Washington, July 15, 2004 – The World Bank approved today two loans for a total of $16.6 million for Peru to support the decentralization of key social programs and fiscal administration. “The decentralization of fiscal management and public services will help authorities at all levels channel resources to where they are needed most, especially the rural poor,” said Marcelo Giugale, World Bank Country Director for Bolivia, Ecuador, Peru and Venezuela. The $8.8 million Institutional Capacity for Sustainable Fiscal Decentralization Technical Assistance Project seeks to provide regional and local governments with the necessary tools for planning, monitoring and evaluating sustainable finances, while strengthening the capacity of the national government to monitor and evaluate the country’s fiscal and financial performance. The project, which supports Peru’s ongoing decentralization process and public sector modernization program, will: · Introduce basic financial management tools (tax collection, accounting, budgeting) at the regional and local government level to produce data and monitor fiscal performance in accordance with the new legal fiscal decentralization framework. · Enhance the efficiency of public expenditure by designing an initial set of institutional performance management indicators for projects and activities, and by evaluating and improving existing results-based management agreements. · Upgrade the national public investment system by providing training for newly created decentralized offices for public investment. · Strengthen local capacity for managing public assets through transfers of know-how and technological support among the 1,700 regional governments and agencies. · Extend the Integrated Financial Management System (SIAF) - which ensures uniform accounting, budgeting and reporting standards to cover all local governments, and finance the design of a consolidated national payroll control system. Accountability for Decentralization in the Social Sectors Technical Assistance Project The $7.8 millionAccountability for Decentralization in the Social Sectors Technical Assistance Project aims to ensure that the targeting and efficiency of social programs, such as education and health, are maintained and improved throughout the decentralization process. In particular, the project seeks to: · Improve the quality of social policies and programs through policy development and evaluation related to education, health, pension system, and other social programs, and the implementation of performance agreements and accreditation systems of social programs at the local level. · Improve the monitoring and evaluation system of social programs by building monitoring instruments and analytical capacity, such as a monitoring system for the Ministry of Women and Social Development programs, and a more user-friendly “Consulta Amigable” Web site to provide open access to information about budgets, expenditures, services and the performance of social programs. The two single currency, fixed-spread loans are repayable in 14 years, including 8 years of grace. Disbursements will run from 2004 through 2008. | 
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