LOAN PROPOSALPROFISCO – P (PROFISCO/PB)

DOCUMENT OF THE INTER-AMERICAN DEVELOPMENT BANK

BRAZIL

LOAN PROPOSALPROFISCO – PARAÍBA FISCAL MODERNIZATION PROGRAM OF THE STATE OF PARAÍBA

(PROFISCO/PB) (BR-L1208)

INDIVIDUAL LOAN UNDER THE CCLIP PROGRAM TO SUPPORT THE MANAGEMENT AND INTEGRATION OF

FINANCE ADMINISTRATIONS IN BRAZIL (PROFISCO) (BR-X1005)

This document was prepared by the project team consisting of: Fátima Cartaxo (FMM/CBR), Project Team Leader; Gerardo Reyes-Tagle (ICF/FMM), Project Team Coleader; Bernadete Buchsbaum (LEG/SGO); Flávio Galvão (Consultant); Lilia Dobbin (Consultant); Daniela do Nascimento (CSC/CBR); Cristiane Vasconcelos (ICF/FMM); and Cecilia Bernedo (ICF/FMM).

CONTENTS

PROGRAM SUMMARY

I. DESCRIPTION AND RESULTS MONITORING ...................................................................... 1

A. Background, problem addressed, rationale ........................................................... 1 B. Objective, components, and cost ........................................................................... 4 C. Key results indicators ............................................................................................. 8

II. FINANCING STRUCTURE AND MAIN RISKS ...................................................................... 8

A. Financing, procurement, and contractual clauses ................................................. 8 B. Environmental and social safeguard risks........................................................... 10 C. Fiduciary risk........................................................................................................ 10 D. Program eligibility................................................................................................ 11

III. IMPLEMENTATION AND MANAGEMENT PLAN................................................................ 11

A. Summary of institutional arrangements for implementation.............................. 11 B. Summary of arrangements for monitoring results .............................................. 12

- ii -

ANNEXES AND ELECTRONIC LINKS

ANNEXES Annex I: Development Effectiveness Matrix (DEM) (summary) Annex II: Results Framework Annex III: Procurement Plan – 18 months (summary table)

REQUIRED TECHNICAL REFERENCES Link

1. Program Plan of Action and Investment Plan – 5 years, and Annual Work Plan (AWP) – 18 months IDBDocs1794619

2. Program Monitoring and Evaluation System IDBDocs1794656

3. Procurement Plan – 18 months IDBDocs1794639

ADDITIONAL TECHNICAL REFERENCES Link

1. Institutional/fiscal macro diagnostic assessment IDBDocs1794636

2. Problems, solutions, and outcomes map IDBDocs1794638

3. Program financial analysis IDBDocs1794706

4. Program indicators table IDBDocs1794623

5. Operating Regulations of the CCLIP-PROFISCO credit line IDBDocs1794635

6. State law authorizing the credit operation IDBDocs1794708

7. Decree creating the Program Coordination Unit (PCU/PB) IDBDocs1794712

8. SER/PB targets plan IDBDocs1794717

9. PMAE/PB project of BNDES IDBDocs1794742

10. Fiscal Adjustment and Restructuring Program 2008-2010 IDBDocs1794762

11. 2008-2011 Multiyear Plan IDBDocs1794771

12. Safeguard policy filter (SPF) and safeguard screening form (SSF) IDBDocs1922668

APPENDICES

Proposed resolution

http://idbdocs.iadb.org/wsdocs/getDocument.aspx?DOCNUM=1794619














- iii -

ABBREVIATIONS

AWP Annual work plan BNDES Banco Nacional de Desenvolvimento Econômico e Social [National

Economic and Social Development Bank] CadSinc Catastro Nacional Sincronizado [National Synchronized Registry] CCLIP Conditional credit line for investment projects CGE/PB Tribunal de Contas do Estado de Paraíba [State of Paraíba Audit Office] COBIT Control objectives for information and related technologies ESAF Escola de Administração Fazendária do Ministério da Fazenda [School of

Public Finance Administration of the Ministry of Finance of the Federative Republic of Brazil]

ESAT Escola de Administração Tributária do Estado [State School of Tax Administration]

GDP Gross domestic product ICMS Imposto sobre a circulação de mercadorias e prestação de serviços [goods

and services sales tax] IPVA Imposto sobre a propriedade de veículos automotores [motor vehicle

ownership tax] ITCMD Imposto sobre transmissão causa mortis e doação [inheritance and

gifts tax] ITIL Information Technology Infrastructure Library LRF Lei de Responsabilidade Fiscal [Fiscal Responsibility Law] NCI Net current income NRI Net real income PAF Programa de Reestruturação e Ajuste Fiscal [Fiscal Adjustment and

Restructuring Program for the Brazilian States] PCU Program Coordination Unit PGE/PB Procuraduria Geral do Estado de Paraíba [State of Paraíba Attorney

General’s Office] PMAE Programa de Modernização da Administração das Receitas e da Gestão

Fiscal, Financeira e Patrimonial das Administrações Estaduais [Program for the Modernization of Revenue Administration and Fiscal, Financial and Asset Management in State Revenue Services]

PNAFE Programa Nacional de Apoio à Modernização da Administração Fiscal para os Estados Brasileiros [National Fiscal Administration Program for Brazilian States]

PROFISCO Programa de Apoio à Gestão e Integração dos Fiscos no Brasil [Program to Support the Management and Integration of Finance Administrations in Brazil]

SEF/PB Secretaria de Estado das Finanças da Paraíba [State of Paraíba Department of Finance]

SEFAZ Secretaria de Estado de Fazenda da Paraíba [State of Paraíba Department of the Treasury]

- iv - SEPLAG/PB Secretaria Estadual de Planejamento e Gestão da Paraíba [State of Paraíba

Department of Planning and Management] SER/PB Secretaria de Estado da Receita da Paraíba [State of Paraíba Department of

Revenue] SIAF/PB Sistema Integrado de Administração Financeira do Estado de Paraíba

[State of Paraíba Integrated Financial Management System] SPED Sistema Público de Escrituração Digital [Digital Public Accounting

System]

BRAZILPROFISCO – PARAÍBA

FISCAL MODERNIZATION PROGRAM OF THE STATE OF PARAÍBA (PROFISCO/PB) (BR-L1208)

INDIVIDUAL LOAN UNDER THE CCLIP PROGRAM TO SUPPORT THE MANAGEMENT AND INTEGRATION OF

FINANCE ADMINISTRATIONS IN BRAZIL (PROFISCO) (BR-X1005)

PROGRAM SUMMARY

Financial Terms and Conditions

Amortization period: 20 years

Grace period: 5 years

Borrower: The State of Paraíba Guarantor: Federative Republic of Brazil Executing agency: The State of Paraíba, acting through its Department of Revenue (SER/PB) Disbursement period: 5 years

Source Amount (US$) % Inspection and supervision fee: *

IDB (Ordinary Capital) 7,479,000 85.4% Interest rate: LIBOR-based

Local 1,278,221 14.6% Credit fee: *

Total 8,757,221 100.0% Currency: U.S. dollars from the Single Currency Facility

Program at a Glance

Program objectives and description:

Objectives: The program’s general objective is to make fiscal management in the State of Paraíba more efficient and transparent, in order to: (i) increase the state’s internally generated revenue; (ii) enhance the efficiency, effectiveness, and control of public expenditure; and (iii) provide better services to citizens. Description: The program comes under the conditional credit line for investment projects (CCLIP) BR-X1005, “Program to Support the Management and Integration of Finance Administrations in Brazil (PROFISCO),” which was approved by the Bank’s Board of Executive Directors on 5 November 2008 pursuant to Resolution DE-132/08. It has four components with their respective subcomponents: 1. Integrated strategic management: (i) institutional strengthening and improved strategic management; and (ii) national and international interagency cooperation. 2. Tax administration and tax litigation: (i) more efficient and effective tax administration; (ii) more efficient and effective management of tax litigation. 3. Financial and property management, and internal control: (i) more efficient and effective financial management; (ii) more efficient and effective management of materials, services, and property; (iii) improved internal control and audit mechanisms. 4. Management of strategic resources: (i) enhancement of mechanisms for transparency and communication with society; (ii) management modernization and upgrading of information and communication technology services; and (iii) improved human resources management.

Special contractual conditions: None.

Exceptions to Bank policies:

The borrower requests authorization to use Brazilian federal legislation on procurement and contracting as described in paragraph 2.5, and to use direct contracting as described in paragraphs 2.6 and 2.7.

Program qualifies as: SEQ [ ] PTI [ ] Sector [ ] Geographic [ ] Headcount [ ] * The credit fee and inspection and supervision fee will be established periodically by the Board of Executive Directors as part of its review

of the Bank’s lending charges, in accordance with the applicable provisions of the Bank’s policy on lending rate methodology for Ordinary Capital loans. In no case will the credit fee exceed 0.75%, or the inspection and supervision fee exceed, in a given six-month period, the amount that would result from applying 1% to the loan amount divided by the number of six-month periods included in the original disbursement period.

I. DESCRIPTION AND RESULTS MONITORING

A. Background, problem addressed, rationale 1.1 This program is an individual operation under the conditional credit line for

investment projects (CCLIP) BR-X1005, “Program to Support the Management and Integration of Finance Administrations in Brazil (PROFISCO),” which was approved by the Bank’s Board of Executive Directors on 5 November 2008 pursuant to Resolution DE-132/08. One of the PROFISCO program’s objectives is to build upon actions taken under the Bank-financed National Fiscal Administration Program for Brazilian States (PNAFE), which is regarded as a major source of support for the federal government’s Fiscal Adjustment and Restructuring Program for the Brazilian states.

1.2 Socioeconomic context. The State of Paraíba is located in Brazil’s Northeast region with an area of 56,439.8 square kilometers and a population of approximately 3.6 million. Over the last decade, its gross domestic product (GDP) grew by an average of 2.6% per year in real terms, slightly behind the Northeast region’s average of 2.8%. In 2005, however, the state posted better results and its GDP (R$12,434 million) contributed 6% of the region’s GDP with average growth of 4% with respect to the previous year, such that national and regional GDP grew by 2.9% and 4.2%, respectively. This is significant growth, particularly in the context of the northeast region—all the more so because the state’s economic activities are not very diversified, and output is concentrated in certain sectors. The sector distribution of state GDP in 2005 was as follows: civil construction, 5.3%; public utility services, 7.6%; agriculture, 10.4%; transformation industries, 20.2%; and services and commerce, 56.6%.

1.3 Fiscal context. The State of Paraíba attained the following fiscal target indicators in the period 2005-2007: (i) the ratio of revenue from the goods and services sales tax (ICMS) to the state’s GDP was 7.9% for the entire the period; (ii) real income administered by the State of Paraíba Department of Revenue (SER/PB) was R$1,758 million in 2007; (iii) the state’s relative share in national ICMS revenue was 0.89% in 2007; and (iv) the ratio of income administered by SER/PB to total current income (i.e. income administered + revenue sharing fund) was 49.80% in 2007. Revenue increased significantly between 2006 and 2007: revenue from the motor vehicle ownership tax (IPVA) grew by 20.32%, ICMS revenue grew by 9.67%, and revenue from the inheritance and gifts tax (ITCMD) grew by 76.42%.

1.4 In terms of compliance with the Fiscal Responsibility Law (LRF),1 in 2007 the State of Paraíba attained nearly all targets agreed upon with the federal government under the Fiscal Adjustment and Restructuring Program, except those under the heading of “Other current expenditures,” which represented 29.67% of net real income (NRI), compared to an agreed maximum of 28.31%.

1 The Fiscal Responsibility Law (Federal Law 101 of 4 May 2000) governs public financial management at

all government levels. It requires budgetary execution reports and statements to be published as a contribution to the transparency of public management.

- 2 - 1.5 The fiscal performance of the State of Paraíba has been good, as shown by:

(i) compliance with the LRF cap on payroll expenditures; (ii) curtailment of public borrowing; (iii) fulfillment of nominal and primary deficit/surplus targets; and (iv) surplus of R$99,897 million on the fiscal and social security budgets.

1.6 Institutional considerations. The State of Paraíba Department of the Treasury (Secretaria de Estado de Fazenda, SEFAZ) managed taxation, revenue collection, the budget, and public expenditure until 2005, when a wide-ranging state administrative reform replaced that system and created a number of agencies and institutions under direct and indirect management, and reorganized public finance functions, among other measures. This process culminated in SEFAZ being split in two: the State of Paraíba Department of Revenue (Secretaria de Estado da Receita, SER/PB) with responsibility for state revenue, and the State of Paraíba Department of Finance (Secretaria de Estado das Finanças, SEF/PB) with responsibility for public expenditure management.

1.7 Four agencies are currently responsible for fiscal management in the State of Paraíba: (i) the SER/PB, which manages state revenue through (a) the formulation and execution of economic/taxation policy, (b) tax administration, and (c) the direction and coordination of activities relating to revenue collection, enforcement, compliance, and oversight of taxes and other state income; (ii) the SEF/PB, which is responsible for the state’s financial management; (iii) the State of Paraíba Attorney General’s Office (PGE/PB), which is responsible for tax litigation management; and (iv) the State of Paraíba Audit Office (CGE/PB), which is responsible for audits and internal control.

1.8 The institutional authority of the SER/PB is concentrated in the area of tax administration, performing the following functions: (i) institutional planning and development; (ii) planning and oversight of fiscal activity; (iii) control of goods in transit; (iv) inspection of business establishments; (v) taxation; (vi) taxpayer assistance and guidance; and (vii) administrative/tax litigation. The SER/PB operates out of headquarters located in the city of João Pessoa and the following decentralized units: 5 superintendencies, 2 reception centers, 2 operation centers, 42 revenue collection offices, 11 agencies, a school of tax administration (ESAT), and 30 fiscal inspection stations.

1.9 The SER/PB has an establishment of 1,327 government employees, 852 of whom (64%) have completed higher education, 399 (30%) have completed secondary education, and the remaining 76 (6%) have completed only basic education.

1.10 Progress and previous work by the Bank. In the last 10 years, the SER/PB has pursued a wide-ranging process of institutional strengthening largely financed by the Bank under the PNAFE program. That program, executed between 1997 and 2006, had a budget of US$29.96 million, of which the Bank financed US$14.98 million (50%). Over the last decade, fiscal, tax, and financial management has made significant progress in the following areas:

- 3 - 1.11 Tax administration. (i) development of strategic planning with annual targets,

process reconfiguration and the formation of management committees; (ii) installation of a program to monitor targets and output indicators; (iii) integration of the online tax enforcement process between the PGE/PB, SER/PB, the Paraíba State Court (Tribunal de Justiça), and the Federal Department of Justice; (iv) establishment of “SINTEGRA” integrated information systems on interstate goods and services transactions, the fiscal current account, taxpayer self-service, and the taxpayer interface (Internet); (v) development of an information technology model and improvements to the technology infrastructure; (vi) creation of a civil service training plan; and (vii) establishment of the ESAT school and implementation of the tax education program.

1.12 Financial management and control: (i) connection of government departments and decentralized agencies to the State of Paraíba’s Integrated Financial Management System (SIAF/PB); (ii) restructuring of the Department of Public Expenditure Oversight; (iii) restructuring of the State Audit Office and (iv) implementation of the Paraíba Total Quality and Control Program (PROPACTO).

1.13 Fiscal challenges for the state. Despite the healthy results achieved, there are still major challenges that Paraíba needs to address to strengthen its fiscal management. Its main fiscal challenge is the limited funding secured by the SEF/PB, attributable to the following factors:

a. Integrated strategic management: (i) Obsolescence of the SER/PB strategic plan; (ii) no results-driven management model at the SEF/PB or the State of Paraíba Department of Planning and Management (SEPLAG/PB); (iii) lack of standardization and absence of institutional and operational procedure manuals; (iv) little exchange of solutions and knowledge with other fiscal agencies; and (v) lack of structured information to support the decision-making process at all levels.

b. Tax administration and tax litigation: (i) no risk-analysis methodology in use, particularly for revenue collection and tax inspection; (ii) inefficient inspection and revenue collection procedures, since certain modules of the tax and financial administration system are either obsolete or nonexistent; (iii) low recovery rates on adjudicated tax claims, owing to a failure to integrate information from existing PGE/PB systems and processes; and (iv) tax and financial administration not adapted to the Digital Public Accounting System (SPED) and the National Synchronized Registry (CadSinc).

c. Financial and property management and internal control: (i) technological failings in the SIAF/PB; (ii) little interaction between the SIAF/PB and its users; (iii) management reports that are inadequate as a basis for strategic management; (iv) poor control and tracking of public expenditure;

- 4 -

(v) inefficient property and document control system; and (vi) ineffective internal audit findings.

d. Strategic resource management: (i) unconsolidated SER/PB information technology management model and obsolescent information technology infrastructure; (ii) inefficient taxpayer services; (iii) little institutional adoption of the human resource development policy; (iv) vagueness in the ethical and disciplinary aspects of institutional and operational conduct, reflected in the lack of an ethical code for public finance personnel; and (v) vulnerability in the management of SER/PB data and archives.

B. Objective, components, and cost 1.14 The program’s general objective is to make fiscal management in the State of

Paraíba more efficient and transparent, in order to: (i) increase the state’s internally generated revenue; (ii) enhance the efficiency, effectiveness, and control of public expenditure; and (iii) provide better services to citizens. The program has four components, with a total of ten subcomponents:

1.15 Component I. Integrated strategic management (US$1,145,529). This component seeks to improve methods and tools to support strategic management and generate information for decision-making. The component has the following subcomponents and respective outputs:

a. Institutional strengthening and improved strategic management. Resources allocated to this subcomponent will finance the implementation of: (i) a results-based management model at SEPLAG/PB; (ii) a results-based management model at SEF/PB; and (iii) a program to physically restructure and equip SER/PB units.

b. National and international interagency cooperation. Resources allocated to this subcomponent will finance attendance by state managers and technical staff at national and international integration meetings and seminars, involving information exchange and cooperation mechanisms.

1.16 Component II. Tax administration and litigation (US$2,586,177). The resources allocated to this component will be used to enhance the performance of tax administration and increase revenue collection. The component has the following subcomponents and respective outputs:

a. More efficient and effective tax administration. Resources allocated to this subcomponent will finance: (i) improvements to the systematic revenue collection process, including a risk-analysis methodology and updating and integration of the revenue module of the tax and financial management system; (ii) improvement of the systematic inspection process, updating and integration of the inspection module of the tax and financial management system; (iii) restructuring of four fiscal inspection stations, which will be equipped with weighbridges; (iv) improvement of the systematic inspection process for business establishments, and updating and integration of the

- 5 -

establishment inspection module of the tax and financial management system; (v) preparation and implementation of a methodology for case prioritization, work distribution, and productivity appraisal; and (vi) restructuring and equipping of the SER/PB tax intelligence area.

b. More efficient and effective management of tax litigation. Resources allocated to this subcomponent will finance: (i) implementation of a systematic case management procedure, encompassing litigations from the PGE/PB, SER/PB, and the Paraíba State Court; and (ii) preparation and implementation of a systematic procedure for monitoring legal assistance and the corresponding module of the tax and financial management system.

1.17 Component III. Financial and property management and internal control (US$1,118,500). This component seeks to improve the performance of financial management and increase control over public expenditure. The component has the following subcomponents and respective outputs:

a. More efficient and effective financial management. This subcomponent will finance the migration and adaptation of the SIAF/PB to the tax and financial management system.

b. More efficient and effective management of materials, services, and property. Resources allocated to this subcomponent will finance: (i) implementation of a model for SER/PB property management, supported by a computerized management system; and (ii) implementation of mechanisms for secure storage of SER/PB fiscal documents.

c. Improved internal control and audit mechanisms. Resources allocated to this subcomponent will finance actions to strengthen the CGE/PB by structuring and equipping its units, reviewing and certifying its operational audit processes, and preparing and implementing the data security policy.

1.18 Component IV. Management of strategic resources (US$3,047,447). This component seeks to improve operational and administrative support methods, instruments and systems, which help to enhance institutional performance and interaction with society. The component has the following subcomponents and respective outputs:

a. Enhancement of mechanisms for transparency and communication with society. Resources allocated to this subcomponent will finance: (i) expansion and improvement of the tax education program, with a view to making it financially sustainable; (ii) development and installation of a new taxpayer services model; (iii) introduction of audit services at the SER/PB; and (iv) creation and online accessibility by stakeholders of an oversight system for bidding processes, contracts, and agreements.

b. Management modernization and upgrading of information and communication technology services. Resources allocated to this subcomponent will finance: (i) design and introduction of an information and

- 6 -

communication technology management methodology, including a review of regulations, standards, and procedures; (ii) upgrading of the tax and financial administration system to meet the management needs of SPED and CadSinc, complementing the state project under the Program for the Modernization of Revenue Administration and Fiscal, Financial and Asset Management in State Revenue Services, which is being supported by the National Bank for Economic and Social Development (PMAE-BNDES); (iii) development and introduction of electronic document management for the State of Paraíba; and (iv) formulation and implementation of an information and communications technology security policy, including the installation of infrastructure.

c. Improved human resources management. Resources allocated to this subcomponent will finance: (i) implementation of a human resource management policy including a performance review system, creation of a skills database, design of a proposal for a jobs and career plan, and an ideal staffing plan for treasury units; (ii) review and upgrading of the ongoing training plan, with a view to making the skill development policy sustainable; and (iii) preparation and institutionalization of an ethics code for SER/PB staff.

1.19 To implement these components and subcomponents, the borrower will procure the following goods and services: (i) training (courses, seminars, or other forms of training, as well as domestic and international technical visits); (ii) consulting services (individual consultants or consulting firms, either national or international, to support or conduct program activities, including computerized systems); (iii) information and communication technology systems and equipment (procurement and installation of hardware, computer networks, basic software and applications); (iv) equipment, materials, and operational support services (procurement of plant for communication and instructional resources, and the contracting of technical, administrative, and operational support services); and (v) physical premises (remodeling and physical adaptation of operational and taxpayer/citizen services units).

1.20 Overall budget. The total estimated cost of the program is US$8,757,221 equivalent. Of that amount, US$7,479,000 will be financed with resources from the Single Currency Facility of the Bank’s Ordinary Capital. Counterpart resources of US$1,278,221 will will be supplied by the State of Paraíba. The following table shows the structure of program financing.

- 7 -

Table 1.1. Overall Budget for Program BR-L1208 by Source of Financing (in U.S. dollars)

Categories IDB Local Total % 1. Project management 34,545 3,837 38,382 0.44%

1.1 Project management 23,109 2,567 25,676 1.2 Monitoring and evaluation 11,436 1,270 12,706

2. Direct costs 7,089,957 807,696 7,897,653 90.18%

2.1 Integrated strategic management 1,013,018 132,511 1,145,529 2.2 Tax administration and litigation 2,327,562 258,615 2,586,177 2.3 Financial and property management

and internal control 1,006,656 111,844 1,118,500

2.4 Management of strategic resources 2,742,721 304,726 3,047,447

3. Unallocated costs 354,498 466,688 821,186 4.52%

3.1 Contingencies 354,498 40,385 394,883 4. Finance charges 426,303 426,303 4.86% TOTAL 7,479,000 1,278,221 8,757,221

% 85.4% 14.6%% 100% 100%

1.21 Disbursement schedule. Disbursements will be made over a five-year period, running from the effective date of the loan contract, in accordance with the scheduling shown in Table 1.2 below. The borrower has requested that interest payments be made on predetermined dates: 20 March and 20 September of each year.

Table 1.2. Disbursement Schedule (in U.S. dollars)

Source Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL % IDB 1,066,880.6 1,823,668.6 1,711,081.6 1,473,464.6 1,403,904.6 7,479,000.0 85.4% Local 224,489.6 288,176.6 275,668.6 249,339.6 240,546.6 1,278,221.0 14.6% Total 1,291,370.2 2,111,845.2 1,986,750.2 1,722,804.2 1,644,451.2 8,757,221.0 100% % 14.75% 24.12% 22.69% 19.66% 18.78% 100.00%

1.22 Financial analysis. Given the scale of the operation, the project team compared the incremental financial costs and benefits expected from the five outputs of greatest impact for the program. The analysis considered the following: (i) a systematic SER/PB revenue collection process, enhanced by the introduction of a risk analysis methodology; (ii) improvement of the systematic SER/PB goods-in-transit inspection process; (iii) improvement of the systematic inspection process for business establishments; (iv) structuring of the tax intelligence advisory unit; and (v) migration of the SIAF/PB and adaptation of the tax and financial management system. The calculation parameters used were: (i) 10-year horizon; (ii) 12.5%

- 8 -

annual discount rate; (iii) 5% annual growth rate;2 and (iv) average annual interest rate of 5.6%.

1.23 The program’s financial analysis paper, included in the additional technical references, calculates that, by the fourth year of disbursements, the program will have produced a net cumulative financial benefit of R$67,247,011 in present value terms; and 10 years after the end of program execution, the net cumulative financial benefit is projected to be R$438,738,123 in present value terms. The program is thus economically and financially justified by the estimated benefits from just five outputs to be financed with the resources allocated under this operation.

C. Key results indicators 1.24 The most important expected outputs at the end of program execution are as

follows:

a. General objective: (i) Trend of the ratio between the balance of outstanding debt and net real income (NRI) = 1.0 (maximum value); (ii) primary result = R$280 million (minimum value); (iii) payroll expenses / net current income (NCI) = 60% (maximum value); (iv) own income = R$2.41 million (minimum value); (v) other current expenditure / NRI = 30% (maximum value); and (vi) investments / NRI = 9% (maximum value). These fiscal targets have been agreed upon with the federal government under the Fiscal Adjusment and Restructuring Program, and may be renegotiated with the National Treasury Secretariat, with the revised values being applied as agreed upon.

b. Components and subcomponents. (i) 5% reduction in the ratio between the cost calculated by the state government and the amount of tax revenue collected; (ii) no less than five good practices disseminated as a result of the exchange program with other states; (iii) 10% real annual increase in revenue collected; (iv) at least a 1% increase in the ratio between outstanding claims and amounts recovered; (v) 70% reduction in items not located by property audits; (vi) increase from 11 to 30 in the number of operational audits by project end; (vii) 3% reduction in the current noncompliance index; (viii) increase from 465 to 2,325 in the number of training opportunities for government personnel providing services at SER/PB; and (ix) increase from 49% to 80% in the satisfaction level of SER/PB personnel.

II. FINANCING STRUCTURE AND MAIN RISKS

A. Financing, procurement, and contractual clauses 2.1 Procurements. The procurement of goods, works and technical services, and the

selection and contracting of consulting services, financed in whole or in part out of the loan proceeds under the program, will be conducted in accordance with Policies for the Procurement of Works and Goods Financed by the Inter-American

2 GDP growth rate of the State of Paraíba.

- 9 -

Development Bank (document GN-2349-7), and Policies for the Selection and Contracting of Consulting Services Financed by the Inter-American Development Bank (document GN-2350-7), both of July 2006, as well as pursuant to the provisions of the loan contract.

2.2 Dissemination and technical cooperation. The borrower may participate in domestic and international fiscal integration and cooperation activities, particularly in the areas of sharing technical solutions, information exchange, knowledge transfer, formation of thematic networks, and interagency cooperation.

2.3 Recognition of expenditures against the local counterpart, and reimbursement of expenditures chargeable to the loan. The Bank may recognize up to US$550,000 against the local counterpart contribution, and reimburse up to US$350,000 equivalent against the loan, in relation to expenditures incurred by the borrower in program preparation (especially small-scale works, goods procured, and training) on or after 24 June 2008 until the date the operation is approved by the Bank’s Board of Executive Directors. The procurements to be considered for this purpose are indicated in an annex to the Procurement Plan and in the program’s first annual work plan (AWP) (see technical references).

2.4 Review of procurement processes by the Bank. The Bank will review, ex ante, the first three procurement processes for program goods, services or works execution, regardless of their value or of whether the borrower has utilized the procurement policies of the Bank or those of Brazilian federal legislation. Thereafter, the Bank will review, ex ante, only those procurement processes for program goods, services or works execution that require international competitive bidding, direct contracting for consulting services, contracting of consulting firms for amounts above US$250,000, and contracting of individual consultants for amounts above US$200,000.

2.5 Brazilian federal legislation. The borrower may utilize Brazilian federal legislation for procurement processes in the case of works for amounts below US$25 million per contract, and in the case of goods and nonconsulting services, for amounts below US$5 million per contract, provided that the requirements of the Bank’s procurement policies for national competitive bidding are satisfied, particularly as they relate to: (i) the origin of the goods; (ii) the nationality of the suppliers; (iii) changes in purchase orders; (iv) prohibition of price ranges; and (v) publication of solicitations in a major national daily newspaper. The borrower will also indicate in the corresponding procurement plan whether it has opted for Brazilian federal legislation.

2.6 Direct contracting. The borrower may directly contract the services of the Escola de Administração Fazendária do Ministério da Fazenda [School of Public Finance Administration of the Ministry of Finance of the Federative Republic of Brazil] (ESAF),3 to provide training to state civil servants. It may also directly contract the

3 When the PROFISCO CCLIP was approved, the Bank agreed to the direct contracting of ESAF, for the

benefit of all projects drawing upon it.

- 10 -

Escola de Administração Tributária do Estado [State School of Tax Administration] (ESAT) for the same purpose, provided that the Bank has previously determined that the institution possesses the institutional and fiduciary capacity to provide such services. If loan proceeds are to be transferred to ESAF or ESAT, the borrower will provide, to the Bank’s satisfaction and prior to the transfer, the legal instrument whereby the institutions assume at least the following obligations: (i) to conduct all procurements of goods and services in accordance with the provisions of the loan contract entered into between the Bank and the borrower, and with the policies on procurement and on the selection and contracting of consultants, in the event that goods are to be procured, or consultants contracted to provide the training services; and (ii) to allow the Bank and the program auditors access to the relevant supporting documentation on procurements.

2.7 Specialized agency. The borrower may use its own resources to directly contract a specialized agency to provide technical support services, exclusively for goods procurement and the selection of consulting firms and individual consultants to conduct activities related to program execution, subject to the following conditions: (i) the contract to be signed between the borrower and the specialized agency in question will be subject to the Bank’s prior approval; (ii) the specialized agency will commit to follow the Bank’s procurement policies and procedures; (iii) authorization will not be given to contract consulting services on an ongoing basis for program execution; and (iv) in the event that the specialized agency is the United Nations Development Programme (UNDP), the respective contract will meet the requirements of the Letter of Agreement signed between the Bank and the UNDP on 20 June 2003.

B. Environmental and social safeguard risks 2.8 On environmental issues, the program has been classified as category “C,” under

the criterion of the Bank’s sustainable finance toolkit. This is consistent with the evaluation made by the project team, since the operation involves institutional modernization of tax administration. It is therefore not considered necessary to prepare an environmental strategy for the program. Risk analysis was performed by a specialist team from the Bank’s Country Office in Brazil, which rated the project as low-moderate risk and made no additional recommendations (see technical references).

C. Fiduciary risk 2.9 The risk analysis found a medium risk in the area of program fiduciary

performance. The principal factors were the risk of fraud and corruption and inadequate use of resources. This finding coincides with the perception of problems related to procurement processes, due maintly to the fact that they were conducted by another government agency (SEA) which displays institutional weaknesses. These risks will be mitigated by the following measures: (i) analysis of PNAFE financial and audit reports, to prevent the same errors from being made again; (ii) ongoing monitoring of those aspects of the state’s fiscal management that could

- 11 -

affect program performance; (iii) the strengthening of internal control, included under the program, through specific actions; (iv) creation of a Special Procurement Commission for procurements of program goods and services; and (v) the inclusion of an ongoing training program in the program on procurement, contracts, and financial and property management.

2.10 Other critical risks and issues. Brazil’s macroeconomic scenario indicates a level of risk as a consequence of the international financial crisis now affecting world markets. Since Brazil has international monetary reserves of around US$200 billion, and has been proactive in economic stimulus measures, economic analysts believe that the contagion of the crisis is being mitigated, giving rise to a positive but cautious outlook for the coming years. The quality of the monetary and fiscal policies adopted by Brazil in recent years, and the relatively low level of public debt, contribute to this assessment. The crisis has led to a worldwide slowdown of the major producers and consumers of industrialized goods. This resulted in a drastic reduction in industrial output to match demand. Consequently, demand for raw materials also contracted. Although this has shrunk the state’s own tax revenue, as well as the federal transfers of revenue to the states, the borrower has been able to balance fiscal revenues and public investments.

2.11 As measures to mitigate the effects of the world economic crisis: (i) this operation will contribute significantly to improve tax revenue collection and the quality of expenditure, cushioning the impact of the crisis on the state’s finances; and (ii) in the macroeconomic context, the state is in compliance with the financial limits set by the Fiscal Responsibility Law, has achieved positive primary results, and its debt stock is declining.

D. Program eligibility 2.12 National integration activities (CadSinc and SPED), with their respective digital

accounting (ECD) and digital tax accounting (EFD) projects, are being implemented in the State of Paraíba using internally generated resources. The borrower will receive support from a specific project under the the PMAE/BNDES program, for which contracting was authorized by the National Treasury Secretariat by Official Letter 9583/2008.

III. IMPLEMENTATION AND MANAGEMENT PLAN

A. Summary of institutional arrangements for implementation 3.1 The borrower of this operation will be the State of Paraíba. The Federative

Republic of Brazil will serve as guarantor of the financial obligations of the loan. The executing agency will be the State of Paraíba, acting through its Department of Revenue, where the Program Coordination Unit (PCU) has been established, reporting directly to the Office of the Secretary. The basic structure of the PCU consists entirely of state government personnel, including: (i) a coordinator general, to whom the following will report: (ii) a technical coordinator, responsible for

- 12 -

technology, organization and management, tax administration, and transparency; (iii) an administrative/financial coordinator, responsible for administration, cash management, accounting, and accountability issues; and (iv) a monitoring and evaluation assistant, who will have access to the project management, monitoring, and evaluation system.

3.2 The PCU will: (i) submit disbursement requests to the Bank with the relevant documentation; (ii) supervise bidding processes for the purchase of goods, bidding processes and contracting for works, and the selection and contracting of services for the project, in accordance with the Procurement Plan and Bank policies; (iii) maintain a financial accounting system for the project that complies with the Bank’s applicable policies; (iv) deliver project execution reports and summaries; (v) deliver annual work plans (AWPs) and update procurement plans; (vi) retain the respective invoices, contracts, and payment orders, and provide them to the Bank and the project auditors upon request; and (vii) ensure that the works and goods procured with project resources are maintained in accordance with generally applicable technical standards.

3.3 Operating Regulations. The project will be executed in accordance with Operating Regulations previously approved by the Bank as part of the CCLIP-PROFISCO credit line. These include eligibility criteria for the borrower, the project, and the outputs eligible for financing. The borrower has produced evidence, to the Bank’s satisfaction, that the program Operating Regulations are in effect (Decree 082/GSER, published in the state’s official gazette on 7 July 2009).

B. Summary of arrangements for monitoring results 3.4 Project monitoring will be based on the schedule of activities and the physical and

financial details of the outputs contained in the AWPs, and on the descriptions of procurement and contracting processes included in the procurement plan. The borrower will deliver six-monthly status reports with the Bank, as provided in the General Conditions of the Loan Contract, with copies to the Executive Secretariat of the Ministry of Finance of the Federative Republic of Brazil. These reports will contain information on the implementation status of the national integration activities mentioned in paragraph 2.12.

3.5 Annual work plans and procurement plan. The borrower has delivered, and the Bank has validated, the AWP and Procurement Plan for the first 18 months, running from the loan contract signature date.

3.6 Audited financial statements. The project’s financial statements will be audited annually by an independent firm of auditors accepted by the Bank, or by the State of Paraíba Audit Office, if accredited by the Bank.

Annex I This annex is confidential.

Annex II Page 1 of 6

BRAZIL

PROFISCO – PARAÍBA FISCAL MODERNIZATION PROGRAM OF THE STATE OF PARAÍBA (PROFISCO/PB)

(BR-L1208)

INDIVIDUAL LOAN UNDER THE CCLIP-PROFISCO CREDIT LINE (BR-X1005)

RESULTS FRAMEWORK - MATRIX OF INDICATORS1

Program objective

To make fiscal management in the State of Paraíba more efficient and transparent, in order to: (i) increase the state’s internally generated revenue; (ii) enhance the efficiency, effectiveness, and control of public expenditure; and (iii) provide better services to citizens.

Results Base 2007 Year 1 (2009)

Year 2 (2010)

Year 3 (2011)

Year 4 (2012)

Year 5 (2013)

Comments

Trend of debt/net real income (maximum value)

0.63 1.00 1.00 1.00 1.00 1.00

Primary result (R$ million) (minimum value)

265 218 250 260 270 280

Payroll/net current income (maximum value)

59.06% 60% 60% 60% 60% 60%

Own income (R$ million) (minimum value)

1,837 1,985 2,090 2,195 2,304 2,410

Other current expenditure (maximum value)

29.67% 28.31% 30% 30% 30% 30%

Investment/net real income (maximum value)

7.14% 11.17% 9% 9% 9% 9%

(*) Payroll amounts appear in item 18 of the Fiscal Adjustment and Restructuring Program (PAF). The maximum value is 60%, but the spreadsheet shows 59.52%, 59.38% and 59.48%. (**) The amounts shown in the PAF spreadsheet are 27.89%, 27.63% and 27.24%. An amount of 28.31% appears in item 22(e) of the PAF.

Comment: The 2007 amount is as executed, while those for 2008 and 2009 are the PAF values for 2007-2009, which will be reviewed in 2008. The amounts for 2010 to 2012 were obtained from projections made in relation to the 2007-2009 PAF, to be reviewed in 2008.

1 Sources for all monitoring and baseline indicators: Fiscal Adjustment and Restructuring Program for the Brazilian States, and Budget Guidelines Law (LDO).


COMPONENT I – INTEGRATED STRATEGIC MANAGEMENT Subcomponent 1: INSTITUTIONAL STRENGTHENING AND IMPROVED STRATEGIC MANAGEMENT Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.1.1. Results-based management model introduced at SEPLAG.

No government programs are subject to results-based management monitoring.

Evaluation criteria set for programs in the Multiyear Plan.

73 of the programs evaluated through results-based management

73 of the programs of the state government’s Multiyear Plan have results monitoring.

Results

R.1. Better use of financial resources available to the state government.

Calculated costs of the state government equivalent to 48% of net revenue from taxes.

5% reduction in the ratio between the calculated costs of the state government and the amount of tax revenue collected.

5% reduction in the ratio between the calculated costs of the state government and the amount of tax revenue collected.

Subcomponent 2: NATIONAL AND INTERNATIONAL INTERAGENCY COOPERATION

Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.2.1. Systematic process institutionalized for dissemination of knowledge and good practices.

Technical visits conducted with no link to a policy for dissemination of knowledge and good practices.

6 technical visits.

6 technical visits.

6 technical visits.

6 technical visits.

6 technical visits. 30 technical visits linked to a policy for dissemination of knowledge and good practices.

Result R.2. Dissemination of knowledge and good practices.

No policy for dissemination of knowledge and good practices.

1 good practice disseminated.





At least 5 good practices disseminated.


COMPONENT II – TAX ADMINISTRATION AND LITIGATION Subcomponent 3: MORE EFFICIENT AND EFECTIVE TAX ADMINISTRATION

Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.3.1. SER systematic transit inspection process for goods-in-transit improved, with updating and integration of the inspection module of the tax and financial management system.

0 fiscal inspection stations operating under the new electronic inspection model.

5 fiscal inspection stations.



27 fiscal inspection stations operating with the security system and the new electronic inspection model installed.

P.3.2. SER tax intelligence advisory unit structured.

10 tax intelligence activities per year.

15 activities. 20 activities. 25 activities. 25 tax intelligence activities per year.

Results R.3. Increase in revenue from the goods and services sales tax (ICMS)

ICMS revenue in 2007: R$1.678 billion/year.

10% real annual increase in revenue collected, compared to the previous year.





10% real annual increase in revenue collected.

Subcomponent 4: MORE EFFICIENT AND EFECTIVE MANAGEMENT OF TAX LITIGATION

Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.4.1. Systematic case management procedure implemented, encompassing litigations from the PGE/PB, SER/PB (CDA), and the Paraíba State Court.

In 2007 there were 86,000 legal proceedings in progress.

10% 10% 10% 30% increase in the number of legal proceedings in progress by the end of the project.


Results R.4. Recovery of adjudicated tax claims.

0.50% recovery of adjudicated tax claims, on average, over the last five years.

At least a 0.6% increase in the ratio between outstanding claims and amounts recovered.

At least a 0.8% increase in the ratio between outstanding claims and amounts recovered.

At least at 1% increase in the ratio between outstanding claims and amounts recovered.

At least at 1% increase in the ratio between outstanding claims and amounts recovered.

COMPONENT III – FINANCIAL AND PROPERTY MANAGEMENT AND INTERNAL CONTROL Subcomponent 6: MORE EFFICIENT AND EFFECTIVE MANAGEMENT OF MATERIALS, SERVICES, AND PROPERTY Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.6.1. SER property records updated.

Property inventory centralized and updated by request.

15 units at headquarters.

60 units. 11 units. 96 SER units with updated property records, and online management implemented.

Results R.5. Reduction in the number of items not located by property audits.

11 items mentioned in the reserve of audit samples undertaken in 2006 by the CGU.

30% reduction in items not located by property audits.




Subcomponent 7: IMPROVED INTERNAL CONTROL AND AUDIT MECHANISMS Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.7.1. CGE/PB reviewed and strengthened.

No ISO 9001:2008 certification.

First pre-certification audit.

Second pre-certification audit.

100% of processes targeted by operational audit standardized and certified.

100% of processes targeted by operational audit standardized and certified.

Results R.6. Increase in the universe of operational audits.

11 operational audits performed in 2007.

15 operational audits performed.



Increase from 11 to 30 in the number of operational audits by project end.


COMPONENT IV – MANAGEMENT OF STRATEGIC RESOURCES Subcomponent 8: ENHANCEMENT OF MECHANISMS FOR TRANSPARENCY AND COMMUNICATION WITH SOCIETY

Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.8.1. Oversight system for bidding processes, contracts, and agreements developed and available online.

Bidding processes, contracts, and agreements not tracked in a computer system.

Information system introduced for government departments.

Information system introduced for decentralized agencies.

Information system introduced for fund, agreements and other agencies.

100% of state bidding processes, contracts and agreements tracked in an information system.

Results R.7. Less noncompliance with agreements.

11% noncompliance with agreements entered into by state public administration and other entities.

8% reduction in the current noncompliance index.




Subcomponent 9: MANAGEMENT MODERNIZATION AND UPGRADING OF INFORMATION AND COMMUNICATION TECHNOLOGY SERVICES Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.9. Information and communication technology management methodology (regulations, standards, and procedures) designed and introduced at SER.

No procedures based on an information and telecommunications technologies management methodology, to meet requests in the SER’s area of activity (roughly 10,000 requests in 2007).

Information and communication technology management model established.

COBIT, ITIL, PDS – computer program and MPS development standard – quality model 50% established.

COBIT, ITIL, PDS – computer program and MPS development standard – quality model 100% established.

80% of requests/year met on the basis of the information and communication technology management methodology, within the established timeframes.

Results R.8 Backup requests met within the agreed upon timeframes.

No timeframes agreed upon for meeting backup requests.

40% of backup requests met within the agreed timeframes.



80% of backup requests met within the agreed timeframes, by the end of the project


Subcomponent 10: IMPROVED HUMAN RESOURCE MANAGEMENT

Outputs Base 2008 Year 1 Year 2 Year 3 Year 4 Year 5 Target Comments P.10. SER ongoing training plan reviewed, adapted and made viable.

Obsolete training plan that does not include civil servants from the administrative payroll assigned to the SER.

465 training opportunities offered.





Increase to 2,325 in the number of training opportunities for government personnel assigned to the SER, according to the updated training plan.

Results R.9. Higher levels of satisfaction with training among SER personnel.

Only 49% of civil servants surveyed state that they are satisfied or very satisfied with the training activities. Source: Report on the institutional climate survey of SER staff conducted in 2008.

60% of SER personnel surveyed are satisfied or very satisfied with the training activities.

70% of SER personnel surveyed are satisfied or very satisfied with the training activities

80% of SER personnel surveyed are satisfied or very satisfied with the training activities

Increase to 80% in SER personnel surveyed who are satisfied or very satisfied with the training activities

Notes:

1. The Matrix of Indicators will show the base-level values, expected year values, and target values of each indicator. 2. Outputs and outcomes are grouped together to facilitate monitoring of component performance. 3. The right-hand column can be used for description of output/outcomes and choice of indicator and other explanatory notes. 4. In the Results annex/section, this Matrix will be complemented by a detailed account of the arrangements (including institutional responsibilities, Operating Regulations,

terms of reference, hiring of consultants, budgeting) showing how the data will be collected, verified, analyzed, and reported to the Bank. The data sources and rationale behind the baseline and target values will also be described.

Annex III Page 1 of 9

BRAZIL

PROFISCO – PARAÍBA FISCAL MODERNIZATION PROGRAM OF THE STATE OF PARAÍBA (PROFISCO/PB)

(BR-L1208)

INDIVIDUAL LOAN UNDER THE CCLIP-PROFISCO CREDIT LINE (BR-X1005)

PROCUREMENT PLAN -18 MONTHS (SUMMARY TABLE)

Source (%) Estimated dates

No. Description of contract

Related output item in

the procurement plan or AWP

Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local

Publication of notice

Completion of contract

Comments

CONSULTING SERVICES

1

Development and implementation of the ISO 9001:2000 quality management system

8.1 63,529 IDB CQS Ex post 91% 9% Apr. 2009 Dec. 2013

2 Institutional consulting services


3 Consulting on the audit procedures model


4

Information and telecommunication technology management model of the State of Paraíba Department of Revenue (SER)

10.1 59,059 IDB CQS Ex post 90% 10% Apr. 2009 Jan. 2010

5 PDS-SER computer program development standard


6 MPS BR computer program quality standard


7

Electronic document management (identification and implementation of workflows)


8 Consulting on systems audit


9 Consulting on personnel management


10 Specialized consulting on design of functional organizations


11 Consulting on project management

A.2 8,471 IDB CQS Ex post 90% 10% Apr. 2009 Dec. 2013

12 Public management - SEPLAG







Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

13 Public management - SEF


14 Methodology for producing results indicators - SEPLAG


15 Methodology for producing results indicators - SEF


16 Consulting on process systemization

3.5 16,941 IDB CQS Ex post 90% 10% Apr. 2009 Mar. 2010

17 Redesign of processes - PGE


18

Creation and establishment of an integrated system for managing data and accounting, financial, budgetary, and property indicators.


19

Expansion of electronic document management systems to standardize audit processes


20

Creation of an oversight system for bidding processes, contracts, and agreements


TOTAL CONSULTING SERVICES 1,861,672 71% 29%

NONCONSULTING TECHNICAL SERVICES 1 Project management A.1 11,554 IDB SSS Ex post 0% 100% Mar. 2009 Sep. 2010

2 Conferences 2.1 11,765 L8666/93 IE Ex post 90% 10% Apr. 2009 Sep. 2010

3 Seminars 2.1 11,765 L8666/93 IE Ex post 90% 10% Apr. 2009 Sep. 2010

4 Meetings 2.1 11,765 L8666/93 IE Ex post 90% 10% Apr. 2009 Sep. 2010

5 Work groups 2.1 11,765 L8666/93 IE Ex post 90% 10% Apr. 2009 Sep. 2010

6 Technical visits for institutional cooperation

2.2 18,824 L8666/93 IE Ex post 0% 100% Apr. 2009 Sep. 2010

7 Workshops with teachers from the public network

9.1 21,176 IDB DC Ex post 0% 100% Apr. 2009 Sep. 2010

8 Workshops with state government personnel


9 Workshops with education managers


10 Technical visit to audits at other functional units

9.3 2,353 L8666/93 IE Ex post 0% 100% Apr. 2009 Sep. 2010

11 PCU technical visits A.1 2,353 L8666/93 IE Ex post 0% 100% Apr. 2009 Sep. 2010






Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

12 Course on process management and results evaluation

1.1 7,059 L8666/93 INV Ex post 96% 4% Apr. 2009 Jul. 2009

13

Course on the monitoring and evaluation of plans and programs


14 Course on public planning and projects


15 Course on preparation and evaluation of indicators


16

Course on formulation of programmatic instruments for the Multiyear Plan


17 Information technology training course


18 Course on preparation and evaluation of indicators


19 Course on process management and results evaluation


20 Training in risk analysis 3.1 2,824 L8666/93 INV Ex post 90% 10% Apr. 2009 Jul. 2009

21 ABIN analysis course 3.6 11,765 L8666/93 IE Ex post 78% 22% Jan. 2010 Jan. 2010

22 Project management course

8.1 5,882 IDB CQS Ex post 91% 9% Apr. 2009 Jul. 2009

23 Institutional risk management course


24 AUTOCAD course 8.1 1,765 IDB CQS Ex post 91% 9% Apr. 2009 Jul. 2009

25 Audit training 9.3 5,882 IDB CQS Ex post 90% 10% Apr. 2009 Jul. 2009

26 Course on GED system/workflow/processes


27 Information technology courses


28 Courses on conduct 11.2 88,235 IDB CQS Ex post 90% 10% Apr. 2009 Jul. 2009

29 Postgraduate course 11.2 188,235 L8666/93 IE Ex post 90% 10% Apr. 2009 Mar. 2010

30 Professional development courses


31 Management courses 11.2 22,059 L8666/93 INV Ex post 90% 10% Apr. 2009 Jul. 2009

32

Application to establish a debit routine in the tax and financial management system

3.1 52,941 L8666/93 PRE

PRE Ex post 0% 100% Jan. 2010 Dec. 2011






Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

33

Application to automate the obtaining and processing of bank records from the tax and financial management system

3.1 23,294 L8666/93 PRE


34 Application for monitoring control of the appropriation of credits

3.1 42,353 L8666/93 PRE


35 Application for logical diffusion

3.2 80,471 L8666/93 PRE


36 Application for electronic diagnostics (electronic audit module)

3.4 105,882 L8666/93 PRE


37 Application for control of processes through online protocol

5.2 38,118 L8666/93 PRE

PRE Ex post 22% 78% Apr. 2009 Dec. 2013

38

Adaptation of information technology systems in the Paraiba integrated financial management system to the tax and financial management system

6.1 105,882 L8666/93 PRE


39

Adaptation to integrate legacy data from the tax and financial management system with respect to new electronic invoicing, synchronized registry, and public digital accounting systems

10.2 186,353 L8666/93 PRE


40 Application for revenue collection audit

3.1 67,764.71 L8666/93 PRE


41

Application for the change in bank account movements to separate the movement from the recording of payments in the tax and financial management system

3.1 65,647.06 L8666/93 PRE


42

Application for calls from the Operational Division for the Inspection of Goods in Transit (GOFMT)

3.2 72,000.00 L8666/93 PRE







Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

43

Application for planning and administration of activities and data obtained from the inspection of goods-in-transit and monitoring of the findings of inspection activities

3.2 82,588.24 L8666/93 PRE


44 Application for inspection quality control

3.4 105,882.35 L8666/93 PRE


45 Application for claims in the tax and financial management system

3.6 84,705.88 L8666/93 PRE


46

Application for legal assistance in the tax and financial management system

5.2 133,411.76 L8666/93 PRE


TOTAL TECHNICAL SERVICES 1,861,672 71% 29%

GOODS

1 Air conditioning for SER units

1.3 7,059 L8666/93 PRE

PRE Ex post 90% 10% Apr. 2009 Sep. 2010

2 Weighbridges 3.3 117,647 L8666/93 CDP Ex post 90% 10% Apr. 2009 Sep. 2010

3 Microcomputer 1.2 30,882 L8666/93 PRE


4 Department server 1.2 11,765 L8666/93 PRE


5 Notebook 1.2 12,353 L8666/93 PRE


6 Laser printer 1.2 2,353 L8666/93 PRE


7 Router 1.2 294 L8666/93 PRE


8 Switch 1.2 294 L8666/93 PRE




10 Laser printers 5.1 4,706 L8666/93 PRE


11 Department server 5.1 23,529 L8666/93 PRE


12 Router 5.1 588 L8666/93 PRE


13 “No Break” UPS 5.1 824 L8666/93 PRE


14 Switch 5.1 588 L8666/93 PRE







Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

15 Barcode reader 7.1 471 L8666/93 PRE


16 Multimedia projector 8.1 1,765 L8666/93 PRE


17 Envelope maker 10.2 17,647 L8666/93 PRE




19 Laser printer (50 PPM) 10.2 27,059 L8666/93 PRE


20 Laser printer 10.2 17,647 L8666/93 PRE


21 Notebook 10.2 20,588 L8666/93 PRE


22 Switch 10.2 26,471 L8666/93 PRE


23 Digital certificates 10.2 29,412 L8666/93 PRE


24 Server 10.3 35,294 L8666/93 PRE


25 Heavy duty scanner 10.3 29,412 L8666/93 PRE


26 Notebook A.1 2,059 L8666/93 PRE


27 Laser printer A.1 588 L8666/93 PRE


28 Meeting table 1.3 11,765 L8666/93 PRE


29 Swivel armchair 1.3 23,529 L8666/93 PRE


30 Chest of drawers 1.3 30,882 L8666/93 PRE


31 Waiting room seat for four people

1.3 14,118 L8666/93 PRE


32 Fixed armchair 1.3 17,647 L8666/93 PRE


33 Sliding filing cabinet 7.2 132,353 L8666/93 PRE


34 Drawers unit 8.1 22,059 L8666/93 PRE


35 Armchairs with support table

8.1 14,118 L8666/93 PRE


36 Workstation A.1 2,118 L8666/93 PRE


37 Swivel armchair A.1 706 L8666/93 PRE


38 Cupboard, two-door A.1 588 L8666/93 PRE







Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

39 Production of educational posters, folders and leaflets

9.1 14,706 L8666/93 INV Ex post 90% 10% Apr. 2009 Sep. 2010

40 Educational campaign (electronic media)


41 Production of shirts, buttons, keychains, and caps


42 Property management computer program


43 Basic applications computer program


44 AUTOCAD 8.1 2,353 L8666/93 CDP Ex post 91% 9% Apr. 2009 Sep. 2010

45 SQL Server 8.1 1,765 L8666/93 INV Ex post 91% 9% Apr. 2009 Sep. 2010

46 MS Visio 8.1 8,824 L8666/93 INV Ex post 91% 9% Apr. 2009 Sep. 2010

47 Text database license 10.3 6,588 L8666/93 INV Ex post 90% 10% Apr. 2009 Sep. 2010

48 Client/server database license


49 Computer program for data analysis, extraction and processing


50 Audit computer program 9.3 5,882 L8666/93 INV Ex post 90% 10% Apr. 2009 Sep. 2010

51 License for content management systems


52 System for document control and procedures


53 Fax 1.3 11,765 L8666/93 PRE


54 Professional digital camera

3.6 4,118 L8666/93 PRE


55 Photographic pen 3.6 2,353 L8666/93 PRE


56 Objective lens 3.6 2,353 L8666/93 PRE


57 Digital video camera 3.6 2,353 L8666/93 PRE


58 Nightvision binoculars 3.6 1,765 L8666/93 PRE


59 Binoculars 3.6 353 L8666/93 PRE


60 Digital minirecorder 3.6 1,176 L8666/93 PRE


61 Wireless microcamera 3.6 882 L8666/93 PRE


62 Receiver 3.6 1,176 L8666/93 PRE


63 29-inch digital television 3.6 1,412 L8666/93 PRE







Estimated cost

(US$ = 1.7)

Procurement method1

Review2 IDB Local



Comments

64 Batch 3.6 706 L8666/93 PRE


65 Radiofrequency wave detector

3.6 1,176 L8666/93 PRE


66 Telephone listening device detector

3.6 1,176 L8666/93 PRE


67 Telephone listening device protector

3.6 2,941 L8666/93 PRE


68 Paper shredder 3.6 2,353 L8666/93 PRE


69 Mobile radio 3.6 1,412 L8666/93 PRE


70 Fixed radio 3.6 1,176 L8666/93 PRE


71 Vehicle mobile radio 3.6 1,765 L8666/93 PRE


72 Flashlight 3.6 235 L8666/93 PRE


73 Fixed telephone with BINA

3.6 353 L8666/93 PRE


74 Utility vehicle 1.3 47,059 L8666/93 PRE


75 Automobile with at least 1.6 liter engine

3.6 42,353 L8666/93 PRE


76 Motorcycle 8.1 2,235 L8666/93 PRE


77 Procedural manuals 9.3 59 L8666/93 PRE


78 Service manuals 9.3 565 L8666/93 PRE


79 Posters 9.3 294 L8666/93 PRE


80 Printing of copies of the code of ethics for SER staff

11.3 4,412 L8666/93 PRE


TOTAL GOODS 1,093,624 87% 13%


WORKS

1 Construction of foundations for weighbridges

3.3 176,472 L8666/93 CDP Ex post 90% 10% Apr. 2009 Sep. 2010

2 Physical adaptation of auditorium (facilities)

8.1 32.94 L8666/93 INV Ex post 91% 9% Apr. 2009 Sep. 2010

3 Physical adaptation of the Compliance Assessment and Control Division


4 Physical adaptation of the public debt sector


TOTAL WORKS 242,354 91% 9%

GRAND TOTAL 4,169,414

% 48% 85% 15%

1. Bidding/selection methods (a) IDB: ICB: International competitive bidding; NCB: National competitive bidding; PC: Price comparison (shopping); DC Direct contracting QCBS Quality- and cost-based selection; CQS: Selection based on the consultants’ qualifications; LCS: Least-cost selection; FBS: Selection under a fixed budget; SSS: Single-source selection; IC: Individual consultant. (b) Law 8666/93: INV: Invitation; CDP: Price quotes; C: Competition; PRE PRE Live auction; PRE ELE: Electronic auction; REG PR: Price list; IE: Event enrolment.

2. The Bank will review, ex ante, the first three procurement processes for program goods, services or works execution, regardless of their value or of whether the borrower has utilized the procurement policies of the Bank or those of Brazilian federal legislation. Thereafter, the Bank will review, ex ante, only those procurement processes for program goods, services or works execution that require international competitive bidding, direct contracting for consulting services, contracting of consulting firms for amounts above US$250,000, and contracting of individual consultants for amounts above US$200,000.

DOCUMENT OF THE INTER-AMERICAN DEVELOPMENT BANK

PROPOSED RESOLUTION DE-___/09

Brazil. Loan ____/OC-BR to the State of Paraíba Fiscal Modernization Program of the

State of Paraíba (PROFISCO/PB)

The Board of Executive Directors RESOLVES:

That the President of the Bank, or such representative as he shall designate, is authorized, in the name and on behalf of the Bank, to enter into such contract or contracts as may be necessary with the State of Paraíba, as Borrower, and the Federative Republic of Brazil, as Guarantor, for the purpose of granting the former a financing aimed at cooperating in the execution of a Fiscal Modernization Program for the State of Paraíba (PROFISCO/PB), which constitutes an individual operation under the Conditional Credit Line (CCLIP) to cooperate in the execution of a Program to Support the Management and Integration of Finance Administrations in Brazil (PROFISCO) approved on November 5, 2008 by Resolution DE-132/08. Such financing will be in the amount of up to US$7,479,000, from the resources of the Single Currency Facility of the Bank’s Ordinary Capital, and will be subject to the Financial Terms and Conditions and the Special Contractual Conditions of the Project Summary of the Loan Proposal. LEG/SGO/CSC/IDBDOCS# 1945043 BR-L1208

LOAN PROPOSALPROFISCO – P (PROFISCO/PB)

Documents

Transcript of LOAN PROPOSALPROFISCO – P (PROFISCO/PB)