministerial Dispatch 10/2011, regulating the planning

phases for the 2012 project cycle. The Dispatch only regulated the initial phases of the

planning process, up to the submission of proposals from the Sub-District Development

Committee (SDDC) to the District Development Committee (DDC); it further assumed that

the PDID decree law would establish two different budgets (mainly depending on the size of


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the projects). The fact that the decree law could not be approved within year 2011 caused that

the following phases of the planning process were carried out in a sort of legislative vacuum,

departing significantly from past LDP regulations.

A first consequence of the application of the new Dispatch was that there were no communityconsultations at the Suco level, as Suco Councils selected their proposals among those

identified through Suco Development Plans (SDP) that had been drafted in 2010 following a

process of consultation with the relevant communities. Therefore, the new Dispatch provided

that new consultations are only required when communities or suco councils would like to

proposed projects that are not included in the SDPs.

All projects proposed by the Sucos, as well as others proposed by line sectors at the Sub-

District level, were submitted to the SDDC. By 6 May 2011, all the proposals that were

prioritized by the SDDCs were sent to the LAs for discussion and screening. LAs and

relevant line sectors were then able to finalise draft District Investment Plans for 2012. At the

end of May, LAs organized District Integrated Meetings, in which relevant stakeholders were

invited to discuss the proposed investment plans in order to avoid project duplications and to

increase their technical capacity and skills. Participants included both state and non-state

institutions. As a result of the meetings, the LAs recommended 714 project proposals with a

total proposed allocation of 85,211,907 USD (see Table 8).

Table 8: List of District Integrated Meetings

District Meeting Date #Project Proposals Total amount (USD)

Aileu 25/05/2011 37 5,090,000

Ainaro 26/05/2011 82 7,032,000

Baucau 30/05/2011 50 6,244,000

Bobonaro 27/05/2011 66 8,241,500

Covalima 27/05/2011 73 7,122,900

Dili 25/05/2011 66 13,319,000

Ermera 25/05/2011 64 5,293,828

Lautem 27/05/2011 40 1,816,700

Liquia 26/05/2011 37 4,232,000

Manatuto 25/05/2011 26 4,483,000

Manufahi 27/05/2011 66 3,941,600

Oe-cusse 31/05/2011 47 4,848,700Viqueque 31/05/2011 60 13,546,679

TOTAL 714 85,211,907

All proposals were then presented and discussed at a national level meeting, the District

Budget Consultation Workshop, which was held in Dili on 13 and 14 June. During this two-

day workshop, District Administrators presented the proposed projects for their Districts.

Relevant ministries were present to provide their appreciations. The main objective of the

meeting was to synchronize the district investment plans with national level initiatives. As a

follow up action to the meeting, technical staff from DNDLOT and LGSP met with District

Administrators to rank and prioritise the proposed projects. As a result, a total of 281proposals were recommended for data verification prior to their submission to the Budget


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Revision committee.

On 15 August, without conducting data verification, DNDLOT sent to the Budget Revision

Committee of the MoF a list of 216 proposed projects under the LDP (including 150 LDP

projects and 66 Community Centres), plus a second list of 205 proposed projects for the PDD

I (see Table 9). Following the review by the Budget Revision Committee, 199 of the 216LDP projects were included in the draft 2012 State Budget, with a total budget allocation of

6,292,910 USD and 115 projects with a total budget of 7,415,000 for PDD I projects (see

Summary of the project budget of MSATM in Annex 1).

Table 9: Number of Projects and Budget Allocation before and after the Budget Review Commission

District

PDL Projects (including Community Centre) PDD Projects

Proposed by DNDLOT Included in State

budget

Proposed by DNDLOT Included in State

Budget

Projects Budget Projects Budget #Project Budget #Projects Budget

Aileu 10 417,477 10 368,000 11 922,000 6 610,000

Ainaro 15 458,463 14 408,000 23 978,000 14 508,000

Baucau 15 770,859 13 652,000 11 860,000 5 420,000

Bobonaro 19 672,881 17 576,000 20 1,145,000 10 585,000

Covalima 18 525,015 17 475,000 18 1,211,400 10 746,000

Dili 16 728,579 14 529,000 21 1,432,000 11 846,000

Ermera 24 847,731 22 748,000 21 1,372,000 15 1007,000

Lautem 16 498,890 15 429,000 16 525,700 10 416,000

Liquia 12 515,874 11 452,000 14 1,020,000 9 525,000

Manatuto 13 381,945 12 356,000 6 660,000 3 160,000

Manufahi 23 406,652 19 354,000 12 830,000 7 535,000Oe-cusse 22 561,733 19 464,000 21 1,143,500 9 599,000

Viqueque 13 573,393 12 485,000 11 793,000 6 458,000

TOTAL 216 7,359,492 195 6,296,000 205 12,892,600 115 7,415,000

In late October 2011, the data verification process started for both LDP and DDP projects.

While most proposed projects were sound, the verification teams found some cases in which

budget allocations were not realistic, or the conditions at the project site were not fit for

adequate project implementation.

1.5 Gender Support ActivitiesIn January, LGSP produced a Gender training manual in Indonesian language. On 19 and 20

January, LGSP also organized a two-day Training of Trainers (ToT) session for 10 LGSP and

MSATM staff. LGSP has finalised the recruitment process to hire an international Gender

Specialist, who should arrive in February 2012. Many of the gender-related activities

included in the 2011 AWP are therefore being re-scheduled for the next year.


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1.6 Capacity Building1.6.1 Refresher training on local planning, finance and procurement processTo develop capacities at both national and district levels, LGSP organized and carried out

refresher training on local planning, finance and procurement processes. The session targeted24 participants from both districts and the central levels. The training was conducted from 30

April to 1 May in Dili. As a continuation of this training, DNDLOT and LGSP staff is

presently providing training to district administration treasury and finance teams. This

activity is planned in five districts, three of which were already completed (Liquia, Ermera

and Oe-cusse).

1.6.2 AutoCAD training for District technical staffA total of 41 technical staff was trained on basic project design. A national short-term

consultant was recruited to help LDP and DNDLOT teams to train the participants. Two

training sessions were held in Dili, respectively from 10 to 14 and from 17 to 21 October.

The objective of the training was to develop participants graphic design and the ir calculation

specification skills.

1.6.3 Study tour on the integrated Planning for Local Governance in IndonesiaA team consisting of 10 MSATM and LGSP staff went to Indonesia for one week (15-22

December 2011) to receive training on Integrated Planning for Local Governance. The

training was carried out at the Satunama Training Centre in Yogyakarta with the objective of

helping participants in understanding the concepts, principles and alternative models of

integrated development planning and to have an overview of legislative and conceptualframeworks for project design, implementation and monitoring.

Output 2: Policy & Legislation

Support is provided to GoTL for the establishment of an appropriate and comprehensive

institutional, legal, and regulatory framework for local government

2.1. Continued support to Local Government LegislationThe finalization of some pieces of the policy and legislative frameworks for decentralizationand local government was put on hold by the Government following the postponement of the

municipal elections in April 2010. LGSP has therefore concentrated its efforts on supporting

the drafting of other pieces of legislations that related to the improvement of the current PFM

framework rather than with the establishment of future municipalities.

Pending the recruitment of a legal adviser, a consultant has been hired during critical periods

of the year in order to support the drafting of the PDID (please see 2.2). A legal advisor was

also recruited and is expected to start her duties on 3 January 2012. Following the approval of

the PDID, the legal adviser will support the legal drafting of the required subsidiary


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legislation.

2.2. Support the drafting process approval of the PDID Decree LawLGSP supported MSATM in drafting a decree law on the Integrated District Development

Planning (PDID in Tetum acronym) and a legal consultant was recruited to help drafting andto submit the PDID. The PDID integrates sector-wide programmes (such as the DDP) with

bottom-up programmes (such as the LDP). The PDID also streamlines and harmonizes local

development processes and procedures for local planning, procurement, financial

management, implementation and oversight, building as much as possible on the LDP rules

and regulations.

The draft Decree Law on PDID was initially presented to the council of Ministers (CoM) in

October 2011 with the objective to obtain inputs from line ministries. A working group (WG)

comprising of senior staff from MSATM and MoF (as further explained in point 2.4.3) was

established in November to continue to discuss and finalize the PDID. The PDID was

eventually approved by CoM on 11 January 2012, and at the time of drafting this report it is

waiting for promulgation by the President of the Republic and for subsequent publication. A

brief summary of the approved PDID is in Annex 6.2.

2.3. Support the Production of Secondary Legislation2.3.1 Ministerial Dispatch on Planning Process

In anticipation of the approval of the PDID decree law, in early 2011 LGSP supported the

Ministry in drafting Ministerial dispatch No.10/2011, which regulates the planning processfor the 2012 project cycle. The dispatch builds on the LDP planning regulation, but it only

covers the initial steps of the planning process, up to the submission of priority proposals to

district assemblies by sub-district development committees and district-level sector

departments. It also establishes that project identification at Suco level should take into

consideration the Suco Development Plans that were drafted in 2010 through a participatory

community process.

2.3.2 Revision of MSATM Guidelines on Community Contracting

LGSP assisted the MSATM in the revision of its guidelines on Community Contracting, in

order to ensure that such guidelines are in line with Decree Law No 18/2011 that established

PDD I and II. Some significant changes fix a threshold of USD 15,000 up to which contracts

will mandatorily be adjudicated for community implementation, and a threshold of USD

75,000 up to which community contracting will be used whenever technically feasible.

Another important change is that the Project Implementation Committee will be able to

request up to 75% of the total allocated funds, before the project is started. The revised

version of the guidelines is waiting for Ministers approval.


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2.4. Policy Development2.4.1 Community Development (CD)During the second half of the year, LGSP was involved in a process of discussion regarding

the establishment of a government policy on a national mechanism to accelerate aCommunity Development (CD) process. LGSPs contribution included providing comments

on a concept note development by the Government. As part of this debate, LGSP also took

part in a two days workshop in November. LGSPs contributions focused on how any

framework for future CD programmes should be an integrated part of the PDID process, so

that different programmes and processes can all be linked together under a common strategy.

This discussion seems to be extremely timely, as a new programme that might receive

substantial financial support from AusAid and possibly other donors is envisaged to start in

2012, with the first cycle of projects to be implemented in all sucos in early 2013. A

Government Resolution on a national mechanism to accelerate community development was

approved by the CoM on 18 January 2012, while this report is being drafted. The government

resolution provides an official endorsement to the mentioned concept note, and aims at

complementing the existing development plans so that, through an active involvement of

citizens, they will be able to ensure an equitable intervention in all communities in Timor-

Leste.

2.4.2 Local Governance Working Group (LGWG)The LGWG was initiated by Irish Aid in July 2011 with the objective to gather together all

the organizations that work on issues related to local governance. It meets monthly, and italso functions as a forum for members capacity development on the local governance related

development issues.

2.4.3 Technical Working Group (TWG) on Fiscal DecentralizationAs stated in (point 2.2), this Working Group (WG) comprising senior staff from Ministry of

Finance (MoF) and Ministry of State Administration and Territorial Management (MSATM)

was set up in September to discuss issues related to Fiscal Decentralisation, including PDID

draft Decree Law and CD Concept notes. This TWG is envisaged to be a long term running

working group, therefore, the group has developed and discussed a Terms of Reference for

conducting a workshop on Fiscal Decentralisation in earlier 2012.

Output 3: Support to Implementation of Local Government Reforms

Support is provided to GoTL for the implementation of local government reforms

LGSP continued to provide support to the MSATM in implementing communications and

civic education focusing on local governance and the decentralization process, as well as

ensuring press coverage of LGSP-MSATM joint activities. A new communication strategy


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was elaborated involving all the relevant Directorates of the Ministry, and it was presented

during a joint workshop in January 2011. The main objective of the strategy is to better adapt

the outreach, social communication and civic education initiatives to the current scenario of

the project, specifically in terms of key messages, audience, productions, activities and

monitoring system.

3.1. Production of Social Communication Materials (SCM)3.1.1 Monthly Radio Programme

Seven editions of the monthly community radio programme (Development with

Decentralization) were produced, distributed and aired at national and community level,

through a network of 16 Community Radios (see Table 10).

Table 10: List of Produced Radio Program during the Report Period

No Topic of Radio Programme Edition/date1 Government allocates US$ 3.5 million to the local development fund

January/February

2 Districts and Sub-Districts receive the new information and suggestion

box on local governance, development and decentralization March

3 LDP making a difference in education: the story of the Vemasse

Secondary School - also featuring an exclusive interview with the Irish

Aid Head, Mr. Eoghan Walsh.

April

4 DDP and LDP moving towards integration - featuring an exclusive

interview with Minister Arcangelo Leite, the Manufahi Administrator and

the DNDLOT Chief of Department

May

5 MSATM completes the Local Development Programme MinimumConditions Evaluation in the Districts June

6 New furniture is delivered to health centres in Liquia District with a

LDP supported project

September

7 Training for 42 LDP Technical staff from 13 districts October/November

3.1.2 Monthly Bulletin

Seven editions of the monthly bulletin, both Tetum and English versions were produced (see

Table 11) and distributed to the Districts, Sub-Districts, NGOs, UN Agencies, line ministries,

National Parliament, universities, Donor community and uploaded on the MSATM website

and the UNCDF global website.

Table 11: List of Monthly Bulletin Topics

No Topic of Monthly Bulletin Edition/Date

1 New LDP training module on gender responsive local governance

Revised regulations will harmonize LDP-DDP procedures

"Our coffee plantations are now safe from flooding"

New communication strategy to be approved soon

February

2 Government of Timor-Leste allocates 3.5 million to the Local

Development Fund

The "PDID" will open a new season for Local Development in Timor-

LesteBrief History of the collaboration between the Ministry of State

March


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Administration and LGSP

3 New Information and Suggestion Box is an opportunity for communities

Communication Campaign on the Information Box kicks-off

Local Governance approach makes the difference in Manufahi

April

4 Local assemblies will soon award 144 LDP projects for 2011

"A country with no education is a country with no future"A Suco chief explains how the proposed construction of a secondary

school became reality

District profile: Baucau

May/June

5 The Ministry of State Administration and Territorial Management

completes the LDP Minimum Conditions Evaluation in the Districts

Districts discuss 2012 Budget, towards integrated planning

July

6 Monitoring by local assemblies is key for the LDP project

implementation

New furniture is delivered to 21 health centers and clinics in Liquia

District profile: Liquia

August/September

7

Verification and Implementation of PDL 2011/2012 CommencesStrengthening the Capacity of Local Development Program (LDP)

Technical Staff Will Help Deliver Better Community Service

PDID Decree Law Presented to the Council of Ministers

October/November

Compared to year 2010, a higher number of news and stories was issued, distributed to the

national media and posted on the MSATM website. Eight news were produced in Tetun,

English and Portuguese: four were published on the UNDP TL website, and four on the

global UNCDF website.

A new version of the LGSP Factsheet with updated figure and enriched content wasproduced, printed and distributed to the main national, local and international partners and

stakeholders along the first semester of 2011. LGSP 2012 printing materials such as folder

and note book were printed during the reporting date, except the delayed of 2012 calendar

printing due to some technical failure experienced by the tender winner company.

The Communication Unit also monitored the coverage of the decentralization process in the

national print and broadcast media. A new Communication Check List was produced in

collaboration with MSATM (DNDLOT) and distributed in the 13 Districts with the LDP

team. The main objective of the check list is to receive feedback from District Local

Authorities on the impact and dissemination of radio programmes, monthly bulletins, posters,

information box installation and to receive suggestions on future publications and

productions, including a video documentary and organization of thematic workshops. Results

on collected data (see Table 12) will be used during the preparation of the 2012 Work Plan

and Budget, to better reflect information and outreach needs as well as priorities in the field.

Table 12: The summary of views from respondents to Communication Check list for 2011

Type of EIC Materials Summary Analysis

Monthly Bulletin The monthly bulletin provides significant details of information and data regarding

the local development process in Timor-Leste. This bulletin has reached to district

and sub-district level so far, and it is suggested that this Bulletin can be distributed to

Sucos, Aldeia and Bairros, because rural areas community needs to know and keep


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up to date the current and future likely local development in Timor-Leste.

Monthly Radio

Programme

The monthly radio program brings a unique approach to disseminate information

regarding development process to community in rural areas because a significant

number of rural areas communities cannot read and write. This electronics media

approach makes people aware of the PDD and LDP program for those who have

radio.Information Board The information board is a useful information sharing tools to help local people to

access to various information including on PDD and PDL projects, announcement of

the LDP funds, vacancy announcement and some useful information data from other

state and non-states institution such as NGO the district.

In addition, LGSP supports the Ministry in making-over and re-styling the ministrys website,

including insertion of new photo galleries and renewed few section appearances to be looked

more attractive and substantially easy to access. Furthermore, to maintain and develop the

ministrys website a website manual was produced and five (5) of the ministry staff were

trained to self-maintain and developing the website in the future.

3.2. Civic Education on Local GovernanceWith the postponement of the municipal elections to 2013/14, civic education activities were

downsized and mostly focused on different initiatives aiming at raising awareness on the

Local Governance key principles, such as transparency, bottom up participatory process and

accountability in implementing local development projects.

In particular, the new Information and Suggestion Boxes of the Ministry were distributed into

all Districts and Sub-Districts, under the supervision of LGSP in March. An intensive

communication campaign was organized by the team with the production of an illustrated

poster designed by an international cartoonist then was distributed at the District and Sub-

District level. In addition to that, a special edition of the Community Radio Programme and a

longer and detailed version of the Bulletin were also developed by LGSP, besides a specific

factsheet on the initiative and the organization of two presentations and workshops on the

Suggestion Boxes which took place in Dili: the first one for the 13 District Administrators,

and the second one for the 65 Sub-District Administrators. The first collection of suggestions,

proposals and complaints channelled through the Box was conducted in mid-September, and

only one letter of complaint was received from Oe-cusse. LGSP is presently assessing the

letter that was received, following which it will discuss with MSATM whether the currentprocedures should be updated or whether the use of the information boxes should even be

discontinued.

A Learning Programme on communication related activities was organized in March May in

collaboration with the UNMIT Training Centre for the 12 Communication Focal Points

within the different MSATM Directorates. The course covered different topics including

team work, priority management, and introductory lessons on the use of PowerPoint and

Microsoft Publisher.


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OUTPUT 4: Programme Management

4.1. Recruitment processesDuring 2011, a number of recruitment processes were initiated and the positions advertised.Recruitment processes were finalized for the positions of LDP Coordinator (January 2011),

Policy and Legislation Associate (May), Programme Manager (July, although the position

was discontinued in December), Communications Associate (July) and Chief Technical

Adviser (CTA). The following positions were filled in early January 2012, and the selected

candidates have already started their duties at the time of drafting this report: Legal Adviser,

Infrastructure Associate and Driver. Finally, recruitment processes for the positions of the

Operations Manager, M&E Officer, Gender Adviser and Drivers Coordinator should also be

finalized in early 2011.

4.2. Other issuesDue to the internal restructuring within the MSATM, the Operations Unit and most of LDP

team moved to a newly-built pre-fabricated office in April 2011. Currently, the team is spread

over different buildings in the same Ministry compound.

Office furniture that was no more in use was handed over to the MSATM, which further

distributed it to Sub-District offices of Dili District.

VII. SUMMARY OF THE MAIN ACHIEVEMENTS AND LESSONS LEARNED IN

2011Since 2010, the local governance context has developed in a way that was not expected when

the project was designed in 2006. In particular, the pace towards the establishment of

municipalities has slowed considerably, while the focus has shifted towards a substantial

increase in funding for small infrastructure projects to be planned and implemented locally.

In this context, the following have been the main achievements and lessons learned by LGSP

in 2012:

Achievements

Supported six-fold expansion of bottom-up planning procedures

By supporting the drafting and implementation of new planning regulations (Dispatch

10/2011) and the overall policy discussions around the PDID, LGSP has contributed to

extending the bottom-up planning process for year 2012 to a much larger number of

projects, totalling almost USD 20 million (up from 3.5 million in 2011). In this way, and

although the planning process has been far from perfect during this initial year of

application of the new regulations, LGSP has put the basis for extending its influence

beyond the LDP, covering a much wider range of projects that will be locally

implemented by the MSATM during 2012. This is very consistent with the goal of

strengthening the overall efficiency and effectiveness of government capital resources.


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Provided key support to PDID drafting

Although the PDID Decree Law has yet to be approved, the political will showed by the

MSATM and the technical support provided by LGSP have finally allowed for the

presentation of the draft decree law to the CoM in October. On-going discussionsbetween MSATM and MoF should eventually lead to an agreed integrated approach,

which allows for linking horizontal planning programs (e.g. the LDP) and sector-wide

planning programs. Among other salient features of the present PDID draft, there are

provisions that allow for multi-year planning and for the establishment of a Performance

Based Grant System (PBGS).

LoA signature

The LoA signed between UNDP and MSATM marks a significant step in the relationship

between the two institutions, as this can be seen as the start of the transition from Direct

Implementation (DIM) to National Implementation modalities (NIMs). This will permit

to test the capacity of the MSATM to carry out activities in accordance with procedures

that are previously agreed with the LGSP. Once such procedures will have become

normal practice for the MSATM, amounts covered by the LoA can be gradually increased

until there is eventually a full transition to NIM modalities.

Lessons Learned

Need for timely approval of subsidiary legislation

The year 2011 was marked by the continuous uncertainty regarding the approval of thePDID and the Omnibus decree law on procurement. Although year 2012 has started

auspiciously with the approval of the PDID decree law on 11 January, it will be crucial

that the related subsidiary legislations are quickly approved in order to allow for an

orderly start of the planning phase for 2013 projects and the implementation phase for the

2012 projects. Ideally both phases should be started by February. LGSP is currently

providing support in the early drafting of the relevant secondary legislation to ensure

timely approval and start their implementation.

Need to ensure that established planning procedures are properly followedDuring 2011, bottom-up planning has expanded dramatically. However, exceptional

circumstances (such as the uncertainty and legislative vacuum that accompanied the

delayed approval of PDID) caused the planning procedures rather flexibly adhered to.

(Please see sub-section 1.1.4 and 1.4.1 of this report for detailed explanation of this

matter). As new procedures are currently being drafted for the whole PDID, it will be

important to ensure that they are properly understood and followed by all stakeholders, in

spite of the challenged posed by the electoral year. It will also be necessary to establish a

coordination mechanism with the upcoming CD programme; in this sense it might be

useful to have a common planning process for LDP in which the focus of both

programmes would possibly be on projects bigger than 50,000 USD leaving the


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responsibility of smaller projects to the new CD programme when it comes to

implementation in 2013.

Need to define whether LGSP should mainly support the implementation of LDP

projects, or extend its support to the PDD as wellIt is important for the LDP to continue its transformation from a pilot programme into a

fully-fledged support to the overall MSATM activities in the field of infrastructure and

service delivery projects. At the same time, present legislation is not always conducive to

this transformation processes as different procurement procedures were being followed in

the implementation of PDD. In this context, LGSP can already provide support to the

whole planning process, while LGSPs support to the implementation process of

programmes other than LDP might depend on the final version of the Procurement decree

law. It will be important for LGSP to maintain a regular dialogue with MSATM on this,

and to be ready to further extend its support beyond LDP as soon as legislation becomes

conducive to this.

Need to start an early engagement in discussions with both the current and the

subsequent government regarding LGSPs possible longer-term role.

Local government reforms did not take place during the original life span of LGSP and

are not likely to take place during the period of its two-year extension. A new government

should be formed around August 2012, and it is only likely to take its first important

decisions during 2013. For LGSP, it will be crucial to establish with it an early

engagement and discussion about the possible role that the programme might play during

the next UNDAF cycle (2014-2018). This may include support to local governmentreforms (if these gain new momentum), or alternative ways of helping the government in

improving its PFM/PEM at the sub-national level.

VIII. THE WAY FORWARD: PROJECT EXTENSION & WORK PLAN 2012

The duration of the LGSP is from 2007 to 2011. However, early in 2011 the GoTL requested

a two-year extension, until end-2013. Two UNDCF-UNDP missions were carried out

respectively in May and June to initiate the design of the new project, which was then

finalized in November. A meeting of the Project Steering Committee (PSC) was held on 13

December to review and approve the extension project document.

The extension was negotiated for a limited period of two years in order to align the project

with the UNDAF cycle, but more importantly to take into account the fact that 2012 will be a

period of transition, with presidential and parliamentary elections to be held and a new

government to be formed: this means that important policy decisions may not be taken until

at least the end of 2012. In view of this, only in 2013 it is likely to be clearer where does

Timor-Leste want to go in terms of decentralization, and with what speed does it intend to

undertake reform.


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For this reason the project extension does not have Output 3 (Implementation of Local

Government Reforms), and communication and public outreach activities become a cross-

cutting issue.

The project extension includes instead an expanded focus on Local Development, particularlyin regards to the creation of an enabling environment for increased community involvement

in state processes. However, it is important to note that many of the proposed activities that

would relate to this expanded focus of the LDP are yet unfunded. Therefore, the AWP 2012

will not include such activities until there are concrete indications that they would find a

donor.

During the PSC meeting, the Minister explained that 2012 will be the last year for LDP, as all

current development programmes will need to fully merge into the new PDID framework. In

this perspective, he requested that LGSP focus on supporting the whole PDID process.

Relevant aspects of the draft AWP 2012 were discussed during the last PSC meeting held on

13 December 2011. The approved plan is in annex 6.3.


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PART II: FINANCIAL PERFORMANCE

The MPTF Office, as the Administrative Agent of the Local Governance SupportProgramme (LGSP) Timor-Leste Joint Programme, receives, administers and manages

contributions from donors, and disburses these funds to the Participating Organizations inaccordance with the decisions of the Steering Committee. In addition it submits annualconsolidated reports, which report to donors on total contributions received, transfers made toParticipating UN Organizations for the implementation of approved projects and theexpenditures incurred against these projects. This financial report covers only funds receivedthrough the pass through funding modality (i.e. contributions from Irish Aid).

1.Financial Overview

During the reporting period