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Lesson
Executing agencies, ADB project officers, project consultants, and others must very carefully examine and assess the full range of possible impacts from a change of scope. Technically correct, evidence-based positions must prevail.

Project Number: 30535-013
Project Name: Financial Management Project
Report Date:
Lesson
The design of the BRMP, supported by the TA loan, was meant to promote the use ofavailable fiscal resources for delivering services to the poor. This can happen only if the system that links the financial sector and the delivery of services to the poor exists on the ground, and is functioning properly. The situation in Balochistan clearly did not fulfill these conditions. During Board consideration of the loan, a number of members had raised this issue and cautioned the staff, saying that implementation was going to be key.

Project Number: 37135-023
Project Name: Supporting Public Resource Management Reforms in Balochistan
Report Date:
Lesson
The other lesson learned was that this sort of vital reform measure, i.e., reorganizing the BPKP, should not have been pushed back as a condition for release of the second tranche. This appears to be a flaw in the program design. ADB should have insisted on reforming the BPKP step by step, making the government's agreement to reorganize the BPKP a condition for submitting the program for Board approval. Then government agreement to come up with a firm plan to reorganize the BPKP should have been made a condition for the release of the first tranche.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Implementing a reform program that involved cross-agency coordination and cooperation needed the country's highest political support, while this program was supported mainly by the Ministry of Finance (MOF) as part of its public financial management reform program. The MOF by itself appeared to lack support to push for downsizing the BPKP as contemplated under the program. In the end, the government appeared willing to sacrifice the second tranche in the interests of political expediency.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
The major lesson learned from implementing the program is that it is generally difficult to implement reform measures that involve institutional shrinking and downsizing staff as in the case of the Badan Pengawasan Keuangan dan Pembangunan or Financial Supervisory and Development Board, now the government internal auditors (BPKP). The BPKP was a well-entrenched auditing institution with about 6,500 staff, about 5,000 of whom were spread in about 30 regional offices.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date: