Paid Payment and District Nurse

Public Disclosure Authorized
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD1641

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF
US$300 MILLION
TO THE
ISLAMIC REPUBLIC OF PAKISTAN
FOR A
THIRD PUNJAB EDUCATION SECTOR PROJECT
May 10, 2016
Education Global Practice

South Asia Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
CURRENCY EQUIVALENTS
Exchange Rate Effective: January 31, 2016
Currency Unit = Pakistani Rupee (PKR)
PKR 105.50 = US$1.00
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS
AGP Auditor General of Pakistan

ASER Annual Status of Education Report
ASC Annual School Census
BER Budget Execution Report
CoA Chart of Accounts
CMMF Chief Minister’s Monitoring Force
CPD Continuous Professional Development
CPF Country Partnership Framework
CTSC Cluster Training and Support Center
CQS Selection Based on the Consultants’ Qualification
DCO District Coordination Officer
DDO Drawing & Disbursing Officer
DEO District Education Officer
DFID U.K. Department for International Development
DLI Disbursement-linked Indicator
DMO District Monitoring Officer
DNO District Nutrition Officer
DPC Development Policy Credit
DRC District Review Committee
DSD Directorate of Staff Development
DTE District Teacher Educator
DTSC District Training and Support Center
ECE Early Childhood Education
EDO Executive District Officer
EEP Eligible Expenditure Program
EMIS Education Management Information System
EVS Education Voucher Scheme
FAS Foundation Assisted Schools
FD Finance Department
FM Financial Management
FMIS Financial Management Information System
GDP Gross Domestic Product
GoPunjab Government of Punjab
GRS Grievance Redress Service
ICT Information and Communications Technology
IRR Internal Rate of Return
IS Implementation Support
ISP Institutional Strengthening Plan
IT Information Technology
IUFR Interim Unaudited Financial Report
KPI Key Performance Indicator
LDC Least Developed Country
LHW Lady Health Worker
LPD Low-Performing Districts
M&E Monitoring and Evaluation
MELQO Monitoring Early Learning Quality and Outcomes
MEA Monitoring and Evaluation Assistant
MTBF Medium-Term Budgetary Framework
NAM New Accounting Model
NCB National Competitive Bidding
NER Net Enrollment Rate
NGO Nongovernmental Organization
NPV Net Present Value
NSB Non-salary Budget
NSP New School Program
P&D Planning and Development
PD Professional Development
PDO Project Development Objective
PEC Punjab Examination Commission
PEF Punjab Education Foundation
PEFA Public Expenditure and Financial Accountability
PIFRA Project to Improve Financial Reporting and Auditing
PFM Public Financial Management
PESP Punjab Education Sector Project
PESRP Punjab Education Sector Reform Program
PMIU Program Management and Implementation Unit
PPP Public-private Partnership
PPSC Provincial Program Steering Committee
PSLM Pakistan’s Social and Living Standards Measurement
PSSSP Punjab Secondary School Stipend Program
RBF Results-based Funding
QAT Quality Assurance Test
QCBS Quality- and Cost- Based Selection
SA Social Assessment
SC School Council
SCP School Council Policy
SCMP School Council Mobilization Program
SDA Special Drawing Account
SDG Sustainable Development Goal
SED School Education Department
SOE Statement of Expenditure
SOP Standard Operating Procedures
SORT Systematic Operations Risk Assessment Tool
STR Student-to-Teacher Ratio
TA Technical Assistance
ToR Terms of Reference
TPV Third-party Validation
Regional Vice President: Annette Dixon

Country Director: Patchamuthu Illangovan
Senior Global Practice Director: Claudia Maria Costin
Practice Manager: Keiko Miwa
Task Team Leader: Scherezad Joya Monami Latif
PAKISTAN
Third Punjab Education Sector Project
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1

A. Country Context ............................................................................................................ 1
B. Sectoral and Institutional Context ................................................................................. 1
C. Higher Level Objectives to which the Project Contributes .......................................... 6
II. PROJECT DEVELOPMENT OBJECTIVES ................................................................6

A. PDO............................................................................................................................... 6
B. Project Beneficiaries ...................................................................................................... 7
C. PDO Level Results Indicators ........................................................................................ 7
III. PROJECT DESCRIPTION ..............................................................................................7

A. Project Components ...................................................................................................... 7
B. Project Financing ........................................................................................................ 12
C. Lessons Learned and Reflected in the Project Design ................................................ 13
IV. IMPLEMENTATION .....................................................................................................14

A. Institutional and Implementation Arrangements ........................................................ 14
B. Results Monitoring and Evaluation ............................................................................ 15
C. Sustainability............................................................................................................... 16
V. KEY RISKS ......................................................................................................................17

A. Overall Risk Rating and Explanation of Key Risks.................................................... 17
VI. APPRAISAL SUMMARY ...…………………………………………………………..18

A. Economic and Financial Analysis ............................................................................... 18
B. Technical ..................................................................................................................... 19
C. Financial Management ................................................................................................ 19
D. Procurement ................................................................................................................ 20
E. Social (including Safeguards) ..................................................................................... 20
F. Environment (including Safeguards) .......................................................................... 21
G. World Bank Grievance Redress .................................................................................. 21
Annexes
Annex 1: Results Framework and Monitoring………….…………………..………………….…22
Annex 2: Detailed Project Description .......................................................................................38
Annex 3: Implementation Arrangements ..................................................................................57
Annex 4: Systematic Operations Risk Assessment Tool (SORT) ............................................89
Annex 5: Implementation Support Plan ....................................................................................94
Annex 6: Economic and Financial Analysis .…………………………………………………94
Annex 7: Education Sector Analysis ….……………………………………………….…….101
MAP……………………………………………………………………………………………109
.
PAD DATA SHEET
Pakistan
Pakistan: Third Punjab Education Sector Project (P154524)
PROJECT APPRAISAL DOCUMENT
.
SOUTH ASIA
GED06
Report No.: PAD1641

.
Basic Information
Project ID EA Category Team Leader(s)
P154524 C Scherezad Joya Monami Latif
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
01-Sept-2016 30-Jun-2021
Expected Effectiveness Date Expected Closing Date
01-Sept-2016 31-December-2021
Joint IFC
No
Practice Senior Global Practice
Country Director Regional Vice President
Manager/Manager Director
Keiko Miwa Claudia Maria Costin Patchamuthu Illangovan Annette Dixon
.
Borrower: Islamic Republic of Pakistan
Responsible Agency: School Education Department
Contact: Abdul Jabbar Shaheen Title: Secretary
Telephone No.: 924299211518 Email: secretary. [email protected]
.
Project Financing Data(in US$, millions)
[X] Loan [] IDA Grant [ ] Guarantee
[] Credit [ ] Grant [] Other
Total Project Cost: 13,357.50 Total Bank Financing: 300.00
i
Financing Gap: 0.00
.
Financing Source Amount
BORROWER/RECIPIENT 12,907.50
International Bank for Reconstruction and
Development (IBRD) 300.00
DfID 150.00
Total 13,357.50
.
Expected Disbursements (in US$, millions)
Fiscal Year 2017 2018 2019 2020 2021
Annual 77.31 79.31 79.81 31.48 32.09
Cumulative 77.31 156.62 236.43 267.91 300.00
.
Institutional Data
Practice Area (Lead)
Education
Contributing Practice Areas
Gender, Social Protection & Labor
Cross Cutting Topics
[] Climate Change
[] Fragile, Conflict & Violence
[X] Gender
[] Jobs
[] Public Private Partnership
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation Mitigation
Co-benefits % Co-benefits %
Education Pre-primary education 20
Education Primary education 40
Education Secondary education 40
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information
applicable to this project.
.
ii
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Human development Education for all 80
Human development Education for the knowledge economy 20
Total 100
.
Proposed Development Objective(s)
The project development objective would be to support Punjab province to improve school participation,
completion, and teaching-learning practices with a particular focus on low-performing districts.
.
Components
Component Name Cost (US$, millions)
IBRD Financing only
Component 1: Improved Access, Quality and Education 289.89.00
System Management
Component 2: Capacity Building, Project Management, 9.36
Monitoring, and Evaluation
.
Systematic Operations Risk- Rating Tool (SORT)
Risk Category Rating
1. Political and Governance Substantial
2. Macroeconomic Substantial
3. Sector Strategies and Policies Moderate
4. Technical Design of Project or Program Moderate
5. Institutional Capacity for Implementation and Sustainability Moderate
6. Fiduciary Moderate
7. Environment and Social Low
8. Stakeholders Moderate
9. Other Substantial
OVERALL Moderate
.
Compliance
Policy
Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ]
respects?
.
iii
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ]
.
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
.
Legal Covenants
Name Recurrent Due Date Frequency
Provincial Steering Committee X
Description of Covenant
Maintain, at all times during project implementation, a provincial steering committee, headed by the
Chairman of Punjab’s Planning and Development Department, and comprising representatives from,
among others, Punjab’s Planning and Development Department, Finance Department (FD), School
Education department (SED), and the Program Management and Implementation Unit (PMIU), as well
as development partners (as observers); which committee shall meet at least twice a year and shall be
assigned with functions and responsibilities satisfactory to the Bank, as shall be required for the overall
strategic policy guidance and planning, oversight, support, and review of implementation of progress
and performance project activities.
District Review Committees X
Maintain in each provincial district, throughout the period of implementation of the project, District
Review Committees (DRCs), chaired by a District Coordination Officer (DCO) or any successor there
to, and provided with sufficient resources and competent staff in adequate numbers, under terms of
reference satisfactory to the Bank, comprising among others, executive officers responsible for finance
and planning, education and services, and monitoring and evaluation, which committees shall be
assigned with such functions and responsibilities, satisfactory to the Bank, as shall be required for: (i)
providing guidance, oversight, and support for project activities, and managing their monitoring and
implementation at district level; (ii) carrying out district review of project implementation, progress and
iv
performance; and (iii) liaising with the PMIU and SED and its sub departments.

Program Management and X
Implementation Unit (PMIU)
Maintain, at all times during project implementation, within the School Education Department’s regular
structure, a project monitoring and implementation unit, to coordinate and monitor the implementation
of the project. Ensure that the PMIU is headed by a Project Director, and adequately staffed with
professional and administrative staff.
Grievance Redress Mechanism X
Maintain throughout project implementation a project grievance redress mechanism, with staffing and
operating procedures acceptable to the Bank, for monitoring and addressing the concerns of people
affected by the project and building public and stakeholder support for the project.
Audited Project Financial Statements X 9 months from the Annually
end of each fiscal
year
Submit to the Bank, financial statements audited by independent auditors acceptable to the Bank, and
make them publicly available.
Budget Execution Reports X 45 days after the Semi-annually
end of each
semester
Submit to the Bank semiannual consolidated Budget Execution Reports, setting out the values of
budgets, actual expenditures incurred and balances thereof, if any per month, per budget line, for the
whole education sector, jointly with an executive summary cover note updating on EEPs defrayment.
.
Conditions
Source Of Fund Name Type
Description of Condition
Team Composition
Bank Staff
Name Role Title Specialization Unit
v
Scherezad Joya Monami Team Leader Senior Education GED06
Latif (ADM Specialist
Responsible)
Rehan Hyder Procurement Senior Procurement GGO06
Specialist (ADM Specialist
Responsible)
Akram Abd El-Aziz Financial Sr. Financial GGO24
Hussein El-Shorbagi Management Management
Specialist Specialist
Ali Ansari Team Member Education GED06
Economist
Amanda Epstein Team Member Senior Education GED07
Devercelli Specialist
Amna W. Mir Team Member Senior Program SACPK
Assistant
Anwar Ali Bhatti Team Member Financial Analyst SACPK
Ayesha Y. Vawda Peer Reviewer Senior Education QER Panelist GED05
Specialist
Dilip Parajuli Team Member Senior Economist GED06
Helen J. Craig Team Member Lead Education GED01
Specialist
Javaid Afzal Environmental Senior GEN06
Specialist Environmental
Specialist
Juan Carlos Alvarez Counsel Senior Counsel LEGES
Chau-Ching Shen Disbursement Senior Finance WFALN
Officer
Juan Manuel Moreno Peer Reviewer Lead Education GED05
Olmedilla Specialist
Margaret M. Clarke Team Member Senior Education GEDGE
Specialist
Samer Al-Samarrai Peer Reviewer Senior Economist QER Panelist GED02
Sophie Naudeau Peer Reviewer Senior Education GED01
Specialist
Extended Team
Name Title Office Phone Location
Ali Inaam Consultant
Ambreen Gilani Consultant
Ayesha Khan Consultant
Gerard Peart Operations Consultant Toronto
vi
Vardah Malik Consultant
.
Locations
Country First Location Planne Actual Comments
Administrative d
Division
.
Consultants (Will be disclosed in the Monthly Operational Summary)
Consultants Required Consulting services to be determined
vii
I. STRATEGIC CONTEXT
A. Country Context
1. Pakistan is the world’s sixth most populous country with an estimated population of 182
million people and a per capita income of US$1,360 in 2013, falling into the category of a lower-
middle-income country. While Pakistan’s per capita income has almost doubled and the share of
population living in poverty has decreased by two-thirds over the last decade, the country’s
recent gross domestic product (GDP) growth rates (estimated at 4.2 percent in 2015) have been
slower than needed to provide for the level of jobs required for a young and growing population.
2. Prospects for economic growth are beginning to improve, supported by increasing

reserves, low inflation, and continuing strong remittances. Nevertheless, a weak private sector
environment, public sector management, and implementation capacity will continue to hamper
service delivery performance. As a result, human development indicators continue to lag; in fact,
Pakistan did not meet the targets for the majority of the Millennium Development Goals by
2015, including those related to education and health. Punjab is one of the country’s most
economically dynamic provinces (representing 52 percent of Pakistan’s GDP) and is also
Pakistan’s most populated province (56 percent of Pakistan’s population). However, its growth
and service delivery potential have been affected by the same factors affecting the country as a
whole.
3. To promote sustainable economic growth, accompanied by poverty reduction, the country

as a whole, including Punjab, will require, among other things, continued and increasing
investment in human development, including education. Investments in human capital are
particularly critical at this time, given that almost half of the country’s population is estimated to
be under the age of 15 years.
B. Sectoral and Institutional Context
4. Pakistan has made progress in improving education outcome indicators over the past
decade.1 However, there has been persistent underperformance in comparison to other
developing countries at its level of per capita income, including in South Asia. Pakistan has the
world’s second highest out-of-school population, 6.7 million (12 percent of the world’s total), of
which 56 percent are girls. This issue is made more challenging by a relatively high population
growth rate (1.65 percent compared to 1.3 percent regionally in 2013). Public spending for
education as a share of the country’s GDP is low at 2.5 percent in 2013. Pakistan’s social
development indicators place it among the least socially developed countries in the world. Less
than half of the country’s population has completed primary education. Approximately 42
percent of people (age 10 years and above) cannot read and write. About 45 percent of children
under 5 years old have a stunted growth. Low social development is also prevalent in Punjab
Province, and strikingly so in its low-performing districts (LPDs).2
1
An amplified version of this section is in Annex 7. All references are provided there.
2
In the context of this project, Punjab’s LPDs are those 10 districts that have the lowest school participation rate for
children of age 6–15 years.
1
5. In the public sector, the School Education Department (SED) runs over 52,000 schools in
all 36 districts of Punjab, employing over 320,000 teachers and enrolling almost 11 million
students from katchi (pre-primary) to Grade 10. The low-cost private schooling sector, which has
emerged as a viable alternative to government schooling, now enrolls almost one-third of
children of age 6–10 years and almost one-fourth of children of ages 11–15. The government of
Punjab (GoPunjab) has partnered with the private sector in education delivery through the
Punjab Education Foundation (PEF), which reported almost 4,000 partner schools and 1.6
million student beneficiaries in 2014.
6. Since 2003, GoPunjab has implemented several phases of the Punjab Education Sector
Reform Program (PESRP), sector wide, medium-term education programs, which support public
and low-cost private education at the primary and secondary levels (up to Grade 10).3 Under
PESRP I and II, supported by the Bank through the First Punjab Education Sector Project (PESP
I) and Second Punjab Education Sector Project (PESP II), the GoPunjab has focused on systemic
improvements in the education sector for sustained results. These have included developing
administrative systems (for example, regular measurement of student achievement through
universal testing at the Grades 5 and 8 levels), improving the provision and quality of inputs (for
example, continuous professional development [CPD] of teachers), and the development of
interventions that strengthen incentives and accountability for service delivery performance (for
example, merit-based recruitment of teachers, provision of school-specific non-salary budgets
[NSBs] to schools). Some encouraging results have begun to materialize, and these reforms
would have to be implemented and supported for several more years for their full impact to be
seen and to ensure institutional sustainability.
7. Punjab’s out-of-school population (6–15 years) is over 5.5 million. Approximately 16

percent of children of age 6–15 years have never attended school. Among the children of age 6–
15 years, 21.9 percent are out of school; the figure for the LPDs is 31 percent, and goes as high
as 47 percent (in Rajanpur). Out-of-school children are more likely, among other characteristics,
to be female, older, rural, and poor, to have less educated parents, and be located further away
from school than in-school children in the same age cohort.4
8. School retention and transition are serious challenges. Only 47 percent of children
complete primary schooling by age 12, and 37 percent complete secondary school (Grade 10) by
age 18. The highest dropout rate is in Grade 6, with 20 percent (30 percent female, 19 percent
male) of 15–19 year olds dropping out of school. Grade repetition is not a challenge in earlier
grades, but by Grade 9 there is a 9 percent repetition rate. Over the last ten years, efforts have
been made by the SED to address retention and transition for girls through the Punjab Secondary
School Stipend Program (PSSSP), which offers stipends to girls enrolled in secondary grades in
public schools in target districts. The initial impact of this program on female enrollment was
positive, with a 9 percent increase in female enrollment.
3
These reform programs have received financial and technical support from the Bank through four development
policy credits (DPCs) (2004–2007), and two results-based specific investment credits (2009–2012 and 2012–2015),
the second of which, PESP II, is ongoing and draws to a close in June 2016. The PESRP has also been supported by
the U.K. Department for International Development (DFID).
4
The participation rate for girls in the poorest wealth quintile is 16 percentage points less than for boys (age 6–10
years) and 26 percentage points less than for boys in the 11–15 years age group
2
9. Progress in enrollment has plateaued. As a result of these difficulties in getting
children into and keeping them in school, and ensuring their timely progression between grades,
the net enrollment rate (NER) at the primary level (ages 6–10) increased by only 1 percentage
point from 71 percent in 2008/09 to 72 percent in 2013/14; the primary NER in the LPDs was 66
percent in 2012–13. Similarly, the NER at the middle school level (ages 11–13) increased by
only 3 percentage points, from 36 percent in 2008/09 to 39 percent in 2013/14. The NER at the
high school level (ages 14–15) was only 31 percent in 2013/14.
10. The poor coverage and efficiency of the education system can be ascribed to several
factors: (a) demand-side constraints such as poverty and opportunity costs; (b) limitations on
access to quality early childhood education (ECE); (c) access constraints particularly at the
secondary level; (d) human resources management; (e) the quality of teaching and the learning
environment; and (f) constraints pertaining to financing, system management, accountability, and
evidence-based decision making.
11. Learning outcomes remain unsatisfactory, though there have been some improvements
in recent years. Learning achievements for Urdu have plateaued, while achievements in
mathematics and English, though still low, have improved. For instance, the percentage of Grade
3 children who can perform two-digit subtraction increased from 38 percent in 2010 to 48
percent in 2014, and the percentage of Grade 3 children who can read words in English (at a
Grade 2 level) increased from 50 percent in 2010 to 59 percent in 2014. Boys perform slightly
better than girls with regard to learning outcomes for language (both Urdu and English) and
mathematics at the primary level.
12. There is a low access to quality ECE. The quality of a child’s early learning experience
makes a marked difference with regard to school preparation, participation, completion, and
achievement. In 2012, the GoPunjab initiated a project to introduce ECE across the province.
The number of ECE classrooms established was 1,225. Learning materials were developed,
caregivers were recruited, and teachers and school council (SC) members received ECE training.
Although there is a national curriculum for ECE (2007) and a scaling-up strategy for ECE in
Punjab, there is no comprehensive ECE policy for the province. However, only 30 percent of
children of ECE age attend a preschool. Few learning activities are provided in preschool
classrooms, and 43 percent of those enrolled will not make the transition to Grade 1. In addition
to severely limited classroom spaces, there is a scarcity of qualified teachers for ECE.
13. There is a suboptimal use and quality of teaching resources. While the overall
student-to-teacher ratio (STR) for primary grades is 39:1, there are (a) almost 16,000 primary
government schools which have an STR of 40:1 or higher; and (b) over 11,000 primary
government schools with an STR of 15:1 or lower. Multigrade teaching occurs in 67 percent of
primary schools. High STRs and the poor quality of teaching and support in the classroom, place
a significant constraint on improving the quality of teaching and learning. Many teachers have
low content knowledge and weak pedagogical skills.5 There is still a strong focus on rote
learning and repetition in the classroom. A teacher’s time-on-task is lower than required due to a
variety of factors, which include teacher involvement in non-teaching activities. Students lack
5
For instance, a sample-based survey of teachers in Pakistan found that only 36 percent of teachers could explain
two-digit addition.
3
sufficient practice on learning tasks, and other than the textbook, there is very little exposure to
reading and other teaching-learning materials.
14. Progress has been made to improve the allocation and quality of teachers. Under
PERSP I and II, the SED introduced merit-based recruitment of teachers; and improved its
teacher placement policies to ensure more efficient use of teaching staff resources, with more
than 31,000 teachers being transferred to schools with teacher shortages using a needs-based
formula. Some of this has met with resistance, and pay-offs from these reforms will take more
time to be realized under sustained political will and commitment.
15. Support to teachers needs to be strengthened. Under PERSP II, the GoPunjab
established a system of field-based support to teachers through the district teacher educators
(DTEs). However, the number of DTEs is insufficient, their capacity needs to be strengthened,
and their focus is more on teacher monitoring than teacher support. Moreover, the DTE model of
support does not address the needs of multi-grade teachers. Data collected by the DTEs could be
better utilized and tailored to address teacher training and support needs. Existing teacher
development programs lack standardization and do not provide adequate incentives for the
improvements of the qualifications of candidates. Strengthening pedagogical support to teachers
is of vital concern given its impact—through improved teaching-learning practices—on student
outcomes.
16. Punjab lacks an overarching assessment policy framework or strategy that will clarify
the role of assessment in the education system and provide a basis for prioritizing and organizing
assessment activities. Existing assessment activities, though improved through both phases of the
PESRP, still require significant strengthening with regard to administration, quality, and the use
of results to improve system accountability, teacher performance management, and teaching-
learning processes in the classroom. The Punjab Examination Commission (PEC), which
oversees the design, administration, and scoring of the mandatory annual Grades 5 and 8
examinations in public schools, lacks sufficient human, physical, and financial resources to do
this, and reporting and use of PEC exam results is seen by many as neither useful nor timely. The
PEF also administers a biannual Quality Assurance Test (QAT) to public and private schools with
whom it has a partnership, but the quality of test content and administration has not been
reviewed in years.
17. Management capacity of education administrative staff at the district and sub
district levels is low, and performance management systems do not foster accountability.
Promising reforms have taken place at the school level, including the introduction of guaranteed
NSBs, which are provided to schools using a needs-based formula. The bulk of the funds have
been spent on repair and maintenance, leading to an improvement in the schools’ physical
environments. However, more needs to be done at the school level and the district level, where
there is limited capacity to follow and implement the reform’s financial management (FM)
guidelines. There is a need to place greater emphasis on utilizing the non-salary funds for
procuring teaching and learning materials. In addition, institutional arrangements for public
financial management (PFM) in the education sector lack transparency. Despite the presence of
multiple layers of robust monitoring in the province that produces good quality data on schools,
teachers and students, there is a lack of evidence-based decision making at all levels, as data
collected regularly by several agencies is not always easily available or integrated. Data
4
dissemination at the school level, though started under PERSP II through the provision of
biannual school report cards, needs to be strengthened to ensure effective outreach to parents and
the community to foster demands for school accountability. The capacity of SCs remains low in
many schools.
18. The GoPunjab plans to build on PESRP I and II with its 2018 Education Goals.6 The
GoPunjab is committed to support ongoing reforms and implement new initiatives such as ECE
and stipends for out-of-school children, to bring about transformative change. It aims to have a
better managed and accountable education system, which enables the best quality education
opportunities and environment for children, especially in its priority districts. The 2018 goals are
grouped into four areas: (a) ensure high-quality teaching and learning in the classroom; (b)
improve leadership and accountability at all levels; (c) enable a conducive learning environment
for students; and (d) support with high-quality school infrastructure. Table 1 shows planned
activities under each goal.
19. The World Bank has a history of coordinating closely with Department for International
Development (DFID), which is currently the largest donor in the basic education sector in
Punjab.7 In both PESRP I and PESRP II, DFID was a parallel financier. Currently, DFID is
providing 457 million pound sterling to the GoPunjab between 2014–2018 to support the
GoPunjab’s PESRP II and 2018 Education Goals. The project has been designed and prepared in
close consultation with DFID. The DFID also supports the GoPunjab’s Education Sector Road
Map, which consists of regular review meetings at the district and provincial levels to review
progress toward achieving key performance indicators (KPIs) in the sector. The Bank and DFID
continue to work together and in parallel in their support to the implementation of the
GoPunjab’s 2018 Education Goals.
Table 1. GoPunjab’s 2018 Education Goals - Summary
Reform Area/Goal Planned Activities
Ensure high-quality  Simplify the curriculum to allow optimal learning at quality and pace
teaching and learning in  Develop world-class textbooks and teacher guides for all grades
the classroom  Reform exams to better assess student learning
 Increase quality and frequency of teacher coaching
 Strengthen teacher training on content and pedagogy
Improve leadership and  Increase quantity and effectiveness of school leaders
accountability at all  Ensure high-quality leadership in every district
levels  Strengthen collection of high-quality data to track progress and drive accountability
Enable a conducive  Engage the wider community of parents and other citizens to support reform efforts
learning environment  Provide remedial support to Grades 1–8 as required
for students  Expand outreach of the PEF to 2.8 million out-of-school children
Support with high-  Build additional classrooms and hire sufficient teachers to eliminate multi-grade and
quality infrastructure overcrowding
6
The GoPunjab acknowledges that the duration of this phase of its reform program may have to be extended beyond
the originally envisaged 2018.
7
DFID has already begun its next phase of support to the GoPunjab’s 2018 Education Goals 2018 through an
extension of its original support to PESRP II. DFID currently supports all four areas of the GoPunjab’s goals,
including a large missing facilities and infrastructure program. Its support to the GoPunjab is approximately GBP
457.3 million, and is expected to end in 2018. The GoPunjab, Bank, and DFID teams have been and will continue to
coordinate closely to ensure close alignment with the GoPunjab’s Goals, and avoid a duplication of efforts.
5
Reform Area/Goal Planned Activities
 Provide and maintain basic facilities in all schools
 Repair all buildings that could prove dangerous
 Upgrade selected schools to benchmarked international standards
C. Higher Level Objectives to which the Project Contributes
20. The priority areas of focus for the country are reflected in the Bank’s Country Partnership
Framework (CPF) for 2015–20198. Priority areas for interventions to support these objectives are
(a) the promotion of energy security; (b) increased productivity to drive growth and job creation,
particularly in agriculture and small and medium enterprises; (c) inclusive growth and reduced
inequality for marginalized and vulnerable population groups, including women; and (d)
improved service delivery, particularly taking into account the devolved system of governance in
the country. The project is fully aligned with CPF by supporting reforms which seek to accelerate
improvements in education service delivery to the underserved, neglected, and poor—the main
users of the public and low-cost private schooling systems. Specifically, the project will
contribute to the CPF –outcome on increased school enrollment and adoption of education
quality assessment by supporting interventions which directly aim to increase the enrollment of
out-of-school children, improve student transition and retention, and improve learning outcomes
and their assessment.
21. The project will also directly contribute to Pakistan’s efforts to achieve the Sustainable
Development Goals (SDGs) 2030, specifically Goal 4 - Ensure inclusive and equitable quality
education and promote lifelong learning opportunities for all.9
II. PROJECT DEVELOPMENT OBJECTIVES
A. PDO
22. To support Punjab province to improve school participation, completion, and teaching-
learning practices with a particular focus on low-performing districts.
23. LPDs are ten districts that have among the lowest participation rates for children of age
6–15 years.10
8
May 1, 2014 Report Number 84645
9
It does this by supporting reforms, which contribute to the following targets under Goal 4: (a) 4.1 - by 2030, ensure
that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and
effective learning outcome; (b) 4.2 - by 2030, ensure that all girls and boys have access to quality early childhood
development care and pre-primary education so that they are ready for primary education; (c) 4.6 - by 2030, ensure
that all youth and a substantial proportion of adults, both men and women, achieve literacy and numeracy; (d) 4.c -
by 2030, substantially increase the supply of qualified teachers, including through international cooperation for
teacher training in developing countries, especially Least Developed Countries (LDCs) and Small Island Developing
States.
10
Based on Pakistan’s Social and Living Standards Measurement (PSLM) Survey data 2012–13, these districts are
Rajanpur, D.G. Khan, Muzaffargarh, Vehari, Lodhran, Pakpattan, Bhakkar, Multan, Khanewal, and Sahiwal. The
manner in which the subcomponents cover these districts is explained in annex 2.
6
B. Project Beneficiaries
24. The project is expected to benefit 420,000 students from poor households through
vouchers to attend low-cost private schools; 900,000 students from poor households through
support to public-private partnerships (PPPs) that cover the students’ tuition costs; 450,000
female secondary school students through stipends to attend a government school; 210,000
preschool students through improved quality of ECE; 2.3 million primary students and 90,000
primary teachers in government schools through the strengthening of in-service professional
support; and all 10.9 million students and 321,000 teachers in government schools through the
strengthening of education assessments, the reinforcement and expansion (from primary to
secondary) of NSB allocations, and improved human resources and data-based system
management. It is expected that as a result of direct project interventions, 1 million out-of-school
children in Punjab would be brought into school.
C. PDO Level Results Indicators
25. The following PDO indicators will be used:
(a) School participation rate (6–15 years), disaggregated by 6–10 and 11–15 years age
groups and by gender and by low-performing districts11
(b) Completion rate, Grade 5, disaggregated by gender
(c) Quality score of primary teaching-learning practices12
(d) Level of school readiness13
III. PROJECT DESCRIPTION
A. Project Components
26. The proposed project supports the implementation of the Government of Punjab’s larger
education program supporting the 2018 Education Goals. The project will be implemented over
the period FY2016/17–2021/22. The project will have two parts. The first will use results-based
financing to support the achievement of the GoPunjab’s 2018 Education Goals and Growth
Strategy through nine subcomponents along three strategic areas: (a) improving access to
schooling for the poorest; (b) ensuring quality teaching and learning for all; and (c) improving
11
The school participation rate is defined as the share of children in the respective age group that are enrolled in
school, regardless of grade level (including katchi)) at two levels of schooling (primary: ages 6–10; and secondary:
ages 11–15) derived from the PSLM Survey, a large-scale representative household sample survey, which serves as
the main data source of the government to measure progress toward the SDGs.
12
The quality score is constructed from teaching-learning practices at the primary level, as observed and scored by
independent evaluators. The score will be derived from a representative sample of observations of teachers targeted
by DLI 6. See annex 1.
13
The level is a score derived from the child’s performance on a preschool readiness measurement tool that assesses
pre literacy, pre numeracy, and fine motor skills, as well as the child’s level of language and socio emotional
development. The Monitoring Early Learning Quality and Outcomes (MELQO) tool (or a similar one) will be
administered to a representative sample of children who have completed at least one preschool year at the ECE
schools targeted under DLI 4. See annex 1.
7
leadership, management, and accountability. For each subcomponent, there will be a
disbursement-linked indicator (DLI) with time-bound targets. Funds will be disbursed against
agreed eligible expenditures upon the achievement of DLI targets. A detailed description of the
DLIs, and protocols for verifying compliance with each, is given in Annex 1.
27. The project supports the first three 2018 Education Goals, that is, (a) to ensure high-
quality teaching and learning in the classroom; (b) to improve leadership and accountability at all
levels; and (c) to enable a conducive learning environment for students.14 The choice of areas
supported under the project is in line with the GoPunjab’s policy to halt the establishment of new
public schools, and to focus on school expansion through PPPs via the PEF.
28. Component 1 has several noteworthy design elements: (a) the DLIs support reform areas
which are expected to affect the sector as a whole, including system performance and outcome;
(b) the reforms selected represent ongoing programs, which require further strengthening and
support to bring them to fruition; (c) support to these reform areas is scalable, should the
GoPunjab increase financing either through its own budget or through additional development
partner funding; and (d) the reforms focus mainly on the primary education subsector, reflecting
the urgent need to increase efforts to achieve universal primary education in the province.
29. The DLIs have been grouped into three strategic areas that reinforce one another to
achieve the PDO: (a) participation and completion; (b) quality; and (c) leadership, management,
and accountability. The financial incentives and education opportunities provided by the three
DLIs in the first area will work to increase access to and completion of education. The quality-
related improvements provided by the four DLIs in the second area will improve the readiness of
children for primary learning, the availability of qualified teachers, the quality of teaching-
learning practices, and the assessment instruments used to measure outcomes. Together these
will enhance the quality of schooling, and also encourage students to participate in and complete
school. The final two DLIs pertaining to NSBs and the improved use of data for decision making
will contribute to an improved deployment of scarce resources and management of the school
system, which together should lead to a more equitable distribution of resources and
improvements in the quality of schooling, further reinforcing participation and completion.
Overall, the targets have been selected as key links in a results chain that incrementally
contribute during the implementation cycle to the achievement of the PDO. (See also figure 2.1
in annex 2).
30. Component 2 will finance technical assistance (TA) to strengthen implementing

institutions to deliver their mandates in the education sector and achieve the DLI targets; as well
as project management and monitoring and evaluation (M&E). The component will use a
traditional reimbursement modality based on statements of expenditures (SOEs) on the agreed
activities.
Component 1: Improved Access, Quality, and Education System Management (Bank

financing: US$289.89 million, 96.6 percent of total Bank funding)
14
As mentioned, the DFID already supports a large program for missing facilities and infrastructure (the fourth 2018
Education Goal).
8
31. The objectives of this component are to (a) improve access to schooling for the poorest;
(b) ensure high-quality teaching and learning for all; and (c) improve leadership, management,
and accountability.
32. Strategic Area 1: Improving access to schooling for the poorest. The project will
support interventions to provide students from the poorest households with financial resources
and opportunities enabling them to attend school at the primary and secondary levels. It will
achieve this by (a) providing vouchers to attend a low-cost private school; (b) expanding PPPs to
enable students to attend low-cost private schools; and (c) providing stipends to attend secondary
schools. Three subcomponents will support this strategic area.
Subcomponent 1.1: Education Voucher Scheme (EVS)
33. The objective of this subcomponent is to extend the EVS run by the PEF to an additional
420,000 children of age 5–16 years over five years under a strengthened program design. The
project will strengthen the program through supporting higher standards pertaining to
participation and quality, improved verification and monitoring, and more valid and reliable
assessment. This subcomponent will be linked to the achievement of DLI 1, strengthening
program design to expand coverage of tuition-replacement vouchers to children from
disadvantaged households.
Subcomponent 1.2: Public-Private Partnerships in Education
34. The objective of this subcomponent is to increase the access to, enrollment in, and quality
of schools operating under PPP programs administered by the PEF and enrolling an additional
900,000 children. The children will be enrolled in PEF partner schools under the Foundation
Assisted Schools (FAS), New School Program (NSP) and other PEF programs approved by the
PEF Board. Contract payments will be performance-based using target-linked indicators. This
subcomponent will be linked to the achievement of DLI 2, leveraging the private sector to
support schools to increase enrollment.
Subcomponent 1.3: Stipends for Secondary School Girls
35. The objective of this subcomponent is to strengthen the PSSSP to increase transition to
and retention in secondary schools. The existing scheme for girls in 16 districts will be
strengthened through (a) introduction of grade promotion as an eligibility criterion; (b) an
enhanced compliance verification system; and (c) a more efficient payment modality. This
subcomponent will be linked to the achievement of DLI 3, stipends for secondary school girls to
increase secondary school participation/retention.
36. Strategic Area 2: Ensuring quality teaching and learning for all. The project will
support interventions to raise the quality of teaching and learning by (a) improving the quality of
ECE in schools; (b) strengthening the human resources management of teachers; (c) reinforcing
the field-based CPD of teachers; and (d) creating an enabling context for assessment activities
and improving the quality, utility, and accessibility of assessment data. Four subcomponents will
support this strategic area.
Subcomponent 1.4: Early Childhood Education
9
37. The objective of this subcomponent is to improve the cognitive, socioemotional, and
physical development of children and facilitate their transition to primary school through
strengthened ECE. The project will ensure that 7,000 schools have ECE classrooms that meet
quality standards and enroll at least 210,000 children of age 3–5 years. The standards will
include having trained staff, with teachers following a strengthened ECE curriculum and using
an ECE activity guide; an ECE toolkit of teaching-learning materials being available and used;
receiving monthly ECE mentoring by trained DTEs;15 and parents receiving an ECE activity
guide. The project will achieve the standards at school level by delivering an integrated package
of capacity building and materials targeted at beneficiary schools, the DTEs from the Directorate
of Staff Development (DSD), and the community. For this subcomponent, release of IBRD funds
will be linked to the achievement of DLI 4, improving quality and expanding access to early
childhood education.
Subcomponent 1.5: Effective Human Resources Management for Teachers
38. The objective of this subcomponent is to ensure that new teachers are recruited to vacant
posts on merit, according to the recruitment policy. The project will strengthen the test-based
recruitment of teachers, to ensure merit-based recruitment and an improved matching of teacher
profile to subject gaps at school level. This will include a review and reinforcement of the tests
and testing procedures, and of the process whereby results are mapped to available posts.
Further, the project will support the inclusion of a test module on ECE for primary
schoolteachers. Finally, the project will review the recruitment policy work processes,
particularly the assessment of teaching needs, the rationalization of vacant posts, and the
verification of recruitment. This subcomponent is linked to targets pertaining to DLI 5,
strengthening HR processes through continuous merit-based recruitment and rationalization of
teaching posts.
Subcomponent 1.6: Quality in the Primary Classroom
39. The objective of this subcomponent is to improve teaching quality and learning in
primary schools. There will be two packages. The first package will reinforce the DSD’s existing
DTE-based model of field-based professional development (PD) by building the capacities of
teachers to better deliver the curriculum, and of head teachers, DTEs, and the Cluster Training
and Support Center (CTSC)/District Training and Support Center (DTSC) staff to support
teachers; with a particular focus on multi-grade and large classroom settings. The DSD will
improve its observation and assessment instruments, and build the capacities of the DTEs to use
them and provide data-based feedback to teachers. The second package will be an innovative tool
designed for multi-grade schools that consists of a structured set of sequenced learning activities
covering core subjects in Grades 1–3, to be trialed and evaluated in 100 schools. For this
subcomponent, release of IBRD funds will be linked to the achievement of the DLI 6,
strengthening field-based CPD for improved teacher performance.
Subcomponent 1.7: Improved Education Assessments to Enhance Quality
15
All references to the DTE refer to the DTE post/person and functions in operation at the time of project design, as
well as any successor or equivalent thereto.
10
40. The objective of this subcomponent is to strengthen the enabling context for assessment
activities and improve the quality, utility, and accessibility of assessment data. The project will
develop an assessments policy framework. It will clarify PEC’s mission and implement an
Institutional Strengthening Plan (ISP). PEC will build its capacities in three key areas. First, it
will enhance the quality of items and tests. Second, it will more effectively analyze assessment
data to produce actionable information. Third, it will integrate data sets from various assessments
and other relevant resources to allow for more effective analysis of education issues; and develop
options for research use of data. For this subcomponent, release of IBRD funds will be linked to
the achievement of the DLI 7, PEC and its instruments strengthened within a revised policy
framework.
41. Strategic Area 3: Improving leadership, management and accountability. The project
will strengthen the system of allocation and accountability in the use of NSBs, and better
integrate and use education data to lead and efficiently manage the education system. Two
subcomponents will support this strategic area.
Subcomponent 1.8: School Specific Non-Salary Budgets
42. The objective of this subcomponent is to improve learning environments through an

expanded and more efficient system of allocating and using NSBs. First, the project will simplify
the funds flow and extend its coverage to high schools. Second, the project will strengthen the
legal-regulatory framework for school governance and build the capacities of SCs and
administrators. Third, the NSB allocation formula will be revised to account for incentives,
recent changes in school assets endowments, and equity. Mechanisms will be strengthened to
supervise timely disbursements and monitor expenditures. The project will also pilot a new
disbursement mechanism whereby districts contribute to the NSB budget allocations. For this
subcomponent, release of IBRD funds will be linked to the achievement of the DLI 8, setting and
executing school budgets in line with school resource needs.
Subcomponent 1.9: Data Strengthening and Performance Management
43. The objective of this subcomponent is to improve evidence-based decision making by

strengthening education sector data and promoting its effective use by provincial- and district-
level decision makers. First, the project will strengthen and integrate data sets. A private school
census will be undertaken. Multiple data sets will be integrated into a common platform and
compiled in the form of actionable indicators. Second, the project will facilitate data
dissemination including through district report cards, enabling public access, and providing
school performance information to SCs. Third, the project will strengthen the capacities of
decision makers to analyze data for decision making. Information technology (IT) equipment and
services will be supplied where needed. For this subcomponent, release of IBRD funds would be
linked to the achievement of the DLI 9, strengthening management capacity and evidence-based
decision making.
Component 2: Capacity Building, Project Management, Monitoring, and Evaluation.

(Bank financing: US$9.36 million, 3.4 percent of total Bank funding)
11
44. The objective of this component is to strengthen implementing institutions to design,
deliver, and monitor and evaluate activities to achieve their mandates and the DLIs; and to
ensure efficient and effective project management. The project will provide critical and strategic
TA and capacity building to support and strengthen implementing agencies in the primary and
secondary education subsectors in Punjab. This will include the development or review of the
ISPs and support for their implementation. In addition, this component will finance the advisory,
TA, and capacity-building support to implementing institutions to achieve DLIs 1–9. M&E
strengthening of implementing institutions in relation to their DLIs is embedded within the
project design, and financing for M&E activities will be funded by this component. It will
finance evaluations pertaining to the EVS (DLI 1), ECE (DLI 4), and the strengthening of the
DSD’s field-based system for CPD as well as a pilot initiative for multi-grade schools (DLI 6);
and the baseline and follow-up evaluations of school readiness and primary teaching-learning
practices to determine the associated PDO indicator values. It will also finance project operating
costs, among others, personnel costs associated with hiring seconded staff (project allowances
only) to the Project Management and Implementation Unit (PMIU), TA for the unit, equipment,
supervision costs (transportation and per diems), and incremental operating costs at the SED,
DSD, PEF, and PEC associated with the work of staff or TA working on project implementation.
Communications activities will be financed to provide outreach to stakeholders, particularly
women and the poor, as well as to provide information about project activities and benefits.
B. Project Financing
45. The project will be financed by a US$300 million IBRD Loan using an Investment
Project Financing lending instrument, based on a results-based funding (RBF) approach.
Component 1 will be results-based and project funds will be disbursed against selected key
education budget line items referred to as Eligible Expenditure Programs (EEPs), capped at
amounts and contingent on the achievement of the agreed DLIs. The EEPs are part of PESP III’s
budget of eligible activities. The EEPs include: (i) employee related expenditure of primary and
secondary subfunctions of provincial and all district governments; (ii) eligible expenditures
incurred by the PEF; (iii) Girls’ Stipends Program; (iv) NSB; (v) Monitoring Systems (CM
Monitoring Force). Component 2 will use a traditional disbursement mode based on unaudited
interim unaudited financial reports (IUFRs).
46. The choice of an RBF approach for the project is to allow a focus on results, especially
given the GoPunjab’s ambitious reform agenda. The DLIs are designed to facilitate
implementation of challenging new reform areas, as well as support and scale up ongoing
activities under the GoPunjab’s education reform program. In addition, the RBF approach serves
as an umbrella for other development partners to support shared results in the sector. The
GoPunjab is very familiar with the RBF approach and acknowledges its usefulness, as it has been
used in both PESP I and II, as well as in several Bank-supported projects in other sectors.
47. The DLIs reflect the GoPunjab’s priority reforms in education, and include intermediate
results, KPIs, and institutional performance targets. Each DLI has time-bound disbursement-
linked targets, which from a disbursement perspective are independent of each other.
Noncompliance with a DLI target in a period means that the disbursement of funds associated
with that DLI target will be withheld until the target is met, yet it does not affect disbursement
against targets of other DLIs. There are 45 targets in total: 27 during years 1–3 and 18 during
12
years 4–5. Each disbursement target value is weighted equally at US$8.59 million during years
1–3 of project implementation; during years 4–5, each target value is weighted equally at
US$3.22 million. This front-loading of loan funds during the first three years of the project will
inject resources that will give the GoPunjab’s ambitious education reform program a head start.
However, the DLI targets for years 4 and 5 will require continued strong commitment by the
GoPunjab as well as the provision of adequate financial resources. To fill any financing gap in
achieving the years 4–5 DLI targets, the GoPunjab and the Bank will explore the option of
additional financing during the project’s midterm review, subject to the successful achievement
of project DLIs and progress toward achieving the PDOs. The verification of the achievement of
the DLIs in a given fiscal year will be conducted no later than the first week of June each year
and it is expected that disbursements against the achieved DLIs will be made each year before
the end of the government’s (and the Bank’s) fiscal year on June 30.
48. In 2014–15, the SED received a (revised) budget allocation of PKR 206.41 billion
constituting approximately 15 percent of the GoPunjab’s provincial budget. Out of this
allocation, the SED was able to spend approximately PKR 185.38 billion (90 percent). In each
given year, Bank financing of US$300 million is expected to constitute only 2–3 percent of the
total forecasted expenditure of the SED. It should be noted that the project and the Bank’s
contribution of US$300 million is ensconced within the larger education sector reform program
which is designed based on the 2018 Education Goals.
Table 2. Total Project Cost and Financing

Funding Source Total (in US$, million) Share (in percent)
Total Provincial government 12,907.5 96.6
education financing for education
sector
IBRD 300 2.3
DFID16 150 (GBP 100 equivalent) 1.1
Total 13,357.5 100
C. Lessons Learned and Reflected in the Project Design
49. The design of the PESP III is informed by the lessons learned from the Bank’s long-
standing engagement in the education sector in Punjab, including PESP I and II, in addition to
other education programs in the country and region. The following description reflects the
lessons learned which will be used to inform the design of the project.
50. The results-based instrument in the Pakistan context, specifically the use of DLIs
with predefined implementation progress and performance targets has contributed
significantly to sector dialogue being entrenched in an overall program focused on predefined
results, political ownership, and donor coordination. This instrument was put in place during the
first phase of PESP I and has contributed to donor harmonization because it facilitates
16
DFID funding is GBP 420 million over the period from 2014–2018, of which sector budget support is GBP 100
million (US$150 million equivalent) and the rest is financed through TA functioning outside the government
program. Of the total committed amount, GBP 270 million remains unspent. DFID funding is parallel financing, not
project co-financing.
13
implementation support (IS) to a government strategy under a common results framework and
reduces the government’s reporting burden. Hence, this project will continue to use the RBF
modality.
51. Clear articulation of linkages in formulating indicators, DLI targets, and protocols
spelled out clearly are important to focus efforts on factors that are critical to the achievement of
the project objectives. Furthermore, the DLI targets need to be formulated very carefully to avoid
any ambiguity in the gauging of results and to ensure that agreed protocols are followed.
52. Strengthening data systems to improve the quantity and quality of data in the
education system leads to better outcome data. In Punjab, the use of monitoring and
evaluation assistants (MEAs) has had a positive impact on the decrease in teacher absenteeism in
the past decade. However, there needs to be an equal focus on the use of outcome information
and monitoring data, which is an essential aspect to the strengthening of data systems.
53. Capacity Building and TA, as well as continued Bank IS in an advisory capacity, are
critical complements to a RBF approach. Continuous and intensive TA to the implementing
agencies has been shown to result in timely identification and resolution of implementation
challenges.
54. Partnerships between the GoPunjab and the private sector schooling system have
positive results in Punjab making these partnerships a viable complement to the GoPunjab’s
efforts to improve education goals. Rigorous evidence illustrates that the PPP initiatives in
Punjab (through the PEF and nongovernmental organizations [NGOs] in rural areas) have
generated large and quick gains in both enrollment and achievement, which have reinforced the
GoPunjab’s commitment to partnering with the private sector particularly in hard-to-reach and
underserved areas of the province. Given the success so far with these partnerships, they will be
a key feature of the project.
55. A realistic assessment of the district and provincial capacity to implement reforms is
important in informing the design and sequencing of the reform program for maximum
impact. This is particularly important as reform implemented too quickly without adequate time
given to the study of its impact and ownership by all stakeholders can have an adverse effect and
set back whatever incremental progress may have been made. Hence the project will strengthen
district-level management and decision-making capacity. In addition, the need to have a flexible
approach to implementing reforms, including phasing-in, will be a critical aspect to the project
design.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
56. Implementation arrangements for PESP III rely primarily on the arrangements which
have been in place for both phases of the PESRP I and PESRP II, and which will continue to be
in place for the implementation of the GoPunjab’s sector reforms as articulated in its 2018
Education Goals. The GoPunjab’s Planning and Development (P&D) Board will continue to
head the Provincial Project Steering Committee (PPSC) for the 2018 Education Goals, with the
participation of, among others, the Finance Department (FD), and the SED/PMIU and its sub
14
departments. The PPSC will provide overall strategic guidance and enabling support to the
education sector reform program, and serve as a forum for high-level decision making and an
interface with the political leadership.
57. Under PESP III, the SED/PMIU will be responsible for (a) reporting on the DLIs, EEPs,
monitoring indicators, and TA implementation; (b) ensuring that the Bank’s fiduciary regulations
and requirements are followed; and (c) coordinating support from and actively communicating
with the Bank and other development partners. The SED/PMIU will share project
implementation and monitoring responsibilities with district education administrations, which
have primary responsibility for public education service delivery and have staff at the district and
sub district levels.
58. The SED is supported by apex educational institutions for project implementation at the
provincial level. Institutions, which will implement activities under the project include the DSD,
the PEC, and the PEF. See annex 3 for details.
59. Strengthening the PMIU’s capacity to provide technical guidance and fiduciary oversight
of program activities is a critical part of the project design. Key steps to be supported under the
project to strengthen implementation effectiveness at the PMIU and field level include (a)
strengthening capacity of oversight over all focal persons responsible for DLI monitoring and/or
implementation; (b) ensuring that the Communication Cell is staffed adequately and with
relevant expertise; and (c) reviewing the scope of services of the Research and Policy Wing to
improve its effectiveness to cater to just-in-time demands. The PMIU will leverage TA funds to
hire expertise and operational staff as needed.
B. Results Monitoring and Evaluation
60. The PDO indicators will be measured using different data sources. The school
participation rate will be sourced from the PSLM Survey, a large-scale representative household
sample survey, which serves as the main data source of the government to measure progress
toward the SDGs. The completion rate (Grade 5) will be calculated based on data from the
Annual School Census (ASC), which is conducted by the SED/PMIU. The quality score of
primary teaching-learning practices will be generated through a representative sample of
classroom observations in schools targeted under DLI 6, conducted by contracted TA using a
validated observations format designed to measure the quality of learning-related practices that
are targeted by the DSD under the project. The level of preschool readiness will be derived from
observations using the MELQO tool (or a similar one), which will be administered by contracted
TA to a representative sample of children who have completed at least one preschool year at the
ECE schools targeted under DLI 4. The TA generating the quality score and the level of
preschool readiness will be managed by the PMIU, working in close collaboration with the DSD.
61. The PMIU under the SED will be responsible for the following project-specific M&E
activities: (a) routine monitoring of project performance; (b) overseeing and coordinating data
collection for results framework indicators; (c) reporting on indicator values at the intervals
stipulated in the framework; (d) providing the evidence for the DLIs; (e) validating data provided
by implementing agencies, where necessary, and as amplified in the DLIs and the results
framework; (f) conducting project midterm and completion reviews; and (g) coordinating the
15
surveys and evaluations conducted during the project. The PMIU will contract implementing
partners to support data validation exercises, as needed; and in such cases will be responsible for
controlling the quality of the IPs’ work. The PMIU has a dedicated M&E unit which also acts as
the M&E wing of the SED and regulates an effective data collection system at the district level.
It oversees the conduct and processing of the ASC and a monthly monitoring system (covering
approximately 53,000 schools), which generate vital information on the education system and
will be used for project monitoring purposes.
62. All agencies with implementation responsibilities under Component 1—principally the
PEF, DSD, and PEC—have their own internal mechanisms for M&E, and will be responsible for
monitoring and reporting on activities, and for generating information for the results framework
as explained in annex 1. These mechanisms will be strengthened specifically in relation to DLI
activities and more generally through institutional strengthening support, as envisaged under
Component 2. All monitoring data will be used to improve the design and implementation of
project interventions and to introduce course corrections as needed.
63. The project will support evaluations of initiatives pertaining to the EVS (DLI 1), ECE
(DLI 4), and strengthening of the DSD’s field-based CPD system and a pilot initiative for multi-
grade schools (DLI 6); as well as the baseline and follow-up evaluations of teaching-learning
practices and school readiness to determine the quality-score and school readiness PDO
indicators. It will also conduct independent data validation and review exercises, including of
DSD data (pertaining to ECE and primary grade teachers), the implementation of the teacher
recruitment policy, and funds disbursement reported by the FD. (See annexes 1 and 2 for a full
list). In addition to yielding lessons and recommendations on project-financed reforms, these
independent exercises provide objective information pertaining to DLI values and project results.
Whenever conducted before year 5, these exercises will be used to introduce course corrections,
and to strengthen the design and implementation of project interventions.
C. Sustainability
64. The sustainability of the interventions, particularly those that are being carried forward
from PESP II, is supported by several factors. First is the priority given to education for the past
three years by the political leadership, illustrated by the chief minister’s push for the full
implementation of the road map which developed the 2018 Education Goals which the project
adheres to. As a result, the project’s interventions and their success are more likely to be
ensconced within the larger political discourse, which would then be translated into action and
sustainable government programs. This is how it worked for the large part of the implementation
period for PESP II. Second, all activities in the project are part of the government’s budget,
which, given the experience of past operations with this modality, greatly increases the chances
of fiscal sustainability. In addition, with regard to stakeholder and counterpart ownership and
commitment to the effective implementation of the interventions the following two points should
be considered: (a) the GoPunjab has been in the driver’s seat of this set of reforms, both in their
implementation in PESP II and in the design of new interventions and (b) considerable
consultations have taken place, during the design of this third phase of reform, with parents and
communities, school leaders, district education officials, teachers, and district teacher educators
as well as stakeholders and government officials in Lahore. Notwithstanding, there remain
moderate risks to sustainability and these are discussed in more detail in annex 5.
16
V. KEY RISKS
A. Overall Risk Rating and Explanation of Key Risks
Table 3. Summary of Risks

Risk Category Rating
4. Technical Design of Project Moderate
9. Other: Security Substantial
OVERALL Moderate
65. The overall implementation risk rating for the project is Moderate. Substantial risks to the
project arise from country level factors. There is a substantial risk of sudden change to the
political landscape in Pakistan, and this political instability creates the risk of a shift or change in
government priorities. Moreover, governance is a considerable concern for growth and
development in Pakistan. Institutions of accountability have not provided a strong framework for
holding the executive or service delivery agents accountable for results. Initial steps taken by the
government to improve transparency, accountability, and participation have as yet had limited
impact. Macroeconomic risk is rated as Substantial, as the country’s fiscal situation remains
highly vulnerable, particularly in light of expansionary spending linked to security and the
continuous natural disasters. The fiscal deficit remains large and progress on revenue
mobilization, power reforms, and SOEs restructuring is slow. The security risk is also substantial
throughout the country given ongoing actions by militant groups and counteractivities by the
military.
66. Continued strong dialogue and analytic work with all levels of government and political
parties to make the case for priority reforms at the macroeconomic and sector levels is expected
to help mitigate these risks, and is part of the Bank’s overall risk mitigation strategy at the
country level. In this context, the Bank will work together with the government and development
partners to sustain momentum for key reforms (for example, tax policy and administration,
power sector, and so on). At the project and province level, the Bank will continue to engage at
all levels to ensure that priority is given to the education sector. The DLI structure will also help
to focus on results even within a shifting macro and security environment.
67. There exists strong government ownership and support of the project and considerable
alignment of expected outcomes among all stakeholders. There is some expected resistance to
institutional reform, which may pose risks to timely implementation but the lessons learned from
PESP II, on how to push critical reform through, will be useful in this regard and will be a
mitigating factor in this regard. Economic conditions remain poor, possibly dampening the
demand for schooling and the GoPunjab's ability to finance major increases to the budget, given
its improving but still unfavorable fiscal position. The project’s activities in many areas are new,
17
technically complex, and/or politically difficult, and thus require careful design and
implementation, with a range of efforts to build strong and wide ownership for sustained efforts.
68. Despite the overall risk rating as Moderate, it is important that there is continuous
engagement with all levels of government and stakeholders to maintain focus on priority
reforms. The use of DLIs is expected to promote institutional reforms, which will encourage the
GoPunjab’s agenda of making important structural changes to the institutional framework in the
sector, and protect the continuity of desira ble reforms and activities. TA funds will be leveraged
to support institutional strengthening of key implementing institutions and support capacity
building at the field level.
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis
69. Expected development impact. The project aims to support the GoPunjab to improve
participation, completion, and quality of school education with a particular focus on low-
performing districts. In doing so, the project will contribute toward higher completion rates and
hence an increased number of years of schooling and, consequently, increased probability of
employment and higher adult labor earnings. Additional benefits are expected from
accountability-related reforms, which will increase school and system accountability through
increased awareness and access to information.
70. Rationale for public sector provision. While the private sector plays a critical role in
education service delivery in Punjab, the public sector is the primary provider of services, as 64
percent of the total in-school population between the ages of 6 and 15 is enrolled in government
schools.17 Furthermore, the public sector is the only entity in the province that has an
administrative presence at the district and sub district level. Therefore, reforms to improve
education outcomes in the province will require public sector financing and a focus on
strengthening public sector service delivery. Public investments in primary and secondary
education are warranted as economic benefits outweigh costs associated with such investments
(see annex 6). The cost-benefit analysis provides justification for public sector financing. Under
the base case scenario, the net present value (NPV) of the project is US$4.25 billion and the
economic internal rate of return is 26 percent. The results of the sensitivity analysis suggest that
the economic internal rate of return varies from 23 percent to 29 percent and the NPV from
US$3.36 billion to US$5.15 billion.18
71. Valued added of Bank’s support. The Bank is well-placed to provide support to the
primary and secondary education sector in Punjab, given its global and local operational
experience and technical expertise in the education sector. The Bank has a long history of
supporting the GoPunjab’s education sector reform programs through a succession of DPCs from
2004–2007 and two sector investment loans from 2009 to 2015. This engagement has not only
17
Statistics derived from the PSLM Survey 2012/13 data
18
This analysis assumes that the non-salary expenditures of the SED budget are part of the additional investments
required to implement PESP III and the analysis also factors in the estimated PESP III component costs. For more
information, see annex 6.
18
facilitated a sector wide approach to supporting education in Punjab, but has also provided the
government with rigorous evaluations of various programs.
B. Technical
72. The technical content of the project has been designed based on the GoPunjab’s reform
program as articulated in its 2018 Education Goals and its Growth Strategy and the lessons and
experience of the past decade of interventions in Punjab. Furthermore, the Bank team has a rich
repertoire of analytic studies, third-party validations (TPVs) from PESRP II and impact
evaluations which have supported the project’s design. This has been combined with the Bank’s
experience globally and in the rest of Pakistan through similar schemes and extensive
stakeholder consultations. In selected subcomponents, proposed actions are targeted at smaller
numbers of specific beneficiaries such as the EVS. In addition, many of the interventions will be
piloted and scaled up once results have been assessed. This approach is based on the premise that
new innovations, even if tried and tested in other contexts, require careful implementation and
learning before scaling up and rolling out.
73. The project’s technical impact will be the successful implementation of the GoPunjab’s
2018 Education Goals, leading to an increase in the participation rates and education outcomes
of children. There will also be an impact on the longer-term goals of system reform pertaining to
PPPs in education delivery, teacher support in the classroom, mainstreaming and expansion of
ECE, NSBs for SCs to spend, and standardized testing for Grades 5 and 8.
C. Financial Management
74. The FM arrangements designed for PESP III rely on the country’s FM systems and the
existing systems of PESP II to the extent possible. An assessment of current FM arrangements
was carried out for all implementing entities with a focus on the SED from whose budget EEPs
have been selected. The proposed FM procedures and practices for the project are satisfactory for
meeting the requirements of OP/BP 10.00. Annex 3 contains the assessment of the project’s FM
arrangements. The overall FM risk is rated Moderate due to the positive progress noted in the
Public Expenditure and Financial Accountability (PEFA) and the Public Financial Management
and Accountability Assessment of 2012, as well as the acceptable capacity of the FM staff and
system at the PMIU, provided establishing of an Internal Auditing Section in the PMIU or
outsourcing it on time to mitigate risks pertaining to accounting and internal controls.
75. Component 1 will be DLI-based with the EEPs selected from SED salaries and other line
items from the education sector budget. The reporting method will be through biannual IUFRs
prepared by the PMIU and will be subject to review by the accountant general of Punjab and FD
of the GoPunjab before submission to the Bank for reimbursement to the GoPunjab.
Disbursements for Component 2 will be on an advance basis. A segregated designated account
will not be established for PESP III, however funds will be disbursed by the FD in the Special
Drawing Account (SDA) for meeting TA expenditure under Component 2 operated by the PMIU.
The PMIU will submit IUFRs to the Bank in an agreed format within 45 days of the close of
each semester. The IUFRs submitted will be used to document expenditures incurred against
advances disbursed into the Provincial Consolidated Fund Account No. 1 (Non-Food).
19
76. Annually for Component 1 and biannually for Component 2 of the project, the PMIU will
submit to the Bank a withdrawal application for all disbursements, which will be signed by a
representative of the FD and the PMIU project director. The application will include the IUFRs
for both the EEPs and the PMIU (for Component 2), and DLI results reports for disbursement
and the documentation of expenditure.
D. Procurement
77. TA activities under Component 2 of the project will be carried out in accordance with the
Bank‘s ‘Guidelines: Procurement of Goods, Works, and Non-consulting Services under IBRD
Loans and IDA Credits and Grants by World Bank Borrowers’, dated January 2011 and revised
July 2014; and ‘Guidelines: Selection and Employment of Consultants under IBRD Loans and
IDA Credits and Grants by World Bank Borrowers’, dated January 2011 and revised July 2014.
Identified EEPs do not contain any procurable items. The capacity of the PMIU will need to be
bolstered and in addition to the existing procurement staff, a procurement specialist and a
contract management specialist will also be recruited/notified. Moreover, the existing standard
operating procedures (SOPs) will be updated for the purposes of the project.
E. Social (including Safeguards)
78. Project activities do not include any interventions that may lead to involuntary
resettlement. Thus OP 4.12 will not be triggered. Further, the project is not located in an area
known to have indigenous people and does not trigger OP 4.10.
79. As part of project preparation, a Social and Gender Assessment was conducted (see annex
3). The assessment explored a number of social issues related to and including exclusion,
poverty, household dynamics, and gender roles and their impact on school enrollment and
dropout, particularly for girls. In addition, a stakeholder analysis was also undertaken. The
findings show that while caste and religious affiliations do not impact school enrollment,
household poverty and labor requirements continue to influence it. For boys, even at a young
age, the need to learn a skill and add to family income prevents school enrollment. For young
girls, household duties act as the main preventive reason.
80. Poverty. To address the poverty constraints preventing households from sending children
to school, the project will leverage PPPs in education to provide access to low-cost private
schooling free of cost, for typically poor households. In addition, the project will also target
LPDs through other results areas which are also most likely to have large pockets of poor
households.
81. Gender. Gender is a critical cross-cutting theme of the project. Each component activity
will pay special attention to gender dimensions to improve participation, completion, and quality
of teaching-learning practices for female students and teachers. Specifically, the project will
continue to support the PSSSP to incentivize households to send girls to secondary schools. In
addition, female participation in SCs will be supported, and their capacity will be strengthened to
ensure that they are well prepared to manage resources more efficiently.
82. Citizen engagement. The project will strengthen trainings for SCs regarding their role,
improve their capacity for financial oversight and introduce some auditing oversight for NSB
20
funds to ensure greater community engagement. In addition, the ECE intervention will also
engage parents through awareness campaigns and trainings on child health and nutrition needs.
Moreover, there is a Complaints Redressal Cell within the chief minister’s secretariat that is in
place, which will be strengthened so that SCs and other stakeholders can get recourse to
complaints redressal.
83. The stakeholder analysis highlighted the need for improved coordination between the
SED, PEC, DSD, and other institutions (including district-level administration). The demands
placed on teachers for duties other than teaching also need to be rationalized.
F. Environment (including Safeguards)
84. Not applicable. This Project is an Environmental Category C given that the Project does
not involve any physical works, civil works or rehabilitation and hence has no interactions with
the physical environment relevant to safeguards analysis.
G. World Bank Grievance Redress
85. Communities and individuals who believe that they are adversely affected by a Bank-
supported project may submit complaints to existing project-level grievance redress mechanisms
or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are
promptly reviewed to address project-related concerns. Project-affected communities and
individuals may submit their complaint to the Bank’s independent Inspection Panel which
determines whether harm occurred, or could occur, as a result of the Bank’s noncompliance with
its policies and procedures. Complaints may be submitted at any time after concerns have been
brought directly to the Bank's attention, and Bank management has been given an opportunity to
respond. For information on how to submit complaints to the Bank’s corporate GRS, visit
http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank
Inspection Panel, visit www.inspectionpanel.org.
21
Annex 1: Results Framework and Monitoring
PAKISTAN: Third Punjab Education Sector Project
Results Framework
Project Development Objectives
PDO Statement
To support Punjab to improve school participation, completion, and teaching-learning practices with a particular focus on low-performing districts.
These results are at Project Level
.
Project Development Objective Indicators
Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 End Target
School participation rate (6–15
years) (Percentage), 75.8 – – 77 – 79 79
disaggregated by:
Girls (6–10 years) 77.8 79 80 80
Boys (6–10 years) 85.4 86 87 87
Girls (11–15 years) 64.6 – – 66 – 68 68
Boys (11–15 years) 75.4 77 79 79
LPDs 68.5 70 73 73
Completion rate, Grade 5

(Percentage), disaggregated by 67 – – 68 – 70 70
gender:
Boys 69 70 71 71
Girls – – –
66 67 69 69
To be determined
by December
Quality score of primary Improvement Improvement over
2016. (See notes – – – –
teaching-learning practices over baseline baseline
in the indicator
description table)
To be determined Improvement Improvement over
Level of school readiness – – – –
by December over baseline baseline
22
2016
.
Intermediate Results Indicators
Cumulative Target Values
Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 End Target
Number of additional children
of age 6–16 years to whom a
voucher is provided to pay low-
0 0 10,000 130,000 270,000 420,000 420,000
cost private school tuition fees
(Number), disaggregated by
gender:
Girls 0 0 5,000 65,000 135,000 210,000 210,000

Boys 0 0 5,000 65,000 135,000 210,000 210,000

enrolled in PPP initiatives
supported by the PEF under a
0 180,000 360,000 540,000 720,000 900,000 900,000
quality assurance system
(Number), disaggregated by
gender:
Boys 0 90,000 180,000 270,000 360,000 450,000 450,000

Girls 0 90,000 180,000 270,000 360,000 450,000 450,000
Number of additional schools

covered by PPP initiatives
supported by the PEF under a 0 225 450 675 900 1,125 1,125
(Number)
Number of children of age 3–5

years enrolled in an ECE
classroom that meets quality 0.00 0 30,0000 75,000 135,000 210,000 210,000
standards (Number),
disaggregated by gender:
23
Boys 0 0 15,000 37,500 67,500 105,000 105,000
Girls 0 0 15,000 37,500 67,500 105,000 105,000
Percentage of new teachers
recruited based on merit, for all
vacant posts under the initial
100 100 100 100 100 100 100
recruitment quota reallocated to
schools according to the
recruitment policy (Percentage)
Number of districts in which at
least 85% of primary public
schools are covered by
0 0 4 8 12 18 18
strengthened package of field-
based CPD
(Number)
PEC
instruments do
not use equated
Grades 5 and 8 Grades 5 and 8 Grades 5 and 8 PEC results from
Grades 5 and 8 PEC (revised) items or
Revised PEC (revised) PEC results are PEC results are previous year are
results are analyzed and widely measure higher- Instruments
instruments administered to analyzed and analyzed and analyzed and
disseminated in actionable form order cognitive revision
piloted all public school reported in reported in disseminated in
(Text) skills, and
children. actionable form. actionable form. actionable form.
results are not
disseminated in
actionable form
Increase of 2 Increase of 5 Increase of 5
NSB execution rate TBD – – percentage points – percentage points percentage points
over baseline over baseline over baseline
Number of Executive District
Offices (EDOs)-Education that
analyze and act on revised
district education report card 0 0 3 12 36 36 36
generated from integrated
database
(Number)
Number of SC members
reached through citizen 80,000 80,000 96,000 128,000 212,000 212,000 212,000
engagement initiatives
24
Indicator Description
Project Development Objective Indicators
Responsibility for Data
Indicator Name Description (indicator definition and so on.) Frequency Data Source/Methodology
Collection
Measures the number of children in the
relevant age group who are enrolled in school PSLM. Baseline data are from
School participation rate (regardless of grade), expressed as a percentage Years 3 and 5 2013–14, with the exception of Pakistan Bureau of Statistics
of the number of children in the relevant age the LPDs (2012–13).
group.
An indicator of the extent to which children
School census data, which are
who enroll in Grade 1 then go on to
collected from all government
successfully complete Grade 5. The data will
schools using a standardized
cover only government schools. The rate is
Completion rate, Grade 5 Years 3 and 5 format at the midpoint of the PMIU/SED/MEAs
calculated using the number of children
academic year. The baseline is
enrolled in Grade 5 as a percentage of the
calculated using data from
number of children enrolled in Grade 1, four
2010 and 2014.
years earlier.
Independent third party.
Derived from observations of a
representative sample of
A score that measures the quality of teaching- teachers or classrooms targeted
learning practices at the primary level. The Baseline and under DLI 6. The observation
quality of practices is scored based on data year 5. The format will be aligned with the
derived from an observation format that covers baseline value teaching-learning practices
Quality score of primary
different domains of teaching-learning practice, is scheduled to targeted by the DSD. Once the PMIU/DSD/third party
teaching-learning practices
such as classroom organization, instructional be determined instrument has been designed
support, and emotional support. The practices by December and validated, and a team of
observed are those known to be related to 2016. observers has been trained to
student learning. reliably collect data, the
baseline data collection will be
undertaken to determine the
baseline value.
Measures the child’s readiness for primary Independent third party. The
school. The level is a score derived from the Baseline and MELQO tool (or a similar one)
Level of school readiness PMIU/DSD/third party
child’s performance on a preschool readiness year 5 will be used, and administered
measurement tool that assesses preliteracy, to a representative sample of
25
prenumeracy and fine motor skills, as well as children who have completed
the child’s level of language and the preschool year at schools
socioemotional development. targeted under DLI 4.
Intermediate Results Indicators

Responsibility for Data
Indicator Name Description (indicator definition and so on.) Frequency Data Source/Methodology
Collection
Measures the number of children to whom a
voucher is provided to pay for low-cost private
school tuition at a school that maintains quality
Number of additional children PEF. Partner schools are
standards as contractually defined between the
of age 6–16 years to whom a responsible for providing
school and the PEF. This indicator will include PEF, using own and PEF-
voucher is provided to pay Annual attendance data. The PEF is
only those children who participate in the EVS validated partner school data
low-cost private school tuition responsible for administering
that uses a strengthened quality assurance
fees QAT.
system designed under the project; and who are
in addition to the children enrolled in the EVS
schools as captured in the DLI baseline
Measures the number of additional schools
Number of additional schools covered by a PPP initiative and for which there
PEF. Based on PEF-validated
covered by PPP initiatives is a quality assurance system strengthened by
Annual PEF data provided by partner
supported by the PEF under a the project. ‘Additional’ means schools that are
schools.
quality assurance system in addition to the schools included in the DLI
baseline.
Measures the number of children enrolled in
additional schools covered by a PPP initiative
and for which there is a quality assurance PEF. Based on PEF-validated
enrolled in PPP initiatives
system strengthened by the project. These Annual PEF data provided by partner
supported by the PEF under a
children are in addition to children enrolled in schools.
PPP schools already operating at baseline, as
captured in the DLI.
Number of children of age 3–5 DSD. DTE data to be validated
Measures the number of children enrolled in
years enrolled in an ECE on a sample basis in years 3
the classrooms that meet all the quality Annual PMIU/DSD
classroom that meets quality and 5 by a third party
standards, as stipulated in DLI 4
standards evaluation.
Percentage of new teachers Measures the number of new teachers recruited EDOs/District Monitoring
Annual PMIU
who are recruited based on based on merit for all vacant posts (which are Officers (DMOs). The data
26
merit, for all vacant posts to be filled by initial recruitment of teachers will be validated in year 3 by a
under the initial recruitment and not by promotions) reallocated to schools third party.
quota reallocated to schools based on the recruitment policy, as a
according to the recruitment percentage of all new teachers recruited for
policy those vacant posts
Number of districts in which at
Measures the number of districts in which at
least 85% of primary public DTEs. The data will be
least 85% of primary public schools receive all
schools are covered by Annual validated on a sample basis in PMIU/DSD
elements of the strengthened package. The
strengthened package of field- years 3 and 5 by a third party.
elements are those that are stipulated in DLI 6.
based CPD
Revised instruments will include instruments
that measure higher-order cognitive skills and
contain items that are designed for inter-year
equitability. The reporting of data in actionable
Grades 5 and 8 PEC (revised)
form means that the data are analyzed, tailored, In years 4 and
results are analyzed and TPV Report PMIU/PEC
and disseminated to relevant stakeholders 5
reported in actionable form
(teachers/trainers, curriculum and textbook
developers, and decision makers) in a form that
is useful to them in deciding what actions can
be taken to improve the quality of education.
Equivalent to the funds expended by schools To establish
Third party surveys will be
against the NSB funds received by schools, as baseline, and
NSB execution rate conducted to establish PMIU
a percentage of the NSB funds received by in years 3 and
baseline, and in years 3 and 5
schools 5
Measures the number of EDOs-Education that
analyze the revised District Report Cards
generated from the integrated database, and
that take action based on the analysis. Evidence
of analysis and action will be based on minutes
Number of EDOs-Education
of the District Review Committee (DRC),
that analyze and act on revised
using a protocol to be elaborated during the
district education report card Annual PMIU PMIU
first 6 months of the project implementation
generated from integrated
period. Only those DRCs will be analyzed that
database
have received training through the project on
how to analyze and act on the data in the
revised district education report card. ‘Revised’
refers to revisions to be made to the report card
as described in annex 2. ‘Integrated’ means
27
that the report card is generated from a master
database that incorporates data sets as agreed in
the Memorandum of Understanding to be
elaborated in year 1 of project implementation.
Measures the number of members of a SC
(mostly parents) who are given a forum
through either a school mobilization program
Number of SC members (on going) based on information and
reached through citizen communication technology (ICT) or any other Annual PMIU PMIU
engagement initiatives forum to voice their service delivery related
needs and/or complaints. This will be measured
through the data collected by the PMIU on the
SC mobilization program(s).
28
PAKISTAN: Third Punjab Education Sector Project (P154524)
Disbursement-Linked Indicators
DLI 1 Baseline Target Values

2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 1: Private school  Vouchers to attend Revised EVS system 10,000 Eligible 130,000 Eligible 270,000 Eligible 420,000 Eligible
vouchers private schools in place; and Children received Children received Children received Children received
Strengthening provided to vouchers to attend vouchers to attend vouchers to attend vouchers to attend
program design to 322,679 children private schools; and private schools. private schools. private schools.
expand coverage of from PEF initiates pilot
tuition-replacement disadvantaged for EVS.  PEF’s Board of
vouchers to children households Directors approved
from disadvantaged  The program has the Revised
households undergone rapid System for EVS.
expansion, and
present design
features need to be
revisited to ensure
more effective
beneficiary
selection and
monitoring
Definitions, Evidence, and Verification Protocol
Definitions
 All targets are cumulative and are in addition to the number of children attending the EVS schools as captured in the baseline. In the LPDs and included
in the targets for DLIs 1 and 2 (under the EVS and PPP Programs), the cumulative number of children who were previously out of school will be not
less than 150,000 by year 5
 Pilot initiated is defined as vouchers distributed to households under the revised system
 The revised system includes revised beneficiary targeting and validation system, and improved monitoring system includes quarterly monitoring of
partner schools
 “Eligible Children” refers to those children who would be able to participate in the EVS as defined by the PEF Board of Directors’ criteria for
eligibility.
Evidence
 (a) Database of registered voucher recipients (with unique identifiers) (b) database of partner schools (with unique identifiers) (c) expenditures under the
vouchers program, in agreed format
 QAT and monitoring database of schools and beneficiaries with unique identifiers
29
 Approval by the PEF’s board of directors will be evidenced with official board minutes. Evidence provided by the PEF to the PMIU
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 2. Public-private Currently 1.3 million 180,000 children are 360,000 children are 540,000 children are 720,000 children are 900,000 children
partnerships in children are studying enrolled through enrolled through enrolled through enrolled through are enrolled
education in PEF partner Public-Private Public-Private Public-Private Public Private through Public
Leveraging the private schools through the Partnerships under Partnerships under Partnerships under Partnerships under Private
sector to support NSP and FAS. PEF approved PEF approved PEF approved PEF approved Partnerships under
schools to increase Capacity to enroll programs that have a programs that have a programs that have a programs that have a PEF approved
enrollment additional children Strengthened Quality Strengthened Quality Strengthened Quality Strengthened Quality programs that have
through PPPs Assurance System. Assurance System. Assurance System. Assurance System. a Strengthened
remains Quality Assurance
System.
Definitions
 All targets are cumulative, and are over and above the 1.3 million baseline. In the LPDs and included in the targets for DLIs 1 and 2 (under the EVS and
PPP programs), the cumulative number of children who were previously out of school will be not less than 150,000 by year 5.
 PEF-approved programs to include the FAS, NSP, and any newly developed program including the Public School Support Program that is approved by
the PEF’s Board and is acceptable to the Bank.
 PPPs will be between the PEF and the private sector including private school owners, NGOs, civil society organizations, and educational institutions.
 Strengthened quality assurance system includes (but is not necessarily limited to) CPD support to teachers; improved QATs; and enhanced monitoring
of partner schools to include quarterly monitoring.
 Minimum performance standards are those that are contractually agreed to between the PEF and the partner school, and are acceptable to the Bank.
Evidence
Database of beneficiary students, database of partner schools, periodic monitoring reports, TPV reports, and QAT results. Approval of a program by the PEF will
be evidenced by official minutes of the PEF Board meetings. Evidence provided by the PEF to the PMIU
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 3. Stipends for Stipends are offered SED has SED continues to SED continues to SED continues to SED continues to
secondary school girls to girls enrolled in strengthened its implement the implement the implement the implement the
Stipends for secondary secondary grades in original program strengthened strengthened strengthened strengthened
school girls to increase 16 districts under the and is program in 16 program in 16 program in 16 program in 16
secondary school original program. implementing it in Districts. Districts. Districts. Districts.
participation/retention The stipend amount 16 Districts.
and conditions have
remained unchanged
since program
inception.
30
Definitions
 Strengthened program includes additional repetition condition (whereby a student becomes ineligible during a repeated grade), biannual stipend
payments, and more efficient payment mechanisms.
 Ongoing Stipend Program includes the 16 districts where girls enrolled in secondary school have been receiving stipends since 2004.
Evidence
 Database of beneficiaries in agreed format
 Biannual program implementation status report with beneficiary identification, confirmation, and disbursement data, in agreed format
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 4: Early ECE is currently SED has approved the 1,000 schools have 2,500 schools have 4,500 schools have 7,000 schools have
childhood education being implemented ECE Policy classrooms that meet classrooms that meet classrooms that meet classrooms that meet
Improving quality and on a small scale Framework, which the Quality Standards the Quality Standards the Quality Standards the Quality
expanding access to includes Quality prescribed by the ECE prescribed by the ECE prescribed by the ECE Standards prescribed
Standards for ECE Policy Framework. Policy Framework. by the ECE Policy
early childhood Policy Framework; and
classrooms. Framework.
education 50 schools have started
implementation of
District health/ nutrition
officers pilot.
Definitions
 All targets are cumulative
 ECE Policy Framework includes institutional unit and budget planning.
 An ECE teacher is defined as a primary schoolteacher who has received the DSD ECE teacher training.
 An ECE caregiver is defined as an individual recruited with revised Terms of Reference (ToR) and who has received the DSD ECE caregiver training.
 ‘Revised’ ToRs mean that the ToRs have been updated and reviewed by the DSD, SED, and PMIU after project effectiveness.
ECE Quality Standards for a Classroom and its School
 Staffing. One ECE teacher and one ECE caregiver
 Training. The following persons have received in-service training on ECE through the DSD: ECE teacher, ECE caregiver, head teacher and 2 School
Management Council members, of whom one must be a woman
 Content. ECE curriculum and ECE activity guide in use
 Materials. ECE toolkit
 Monitoring for improvement. DTE (or equivalent) mandate revised to include ECE classrooms. ECE classrooms are monitored once a month by the
DTEs (or equivalent) who have received ECE training and provide feedback for improvement to ECE teacher and ECE caregivers.
 Parental outreach. Parents have received parent activity guide and follow-up; quarterly parent meetings held at schools. Evidence to be provided by the
PMIU with DSD inputs.
 The ECE curriculum and activity guide are judged to be in use (or not) by the DTE (or equivalent) during the on-site support visit.
 Pilot. District health/nutrition officers receive training in early childhood development to provide information on health and nutrition to ECE classes and
identify malnourished children to refer to district health centers.
31
Evidence
 Random sample of reports from the DTEs on classrooms meeting quality standards.
 Approved ECE Policy Framework with quality standards signed by relevant authority (Secretary Schools Education Department)
 Database of schools with ECE classrooms that meet quality standards, in an agreed format
 TPV report in an agreed format
DLI 5 Baseline Target values
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 5. Human Merit-based SED has started SED continues to SED continues to SED continues to SED continues to
Resources recruitment of new implementation of its implement its implement its implement its implement its
Management teachers for all recruitment policy recruitment policy recruitment policy recruitment policy for recruitment policy
Strengthening HR vacant posts for Merit-Based for Merit-Based for Merit-Based Merit-Based for Merit-Based
processes through reallocated to schools Recruitment of new Recruitment of new Recruitment of new Recruitment of new Recruitment of
continuous merit-based based on existing teachers and teachers and teachers and teachers and new teachers and
recruitment and recruitment policy reallocation of posts. reallocation of posts. reallocation of posts. reallocation of posts. reallocation of
rationalization of Third-party posts.
teaching posts validation of the
SED’s recruitment
policy for Merit-
Based Recruitment of
new teachers and
reallocation of posts
completed.

 Merit-based recruitment means hiring of 100 percent newly recruited teachers under initial recruitment quota through competitive tests carried out by a third
party as under PESRP II. Vacant posts will be identified by district officials based on the recruitment policy.
 Initial recruitment quota is identified as vacant posts, which will be filled by hiring of new teachers and not by promotions or transfers of existing teachers.
 TPV conducted in 2017–18 will review implementation of recruitment policy with particular focus on merit-based recruitment and reallocation of teaching
posts. The TPV review of test-based recruitment will identify potential improvements in test content, design, administration, and use of results. Review of
recruitment and reallocation policy will identify the ratio of success in implementation and propose changes to address challenges.
Evidence
Approved recruitment policy, teacher-specific test results, and placement information in agreed format. In 2017–18, the SED will submit a revised recruitment
and reallocation mechanism acceptable to the Bank.
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 6. Quality in the Field-based system DSD has designed: (a) At least 85% of primary At least 85% of primary At least 85% of primary At least 85% of
primary classroom of CPD has mixed the elements of the school teachers in 4 school teachers in 8 school teachers in 12 primary school
Strengthening field- operational capacity New Mainstream Phase Districts covered by the Districts covered by Districts covered by teachers in 18
based CPD for and performance, of integrated CPD New Mainstream Phase New Mainstream Phase New Mainstream Phase Districts covered by
program and piloted its of integrated CPD of integrated CPD of integrated CPD New Mainstream
32
improved teacher and poor design key components; and program; and program; and program; Phase of integrated
performance match with (b) an innovative DSD has analyzed and CPD program.
multigrade and large teachers support DSD is implementing DSD continues to disseminated:
class teaching. package and tested its the validated innovative implement the validated
components teachers support innovative teachers
package in at least 100 support package in at (a) the results of the
schools least 100 schools integrated CPD
program evaluation and
integrated its findings
into the CPD system;
and
(b) the results of the

innovative teachers
support package
evaluation.
Definitions, Evidence, and Verification Protocol:
 The new mainstream phase strengthens the existing CPD system for primary teachers, and focuses on literacy, numeracy, multigrade, and large class
teaching. It comprises
o support to teachers and head teachers on the effective utilization of instructional resources by teachers and students during lessons, as well as
the use of formative assessment practices by teachers during lessons to identify and remedy student learning gaps. The support will include in-
service training for teachers and head teachers; and data-based supportive feedback to teachers and head teachers provided by the DTEs using
revised observation and learning assessment instruments. The in-service training and observation instrument will be adapted for multigrade
teachers;
o logistical allowances for the DTEs and resources for conducting schools visits, PD days, and training weeks;
o filling all the DTE (or equivalent) posts on revised merit basis for all clusters based on competency levels; and
o use of teacher standards to guide training.
 The selection criteria for the districts are a majority of the project’s LPDs are covered; CPD - Phase 1 districts are included; the teachers perform
relatively well with regard to their mentoring score, including on the activity-based dimension (using the DSD’s measurement); and the students have
relatively low levels of learning achievement (based on the DSD’s measurement).
 The innovative package comprises
o curriculum sequenced by learning steps for Grades 1–3 literacy and numeracy, with learning, assessment and supplementary learning activities
for each step;
o allocation of adequate instructional resources including teacher guides, learning and assessment activity materials for each step, individual
child progress monitoring cards, student workbooks, notebooks, supplementary reading books, and literacy and numeracy materials; and
o support to teachers and head teachers on the effective utilization of instructional resources and the sequenced learning steps by teachers and
students during lessons, as well as the use of formative assessment practices by teachers during lessons to identify and remedy student learning
gaps. The support will include in-service training for teachers and head teachers; and data-based supportive feedback to teachers and head
teachers provided by the DTEs using adapted observation and revised learning assessment instruments.
 Validation means that designers (whether of the new mainstream CPD phase or the innovative package) have reviewed the performance of the
phase/package in school settings using the monitoring and feedback mechanism set up as part of the design process; have redesigned or modified
33
elements of the package accordingly; and are satisfied that the phase/package is sufficiently well-designed to proceed with further expansion to more
schools. Evaluations are undertaken by a third party. They should be designed during year 1, initiated in year 3, and completed in year 4. The evaluation
results must be analyzed and the findings disseminated to stakeholders and discussed. The DSD will modify the mainstream phase or innovative
package as needed, in light of the evaluation findings.
Evidence
 to be provided by the PMIU with DSD inputs.
Baseline Target Values
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 7. Student No assessment PEC has developed 80% of ISP targets 80% of ISP targets PEC has analyzed PEC has analyzed
Assessment policy framework; the its assessment for 2017-18 are met; for 2018-19 are met; and reported Grade and reported Grade
PEC and its outdated PEC ISP policy framework; and and 5+8 PEC results from 5+8 PEC results
instruments that has been and the previous year of for the previous
strengthened within a partially Project year of Project
revised policy implemented and is strengthened Grade strengthened Grade implementation in implementation in
framework in need of revision. The new PEC 5+8 PEC instruments 5+8 PEC instruments Actionable Form. Actionable Form.
Institutional are piloted in at least are administered
Strengthening Plan one subject throughout the entire
has been approved Punjab school system
by the commission
overseeing PEC.
Definitions, Evidence, and Protocols
 The assessment policy framework will be developed based upon a review of extant policy, and the roles, mandates and relative strengths and
weaknesses of PEC and other institutions involved in assessment. It will be approved by the Commission overseeing PEC.
 The ISP will be based upon a functional review of PEC that examines PEC’s mission within the context of the new assessment policy framework, and
will have schedules covering at least the following areas of institutional strengthening: (i) clarification of PEC’s mission; (ii) update of PEC functions,
activities and operating procedures; (iii) staffing levels and profiles, and recruitment and training needs; (iv) equipment procurement; (v) budgetary
requirements, and (vi) capacity building to enhance item/test quality and scoring, and to analyze, report and use data.
 The reporting of data in actionable form means that the data are analyzed, tailored and disseminated to relevant stakeholders (teachers/trainers,
curriculum and textbook developers, and decision makers) in a form that is useful to them in deciding what actions can be taken to improve the quality
of education. This will require doing an upfront focus group with each stakeholder group to get a sense of their data needs. It also will require holding a
dissemination workshop with each stakeholder group once the report has been prepared to review the data and actionable recommendations with them.
Evidence:
Evidence will be provided by the PMIU with PEC input.
DLI 8. Baseline Target Values
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 8. School School-specific SED has prepared SED has prepared SED has prepared SED has prepared SED has prepared
specific NSB NSBs for FY2015/16 School-Specific School-Specific Non- School-Specific Non- School-Specific Non- School-Specific
Setting and executing prepared in Non-Salary Budgets Salary Budgets for Salary Budgets for Salary Budgets for Non-Salary
school budgets in line accordance with for FY2016/17 in FY2017/18 in FY2018/19 in FY2019/20 in Budgets for
with school agreed funding accordance with accordance with accordance with accordance with FY2020/21 in
34
resourcing needs. formula, and agreed funding agreed funding agreed funding agreed funding accordance with
submitted for formula, and formula, and formula, and formula, and agreed funding
inclusion in submitted for submitted for submitted for submitted for formula, and
FY2016/17 district inclusion in inclusion in inclusion in inclusion in submitted for
budgets in FY2017/18 District FY2018/19 District FY2019/20 District FY2020/21 District inclusion in
36 districts for all budgets in budgets in 36 budgets in 36 budgets in 36 FY2020/21
schools, including 36 Districts for all Districts for all Districts for all Districts for all District budgets in
high/high secondary. schools, including schools, including schools, including schools, including 36 Districts for all
high/high secondary; high/high secondary; high/high secondary; high/high secondary; schools, including
and and and and high/high
secondary; and
Punjab’s Finance
Department has Punjab’s Finance Punjab’s Finance Punjab’s Finance
dispersed School- Department has Department has Department has Punjab’s Finance
Specific Non-Salary dispersed School- dispersed School- dispersed School- Department has
Budgets bi-annually Specific Non-Salary Specific Non-Salary Specific Non-Salary dispersed School-
to schools with Budgets bi-annually Budgets bi-annually Budgets bi-annually Specific Non-
establishment of to schools with to schools with to schools with Salary Budgets bi-
Necessary Support establishment of establishment of establishment of annually to
Structure for Necessary Support Necessary Support Necessary Support schools with
execution; and Structure for Structure for Structure for establishment of
execution. execution; and execution. Necessary Support
Structure for
SCs reconstituted in
execution.
required elementary/ TPV of Year 1 and
primary schools and Year 2 of this DLI
constituted in all completed.
high schools.
Definitions, Evidence and Verification Protocol
 ‘Necessary support structure’ for execution of the NSB component entails formulation of a steering committee with representation from all stakeholders
and the required capacity-building program to engage/mobilize SCs and school administrations. The required capacity-building program for school will
be a comprehensive mobilization strategy agreed by all stakeholders. It will also include necessary material aid to SCs, such as SC guidelines. The first
year activities will be focused on establishing protocols and strategies, which will be implemented in following years. For high and higher secondary
schools, Project to Improve Financial Reporting and Auditing (PIFRA) system will be used to identify disbursed money against Drawing & Disbursing
Officer (DDO) codes of respective schools in the first 2 years of the program, while the SCs are being formulated in the schools. In the third year of the
program, the project will work to ensure that disbursement of the NSB will be through SCs in high or higher secondary schools, based on consultations
and subject to agreement with the FD of Punjab Province and the Accountant General’s Office.
 SCs will be reconstituted in primary and elementary schools, which were not part of the capacity-building program during PESRP II. Simultaneously,
SC will be formalized in high or higher secondary schools with required guidelines and materials disseminated.
 The TPV to be carried out in the third year will be against the ToRs as agreed by all stakeholders. The TPV will seek to review the impact) of the NSB
35
component along with the capacity-building program, analyzing the efficacy of the in-place capacity-building program.
 Verification protocol. Verification of disbursements of funds to schools will be sought from certificates submitted by the EDO (or equivalent) office
for release of cheques to all primary and elementary schools.
 For reconstitution and constitution of SCs, certificates will be sought from district EDO (or equivalent) offices highlighting the detail of SCs formulated
according to policy.
Evidence:
The final report of the TPV will be submitted to the Bank for verification of the evaluation activity.
DLI 9. Baseline Target Values
2015 2016–17 2017–18 2018–19 2019–20 2020–21
DLI 9. Data Last private school SED has conducted a PMIU has integrated PMIU has integrated PMIU has integrated PMIU has
strengthening and census was in 2010- private school Education sector data Education sector data Education sector data integrated
performance 11. Various census; and (from PEC, PMIU, (from PEC, PMIU, (from PEC, PMIU, Education sector
management education sector data DSD and PEF); and DSD, and PEF); and DSD, and PEF) ; and data (from PEC,
Strengthening are not integrated, PMIU, DSD, and
management capacity utilization of data PMIU has prepared PMIU provided PEF) ; and
and evidence-based remains low and and delivered on a access and PMIU has provided PMIU has provided
decision-making restricted to source semiannual basis orientation to the access and access and orientation
departments. District performance integrated database to orientation to the to the integrated PMIU has
report cards for Year education integrated database to database to education provided access
1 following agreed departments and education departments and and orientation to
format and contents, District education departments and District education the integrated
to District Education officials in 3 District education officials in 36 database to
Administrations. Districts; officials in 12 Districts; education
Districts; departments and
PMIU has prepared District education
PMIU has prepared
and delivered on a officials in 36
PMIU has prepared and delivered on a
semiannual basis Districts;
and delivered on a semiannual basis
District performance semiannual basis District performance
report cards for Year District performance report cards for Year PMIU has
2 following agreed report cards for Year 4 following agreed prepared and
format and contents, 3 following agreed format and contents, delivered on a
to District Education format and contents, to District Education semiannual basis
Administrations to District Education Administrations District
Administrations performance report
cards for Year 5
following agreed
format and
contents, to
District Education
Administrations
36
Definitions
 Integrated education sector database will include a web-based integrated database at the school level consisting of ASC, MEA data, PEC, DSD, PEF, in
agreed format
 Access and orientation to the integrated education sector dashboard will involve sharing integrated database with source departments and district
education officials, and providing training on utilizing the database, and on data utilization for improving education outcomes
 Departments include the SED, PEC, DSD, PMIU, and PEF
 Indicators in the report cards should include student achievement data from PEC results, teacher and student absence and student-teacher ratios at the
primary level. Additional school level indicators can be included if in agreement with the Bank.
Evidence
 Private school census school-wise database with GPS coordinates
 Integrated education database in agreed format
 District level lists with signatures of relevant officials indicating receipt of cards by district education administrations, in agreed format
37
Annex 2: Detailed Project Description
1. PESP III is designed to support the 2018 Education Goals and Growth Strategy of the
GoPunjab. Three of the 2018 Education Goals are to (a) enable a conducive learning
environment for students; (b) ensure high-quality teaching and learning in the classroom; and (c)
improve leadership and accountability at all levels. The Growth Strategy has five strategic pillars
for education: (a) increasing the demand for primary education; (b) harnessing the strengths of
the private sector for education; (c) ensuring the transition to secondary education; (d) improving
the quality of primary and lower secondary education; and (e) deepening ongoing institutional
and governance reforms.
2. The project will have two components. Component 1 will use results-based financing to
support the bolstering of ongoing reform efforts and initiate new interventions to make primary
and secondary education more accessible, equitable, and of better quality. There will be nine
subcomponents structured in three strategic areas that align with the Growth Strategy and 2018
Education Goals. (Table 2.1). The three strategic areas are (a) improving access to schooling for
the poorest; (b) ensuring quality teaching and learning for all; and (c) improving leadership,
management, and accountability. For each subcomponent, a DLI has been established with time-
bound targets. Targets have been selected as key links in a results chain that incrementally
contribute during the implementation cycle to the achievement of the PDO. Funds will be
disbursed upon the achievement of targets. A detailed description of the DLIs, as well as
protocols for verifying compliance with each, can be found in annex 1.
3. Component 2 will finance TA to strengthen implementing institutions to deliver their

mandates in the education sector and achieve the DLI targets, as well as project management and
M&E. The component will use a traditional reimbursement modality based on SOEs after the
completion of activities.
Table 2.1. Alignment of PESP III with GoPunjab’s 2018 Education Goals and Growth Strategy
2018 Education Strategic Pillars of PESP III Strategic
PESP III Subcomponents/DLIs
Goals Growth Strategy Areas
Enabling a conducive Increasing the Improving access to 1. EVS
learning environment demand for primary schooling for the 2. PPPs
for students education poorest 3. Stipends for secondary school girls
Harnessing the
strengths of the
private sector for
education
Ensuring the
transition to
secondary education
Ensuring high-quality Improving the quality Ensuring quality 4. ECE
teaching and learning of primary and lower teaching and learning 5. Effective human resources
in the classroom secondary education for all management for teachers
6. Improved teaching quality and
learning
7. Improved education assessments to
38
2018 Education Strategic Pillars of PESP III Strategic
PESP III Subcomponents/DLIs
Goals Growth Strategy Areas
enhance quality
Improving leadership Deepening ongoing Improving leadership, 8. Non-salary budgets
and accountability at institutional and management and 9. Data strengthening and performance
all levels governance reforms accountability management
Component 1: Improved Access, Quality, and Education System Management (Bank

financing: US$289.89 million, 96.6 percent of total Bank funding)
4. The objectives of this component are to (a) improve access to schooling for the poorest;
(b) ensure quality teaching and learning for all; and (c) improve leadership, management, and
accountability. There are nine subcomponents, for each of which there is a DLI. The manner in
which each DLI covers the project’s 10 LPDs is provided in table 2.2.
Table 2.2. District Coverage of DLIs

Of which, Number of
DLI District Coverage
LPDs
1: EVS All, with expansion prioritizing LPDs All
2: PPPs All, with expansion prioritizing LPDs All
3: Stipends for secondary school girls 16 All
4: ECE All All
5: Effective human resources management
All
for teachers All
6: Improved teaching quality and learning 16 6
7: Improved education assessments to

All All
enhance quality
8: Non-salary budgets All All
9: Data strengthening and performance
All All
management
Strategic Area 1: Improving access to schooling for the poorest
5. In this area, the project will work to provide primary and secondary students from the
poorest households with financial resources enabling them to attend school.
6. At the primary and secondary levels, there are 4.1 million out-of-school children ages 6–
15, the result largely of never enrolling and dropouts.19 For instance, in 2013–14, 21 percent of
children ages 10–14 had never attended school, while only 71 percent of children enrolling in
Grade 1 in government schools survive to complete Grade 5. Participation rates are lower in rural
than urban areas. Households from the bottom wealth quintiles have much lower school
participation rates, and their children constitute two-thirds of all children out of school. Overall,
28 percent of households cite poverty and the cost of schooling as the primary reasons for never
enrolling their children in school.
19
Statistics derived from the PSLM Survey data 2012–13.
39
7. One intervention that the GoPunjab has been effectively implementing has been to
provide vouchers to parents to send their children to low-cost private schools. Parents often
perceive that private schools deliver a better quality education than public schools and enroll
their children there if they can afford to do so. Research has also found that low-cost private
schools deliver education services more effectively and efficiently than public schools.20 As a
result, the GoPunjab has worked through the PEF to partner with the private sector to increase
school participation and learning outcomes. The PEF operates three major programs, including
the EVS. The EVS offers tuition redemption vouchers to out-of-school children and children at
risk of dropping out between the ages of 5 and 16 to attend low-cost private schools of their
choice.
8. The EVS started operations in 2006 and has undergone rapid expansion over the past
three years. It currently provides vouchers to 322,679 children attending 1,396 private schools in
all districts. Over the next four years, the PEF plans to expand the EVS to cover an additional
125,000 children annually. This expansion plans includes prioritizing the LPDs. The current
method for identifying beneficiaries relies primarily on partner schools to identify and enroll out-
of-school children. There is a need to strengthen targeting to ensure that the poorest are reached
and verification to ensure that beneficiary information provided by partner schools is accurate.
9. Partner schools must maintain certain attendance and learning achievement standards.
The standards could be usefully strengthened, both to promote retention and transition and to
raise quality. The PEF visits partner schools at most twice a year and otherwise relies on an e-
attendance system to monitor attendance. The PEF’s monitoring mechanism could therefore be
strengthened, and the capacity building of monitors is required, especially as PEF plans to recruit
extra monitors to enable more on-site visits. The QATs administered to measure learning
achievements could also be usefully reviewed and strengthened to ensure validity and reliability.
10. To further facilitate poor students’ access to private schooling, the project will have one
subcomponent that aims to increase primary school enrollment and retention among children
from disadvantaged households, by providing a voucher to attend a low-cost private school.
11. As a further measure to increase access to schools for children from poor households, the
GoPunjab has been supporting two public-private programs through the PEF: the FAS and the
NSP. The FAS finances low-cost private schools with a per student subsidy linked to the
achievement of quality standards. The NSP incentivizes private agents to establish low-cost
schools in distant and remote areas where there is little or no access to schools, by providing
them with a per student financing linked to the achievement of quality standards. There is ample
scope to expand the coverage of these programs, including in LPDs, and to include in their ToR
the management of failing government schools. NGO experience has shown that private sector
management of such schools is effective with regard to increasing enrollment, quality, and
outcomes. The project will therefore include one subcomponent to expand PPPs.
12. To address the low levels of female transition to, and completion of, secondary school,
the GoPunjab has been distributing stipends to female students through the PSSSP, a key activity
20
One study found, for instance, that on average private schools achieve better learning outcomes at lower costs and
with less academically qualified teachers. Learning and Educational Achievement in Punjab Schools 2001–2015.
40
of previous PESP projects. The program targets girls enrolled in Grades 6–10 in government
schools in 16 districts. First initiated in 2004, by 2014–15 the program had successfully enrolled
425,000 girls, providing them with PKR 200 per month based on an attendance rate of at least 80
percent. PESP II tested raising of the stipend to PKR 300 per month for Grades 6–8 and PKR
400 for Grades 9–10, with an additional PKR 2,400 being given to girls if they progressed from
lower to upper secondary and maintained an 80 percent attendance rate in the first quarter of the
school year. This proved effective, though the transition-linked supplement will be difficult to
scale up given budgetary constraints. The project will include one subcomponent to increase
transition to, and retention in, secondary schooling for disadvantaged girls.
Subcomponent 1.1: Education Voucher Scheme (EVS)
13. The objective of this subcomponent is to support the GoPunjab to extend the EVS to an
additional 420,000 children ages 5–16 over a 5 year span under a strengthened program with
improved targeting, stronger standards, and an enhanced quality assurance mechanism.
14. First, the project will develop a strengthened EVS Program. The program will be
strengthened through improved standards pertaining to achievement, attendance, and other
dimensions of participation; a more reliable targeting mechanism; a strengthened system for
reporting and verifying school and student information; an enhanced monitoring mechanism; and
the use of more valid and reliable assessment instruments. The capacities of partner schools will
be built to better target children and report against revised standards. The PEF staff will be
trained to implement and apply improved verification procedures and monitoring mechanisms.
QAT designers and administrators will have their capacities built to design and administer valid
and reliable instruments. The strengthened elements of the program will be piloted and
evaluated. Second, the project will support the scaling-up of this strengthened EVS Program to
enroll an additional 420,000 children over five years of age at private schools, with particular
focus on LPDs. Given the relatively small targets in the second year, it is likely that the program
may be oversubscribed. In this scenario, second-year beneficiaries will be selected through a
lottery, and the remaining eligible beneficiaries will be enrolled in subsequent years of the
program. It is expected that the different elements of the program that would be successfully
strengthened by the project would be applied to all partner schools participating in the EVS
Program.
15. This subcomponent is linked to a DLI with targets pertaining to (a) developing a
strengthened EVS Program and (b) progressively increasing coverage of the strengthened
program to an additional 420,000 children. TA will be mobilized under Component 2 to support
the PEF to design various technical aspects of the strengthened program. These will include
setting standards, designing an improved targeting mechanism, improving the system of
reporting and verifying student and school information, and strengthening the monitoring
mechanism and QAT. The TA will also build capacities, particularly with regard to the design of
training modules and creating master trainers.
Subcomponent 1.2: Public Private Partnerships in Education
16. The objective of this subcomponent is to support the GoPunjab to increase the access to,
enrollment in, and quality of schools operating under PPP programs administered by the PEF and
41
enrolling an additional 900,000 children. The children will be enrolled in the PEF partner schools
under the FAS, NSP, and other PEF programs approved by the PEF board of directors. These
programs will be strengthened and expanded in scope to improve quality assurance systems and
to increase enrollment, particularly in LPDs.
17. Private sector partners under this subcomponent will be transparently selected based on
eligibility criteria approved by the PEF. Partnership will be open to all experienced agencies,
including NGOs, educational institutions, corporate entities (consortia including partners with
education experience), the PEF’s existing partners that have demonstrated good performance,
and individuals with a strong proven record in school management. Contract payments will be
performance based using target-linked indicators and will be governed by a strengthened quality
assurance system. Reported target values will be validated by a third party. Contract values will
be based on monthly per student costs to be determined by the PEF, to be in line with similar
PPP agreements at levels below comparable public sector costs.
18. This subcomponent is linked to a DLI with targets pertaining to the number of additional
children enrolled in PPP initiatives supported by the PEF under a strengthened quality assurance
system. TA will be mobilized under Component 2 to support the strengthening of the PEF’s
capacity to manage and implement these programs and the quality assurance system.
Subcomponent 1.3: Stipends for Secondary School Girls
19. The objective of this subcomponent is to strengthen the PSSSP to increase transition to,
and retention in, secondary school. The project will continue to support the PSSSP in selected
districts where secondary participation rates for girls are relatively low. The existing scheme for
girls in 16 districts will be strengthened through (a) introduction of grade promotion as an
additional eligibility criteria, (b) enhanced compliance verification system, and (c) a more
efficient payment modality.
20. This subcomponent is linked to a DLI with targets pertaining to the strengthened and
continued operation of the Girls Stipend Program in 16 districts. TA will be mobilized under
Component 2 to design some aspects of strengthening the program.
Strategic Area 2: Ensuring quality teaching and learning for all
21. In this area, the project will work to create early learning environments for children that
improve their development and facilitate their transition to primary school through quality ECE;
ensure that primary schools have adequate teaching staff to allow curriculum delivery; strengthen
the quality of primary-level teaching and learning; and strengthen assessment data and its use to
improve education for all.
22. The GoPunjab aims to introduce ECE to all primary schools by 2021 for children ages 3–
5. A wide range of evidence has demonstrated that the quality of a child’s early learning
experience makes a marked difference to school preparation, participation, completion, and
achievement. Quality ECE programs increase child development scores on one or more measures
of child development (literacy, vocabulary, mathematics, and quantitative reasoning).21
21
Denboba et al. 2014. Stepping Up Early Childhood Development: Investing in Young Children for High Returns.
42
Increasing access to ECE can also have a positive impact on school participation and retention
for older siblings, particularly girls, when they are freed up from the responsibility of caring for
younger children.22 At this time, however, ECE programs supported by the public sector are
nascent. Only 30 percent of children ages 3–5 attend school, and 40 percent of these drop out
before entering Grade 1. While 50,175 schools have a katchi class, an informal space for pre-
primary children that focuses more on child care than on education, only 1,125 primary schools
have an ECE classroom with a teacher who has received some ECE training and with appropriate
teaching-learning materials. Many of these schools also have a part-time ‘caregiver’ who has
received a limited amount of ECE training and supports the ECE teacher.
23. There are several constraints on quality in the katchi and ECE classrooms. Classrooms
are overcrowded and teaching-learning materials are lacking, particularly in the katchi classes.
Teachers and caregivers have not received adequate training in early childhood development,
and do not receive on-site support for PD. ECE teachers are often required to fill in for other
absent teachers in other grades, leaving the ECE/katchi class solely to the caregivers. While a
National ECE Curriculum was developed in 2007, it requires strengthening for use in Punjab
and, in any case, is not used in the classrooms. ECE teachers rarely meet with parents to discuss
their children’s progress, and parents have limited understanding of child development. Many
children first enter school already laboring under significant constraints, including malnutrition
(40 percent are stunted) and lack of early childhood stimulation. Accordingly, the project will
have one subcomponent that focuses on improving children’s cognitive, socioemotional, and
physical development and facilitates their transition to primary school, through increasing access
to quality ECE.
24. The GoPunjab has implemented various recruitment and rationalization policies in recent
years—including under PESRP II—in an attempt to achieve an overall STR of 40:1, ensure an
equitable distribution of teachers, minimize multigrade teaching, and maintain a minimum level
of quality of teaching resources in all schools to cover all subjects. This has included a school
merger policy, whereby schools with very low STRs and enrollment were merged to form one
school and teacher rationalization, which focused on shifting surplus staff to schools where there
was a shortage. The GoPunjab also introduced merit-based recruitment, to promote the hiring of
good quality teachers. There is a need to persevere with these policies, ensure that adequate
numbers are hired to accommodate remaining shortages and the growing student population, and
address lessons learned. For instance, teacher profiles must be matched to subject gaps at the
school and teachers are not just recruited to meet overall STR goals. Further, there is a need to
ensure that primary teachers have an understanding of ECE, to be able to teach preschool
children and provide continuity between preschool and primary teaching-learning practices. The
SED has recently developed a new recruitment policy, whereby the EDO and DMO jointly
identify all vacant posts at the district level. To fill these, approximately 25,000–30,000 new
teachers must be recruited annually and significant effort will be required to ensure that these
posts are filled properly. Accordingly, the project will have one subcomponent that focuses on
effective human resources management for teachers.
22
Lokshin, M. M., E. Glinskaya, and M. Garcia. 2000. The Effect of Early Childhood Development Programs on
Women’s Labor Force Participation and Older Children’s Schooling in Kenya.
43
25. The DSD, originally established in 1959 under the name Education Extension Centre,
supports primary schoolteachers to improve teaching-learning practices and increase student
learning through in-service training and classroom-based mentoring support.23 Three PD Days
are organized each year, and there is an annual training week for all teachers, though in some
years the training lasts two weeks and is targeted to teachers who are most in need. The DTEs
visit teachers on a monthly basis, observe their classroom practice, and assess students. The DTE
model is generally well designed, but there is room for improvement.
26. More emphasis is needed on interpreting the data that the DTEs collect and providing
supportive feedback to teachers. Further, the data are shared with head teachers (for follow-up)
and education officials, and there is an attendant risk that the information can be used to sanction
teachers; this undermines the DTE’s role as mentor. The instruments and their use also need
strengthening. The observation format is overly simplified, leading to mechanical and repetitive
feedback; a recent evaluation found that there is a need to improve the quality and administration
of the assessment instruments. Further, the DTE model is predicated upon a single-grade
classroom with a manageable number of students, whereas many teachers have multiple grades
and large class sizes. The DTE’s assessment data indicate a strong correlation between student
achievement and the number of teachers at school, suggesting that multi-grade students are at a
disadvantage. There is therefore a strong need to strengthen the DTE model to better support
multi-grade teachers and to explore innovative options that specifically address the constraints
multi-grade teachers experience. The project will address these constraints and include a
subcomponent to strengthen the DSD’s model of field-based CPD to improve teaching quality in
primary schools.
27. With regard to monitoring and reporting on overall quality and learning levels, the PEC
has the primary mandate to carry out assessment and examination activities at the elementary
level in Punjab. It is responsible for the design, administration, and scoring of the annual Grades
5 and 8 examinations, which are compulsory for all students in public schools and optional for
those in private.24 Apart from the PEC, the DSD administers monthly assessments to primary
students in all schools. In addition, the PEF administers QATs on a twice-yearly basis to students
in its partner private schools to monitor their performance against learning standards. The
Annual Status of Education Report (ASER)-Pakistan also administers annual sample-based tests
to measure overall system performance. There are also the occasional donor-supported
assessments, such as the recent U.S. Agency for International Development-funded Early Grade
Reading Assessment, while the chief minister periodically contracts consulting firms to conduct
sample-based assessments to advise on system performance.
28. There is thus ample testing of students. Yet there is little consensus as to what these
tests reveal about system effectiveness, and stakeholders have identified several issues with
existing assessment activities that need to be addressed. With respect to the enabling context,
Punjab lacks an overarching policy framework or strategy that will clarify the role of assessment
in the education system and provide a logic for prioritizing, organizing, and using data from
23
There is no field-based system for the CPD of secondary schoolteachers though they are eligible for in-service
training after 11 years of service.
24
Between 2003 and 2007, the PEC also conducted sample-based assessments of Grades 3, 5, 7, and 8 students in
Punjab on a biannual basis on behalf of the National Education Assessment System testing program. This sample-
based testing partially resumed in 2014, with plans to continue on a biannual basis.
44
various assessment activities. Many stakeholders think that there is too much testing without a
proper understanding of its purpose and how the various tests relate to one another. At an
institutional level, the PEC lacks the human, physical, and financial resources it needs to carry
out its mandate.
29. With respect to the tests themselves, there are concerns about their quality and the utility
and accessibility of the results. The PEC’s assessments are paper based, draw to varying extents
from the national curriculum, and employ a combination of multiple-choice and constructed-
response questions. They overly rely on items that test lower levels of cognitive capacity. The
lack of equated test items undermines the comparability of scores over time. Data quality is
uneven as the lack of detailed rubrics and rater training has led to high error rates in scoring and
mistakes are made during manual data entry. The PEC results are not analyzed for diagnostic and
policy purposes that would lead to changes in education system design or classroom practices.
Reporting of PEC results is viewed as neither useful nor timely, the result of a lack of capacity at
all levels of the education system to understand and use assessment data. Communication with
teachers, students, and parents is particularly lacking. Data analysis is superficial and
overemphasizes passing rates and mean scores, with little or no reporting on variations in
achievement and results-related factors. The project will therefore include a subcomponent to
strengthen the enabling context for assessments and improve the quality, utility, and accessibility
of testing data.
Subcomponent 1.4: Early Childhood Education
30. The objective of this subcomponent is to improve children’s cognitive, socioemotional,

and physical development and facilitate their transition to primary school through strengthened
ECE. The project will ensure that 7,000 schools have ECE classrooms that meet quality
standards and enroll at least 210,000 children of ages 3–5. The standards will include having a
trained ECE teacher, an assistant ECE teacher, head teacher, and School Management Council,
with teachers following a strengthened ECE curriculum and using an ECE activity guide; an
ECE toolkit of teaching-learning materials being available and used; receiving monthly ECE
mentoring by trained DTEs; and parents receiving an ECE activity guide. Fifty schools will be
linked on a pilot basis to lady health workers (LHW) to build parents’ capacities in early
childhood care, nutrition, and education.
31. The project will achieve the standards at school level by delivering an integrated package
of activities targeted at beneficiary schools and the community. At the school level, the project
will first build the capacities of ECE and katchi teachers, assistant ECE teachers, and head
teachers to teach children of ages 3–5 and support their health and physical development. The
project will strengthen and expand the existing training modules for ECE/Katchi teachers and
assistant teachers developed by the DSD to include more training on child development and
effective classroom practice, as well as a module on health and nutrition including the
identification of malnourished children. The head teacher training modules will similarly be
strengthened, and include a module on promoting ECE in the school. The modules will be
revised using teacher and head teacher inputs, and their design and delivery will be periodically
strengthened based on the participant feedback.
45
32. The DSD will provide a 10-day training to ECE teachers, a 5-day training to assistant
ECE teachers, and a 4-day training to head teachers. The head teacher’s training will be followed
up with telephone calls from trained callers to engage them in two-way communication about
their ECE roles and duties. The ToRs for the assistant ECE teachers would be revised so that
their role is extended to cover classroom activities and teaching. Where an assistant ECE teacher
post is not in place, the school’s NSB would be used to hire the assistant until the post is created.
33. Second, the DSD’s field-based system of mentoring will be strengthened to include ECE.
The DTEs will be trained on ECE and good teaching-learning practices. The DTE observation
format will be expanded to include a section on ECE and katchi classrooms and DTEs trained in
its use. They will also be trained on providing data-based, and supportive feedback to ECE
teachers and head teachers. The DTE will then include ECE classroom observations and teacher
mentoring at each of their monthly school visits. These will be complemented with SMS to
teachers from trained callers to monitor and strengthen the usefulness of DTE feedback.
34. Third, the ECE activity guide will be strengthened and supplied to all ECE teachers. The
guide’s 16 weekly modules will be reviewed, revised, and expanded to include a module on
health and nutrition and any others deemed necessary based on the review. Similarly, the list of
ECE teaching-learning materials will be revised based on the development of the formal
curriculum and activity guide, and all target schools will be supplied with the full revised set.
35. At the community level, the project will work to increase parental engagement and
understanding of child development in the 7,000 communities where the participating schools
are located. At least one School Management Council member will be trained in ECE. All
parents will receive an activity guide they can use with their children at home. The topics
covered will include nutrition; hygiene; positive discipline; and linguistic, socioemotional, and
physical development. The guide will be developed for use by parents with limited or no literacy
skills. The messages will also be disseminated through a public information campaign. Further,
the ECE training for teachers and head teachers will be amplified to include a component on
parental outreach, including ideas for regular parent-teacher interaction on ECE topics. Finally,
the project will pilot in 50 schools the creation of formal linkages between the LHW, the district
nutrition officers (DNOs), and the school. ECE/katchi teachers will be trained to recognize signs
of malnutrition and report these to the DNOs, who visit the schools monthly. The DNOs will be
charged to report these cases to the relevant LHW, for further follow-up with the family,
including nutritional and child-care counseling and, if needed, referral to primary health
facilities.
36. This subcomponent is linked to a DLI with targets pertaining to the functioning of 7,000
classrooms that meet quality standards and enroll at least 210,000 children ages 3–5. TA will be
mobilized under Component 2 to create an ECE Policy Framework linked to a permanent
institutional ECE unit with the government’s structures; support the design of a strengthened
ECE curriculum, activity guides, and list of teaching-learning materials; and support the design
and delivery of training packages and a DTE-based mentoring system for ECE teachers.
46
Subcomponent 1.5: Effective Human Resources Management for Teachers
37. The objective of this subcomponent is to ensure that new teachers are recruited to vacant
posts on merit, according to recruitment policy. The project will strengthen the test-based
recruitment of teachers, to ensure merit-based recruitment and an improved matching of teacher
profile to subject gaps at school level. This will include a review and reinforcement of the tests
and testing procedures and of the process whereby results are mapped to available posts. Further,
the project will support the inclusion of a test module on ECE for primary schoolteachers.
Finally, the project will review the recruitment policy work processes, particularly the
assessment of teaching needs, the rationalization of vacant posts, and the verification of
recruitment. This subcomponent is linked to a DLI with targets pertaining to the merit-based
recruitment of new teachers for vacant posts. TA will be mobilized under Component 2 to
strengthen testing, the assessment of needs, the rationalization of posts, and the verification of
recruitment.
Subcomponent 1.6: Quality in the Primary Classroom
38. The objective of this subcomponent is to improve teaching quality and classroom
learning in primary schools. The project will reinforce the existing model of field-based PD and
pilot a new and highly structured approach to curriculum delivery. There will be two packages.
The first package will reinforce the DSD’s DTE-based model of field-based PD and deliver it to
at least 85 percent of primary schoolteachers in 18 districts.25 It will include two elements. First,
the DSD will build the capacities of teachers to better deliver the curriculum and of head
teachers, DTEs, and CTSC/DTSC staff to support teachers. The training for teachers will target
teacher-student interactions that are linked to better learning; teaching in multi-grade and large
classes; using formative assessment; an improved use of instructional time; the development and
use of locally developed manipulatives and teaching aids; and ensuring that students get
sufficient practice. Capacity building in these skills will target the Urdu, English, mathematics,
and science subjects. The DSD will develop new teacher-training modules, consulting closely
with teachers to ensure their needs are addressed, and the teacher training will be structured to
permit teachers to choose sessions based on their needs. The training will be delivered during PD
days, three times per year; over a one-week period at least twice during the project; and on a
voluntary basis through teacher forums and self-learning sessions to be organized at the CTSC
during non-teaching hours. The training will be module based and structured to be part of a
larger program of teacher training, through which teachers can progress and accumulate credits
as part of a proto-system of teacher certification. Further, the DSD will work to create local
teacher support networks, to enable teachers to be mentored by experienced and effective
colleagues.
25
The districts are to be selected using the following criteria: a majority of the project’s LPDs are covered; the CPD
Phase 1 districts are included (to ensure adequate DTE capacity to support teachers); the overall performance of
teachers in the districts is relatively high on the DSD’s measure of teaching quality, including the activity-based
dimension of teaching (to facilitate the effectiveness of the project interventions); and the student scores are
relatively low on the DSD’s learning assessments measure (indicating that non-teaching inputs are required and that
there is significant room for project impact). The districts tentatively selected are (in temporal order of coverage):
Sheikhpura, Mianwali, Okara, and Rahimyar Khan (Year 2 and following); Muzaffargarh, Attock, Gujrat, and
Sargodha (Year 3 and following); Faisalabad, Kasur, M. B. Din, and Rajanpur (Year 4 and following); and D. G.
Khan, Sialkot, Layyah, Bhakkar, Sahiwal, and Multan (Year 5).
47
39. The capacity building for head teachers will cover the same material as for teachers. It
will also cover engaging parents in monitoring and supporting their children’s learning;
analyzing the results of learning assessments; following up DTE findings and recommendations;
motivating teachers; and creating a more child-friendly learning environment. The trainings
would be delivered at PD days and training weeks, as well as at the monthly cluster-level
meetings for head teachers. The DSD will also work to create head teacher support networks.
40. Capacity building for the DTEs will cover the same material as for teachers. It will also
include supporting teachers to apply the knowledge and skills targeted by the training; improving
their observational and assessment skills while using revised formats and instruments; providing
data-based feedback to teachers and improving their mentoring skills; and, where needed,
upgrading their mastery of subject contents. The training will be delivered at PD days and
training weeks, as well as at monthly CTSC PD days.
41. The capacity building for CTSC/DTSC staff will focus on managing the DTE network,
improving the aggregation and analysis of data, and raising the profile of good quality teaching.
42. Second, the DSD will strengthen the design and delivery of organizational and logistical
support to improve learning. This will include a review of the required DTE competency levels,
testing of the DTE competencies, and incorporating competency-based criteria in DTE
recruitment. The classroom observation formats will be redesigned and amplified to, among
others, better capture the complexity of teaching-learning processes, target teacher-student
interactions that are linked to better learning, account for multi-grade and large class-size
teaching, and monitor and foster student practice. DSD staff will be trained in item writing and
test construction, to improve instrument validity and reliability, and in data analysis, to improve
the design of teacher training and field-based support.
43. The second package will be an innovative tool that consists of a structured set of
sequenced learning activities covering Grades 1–3 in Urdu, English, and mathematics, to be
trialed and evaluated in 100 schools. The schools will be selected using criteria to be elaborated
in the first year of the project, with particular focus on rural multi-grade schools where there is a
teacher able to benefit from a structured approach to curriculum delivery. It is particularly in
such schools that teachers find it difficult to effectively execute the complex set of teaching tasks
inherent in traditionally delivering multi-grade lessons, including the preparation of grade-
specific or multi-grade lesson plans, multi-group teaching and management, and monitoring
individual progress—all while maintaining classroom discipline and student interest. The
package will consist of four elements.
44. First, the DSD will identify a sequence of learning steps that the student must follow and
master to acquire the essential competencies, in each of the three subjects and grades. Each step
will identify a learning goal, sufficient learning activities the student must do to achieve the goal,
assessment activities to determine the extent of the student’s mastery, and supplementary
learning activities to undertake in the event of non-mastery. The student will advance to the next
step only upon demonstrated mastery of the current step. An individual record of the student’s
activities, results, and progress along the steps will be kept. Any teaching-learning materials
required as part of learning and assessment activities will be developed, identified (if already
available), or clearly specified for the teacher to develop. The development of teaching-learning
48
materials will include teacher consultation and field testing. A teacher’s guide will be developed
that explains how the structured learning system works and the teacher’s role in overseeing its
delivery.
45. Second, the project will provide one set of the structured learning system materials to
each of the beneficiary schools. The teaching-learning materials will be quantitatively adequate
to ensure that all students at the same level can do the learning activities for their learning step,
that there is sufficient practice at each step to ensure mastery for all students, and that an
individual record is kept of each student’s progress. All teachers will be supplied with the
teacher’s guide.
46. Third, the participating teachers and their DTEs will be trained on how to work with the
structured learning system. The training will include such elements as the pedagogical theory
underlying the system; assigning students to learning steps, introducing the student to their
learning activities, and facilitating their work including peer learning; the use of formative
assessment and monitoring and recording student progress; and how to organize the classroom
and manage the students’ work, time, and movements. The DTEs will be trained in the same
topics, as well as on how to observe teaching and learning within the context of the structured
learning system, appropriately match assessment instruments to students, and provide data-based
and tailored feedback to the teacher. All trainings will be developed in consultation with
teachers, and training feedback from teachers would be used to improve the training design over
time. The CTSC/DTSC will also be trained in how the system works and their role in enabling
the DTEs to support teachers. The trainings will be delivered during training weeks and PD days,
as described for the previous package.
47. Fourth, the DSD would adapt its field-based PD to the structured learning system. This
will include, in particular, the design of a specialized classroom observation format for the DTEs
and an adapted redesign of the DTE’s working procedures in the school.
48. This subcomponent is linked to a DLI with targets pertaining to the percentage of primary
teachers covered by the first package and to the number of schools that implement the second
package. TA will be mobilized under Component 2 to support the DSD to design and evaluate
both packages and their components.
Subcomponent 1.7: Improved Education Assessments to Enhance Quality
49. The objective of this subcomponent is to strengthen the enabling context for assessments
and improve the quality, utility, and accessibility of testing data.
50. The project will strengthen the enabling context and reform the PEC. The GoPunjab will
consult with stakeholders to develop and adopt a policy framework document that clarifies the
role of assessment in the education system and guides the undertaking and use of assessment
activities. Further, the PEC will clarify its mission and implement an ISP that updates its
functions and procedures, budgetary needs, and human resource and material requirements. To
enable this, the PEC will undertake a functional review building on prior institutional analyses
and detail its needs with regard to staffing levels and profiles, recruitment, and training;
equipment procurement; operating and capital budget requirements; and activities and operating
49
procedures. This will result in a detailed action plan that the PEC would implement. This will
include, among others, equipment procurement and staff recruitment and training.
51. The PEC will improve the quality, utility, and accessibility of assessment data, by
building its capacities to improve functions in three key areas. First, it will enhance the quality of
items and tests, with particular focus on constructing items that tap into higher-order thinking
and yield more diagnostic information on students. It will develop and operationalize detailed
rubrics and rater procedures for scoring open-ended items; effectively use Item Response Theory
and /test-equating software to enhance the comparability of results over time; and pilot improved
Grade 5 and 8 examinations in year 2 of the project. Second, it will more effectively analyze
assessment data to produce actionable information for the classroom and other levels of the
system. This will entail, among others, the development and use of cut scores and performance
levels; multivariate, multi-level, and subgroup analyses; and monitoring trends over time. More
effective reports will be developed and tailored for different stakeholders, including the use of
video, multimedia, workshops, and the Internet. Third, it will strengthen data accessibility and
use, by integrating data sets from various assessments and other relevant resources to allow for a
more effective analysis of education issues. The PEC will also develop institutional options for
research uses of data, working in close collaboration with academic and other research-oriented
bodies.
52. This subcomponent is linked to a DLI with DLI targets pertaining to (a) the development
and approval of an Assessment Policy Framework; (b) the development and implementation of a
PEC ISP; (c) the piloting and province wide administration of strengthened PEC instruments;
and (d) the analysis of PEC results and their reporting in actionable form. TA would be
mobilized under Component 2 to support the government to develop an assessments policy
framework document. The TA will support the PEC to undertake the functional review, clarify
its mission, and develop the ISP. The TA will also support the PEC to implement the ISP,
including the design and delivery of trainings in the key areas described above.
Strategic Area 3: Improving leadership, management, and accountability
53. Under this strategic area, the project will support the GoPunjab to strengthen the
allocation and accountable expenditure of NSBs and to better integrate and use education data to
lead and efficiently manage the education system.
54. The NSB reforms supported under PESP II led to a significant increase in per student
spending; on average schools spent over PKR 1,000 more per student, with the rural primary
schools showing the largest increase. Around 80 percent of budgeted funds were in fact used,
with expenditures largely in support of the chief minister’s road map. The main constraints
encountered in the reform were delays in funds reaching schools, the result of numerous
(quarterly) transfers and the novelty of the scheme, and difficulties in disbursement largely
related to school-level capacities. These difficulties persisted despite training sessions held in
person for SC members. A subsequent initiative to communicate with SC members using trained
callers to send SMS and make telephone calls (called the School Council Mobilization Program
50
[SCMP]) was shown to have had better results, with a third-party assessment of the SCMP
reporting it to be a positive complement.26
55. The SED has expressed concerns about weak mechanisms to track expenditures and
monitor that funds are used properly. The large sums involved are a strain on the provincial
budget, and it has been recommended that districts begin budgetary contributions with a view to
ensuring NSB financial sustainability. The project will include a subcomponent to lift these
constraints, support the government to expand the initiative to secondary schools, and ensure
sustainability through institutional reforms.
56. PESP II supported the GoPunjab to develop a three-tier education sector performance
management system, which monitors sector performance at the provincial, district, and sub
district levels. At the provincial level, the secretary, Education, chairs the quarterly EDO
conference to review performance with all 36 education district officers and the heads of key
education institutions. District rankings and progress are reported and analyzed against select
indicators. At the district level, the district coordination officer (DCO) and the EDO, Education,
meet monthly at the DRC with education officials to review the same indicators. In 2015,
monthly pre-DRCs were introduced to review progress against a wider set of indicators and the
implementation of select reform activities. While these meetings have significantly improved
sector monitoring in recent years, there is significant scope to strengthen their effectiveness by
ensuring that data are available on a real-time basis, building the capacities of decision makers to
analyze data in an action-oriented manner, and promoting increased accountability by tracking
and monitoring corrective directives that have been issued.
57. Users tend to restrict themselves to data sets that originate from the department to which
they are attached. There are also data sets that could be usefully integrated into the overall
information package presented to decision makers, as well as missing information that is needed,
particularly pertaining to the private sector. Consequently, there is a need to broaden the range of
data that decision makers access and use. To address these issues, the project will include a
subcomponent to support the GoPunjab to strengthen, integrate, and disseminate data sets and
build the capacities of decision makers in their analysis and action-oriented use.
Subcomponent 1.8: Non-salary Budgets
58. The objective of this subcomponent is to improve learning environments through an

expanded and more efficient system of allocating and using NSBs. First, the project will support
the scheme to move from quarterly to biannual disbursements and extend its coverage to high
schools. At the primary level and elementary level, the project will continue to support
disbursements through the PMIU’s cost center, the districts’ SDAs jointly controlled by the EDO
Education and EDO Finance, and the school’s NSB bank account jointly operated by the head
teacher and SC co-chairperson. For high schools, the project will support disbursements from the
PMIU’s cost center directly to the school’s account, with the head teacher having signatory
authority.
26
The ICT-based SCMP was initially piloted in 5 districts and subsequently scaled up to all 36. The third-party
implementation review found the SCMP to be more cost-effective than in-person trainings and documented positive
feedback from council members. Around 68.5 percent of council members who received in-person training and
participated in the SCMP found the latter to be more effective.
51
59. Second, the project will strengthen the legal-regulatory framework for school governance
and build the capacities of SCs and administrators. At the primary level, the School Council
Policy (SCP, last revised in 2007) will be updated and NSB-related guidelines pertaining to FM,
procurement, and NSB management will be strengthened and incorporated into the policy. The
guidelines will be strengthened to encourage schools to use the NSB to procure essential
teaching-learning resources. At the high school level, SCs are not formally constituted.
Therefore, a new section to the SCP will be created to accommodate high school SCs and FM,
procurement, and budget management guidelines appropriate to that level will be drafted and
incorporated.
60. The project will also build the capacities of district-level authorities and SC members in
the new SCP, including all associated guidelines. With respect to SC trainings, an evaluation of
the ICT-based SCMP will be undertaken, and its recommendations will be used to design a
capacity-building program, which the project would deliver.
61. Third, to strengthen and sustain the NSB initiative, the project will support the revision of
the NSB allocation formula, taking into account such issues as incentive effects, recent changes
in school assets endowments, and equity. An NSB cell will be created at the PMIU to supervise
timely disbursements and administer a strengthened M&E framework to track expenditures. The
project will also pilot a new disbursement mechanism whereby districts contribute to the NSB
budget allocations, with a view to eventually establishing a sustainable budgetary foundation. An
NSB Steering Committee made up of key stakeholders will be established to coordinate and
oversee the design of these activities.
62. This subcomponent is linked to a DLI with targets pertaining to the preparation and
disbursement of NSBs. TA will be mobilized under Component 2 to support the revision of the
funding formula and the legal-regulatory framework and to build the capacities of SCs and head
teachers in the administration and use of the NSB funds.
Subcomponent 1.9: Data Strengthening and Performance Management
63. The objective of this subcomponent is to improve evidence-based decision making by

strengthening education sector data and promoting its effective use by provincial and district-
level decision makers.
64. First, the project will strengthen and integrate data sets. A private school census will be
undertaken covering both registered and unregistered schools. Multiple data sets will be
integrated into a common platform accessible through an Education Sector Data Portal, bringing
together data generated by the PMIU’s MEAs, the DSD, the PEC, and the PEF. The data will be
integrated down to the school level and provided to stakeholders for monitoring, accountability,
and research. There would be four levels of access, for the PMIU; the main Provincial
Departments (SED, DSD, PEC, and PEF); the district-level EDOs-Education; and other partners
(academic and research institutions, development partners, and other qualifying stakeholders).
The data will be compiled in the form of essential and actionable education indicators and to
enable the tracking of key government initiatives (for example, textbooks distribution, stipends
programs, and so on.). The data will be linked, where possible, to map coordinates to enable
52
geographic information system mapping and will be exportable to enable deep statistical
analysis.
65. Second, the project will facilitate the dissemination and presentation of data from the
portal. District report cards will be generated by the PMIU on a biannual basis using core
indicators; public access will be provided to research conducted using the integrated data sets;
and school performance information will be shared with SCs.
66. Third, the project will strengthen the capacities of decision makers to analyze the data for
decision making. A portal user’s manual will be produced for EDOs, Education and district staff.
Guidelines on data analysis and use will be provided to district officials to identify specific
actions to increase school participation and learning outcomes. Further, stakeholders at the
provincial, PMIU, and district levels will be trained in using the portal and the district report
cards; the PMIU will receive supplementary training on updating and maintaining the portal and
on troubleshooting and providing technical support to district and provincial officials. IT
equipment and Internet connectivity will be supplied where needed to district education offices.
IT services will be contracted during the start-up period to facilitate data updating, maintenance,
access, and use.
67. This subcomponent is linked to a DLI with targets pertaining to the development and
operationalization of an integrated database. TA would be mobilized under Component 2 to
develop and maintain the integrated education sector portal, review district-level governance
structures and data requirements, and build capacities in data utilization.
Component 2: Capacity Building, Project Management, Monitoring, and Evaluation (Bank

Financing: US$9.36 million, 3.4 percent of total Bank financing)
68. The objective of this component is to strengthen implementing institutions to design,

deliver, monitor, and evaluate activities to achieve their mandates and the DLIs and to ensure
efficient and effective project management. The institutions include, but are not limited to, the
DSD, PEC, PEF, and the PMIU.
69. Institutional strengthening. The project will provide critical and strategic TA to support
and strengthen the existing implementing agencies in the primary and secondary education
subsector in Punjab. Several of these agencies such as the PMIU, DSD, PEC, and PEF have had
preliminary work done, such as functional reviews and strengthening plans, but none of these
have been implemented. The existing plans for strengthening (PMIU, PEF, and PEC) will be
reviewed and the plans implemented for stronger more robust organizations which are capable of
carrying out the ambitious reforms laid out in the project. In the case of the DSD, a strengthening
plan, particularly in support of the DLI-related programs, will be developed and implemented
within the project’s lifetime.
70. Achievement of the DLIs. The project will finance TA to support activities that include,
but are not limited to, the following. The TA will work directly to support the institutions that are
responsible for achieving their respective DLIs.
53
Table 2.3. Indicative List of TA Activities
DLI Technical Assistance
1. EVS Design components of a strengthened program, including revised standards, improved
targeting mechanism, and improved system of reporting and verifying student/school
information, strengthened monitoring mechanisms, and improved QAT. The TA will
also support the design of training to implement the strengthened program and build
capacities to deliver the training.
Evaluation of the strengthened program at pilot stage: An impact evaluation of the

EVS will be conducted to determine the impact of the existing and revised targeting
systems in enrolling and retaining out-of-school children.
2. PPP Strengthen quality assurance system.
4. ECE Develop an ECE Policy Framework and identify a permanent institutional ECE unit;
strengthen the ECE curriculum and design teacher/parent activity guides and a
recommended list of teaching-learning materials; design ECE training packages and
build capacity for their delivery; and design DTE-based mentoring system for ECE
teachers and build capacity to train the DTEs in its use. Third-party validation of DSD
data on schools that meet quality standards, in years 3 and 5 (for DLI and Results
Framework). Impact evaluation of the ECE intervention to determine the impact on
school readiness, including to generate PDO indicator values.
5. Effective Human Strengthen test-based recruitment of teacher and conduct a TPV of the recruitment and
Resources Management reallocation policy. TPV of data in year 3 (for DLI and Results Framework).
for Teachers
6. Improving Teaching Design the integrated package to reinforce the DTE’s field-based model of CPD.
Quality and Learning This will include design of revised observation and assessment instruments;
strengthening of existing teacher guides and developing a guide for multigrade and large
class teaching; and development of a list of recommended teaching-learning materials.
Strengthen and design training modules for teachers, head teachers, DTEs, and
CTSC/DTSC staff on teaching in multigrade and large classes; formative assessment;
use of instructional time; development and use of locally developed manipulatives and
teaching aids; and ensuring sufficient practice for students. Design supplementary
modules for head teachers on monitoring and supporting learning, analyzing and using
assessment results, using the DTE feedback, teacher motivation, and child-friendly
learning environments; for the DTEs on using revised observation and assessment
instruments, providing data-based feedback to teachers, and updating subject content
knowledge; for the CTSC/DTSC staff on DTE network management,
aggregating/analyzing data, and promoting quality teaching.
Review DTE competency requirements and design DTE competency tests. For all
training modules, build capacities to deliver and quality assure trainings. With respect to
the innovative package, the TA will support its design and delivery, including
identification of learning step sequence; design of learning and assessment activities for
each step; design of training packages for teachers, head teachers, and the CTSC/DTSC
on package implementation; design of adapted observation instrument for the DTEs; and
building capacities to deliver trainings.
Evaluation of both packages. TPV of DSD data (for DLI and RF) in years 3 and 5.
Determination of values for PDO indicator on quality score of primary teaching-learning
practices.
7. Improved Education Develop an assessments policy framework; undertake PEC functional review and
Assessments to Enhance develop ISP; design trainings and build capacity to deliver them, in item/test design;
Quality open-ended item scoring; data analysis for action; and data integration. TPV in years 4
and 5 (for DLI) that PEC data are reported in actionable form.
8. NSB Revise funding formula and legal-regulatory framework. Third-party surveys to
gather data for budget execution rate indicator in results framework.
54
DLI Technical Assistance
9. Data Strengthening Develop, maintain, and update the integrated education sector portal; review district-
and Performance level governance structures and data requirements; conduct private school census; and
Management build capacities of provincial and district-level staff on data utilization.
71. Project management, monitoring, and evaluation. The project will finance project
operating costs including, among others, personnel costs associated with seconding staff to, and
hiring TA for, the PMIU, equipment, supervision costs (transportation and per diem), and any
incremental operating costs at the SED, DSD, PEF, and PEC associated with the work of staff or
TA on project implementation. The PMIU is responsible for project monitoring, including
reporting on all project indicators with mechanisms and sources described in annex 1. The
project will finance an evaluation of the years 4/5 PEC to determine the value of the PEC-related
outcome indicator and the baseline and follow-up evaluations of teaching-learning practices and
school readiness to determine the quality score and school readiness PDO indicators. DLI-
specific evaluations are listed by the DLI in the table 2.3.
72. Communications. The project will finance communications activities to engage and
inform stakeholders about project activities and the sectoral reforms it supports, as well as
project results. Communications will target women and the poor in particular.
73. Figure 2.1 presents the project’s results chain, showing the linkages between the expected
outcomes and the areas of support.
55
Figure 2.1. Causal Linkages between Project Interventions and Outcomes
Education Voucher Scheme
Improved access to primary schooling

for the poorest
Public-private Partnerships in
Education
Improved access to secondary

Secondary School Stipends for Girls
schooling for girls
Increased school participation, completion, and quality
Improved advisory support to ECE

Early Childhood Education
teachers
Increased equity in teacher placement, Effective Human Resource

and increased teacher quality at entry Management
Improved advisory support to teachers Field-based Teacher PD
Improved system for student

Strengthening Student Assessments
assessments
Improved level of resourcing of

schools to support school School-specific non-salary budgets
improvements
Informed decision making by internal

Data strengthening and performance
stakeholders to improve school
management
performance
Stronger community engagement and

improved decision making at the School Council Mobilization
school level
56
Annex 3: Implementation Arrangements
Project Institutional and Implementation Arrangements
1. Implementation arrangements for PESP III rely primarily on the arrangements which
have been in place for PESRP I and II, and which will continue to be in place for the
implementation of the GoPunjab’s sector reforms as articulated in its 2018 Education Goals. The
following discussion outlines arrangements for (a) overall project direction and policy support;
(b) implementation arrangements at the provincial, district, and school levels; and (c) technical
support and capacity building.
Overall Program Direction and Policy Support
2. At the provincial level, the PPSC, GoPunjab, provides policy directives and strategic
guidance to the SED. The PPSC, headed by the Chairman of the P&D Board, is composed of
representatives of the P&D Board, FD, SED (and its sub-departments), Higher Education
Department, PMIU, and development partners (as observers). The PPSC is expected to meet at
least twice a year, and to conduct biannual reviews of policy and program implementation
progress and performance, including identifying bottlenecks and proposing solutions.
3. At the district level, the SED is supported by the District Steering Committee, as
reconstituted in 2006, chaired by the DCO. The other members of this committee comprise the
executive district officer (Finance and Planning); the executive district officer (Education)
(EDO), district education officer (DEO) (works and services), DMOs, and any other member
deemed appropriate to be coopted by the DCO/chairperson. The committee is responsible for the
coordination and review of progress related to enrollment, retention, and school quality.
Implementation Arrangements
4. At the provincial level, the secretary, SED, has overall oversight responsibility for
implementation and monitoring of the program framework, with support from concerned line
agencies, specifically the FD and the P&D Board. The SED is supported by apex educational
institutions for program implementation at the provincial level: the DSD, PEC, Punjab Textbook
Board, and PEF.
5. The SED has established the PMIU to oversee implementation of its education sector
reform programs, including both phases of the PESRP (PESRP I and II), and now the 2018
Education Goals. The PMIU is headed by a program director, assisted by one additional program
director and four deputy directors (finance, coordination, M&E, and planning). Over the years,
the role played by the PMIU has been instrumental to the implementation of the GoPunjab’s
sector reform program. The PMIU is assisted by the DMOs and MEAs. It works directly under
the guidance of the secretary, SED, and acts as a policy wing of the SED. The key functions of
the PMIU are to (a) develop, in close coordination with the SED and other stakeholders, the
reform program of the GoPunjab; (b) coordinate with district governments and other sub-
departments on the implementation of the reform program; (c) oversee the conduct of the ASC
and monthly monitoring by the districts and act as a repository of all program documentation
57
(including the Education Management Information System [EMIS]); (d) prepare periodic
financial statements and accounts, and ensure their reconciliation; and (e) carry out any other
tasks as may be assigned to it by the PPSC or secretary, SED.
6. Strengthening the PMIU’s capacity to provide technical guidance and fiduciary oversight
of program activities is a critical part of the project design. A restructuring plan was developed
for the PMIU in 2013 using PESP II TA funds with a view to strengthen the institution and
restructure it according to program needs. However, implementation of the plan was selective
and limited, and the institution has seen a gradual decline in its capacity over the last reform
program. Effective implementation of reforms as listed in the 2018 Education Goals requires a
strong PMIU with a strengthened institutional structure and adequate resources to perform its
role effectively. Key steps to be taken by the PMIU in this regard include (a) strengthening of
capacity of oversight over all focal persons responsible for DLI monitoring and/or
implementation; (b) ensuring that the Communication Cell is staffed adequately and with
relevant expertise; and (c) reviewing the scope of services of the Research and Policy Wing to
improve its effectiveness to cater to just-in-time demands. The PMIU will leverage TA funds to
hire expertise and operational staff as needed.
7. Under PESP III, the SED/PMIU will be responsible for (a) reporting on the DLIs, EEPs,
monitoring indicators, and TA implementation; (b) ensuring that Bank fiduciary and safeguard
regulations and requirements are followed; and (c) coordinating support from and actively
communicating with the Bank and other development partners. The SED/PMIU will share
program implementation and monitoring responsibilities with district education administration
which have primary responsibility for public education service delivery and have staff at the
district and sub district levels.
8. The SED is supported by apex educational institutions for program implementation at the
provincial level. Institutions that will implement the project include the DSD, PEC, and PEF.
9. The DSD27 serves as an apex institution for in-service and pre-service training of public
schools teachers, and a focal point for capacity-building needs of schoolteachers in Punjab. It
runs 30 elementary colleges for pre-service teacher education and an elaborate network of
district and CTSC for in-service training.
10. The PEC was established in 2006 as an autonomous body to assess student-learning
achievement in the province. It holds mandatory annual examinations at the Grade 5 and 8 levels
in all public schools in the province.28 The functions of PEC include the design, development,
implementation, maintenance, and M&E of a system of examination for elementary education, as
well as identifying areas of improvement for teacher training.
11. The PEF was established in 1991 by the GoPunjab under an enactment and subsequently
restructured in 2004 as an autonomous not-for-profit entity under the Punjab Education
27
The DSD was established in 1959 as the ‘Education Extension Centre’. Since then, it has been merged with the
Provincial Institute of Teacher Education and Science Education Centre, and given the administrative control of the
government colleges of elementary teachers to strengthen the institute as one unit and for a coordinated effort
toward attainment of its goals.
28
Private schools can opt to take the examinations as well.
58
Foundation Act 2004 to provide technical and financial assistance for the establishment,
expansion, improvement, and management of low-cost educational institutions, incentives to
students and teachers, and promotion of quality education in the province through PPPs. The
PEF headquarters is located in Lahore; it has two regional offices located in Rawalpindi and
Multan.
12. In the district, the Executive District Officer (education) has overall responsibility for
program implementation. The EDO is assisted by the DEOs and assistant education officers who
oversee tehsil and markaz-level education activities, respectively. Together, the district education
management is responsible for, among other things, (a) preparing district plans and budgets
(recurrent and development); (b) granting scholarships; (c) organizing meetings of DRCs; (d)
approving selected development schemes; (e) managing SC activities and affairs; (e) conducting
Grade 5 and 8 examinations; (f) inspecting and monitoring devolved institutions; (g) managing
intra-district personnel transfers and postings; (h) performing M&E activities; (i) acting as a
focal point for providing institutional data/information; and (j) facilitating the disbursements of
stipends and other benefits to intended beneficiaries.
13. In addition, monitoring at the district level is assisted by a district monitoring system,
staffed by the DMO and a team of MEAs, responsible for collection of data from schools on a
regular basis using standardized forms. The district monitoring system is also responsible for
implementation arrangements for school-level activities relating to the delivery of textbooks,
stipends, and identification of civil works improvements, and for coordinating district activities
with the PMIU.
14. At the community and school levels, the key role of ensuring community participation
in important tasks of education delivery is entrusted with SCs, which consist of 7–15 members
with representation from locally elected representatives, parents, and the school administration.
SCs are responsible for the execution of the NSB, which is received by schools on a quarterly
basis. In addition, SCs hold monthly meetings to discuss issues faced by the school
administration and parents, and document deliberations in recorded minutes kept by the school
administrations. Considerable investment in building the capacity of SCs has been made over the
last two to three years through contracts with rural support programs, and under PESP II, through
ICT-based capacity building.
15. Table 3.1outlines the key roles and responsibilities for implementation and monitoring of
activities under the reform program.
Table 3.1. Roles and Responsibilities for Implementation of 2018 Education Goals
Unit Key Roles and Responsibilities
Provincial level
PPSC headed by the  Provide advice and overall guidance for implementation of 2018 Education Goals
chairperson of P&D Board  Carry out joint biannual reviews on implementation progress
 Resolve program implementation bottlenecks (including financing of key
supported programs)
Punjab SED  Overall responsibility for program implementation, monitoring, and reporting to
PPSC and development partners
 Coordinate with sub departments involved in delivery of reform program,
specifically, the PMIU, DSD, and PEC
59
 Develop provincial education budget (development and non development)
 Prepare Medium-Term Sector Framework and Sector Plan
 Approve provincial education development schemes
 Issue SCP and guidelines
 Issue notifications/guidelines to districts management offices for implementation
of reform program activities
 Notify revised teacher recruitment policy, prepare teacher recruitment plans
based on school-specific needs and undertake teacher recruitment according to
approved plans
 Conduct pre-entry test for all new teachers
 Coordinate and provide guidance to district education management to make
optimal use of teacher resources in accordance with school-specific needs
 Provide financial oversight of program project implementation
PMIU (SED)  Coordinate all program monitoring and implementation
 Convene PPSC meetings and issue minutes of meetings
 Conduct coordination meeting of program stakeholders
 Issue program project implementation guidelines to district offices
 Coordinate TA to districts to facilitate implementation of school budgets, optimal
teacher resource use, SC reconstitution and capacity development; assist the SED
in development of policies/notifications related to implementation of these
program interventions
 Overall responsibility for preparing and disseminating district report cards
 Overall responsibility for design and delivery of girls secondary school stipend
programs
 Manage implementation of TA activities including procurement
 Liaise with relevant educational institutions/agencies/units on program
implementation (with support from the SED)
 Prepare regular reports on implementation progress and plans
 Consolidate plans and budget estimates, implement and manage project
activities, and prepare relevant reports
 Prepare semiannual financial reports of the EEPs and TA for disbursement
purposes
 Prepare Budget Execution Reports (BERs) of entire education sector for
monitoring 2018 Education Goals expenditures
 House and augment the role of the internal auditing specialist for designing and
implementing interventions for systemic improvements and financial
accountability in the education sector
 Maintain the SAP/R3 terminal for financial reporting
 Ensure that accounts are kept and reports on financial progress are prepared
promptly.
 Facilitate the audit process for the program expenditures and improvement of
internal controls over the life of the program
 Draft the credit withdrawal applications
 Plan and carry out procurement activities and oversee/execute contracts for
goods, works, and services
M&E
 Overall responsibility for data integration and utilization exercise
 Coordinate with DMOs/MEAs/SCs
 Ensure quality and consistency of data collected
 Maintain SED’s EMIS, and the integrated education sector database and
disseminate for data utilization in decision making
 Produce/oversee production of statistical data reports
 Produce/oversee production of semiannual analysis of program progress
60
 Arrange conduct of TPVs
 Oversee production of implementation evaluation studies of reform program
interventions
 Feed data/information into annual monitoring and progress reports
DSD  Provide direction to policy development on promoting sustainable and systematic
teacher development
 Prepare action plans, programs, and CPD activities for public schoolteachers
 Provide capacity building of district governments and related institutions for
managing and delivering district teacher development plans
 Design and implement ECE interventions
PEC  Design, develop, implement, maintain, monitor, and evaluate a system of
examinations for elementary education
 Formulate policy for the conduct of such examinations; and build capacity of
teachers and education management staff to improve systems of learning
assessment
 Conduct standardized examinations for Grades 5 and 8 to enable education
managers in the province to assess learning outcomes
 Conduct analysis on student achievement data collected through the
examinations
PEF  Implement private school vouchers program (including monitoring, quality
control, and reporting)
 Implement and monitor ongoing private sector partnership programs (NSP,
FAS), and design, implement, and monitor the newly developed programs at the
PEF including Public School Support Program
District level
District Steering Committees  Oversee overall program implementation
 Carry out district review of program implementation
 Resolve program implementation bottlenecks (including FM issues)
EDOs-Education, DEOs, and  Administer schools
Assistant Education Officers  Manage intra-district transfers and postings
 Prepare district budgets (nondevelopment) based on school-specific needs-based
formula
 Undertake rationalization of teaching posts based on school-specific needs-based
formula
 Coordinate dissemination of information to schools/SCs (including policies,
policy notifications, and so on)
 Coordinate capacity support to SCs
 Act as focal point for providing institutional data/information, facilitate
disbursements of stipend, and teacher performance pay
 Convene District Steering Committee meetings
 Conduct Grade 5 and 8 examinations
DMOs and M&E Assistants  Conduct monthly visits to schools to collect school-level information on a
standardized form
 Conduct ASC
 Maintain district EMIS
 Liaise with the PMIU on M&E activities
Community and school levels
Head teachers and SCs  Assist in supervising school activities
 Be responsible for school maintenance
 Assist schools in decision making, in preparing school plans and budget
 Keep financial records of school expenditures (NSB) and receipts
 Assist in fostering greater participation of communities in school management
61
through assemblies, meetings, and so on
Integrated Fiduciary Assessment Supervision
Country Issues Related to Public Financial Management System
16. Pakistan has a three-tier governance infrastructure for PFM that operates through the
federal, provincial, and district governments. The Finance Ministry/Department and line
ministries/departments at federal and provincial levels have well defined roles and
responsibilities for budget formulation and execution. The controller general of accounts, a
representative of the federal government, through its associated offices across the country
preaudits the transactions, makes payments, and thereafter prepares financial statements. The
auditor general of Pakistan (AGP), being the Supreme Audit Institution of the country, is
bestowed by the constitution to conduct audit of federal, provincial, and district government
entities.
17. A PEFA was carried out in 2012 in addition to a Public Financial Management and
Accountability Assessment that was finalized for the federal government in 2012 using the
PEFA29 Performance Measurement Framework which is a follow up of the 2009 PEFA
assessment. The report noted significant progress as a result of ongoing reforms for improving
the PFM system in the country. The budget formulation and execution is based on
administrative, economic, and subnational classification using GFS/COFOG.30 Transfers from
the federal government to provincial governments are transparent and governed by rules settled
under the constitution. Accounting and financial reporting have been automated at the federal,
provincial, and district levels through the nationwide implementation of the National Financial
Management Information System (FMIS) using the sophisticated SAP application with a
uniform chart of accounts (CoA).31 Connectivity is established for all line ministries/departments
to monitor budget execution on a real-time basis. Fiscal reports and CoAs used by the federal
and provincial governments is the same. The National FMIS produces fiscal reports within two
months from the end of fiscal year-end. The reports indicate that local and foreign debt are
properly recorded, reconciled, and reported by the State Bank of Pakistan, Ministry of Finance,
and Economic Affairs Division of the Government of Pakistan. Further, payroll is backed by
personnel files containing all information pertaining to payroll master data. Changes to payroll
information in the National FMIS are fully supported by relevant documentation. The GoPunjab
has introduced Medium-Term Budgetary Framework (MTBF) reforms focusing on introduction
of multiyear planning and budgeting preparation for at least three years on a rolling basis. The
MTBF reforms will help the provincial government in prioritizing its expenditures. The
accounting system of the provincial government provides complete and reliable information
about resources received by the health care and primary education units. Financial statements of
the federal and provincial governments are being prepared under cash basis of accounting and
29
PEFA. The PEFA Program was established in December 2001 as a multidonor partnership between the Bank, the
European Commission, the DfID, the Swiss State Secretariat for Economic Affairs, the French Ministry of Foreign
Affairs, the Royal Norwegian Ministry of Foreign Affairs, and the International Monetary Fund. The PEFA PFM
Performance Measurement Framework was issued in June 2005 and updated in 2011.
30
United National Classifications of Functions of Government
31
International Monetary Fund - Government Financial Statistics Manual 1986.
62
are aligned with the format given by the International Public Sector Accounting Standard ‘Cash
Basis’. Annual audits are completed on time, using International Organization of Supreme Audit
Institutions auditing standards and audit reports are laid before the legislature within eight
months of the end of the fiscal year. Progress on transparency through public availability of
financial information is also noteworthy. In Punjab, procurements are undertaken in accordance
with Punjab Procurement Rules 2014, which were initially enunciated in 2009 and were later
amended in 2014. These rules are generally found by this review and other Bank reviews to be
aligned to good procurement practices. These rules provide broad-based policy guidelines for
procuring goods, works, and services. However Rule 59 d (iv) that allows the provincial cabinet
to engage in negotiated tendering and noninclusion in the amended version of the ‘Overriding
Effect of Rules’ as stated in Rule 51 of the erstwhile Punjab Procurement Rules 2009 have
somehow weakened the enforceability of these rules.
18. The assessment identified certain areas for improvement to achieve better PFM
outcomes. For improved budget credibility, the government needs to institutionalize the MTBF.
For better expenditure control, the commitment accounting functionality available within
National FMIS needs to be utilized. The GoPunjab also needs to develop and implement an
effective internal audit function with regular reporting to follow up management actions and
continuing efforts are needed to improve effectiveness of tax collection and the management of
cash balances affecting the predictability of availability of funds.
19. PESP III financing and expenditure framework. The Budget Manual 2008 clearly lays
down the calendar to be followed and allows significant time for budget preparation and
finalization. Funding for PESP III will be provided through the GoPunjab annual budget and will
flow through the treasury system. The Bank operation support will be disbursed against selected
budget line items which make up the Eligible Expenditure Programs for the project
20. Implementing entity. The project’s components will be implemented by the SED/PMIU
with support from other sub-departments including the DSD, PEF, and PEC. The SED/PMIU
will be responsible for (a) reporting on the DLIs, EEPs, monitoring indicators, and TA
implementation, and coordination with the FD, the accountant general’s office and the concerned
audit offices of the AGP; (b) ensuring that Bank fiduciary regulations and requirements are
followed; and (c) coordinating support from and actively communicating with the Bank and
other development partners. The SED/PMIU will share program implementation and monitoring
responsibilities with district education administrations, which have primary responsibility for
public education service delivery and have staff at the district and sub district levels.
21. From an FM perspective, the project consists of a RBF for Component 1 to support the
implementation of the government’s 2018 Education Goals through nine DLIs, and Component 2
(TA Component) would follow a ‘report-based’ IUFRs principle, which allow for adequate funds
to the project, based on biannual cash forecasts, in advance. This component will fund the
institutional strengthening of key implementing partners including the DSD, PMIU, PEF, and
PEC as well as essential advisory, technical, monitoring, and capacity-building support for the
project. Upon meeting the DLIs, funds will be transferred to the GoPunjab based on the agreed
EEPs, which have been selected from the SED and PEF budgets. Therefore, this assessment is
focused on the existing SED/PMIU and PEF FM arrangements.
63
22. Staffing. The present deputy director finance is on deputation from the government and
the five accounting staff who are engaged under the TA component of PESP II are well
acquainted with the Bank’s reporting and auditing requirements and will continue to work for
PESP III. The deputy director finance oversees financial reporting of the project and sector,
using the SAP (PIFRA) terminal available within the PMIU for expenditure monitoring and for
disbursements under the project, as well as preparation of the annual financial statements of the
project and the BERs of the education sector. The deputy director is also responsible for
coordinating with the FD, P&D Board of the GoPunjab, the accountant general, and the AGP.
23. At the PEF, the director finance who is a qualified accountant with more than five years
of experience, heads the entity’s FD. He is supported by 20 accounting staff comprising an
additional director, deputy directors, accounts superintendent, and accounts assistants, including
data processors. Job responsibilities are clearly defined for managing and reporting FM affairs of
the PEF to its board of directors and coordinating with the SED/PMIU including the FD,
GoPunjab, and donor agencies.
24. There is a position of assistant director, accounts at the PMIU and it is expected that with
the placement of a qualified assistant director finance at the PMIU, the staffing and skills mix
will be adequate for the FM of the project.
25. Planning and budgeting. The GoPunjab has a well-defined budgeting process and
reforms are underway to introduce modern practices in financial planning and budgeting. The
GoPunjab currently implements a Medium-term Fiscal Framework and an MTBF.
26. The budgeting of all program expenditures will constitute part of the government
budgeting process. The function and object codes to capture expenditures for the EEPs and the
TA are clearly identified in the New Accounting Model (NAM) CoAs.
27. A well-defined process is being followed at the PEF for developing its annual budget
which is placed before its board of directors in March/April for discussions and approval. PEF-
related expenditures are clearly defined in its CoAs. These CoAs form the basis of financial
reporting and monitoring of budget allocations, revisions, releases, and expenditures. These
codes will be used during the ongoing budget cycle (for FY2016/2017) to facilitate the budget
execution and reporting process for the project.
28. The province follows detailed budget preparation and adheres to a fixed budget calendar
and budget forms are circulated during the year. This calendar provides deadlines for all the steps
involved to ensure that there is sufficient time to receive, review, discuss, and compile the inputs
from all departments. The consolidated budget is prepared by the FD for submission to the
legislature. In recent years, efforts have been made to introduce a medium-term outlook through
preparation of an MTBF. This is yet to be rolled out for the education sector.
29. According to the documents reviewed during the assessment and discussion with
implementing entities’ FM staff, budget releases from the GoPunjab have been found to be
prompt.
30. Accounting. Accounting records will be maintained using the government-wide

integrated FMIS implemented under PIFRA and in accordance with the country accounting
64
procedures and policies defined in the NAM. These policies and procedures are being
progressively and consistently applied at the provincial as well as district government levels. Use
of NAM policies and procedures conforms to international standards and is thus acceptable to the
Bank.
31. The system-generated accounting records will be the basis for preparation of the BERs of
the education sector, including program expenditures, and TA financed under the project.
32. At the PEF, currently, accounting records are maintained in a Microsoft Access database.
Provision for acquiring integrated software has been proposed under the TA component of PESP
II. PEF management will continue with the implementation of integrated software under PESP
III if it has not been achieved before the close of PESP II.
33. Accounting transactions are recorded under appropriate heads of accounts, classified
according to internally developed CoAs, using accrual basis of accounting in accordance with
international accounting standards.
34. Internal controls. The government’s internal control system for expenditure is based on
a series of regulations including the NAM, Punjab Financial Rules, Treasury Rules, Delegation
of Financial Powers, and Rules of Business. The Punjab 2012 PEFA finds that these regulations
need to be reviewed and aligned to ensure consistency in their application across the system. The
report also identifies that the internal audit function, which focuses on systems monitoring and
generating related reports, not being in place is one of the major weaknesses in the PFM system
of the GoPunjab. Internal controls on payroll are satisfactory; which is now automated with a
government financial management information system functional in the entire province. Changes
to payroll information in the government financial management information system are fully
supported by relevant documentation from the manual personnel records. Changes affecting the
payroll are recorded promptly and documented with the audit trail. However, controls over non-
salary expenditures require improvement.
35. To mitigate risks due to control weaknesses, the project management is in agreement to
establish an internal audit section at the PMIU or outsource the function to a firm of chartered
accountants.
36. Learning from the experience of previous PESPs and considering the current rules in
place, PESP III will support the engagement of additional human resources at the PMIU to allow
analysis of relevant information for supporting the enhancement of internal controls within the
sector through tangible recommendations formulated on the basis of a review of data from
various sources, such as existing audit reports. This will include simultaneously increasing
awareness among DDOs to enhance compliance and systemic recommendations to simplify and
strengthen controls within the education sector.
37. As with other GoPunjab expenditure transactions, payments under the project will be
subject to the normal preaudit verification at accounting offices, before payments from the single
treasury account are approved. Use of a single treasury account simplifies the vertical funds flow
and minimizes cash handling at all levels. As the TA component funds, which will be managed
by the PMIU under SDA arrangements, will be expended under Bank procurement guidelines,
65
the preaudit activities at the accounting offices of the Lahore treasury or the accountant general
will be limited largely to budget availability checks, account coding validation, and verification
of spending authorizations.
38. For the PEF, the procedures are clearly defined in an SOP manual for finance, which is
being reviewed and updated as and when required with the approval of the board of directors.
Bank accounts are jointly operated by any two of: managing director, deputy managing director-
operations, director finance, and additional director finance according to the prescribed limits.
The FM Manual contains reasonably defined control policies and procedures including program
payments verification and processing, proper segregation of duties and responsibilities among
the staff, and monthly reconciliation of bank accounts within a week of the month end, among
other controls.
39. The PEF has outsourced the internal audit function to an accounting firm, which conducts
the internal audit on a quarterly basis and submits its reports to the Finance Committee of the
board of directors. The internal audit reports for the quarter ended March 31, 2015, indicate a
Satisfactory rating, whereas, the internal audit report for the quarter ended June 30, 2015, is
pending for management comments. The delays in finalization of report affect the effectiveness
of the internal audit function.
40. Funds flow and disbursement arrangements. The project will make disbursements to
the GoPunjab Provincial Consolidated Fund Account No. 1 (Non-Food) for the EEPs annually
under Component 1 and for TA activities semiannually under Component 2. The report-based
principle will be used for withdrawal of credit funds using the sector’s financial reports
generated from the province’s FM system. The PMIU, on behalf of the GoPunjab, shall prepare
the IUFRs based on the BERs and information provided by the PEF. These reports will be
verified by the accountant general, Punjab, and the FD, GoPunjab. The IUFRs will be due for
submission within 45 days of the end of the periods ending December 31 and June 30. For
Component 1, the period of expenditures to be claimed for the first year of the project will be
from the project signing date to June 2017, while the period for the subsequent claims will be for
one fiscal year that is, July 1 to June 30.
41. Disbursements for Component 1 will be on a reimbursement basis; however, to help the
GoPunjab fully and adequately fund the budget needs of its education reform program cash flow
constraints, a one-time disbursement of US$39 million will be made upon project effectiveness
as an advance against the EEPs to be incurred over the six months immediately following project
signing. Actual expenditures against the advance so made will be documented in the first IUFR
to be submitted by the GoPunjab by February 15, 2017. The remaining US$38.31 million of
scheduled disbursements for FY2016–17 will be disbursed on a reimbursement basis to the
extent that the FY2016–17 DLIs are satisfactorily met. The US$39 million advance will be
adjusted with the amount that will be disbursed for FY2016–17.
42. Disbursements for Component 1 will be on a reimbursement basis (with the exception of
US$39 million at project effectiveness which would be an advance in its entirety) conditional on
the achievement of the DLIs. For Component 2, disbursements will be on an advance basis in
accordance with cash forecasts for the next six months adjusted for any unspent balance.
66
43. For Component 2, the first advance will be for the forecast expenditures during the period
between project signing and December 31, 2016. Subsequently, the forecasts will be for
expenditures during the semesters January to June and July to December. The BERs will provide
the details of expenditures in each of the agreed EEPs and the heads for TA.
44. However, for each disbursement for Component 1, only 70 percent of the amount to be
disbursed will be applied against reimbursement of expenditures in the EEP related to employee-
related expenses of the primary and secondary education subfunctions of provincial and all
district governments. The expenditure in the rest of the EEPs will account for the remaining 30
percent of the amount to be disbursed for Component 1 to promote use of Bank funding for
reform-related expenditure (other than salaries).
45. All IBRD disbursements, both for the EEPs and TA, will be made from the IBRD Loan
account to the Provincial Consolidated Fund Account No. 1 (Non-Food), based on a withdrawal
application duly signed by the PD PMIU and a representative of the FD. The withdrawal
application will be based on the IUFRs and BERs for the relevant period. Disbursement from the
loan proceeds, in U.S. dollars, will be translated to Pakistan Rupees by the State Bank of
Pakistan, and the local currency shall form the transaction basis for the operation’s accounting
and reporting. Funds for TA will be released to the PMIU through normal budgetary allocations,
in its SDA. Use of the SDA should ensure availability of earmarked funds to the PMIU for
critical TA activities in a timely basis.
46. The format and content of IUFRs have been agreed during project negotiations.
Advances will be provided for TA based on the budgeted/forecasted expenditures for the period
up to the next submission of IUFRs. Subsequent IUFRs will document expenditures against the
advance received and provide a forecast of expenditures for the next period on the basis of which
the amount of funds to be disbursed will be determined.
47. Table 3.2 presents allocated financing, inclusive of taxes, to the two disbursement
categories under the project. The allocated amounts represent the 100 percent capped
expenditure limits from the IBRD Loan.
Table 3.2. Allocation of Loan Proceeds

Percentage of
Amount of Loan
Category Expenditures to be
(US$, millions)
Financed
EEPs 289.89 100
Technical Assistance (Goods, Non-consulting Services, 9.36 100
Consultants’ Services, Training and Workshops, and
Incremental Operating Costs)
Front-end Fee 0.75
Interest Rate Cap or Interest Rate Collar premium -0-
Total Amount 300 100
48. Designated account. A segregated designated account will not be established. As
mentioned earlier, receipt of funds from the Bank shall be in the Provincial Consolidated
Account No. 1 (Non-Food). Annually, the Bank will disburse funds for Component 1 into the
Non-Food Account keeping in view the actual achievement of the DLIs and semiannually for
Component 2 based on cash forecasts.
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49. DLIs. The disbursements for Component 1 of the project are conditional on the
achievement of agreed program implementation performance and progress targets that are
presented in annex 1. These are identified as the DLIs. There are nine DLIs for each fiscal year,
and each DLI in any given fiscal year is priced equally. For years 1–3 of the project, each DLI
target is valued at US$8.59 million; whereas in years 4–5 each DLI target is valued at US$3.22
million.
50. For each year, the amount eligible for disbursement will be the product of the total
number of DLIs achieved and the unitary DLI price for the achieved DLI. The DLIs are priced
differently in years 1–3 and years 4–5, as noted above. The price for the DLIs for years 1–3 is
calculated by allocating an equivalent value to each of the nine DLIs per year for years 1–3
across 80 percent of the Component 1 budget, that is, (US$290 million x 0.8) / (9 DLIs per year
x 3 years of implementation). The price for the DLIs for years 4–5 is calculated by allocating an
equivalent value to each of the nine DLIs per year for years 4–5 across 20 percent of the
Component 1 budget, that is, (US$290 million x 0.2) / (9 DLIs per year x 2 years of
implementation). Where achievement of a DLI cannot be certified, an amount equivalent to the
unitary DLI price will be withheld. This amount will be paid at a later date when such an
achievement can be verified.
Table 3.3. Indicative Disbursement Schedule

Date of
Submission
of IUFRs Capped Amount
No. Description Basis
and US$
Withdrawal
Application
1. Effectiveness Advance against the EEPs US$39 million for the For Component 1: Advance
and forecast of TA for 6 EEPs and TA advance against expenditures in the EEPs
months after signing date according to the estimate to be incurred in 6 months after
up to December 31, 2016 project signing
For Component 2: Forecast for
advance from project signing to
December 31, 2016
2. February 15, Advance against forecast TA according to For Component 1:
2017 for the period Jan 2017 to estimate Documentation of actual
June 2017 for TA expenditures in the EEPs
according to the BER for the
period from project signing to
December 2016
For Component 2:
Documentation of actual
expenditures against previous
advance for TA and forecast
3. June 15, Amount due for the DLIs Up to US$77,310,000 for For Component 1: Certification
2017 met, subject to the actual the EEPs and TA of achievement of the DLIs in
EEP expenditures and according to estimate May 2017 and actual
advance against forecast expenditures in the EEPs
for the period July 2017 to according to the BER for the
Dec 2017 for TA period from project signing to
December 2016
For Component 2:
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Date of
Submission
and US$
Withdrawal
Application
4. February 15, Advance against forecast TA according to estimate Documentation of actual
2018 for the period January expenditures against previous
2018 to June 2018 for TA advance for TA and forecast
EEP expenditures and according to the estimate May 2018 and actual
December 2018 for TA period January 2017–December
2017
For Component 2:
2019 for the period January to expenditures against previous
June 2019 for TA advance for TA and forecast
December 2019 for TA period January 2018 to
December2018 For Component
2: Documentation of actual
2020 for the period Jan 2020 to expenditures against previous
EEP expenditures and according to estimate May 2020 and actual
Dec 2020 for TA period January 2019 to
December 2019
For Component 2:
2021 for the period Jan 2021 to expenditures against previous
69
Date of
Submission
and US$
Withdrawal
Application
11. June 15, Amount due for the DLIs Up to balance amount for For Component 1: Certification
Dec 2021 for TA period January 2020 to
December 2020
For Component 2: Unused
portion of TA may be reallocated
to the EEPs before project
closing, subject to agreement
between the Bank and the
GoPunjab.
51. EEPs. Under Component 1, the Bank will finance, up to a capped amount and subject to
any deductions equivalent to the price of unmet DLIs, particular expenditures, which are a part
of PESP III’s budget of eligible activities. These expenditures are clearly identifiable in the
GoPunjab FMIS and the PEF internal CoAs and are referred to as the EEPs. The Bank funds will
not be separately tracked and the Bank will accommodate withdrawal applications from the loan
as long as the overall expenditures eligible under the EEPs are more than or equal to the amount
to be withdrawn from the loan. However, in any disbursement, not more than 70 percent of the
amount to be disbursed will be applied against reimbursement of expenditures in the EEP for
employee-related expenses and the remaining 30 percent will be applied against total
expenditures in the rest of the EEPs so that the disbursements are not all applied toward salaries.
52. A brief description of the EEPs for Component 1 under the project is provided below.
(a) Employee related expenses of primary and secondary education subfunctions of

provincial and all district governments
 Type: Recurrent Budget
 Code: Object head A01 for education subfunctions 091 and 092
 Description: Pay and allowances for district and provincial employees of the
SED.
 Oversight: Salaries are subject to overall payroll controls which are considered
adequate. Personnel records are maintained at the Department of Public
Instruction for BPS 17 and above and, for the rest, the records are kept at the
district level at various offices.
(b) Eligible expenditures incurred by the PEF
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 FAS (PEF-FAS) - Direct program expenditures;
 CPD Program - Direct program expenditures;
 Education Voucher Scheme (PEF-EVS) - Direct program expenditures;
 New School Program (PEF-NSP)
 Salaries and other benefits of PEF staff
 Oversight. The utilization of funds is subject to the PEF’s internal controls,

which are audited by the AGP and also private sector auditors and are
considered adequate.
53. Table 3.4 shows student fee per month contributed by the PEF FAS, EVS, and NSP:
Table 3.4. Student Fee per Month

Class Fee per Student per Month in PKR
Primary 550
Elementary 600
Secondary (Arts) 700
Secondary (Science) 800
Higher Secondary (Arts) 900
Higher Secondary (Science) 1,100
Source: PEF.
(c) Girls’ Stipends Program (PSSP)
 Type. Recurrent Budget
 Code: Object Head A03977
 Description. This includes the amount distributed to girl students enrolled in

grades 6–10 of public schools in 16 selected districts meeting predefined
eligibility criteria (80 percent attendance). The expenditures also include the
distribution cost at actuals and a 1 percent amount for incidental charges
incurred by the districts.
 Distribution is currently through money orders in the name of the beneficiary.
 Oversight. The amount is transferred by the FD, on the advice of the PMIU to
District Account IV from where it is placed into a postal savings account jointly
operated by the EDO (education) and another representative of the district
government.
 From there it is disbursed to beneficiaries through money orders. Appropriate

internal controls are in place at each stage to ensure funds are used as intended.
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(d) NSB
 Code: Object Head A09270-AD7
 Description: This is the budget given to primary/elementary schools’ SCs at

district levels and extended to include high/higher secondary schools. These
funds will be used to meet the schools’ operational expenditure such, as
utilities, repairs and maintenance, and other related expenses, but excluding
development expenditures.
 Oversight: The budget is allocated to the PMIU which is based on each

school’s entitlement; for primary/elementary schools, funds are transferred to
respective SDAs in districts by the FD, on the advice of the PMIU from where
payments are on the advice of the head teacher and co chairperson of the SC.
SDAs are operated by respective EDO (Education) and EDO (Finance and
Planning). For high/higher secondary schools, funds are released/transferred to
the respective district government Account IV by the FD on the advice of the
PMIU; funds are utilized by the DDO (head master/principal) through the
district account office. Appropriate internal controls are in place at each stage
to ensure funds are used as intended.
(e) Monitoring Systems (CM Monitoring Force)
 Code: DDO code LQ5269
 Description. Costs of MEAs, who conduct monthly school inspections.
 Oversight. This is a provincial-level expenditure paid at the central and district

levels (from Account I), subject to routine payment controls, which are
considered adequate.
54. Financial reporting. Project reports and financial statements will identify the uses of
funds according to the predefined eligible expenditure elements and TA costs financed by the
Bank as well as by GoPunjab. Adequate notes and disclosures consistent with acceptable
international practice will be provided in the annual financial statements.
55. Disbursements for Component 2 will be made against semiannual IUFRs to be submitted
by the GoPunjab to the Bank within 45 days after the end of June/December each year.
Component 1 will be disbursed annually on the basis of the IUFRs as well. The format for the
IUFRs has been agreed during negotiations.
56. The IUFRs will be supported by the BER for the relevant period, which will form the
basis of documentation of expenditures against advances and disbursements for the EEPs up to
the extent of the Bank’s financing. In addition, the BERs for the entire education sector along
72
with a cover note summarizing the budget allocations and utilization for the EEPs and the TA
component will be submitted within 45 days after the end of each semester for continuous
monitoring of expenditures and progress of the program. The IUFRs are prepared by the PMIU.
The PEF will provide information related to eligible expenditures incurred by it (actual
expenditures, budget, reasons for variances +/– 15 percent) to the PMIU within 30 days of the
end of the quarter to allow compilation and submission in time.
57. Annual financial statements will be prepared for the project in accordance with the Cash
Basis International Public Sector Accounting Standard which will provide details of expenditures
against the EEPs and TA for the project and sources of funding for the same (GoPunjab, IDA,
DFID, and any other development partner). These will be prepared by the PMIU. The PEF will
fully cooperate with the PMIU for the prompt submission of necessary information for the
preparation of the financial statements and also coordination with the concerned AGP formations
for audit.
58. Auditing. Project financial statements with a comprehensive disclosure of the operations,
resources, and expenditures for the project will be prepared, audited, and submitted to the Bank
within nine months of the close of each financial year. The AGP will conduct an audit of the
project financial statements; this arrangement is acceptable to the Bank. The audited financial
statements along with auditors’ management letter must be submitted to the Bank within nine
months of the close of the financial year, June 30.
59. All audit reports due for the ongoing PESP II have been received up to FY2013/14, albeit
with some delays. The audit report for FY2014/15 due on December 31, 2015, was timely
received and accepted. There are currently no unsettled ineligible expenditures or overdue audit
reports.
60. The audit activity will primarily be carried out by the director general (civil audit) for
provincial expenditures, director general (district audit) for district government expenditures and
the director general (commercial audit) for the PEF.
61. The director general (commercial audit) has completed the audit of the PEF up to
FY2013/2014; the audit for FY2014/2015 is in process. Necessary measures have been taken by
the PEF management to mitigate risk which may arise from control weaknesses. Annual audited
financial statements of the PEF are uploaded on its website: www.pef.edu.pk
62. The annual audit reports from the director general (district audit) and director general
(commercial audit) must be shared with the PMIU on a timely basis to ensure effective internal
controls and appropriate measures to mitigate risks, if any. Therefore, there will be a need for
coordination among all formations to ensure the prompt submission of audit reports. The audit
report will be based on the findings of all formations involved in the audit and the management
letter will include all material observations.
63. Supervision plan. The project will require frequent IS, particularly on financial reporting
aspects. During project implementation, the Bank will review (a) the IUFRs, the project’s
audited financial statements; and (b) the project’s FM and disbursement arrangements to ensure
compliance with the agreed requirements. Given sound implementation of the FM and
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monitoring system by the professional staff for the current PESP II the Bank’s normal
implementation review procedures will suffice.
Table 3.5. Fiduciary Risk Table

Residual Risk
Fiduciary Element Risk Rating KPI
Rating
1. Joint Fiduciary Aspects
1.1 Fiduciary Capacity
Qualified and experienced
accounting staff are working on
1.1.1 Is there adequate fiduciary staff based on the existing PESP II and will
the profile of the project, with regard to continue to work for the project.
numbers and experience, to implement the Significant Moderate In addition to the existing
project, with clear definition and segregation of procurement staff a
function between FM and procurement? procurement specialist and a
contract management specialist
will also be recruited/notified.
1.2 Planning and Budgeting
The GoPunjab’s annual budget
appropriately incorporated the
SED budget. Monthly BERs are
reconciled on time. The
1.2.1 Are realistic budgets and Procurement Procurement Plan for the first
Significant Moderate
Plans prepared and reconciled? eighteen months of the
activities has been prepared
which shall be updated on a
need basis and approved by the
Bank
1.3 Internal Control (including Internal
Audit)
The GoPunjab's General
Financial Rules and Procedures,
clearly define accountability,
internal control processes, and
1.3.1 Are effective internal controls in place, as availability of complete
Significant Moderate
jointly assessed by FM and procurement staff? auditable records of accounts
and procurement processes. To
mitigate the risk establish
internal audit function for the
project.
(i) Staff identified in the
Procurement Plan to be in place
not later than three months after
effectiveness
1.4 Contract Management High High (ii) The existing Operational

Manual of PESP II shall be
suitably modified to describe
contract management activities
related to TA within six months
of effectiveness
1.5. Project Management and Governance
1.5.1 Audit Arrangements
1.5.1.1 External Audit of :project financial Significant Moderate Annual district and PEF audit
74
Residual Risk
Fiduciary Element Risk Rating KPI
Rating
statements; annual district audits; and the reports must be shared with the
PEF will be conducted by the office of the PMIU to ensure effective
AGP internal controls are in place.
The PMIU will establish an
internal audit section or will
1.5.1.2 Internal Audit Significant Moderate
outsource it to a firm of
chartered accountants
1.5.2 Mitigating Fraud and Corruption—

Transparency, Accountability and Moderate Moderate –
Participation
(i) Need to develop an
independent and formal system
for NSB funds
1.5.3 Grievance Redress Mechanisms—
High High (ii) Procurement complaints to
complaints handling and grievance redress
be managed through SED’s
complaints mechanism and the
Bank’s standard protocols
Appointment of additional
procurement and contract
2. Procurement Processes and Procedures Substantial High management staff and updating
of Procurement Operational
Manual
3. FM Considerations
3.1 Funds Flow Moderate Moderate –
3.2 Accounting and Financial Reporting Moderate Moderate –
FM Risk rating Moderate Moderate –

Procurement Risk rating High Moderate
Overall Fiduciary Risk Rating – Moderate –
Procurement Management
64. The operation will be using the existing project implementation of PESP II and will
therefore only strengthen the already existing fiduciary arrangements under this operation. It was
agreed that the existing PMIU will be bolstered with additional procurement and contract
management specialists due to enhanced complexity of the procurement related activities in the
project.
65. TA under the project will be carried out in accordance with the Bank‘s ‘Guidelines:
Procurement of Goods, Works, and Non-consulting Services under IBRD Loans and IDA Credits
and Grants for World Bank Borrowers’, dated January 2011 and revised July 2014; and
‘Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and
Grants by World Bank Borrowers’, dated January 2011 and revised July 2014.
66. Procurement of goods. In the case of procurement of goods through TA funds, the
Bank‘s procurement guidelines will be applicable. International Competitive Bidding procedures
will be used for all contracts estimated to cost more than US$500,000 equivalent, using the
Bank‘s standard bidding documents. Goods contracts costing more than US$100,000 but less
than US$500,000 will be procured through National Competitive Bidding (NCB), using bidding
documents acceptable to the Bank, and contracts costing up to US$100,000 may be procured
75
through shopping procedures. In addition to these: (a) Limited International Bidding, and (b)
Direct Contracting can also be used when and where relevant.
67. Improvement of bidding procedures under NCB. The following improvements in the
bidding procedures will apply to all procurements of goods and works under NCB, to ensure
economy, efficiency, transparency, and broad consistency with the provisions of section 1 of the
Procurement Guidelines:
 Invitation to bid shall be advertised in at least one national newspaper with wide
circulation, at least 30 days prior to the deadline for the submission of bids.
 Bid documents shall be made available, by mail or in person, to all who are willing
to pay the required fee.
 Foreign bidders shall not be precluded from bidding and no preference of any kind
shall be given to national bidders in the bidding process.
 Bidding shall not be restricted to preregistered firms.
 Qualification criteria shall be stated in the bidding documents.
 Bids shall be opened in public, immediately after the deadline for submission of
bids.
 Bids shall not be rejected merely on the basis of a comparison with an official
estimate without the prior concurrence of the Bank.
 Before rejecting all bids and soliciting new bids, the Bank’s prior concurrence shall
be obtained.
 Bids shall be solicited and works contracts shall be awarded on the basis of unit
prices and not on the basis of a composite schedule of rates.
 Contracts shall not be awarded on the basis of nationally negotiated rates.
 A single bid shall also be considered for award.
 Contracts shall be awarded to the lowest evaluated and qualified bidder.
 Post-bidding negotiations shall not be allowed with the lowest evaluated or any
other bidders.
 A draft NCB contract would be reviewed by the Bank in accordance with prior
review procedures.
 Any firm declared ineligible by the Bank, based on a determination by the Bank that
the firm has engaged in corrupt, fraudulent, collusive, coercive, or obstructive
practices in competing for or in executing a Bank-financed contract, shall be
76
ineligible to be awarded a Bank-financed contract during the period of time
determined by the Bank.
 Each contract financed from the proceeds of the loan shall provide that the suppliers,
contractors, and subcontractors shall permit the Bank, at its request, to inspect their
accounts and records relating to the performance of the contract and to have said
accounts and records audited by auditors appointed by the Bank. The deliberate and
material violation by the supplier, contractor, or subcontractor of such provision may
amount to obstructive practice.
68. Selection of consultants. Contracts already signed under PESP II—Component 2

(Technical Assistance) will be continued for implementation under the TA Component where
relevant to the continuation of ongoing activities.
69. New contracts with consulting firms will be procured in accordance with Quality- and
Cost-Based Selection (QCBS) for costing more than US$500,000 equivalent, and through
Selection Based on the Consultants’ Qualification (CQS) for contracts costing up to
US$500,000. Other methods as mentioned in section III of the Consultant Guidelines shall be
used as required. For contracts with consulting firms estimated to cost less than US$500,000
equivalent per contract, the shortlist of consultants may comprise entirely of national consultants
in accordance with the provisions of paragraphs 2.7 of the Consultant Guidelines.
70. Selection of individual consultants. Services for assignments that meet the requirements
set forth in paragraph 5.1 of the Consultant Guidelines may be procured under contracts awarded
to individual consultants in accordance with the provisions of paragraphs 5.2 through 5.3 of the
Consultant Guidelines. Under the circumstances described in paragraph 5.4 of the Consultant
Guidelines, such contracts may be awarded to individual consultants on a sole source basis.
Advertisement for seeking expressions of interest would be required and even for small value
contracts, the request for expressions of interest shall at least be uploaded on websites.
Expressions of interest should specify selection criteria that are solely based on experience and
qualifications. Government officials and civil servants of the borrower’s country may only be
hired under consulting contracts in the borrower’s country, either as individuals or as members
of the team of experts proposed by a consulting firm, provided that such hiring does not conflict
with any employment or other laws or regulations, or policies of the borrower’s country and if
they (a) are on leave of absence without pay, or have resigned or retired; (b) are not being hired
by the agency they were working for before going on leave of absence without pay, resigning, or
retiring; and (c) their hiring would not create a conflict of interest in the case of resignation or
retirement, for a period of at least six months, or the period established by statutory provisions
applying to civil servants in the borrower’s country, whichever is longer. Professors or staff and
experts in specialized fields from universities, educational institutions, and research institutes can
be contracted individually on a part-time basis provided that they have been full-time employees
of their institutions for a year or more before being contracted and such hiring is justified for the
services required.
71. Assessment of agency’s capacity to implement procurement. The PMIU has had
ample experience with the Bank’s Procurement and Consultants Guidelines. However, risks are
being rated Moderate from a procurement and contract management point of view. This
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assessment is based on the previous performance and current capacity of the PMIU in view of
managing high value and complex procurement of services. Additional staff will be hired to
mitigate the moderate risk rating. Hence, in addition to the procurement specialist engaged under
PESP II, an additional procurement specialist and a contract management specialist will be
selected or notified. Even in the case of deputation from a government department, the Bank will
review the profile of the nominated candidate and give its concurrence.
72. Complaints. SED maintains an eComplaints system hosted on its website, run by the
monitoring cell, led by the deputy director, Chief Minister's Monitoring Force (CMMF), SED.
This cell provides a complaints redressal mechanism specifically for education delivery related
grievances.
73. For International Competitive Bidding/international selection of consultants the Bank-

prescribed complaint redressal mechanism will apply.
Table 3.6. Procurement Actions (Summary of the Above Identified Issues and Agreed Actions)
Issues Action Timeline Responsibility
(a) Empowerment (i) Delegation of administrative and financial July 1, 2016 (i) FD, PMIU
powers to SED/PMIU
(ii) PMIU
(ii) Identification and placement of an
additional procurement and a contract
management staff.
(b) Improving The Bank will provide hands-on support for July 1, 2016 Bank and
Procurement adequate planning and monitoring of the SED/PMIUs
Planning and Procurement Plan including use of simple IT
Monitoring tools
(c). Upfront Actions Hiring/identification of second Procurement July 1, 2016 SED/PMIU
and a Contract Management Specialist for
PMIU
(d) Market Constraints (i) Adequate packaging (i) July 1, 2016 SED/PMIU with
(ii) Wide circulation (ii) Ongoing the Bank’s
(iii) Capacity-building and knowledge sharing assistance
events of potential suppliers and service
providers
(e) Transparency (ii) SED/PMIU Intranet Once Project is SED/PMIUs
(iii) Disclosure of procurement information on declared
freely accessible website in accordance with effectiveness
section 2.28 of Consultant Guidelines and
2.60 of the Procurement Guidelines shall be
followed for disclosure of Procurement Plan, As required
procurement notices, invitation to bid, bid
documents, and request for proposals as
issued and so on.
(iv) Procurement clinics with focus on
detecting red flags
(v) Video recording of key procurement stages
(vi) Uploading of the minutes of bid,
technical, and financial openings on same day
(vii) The government shall also ensure that the
project is carried out in accordance with the
provisions of the Anticorruption Guidelines
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Additional Procurement Risk Mitigation Measures
74. The following fiduciary risk mitigation measures will concurrently aim to internalize
procurement and FM capacities of the GoPunjab:
(a) Procurement and finance consultancies will be subject to prior review.
(b) All consulting assignment over US$500,000 will have a provision of secondment of
staff to these consultancies.
(c) The inclusion of the fixed assets will be consistent with the government’s fixed
assets and austerity policies. The procurement assessments will account for
useful/useable assets available in particular departments regardless of the financing
source.
(d) Every procurement publication will have a link to the eComplaints system to ensure
objective reporting of deviations in fiduciary issues.
(e) For enhanced transparency, the pre-bid/pre-proposal conferences, technical proposal

submission meeting, financial proposals, and bid opening meetings will be video
recorded and the proceedings uploaded on a website within 60 minutes of the
conclusion of such meetings.
(f) Detailed guidance will be provided in an updated manual regarding conflict of

interest, transparency measures, and so on. With regard to the code of ethics,
measures will be provided in project procurement SOPs which will take into account
willful deviations from procurement processes.
75. Procurement planning. The SED/PMIU has developed a Procurement Plan for
implementation of TA activities, which provides the basis for procurement methods. This plan
will be made available on the PMIU’s website. It will also be available in the project’s database
and on the Bank’s external website. The Procurement Plan will be updated in agreement with the
project team annually or as required to reflect the actual project implementation needs and
improvements in institutional capacity.
Table 3.7. Summary of Identified Major Procurements
Procurement
DLI Name Cost (US$)
Method
1, 3, 6 M&E 900,000.00 QCBS
2,4,5,7,8 TPVs 600,000.00 CQS
Hiring of a firm for review and revision of the existing
1 300,000.00 CQS
EVS and implementation of improved system
Hiring of a firm to support the strengthening of PEF’s
2 capacity to manage and implement PPPs and the quality 300,000.00 CQS
assurance system
Hiring of firms for design and implementation of the ECE
4 500,000 QCBS
package
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Hiring of a firm to design the integrated package to
6 500,000 CQS
reinforce the DTE’s field-based model of CPD
Hiring of a firm to develop an assessments policy
7 framework; undertake PEC functional review, and develop 500,000 CQS
ISP; design trainings and build capacity to deliver
Hiring of firm for SC capacity building through a mixed
8 300,000.00 CQS
program
9 Hiring of a firm for private school census 500,000.00 CQS
Hiring of a firm for development and integration of the

9 500,000.00 CQS
education database
Total 4,900,000.00
76. Review of procurement by the Bank. Thresholds for prior review of contracts under
eligible expenditures are given below. These thresholds will be reviewed in 18 months and
adjustments upward or downward will be made based on implementation experience.
(a) All single source selections or direct contracts
(b) First NCB contract for goods, irrespective of value; thereafter, each contract for
goods estimated to cost US$500,000 equivalent or more
(c) First contract procured through shopping, for goods
(d) The first consultants‘ services contract with consulting firms, irrespective of value,
and, thereafter, all contracts with firms estimated to cost US$500,000 equivalent or
more
(e) First consulting services contract with individual consultants, irrespective of value,
and, thereafter, all contracts with individuals estimated to cost US$100,000
equivalent or more
(f) ToRs of all of the consultancies regardless of review type shall be prior reviewed by
the Bank’s team
77. All other contracts will be subject to post review by the Bank. The SED/PMIU will send
the Bank a list of all contracts for post review on a quarterly basis. Post reviews as well as
implementation reviews will be conducted every six months. Such review of contracts below
threshold will constitute a sample of about 15–20 percent of the contracts.
78. Procurement information and documentation - filing and database. Procurement

information will be recorded and reported as follows:
(a) Complete procurement documentation for each contract, including bidding

documents, advertisements, bids received, bid evaluations, letters of acceptance,
contract agreements, securities, related correspondence, and so on, will be
maintained by the implementing agency in an orderly manner, readily available for
audit.
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(b) Contract award information will be promptly recorded and contract rosters as agreed
will be maintained.
(c) Comprehensive quarterly reports by the SED/PMIU indicating: (i) revised cost
estimates, where applicable, for each contract; (ii) status of ongoing procurement,
including a comparison of originally planned and actual dates of the procurement
actions, preparation of bidding documents, advertising, bidding, evaluation, contract
award, and completion time for each contract; and (iii) updated Procurement Plans,
including revised dates, where applicable, for the procurement actions.
79. Frequency of procurement supervision. Joint review missions would be carried out
every six months, with the participation of a procurement specialist. In addition to prior review
cases, Bank supervision missions will undertake post review of procurement actions conducted
in the preceding six-month period. The Bank’s procurement specialist, based in the country
office in Pakistan, will be available to discuss procurement issues with the implementing
agencies, with visits as and when needed.
Environmental and Social (including Safeguards)
80. An environmental assessment is not applicable to the project because this is a Category C
Project that does not involve any physical works, civil works or rehabilitation and thus has no
interactions with the physical environment relevant to safeguards analysis.
81. A Social Assessment (SA) was conducted as part of project preparation to explore social,
cultural, and gender issues related to the project. The SA used a mixed methods approach and
explored several social issues related to access to education for various groups, social and
cultural reasons behind school dropouts, parental and teacher attitudes toward stipends, gender
disaggregated perceptions of training and other political, cultural, and social aspects that
influence school education. In addition, a stakeholder analysis was conducted to understand the
relevant strengths and weaknesses of various stakeholders and how the project needs to ensure
their support and manage risks during implementation.
82. Key findings from the SA have been incorporated into the project design. They can be
categorized according to several social issues discussed below.
83. Social exclusion, poverty, and nonenrollment in schools. Both parents and teachers were
surveyed on the reasons behind nonenrollment of children. The overwhelming majority (89
percent respondents) reported that belonging to a caste or religious sect does not exclude a child
from enrollment in schools. Further, 79 percent respondents also agreed that teachers do not
discriminate against children if they belong to a particular sect or caste. However, 89 percent
respondents stated that poverty had a negative impact on the child’s enrollment. Thus
nonenrollment on the basis of being socially marginalized is clearly not an aspect influencing the
sector but poverty seems to be the overwhelming one.
84. Poverty, school location, and non-enrollment - girls versus boys. Household choices
have an impact on girls and boys in different ways when it comes to non-enrollment. The
education sector has focused on providing schools at an accessible distance from homes. This is
generally the right path as 59 percent respondents (teachers and parents) stated that less than 30
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percent girls would be out of school if a school was located nearby. This is particularly the case
in rural areas. However, some attention needs to be paid to explore factors other than location
because about 32 percent parents and teachers believe 30 percent of the non-enrollment of girls
can be attributed to other factors—not just school location. The same question for boys revealed
that roughly 50 percent of respondents believed that even if a school is nearby boys will not
attend it. The overwhelming majority (78 percent) believed that up to 25 percent girls are out of
school. About the same number of respondents believed that up to 25 percent boys are out of
school. Household chores were the main reason cited by respondents as the reason for girls being
out of school at the primary level. About 33 percent believed that out-of-school boys were
engaged in income-generating activities. The percentage of girls reported to be out of school in
the 11–15 age bracket were overwhelmingly (85 percent) seen to be engaged in household
chores. Similarly, some 69 percent respondents perceived that out-of-school boys in the 11–15
age bracket were earning. In other words, income generation and household chores (a proxy for
income generation) are the leading causes for children to be out of school. This was reiterated by
parents (both mothers and fathers) and district administration who stated that child labor is not
abuse and is necessary for a family to survive. In other words, poor families especially in rural
areas, struggling to make ends meet are very likely to keep children out of school. Qualitative
interviews showed that poor parents were keen to enable their children to learn a trade through
apprenticeship early in life. Even if they were not paid for this work, boys were seen to be
learning a skill that would lead to income generation in the near future. The returns of having a
skill were perceived as being higher than if not as high as going to school.
85. Safe transport and school dropouts, especially girls. During the field assessment, this
emerged as a significant social issue affecting parental attitudes toward secondary education for
girls leading to dropouts. Parents were generally fearful of sending pubescent girls to schools
where the school location was remote and involved travel. First, in rural areas, household
resources were scarcely available to invest them in transport for education purposes. Second, the
physical safety of girls in rural areas was seen as a problem during long transportation. While
girls in rural areas continue to go to primary school and secondary/high schools that are located
in a village/close by, this tended to decrease as schools were perceived to be located far off and
required safe transport or transport with a household member.
86. Stipends, student performance, and parental role. A survey of teachers showed that it
was overwhelmingly felt that stipends at both primary and secondary levels will lead to
improved enrollment of girl students (93 percent agreed). Stipends were seen as an excellent
incentive for boys’ enrollment also (91 percent agreed). However, some 38 percent teachers saw
them as a small help for education. Among parents, 71 percent of mothers saw stipends as a
major help while 32 percent of fathers were of the same opinion. Most fathers (36 percent) saw it
as a medium level of help. During focus group discussions, several issues also emerged for the
project to consider as it continues to support stipends. First, while teachers claimed that there
was positive correlation between stipends and performance, this needs to be systematically
evaluated through research based on learning outcomes of students receiving stipends. Second,
teachers reported that stipends may have served as an incentive for school attendance but were
rarely used by parents to buy educational material or to invest in their daughter’s learning needs.
Teachers complained that while they were subjected to monitoring and tight oversight, often it
was parents who were responsible for holding their daughters back from investing time and
resources in education. Teachers reported that fathers often used stipends for their own
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expenditures. They complained that many parents either did not value education enough or were
unaware of the time needed for after school homework and learning. Parents’ main expectations
is that girls shoulder household chores after school (69 percent teachers reported that they know
their girls students undertake cooking at home after school) with or without stipends. This
constrained student ability to undertake homework and prepare for examinations.
87. Health, hygiene, and other issues especially for girl students. Teachers and students
reported facing challenges due to lack of hygiene in schools, lack of awareness on health issues,
and lack of access to health material. Several teachers reported that schools did not have cleaners
and that even if they had functioning toilets, these were often so dirty that children could not use
them. Some schools hired local cleaners on their own initiatives while others did not have
recourse to this and used children to clean toilets. Often this task fell to students belonging to
marginalized and socially excluded groups adding further to the social stigma faced by them.
Girls needed to be made aware of hygiene problems and provided necessary health and hygiene
training and material. Other psychosocial counselling was seen as a part of teaching requirements
and many teachers struggled to cope with them. Teachers in high schools complained of the
demands of dealing with truant and socially disruptive behavior (especially among high school
boys) and stated that they lacked training and other support to deal with such issues. In girls’
high schools, teachers often reinforced a restrictive view of gender roles and blamed girls if they
were emotionally exploited by boys. Only a few teachers were aware of the need to deal with
social and emotional issues to ensure that teenage students continue to value education.
88. ‘Maar Nahi: Pyaar’ - Corporal punishment in schools. The field assessment found that
corporal punishment is often used in schools despite the GoPunjab’s ‘Maar Nahi: Pyaar’ Policy
(No beatings but love). Surveys showed that both male and female teachers believed in various
forms of punishment to discipline a careless student (grabbing and pushing, using a stick/foot,
hitting with a book, standing outside the class). Hitting with a stick/foot was cited by both male
(26 percent) and female (38 percent) teachers as the most frequently used type of corporal
punishment. Male teachers (58 percent) did not agree that the fear of punishment prevents a child
from attending school while female teachers were evenly divided in their opinion. This shows
the overwhelming approval for corporal punishment among teachers and the use of fear in
schools to discipline children. During interviews, teachers stated that children were accustomed
to being beaten up and that without corporal punishment, they could not be disciplined. The
prevalence of corporal punishment will need to be included in monitoring protocols and teachers
should be trained on classroom management that does not include corporal punishment and fear
in the classroom.
89. Child abuse and other psychosocial issues. About 54 percent of teachers believed that
girls are more vulnerable to physical abuse. Surprisingly, about 70 percent of abused children
known to them were boys. Most (57 percent) believed that society/nonhousehold members were
responsible for child abuse. Contrary to popular opinion, boys seem to be more vulnerable to
physical abuse than girls are. During quantitative research, teachers stated that they were trained
well in working with children subject to physical abuse (71 percent). However, during interviews
and focus group discussions both teachers and local administration clarified that they are unable
to handle such cases. Head teachers often had to assume counselling duties in this regard.
Further, teachers received no training on how to handle disabled children (29 percent stated that
they had some training) or those suffering from common learning disabilities such as dyslexia
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(again only 29 percent reported training on learning disabilities). Many teachers also expressed
inability to deal with common psychological problems such as depression among teenagers or
how to deal with attitudes toward religious militancy. While the DSD has developed training
material on these issues, no teacher interviewed during the SA had been trained on how to deal
with any psychosocial issues. The project will explore the role of physical abuse in child
retention and dropouts, and how teachers can be prepared to deal with it better. Furthermore,
efforts need to be made to have at least one trained teacher who can deal with learning
disabilities among children.
90. M&E and social issues. A significant gap in the M&E system is the absence of inclusion
of social factors that affect school education. Issues such as (a) corporal punishment (or
punishment in general); (b) attitudes to marginalized groups and religious minorities; and, (c)
physical safety can and should be included in the survey of schools. Given the escalating
violence in schools most prominent being the Army Public School attack in Peshawar in 2014, it
is critical that school safety is ensured and monitored—a policy that the GoPunjab is also keen
on implementing. Teachers and SCs often stated that they had spent funds on upgrading security
features such as gates, boundary walls, and so on, which indicates increased awareness and
demand for safety measures in schools. SOPs for safety of children should be developed for
schools, made mandatory for implementation, and monitored stringently.
91. Stakeholder analysis. A detailed stakeholder analysis was also conducted as part of the
SA. Key findings in relation to various stakeholders are discussed below.
92. Implementing agencies. The assessment evaluated the role of the PMIU, DSD, PEC, and
SED. The SED indicates enrollment as the weakest area and is directing efforts to reduce the 70
percent dropout rate from elementary to matric. The SED’s main guiding framework remains the
chief minister’s education road map and it is keen to have all interventions of the project
synchronized with the road map. The SED leadership realizes that a lack of clarity of purpose
and the sidelining of local opinion makers in education interventions may be creating hurdles to
making quick progress. One of the strengths of the current education system is its decentralized
governance. The SED encourages PESP implementers to engage with local management and
administrators but also raises alerts about bureaucratic and coordination issues.
93. The PMIU plays a key role as the main stakeholder in implementation. However, its
monitoring role came under criticism from local staff and teachers who complained of an
expedient and a reductionist ‘numeric-driven approach’ (locally and informally understood as an
approach that ignores the ‘what’, ‘who’, and ‘how’ of the social processes and forces that affect
data production). Further, the chief minister’s road map has introduced real-time monitoring
through tablets — but the DMOs and other local administrators explained how the use of tablets
has created issues for MEAs, teachers, and students. Trainings for relevant stakeholders is much
needed. With the introduction of monthly Learning Assessments, also being operationalized on
tabs—it has become absolutely necessary to make the ‘product’ available at the school level and
in all classes that require this support.
94. The PMIU does not engage with civil society regularly. Sole reliance on teachers to
enroll out-of-school children is not sufficient and will be addressed during the project’s
implementation.
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95. School councils. SCs were found to be functional. Some were more gender
representative than others. Mostly in girls secondary schools, 2–3 members are male, but in boys
secondary schools the council largely consists of men. A survey among noncouncil respondents
showed that 87 percent considered them to be representative of the community. Further, some 73
percent were content with the performance of SCs. Some 46 percent also believed that women’s
participation in SCs was impressive. Roughly about the same percentage of men believed that
women were silent during meetings (40 percent) as opposed to those who believed them to be
vocal (42 percent). Some 56 percent women believed that female council members spoke their
mind in meetings. The survey reinforces the needs for the project to continue to support SCs.
96. However, it is clear that further training of SCs on their duties and a mandate needs to be
undertaken. Out of the 12 schools that were visited, only one SC of a boys secondary school—
Jhelum Urban, was aware of the list of duties, and the PMIU guidebook. Almost half of the
schools had displayed these duties prominently at the entrance to the compound.
97. Largely the councils understand their work in relation to use of the NSB. Some 73
percent agreed with the use of the NSB. However, they clearly need further training and
guidance on FM as about 40 percent did not believe that the councils were proficient in finance
and budget making. The head teacher plays a key role in identifying school needs and the council
develops a consensus around it. In some schools, the head teachers were quick to show cash
registers and in other schools, there was reluctance to show any financial record.
98. The recent spate in terrorism has affected how budgets are used. Post the attack at the
Army School in Peshawar, the NSB has been used to installed closed-circuit television in
schools, cementing gaping boundary walls, adding barbed wires, and marking emergency exit
routes. Other than this, the NSB has been used to make repairs, construct toilets, storerooms,
showcase achievements/results, make drinking water arrangements, and so on.
99. The SC members shared the need to receive some financial and budget management
related trainings so that they could play a greater role in helping the head teacher in maintaining
financial record. In some places, council members discussed their inability to collaborate with
the head teacher (or to keep a proper check on the statements and cash registers maintained by
the head teacher). This issue was particularly raised in boys schools.
100. In girls schools, it was noted, that mostly SCs are managed through clerks and
collaboration with head teachers appointed at boys schools. This allows women-run
administrations to easily deal with market matters and decide on better and economical products
for purchase.
101. The project needs to and will be doing the following throughout its life: (a) strengthen
trainings for SCs regarding their role, (b) improve their capacity for financial oversight and
introduce some auditing oversight for NSB funds. A Grievance Redress Mechanism needs to be
in place so that SCs and other stakeholders can get recourse to complaints redressal.
102. Teachers. Teachers viewed the CPD Program provided by the DSD as being too
syllabus-focused, that is, service oriented. Teachers explained the need to design the CPD
Program in a way that it allows teachers to grow as independent professionals in their field. For
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example, an IT teacher should not only be enabled to deliver the syllabus but also be provided
with funding opportunities to attend course work in universities affiliated with the Higher
Education Commission of Pakistan and develop alongside larger advancements in IT. Teachers
expressed the need to be trained better in teaching methods and methodologies that can directly
improve students’ class performance. Quite often teachers, particularly natural science and IT
teachers, do not have the necessary equipment required for teaching. The DTEs continue to
perform as observers rather than as mentors or teachers’ educators. No teacher could share any
concrete or substantive teaching tool or technique as an example for having learned it from the
DSD and/or DTE.
103. A small field-based survey was carried out with teachers as part of the social and gender
assessment. Findings of the survey illustrate that majority of teachers believe that female and
male teachers are offered equal number of training opportunities, yet gender roles, that is,
household and community dynamics prevent women from ‘availing’ all these opportunities.
Female teachers continue to experience mobility issues and culturally defined gender roles have
a restrictive effect on their career advancement. Almost 80–90 percent of male and female
teachers believe that it often happens that female teachers’ safety is compromised when they are
appointed at far away examination centers.
104. The teachers and DTEs were very keen to develop their skills in protecting and
supporting victims of physical abuse and children with physical and learning disabilities.
Terrorism and security repeatedly emerged as a topic of discussion and teachers expressed their
need to be trained in self-defense so that they could safeguard schoolchildren against terrorist
attacks. Female teachers were particularly concerned with the state of political affairs and
worried about their own as well as children’s safety.
Monitoring and Evaluation
105. Results monitoring at the PDO level. The first indicator, pertaining to school
participation, will be measured by the school participation rate for two age groups (6–10 and 11–
15 years, both disaggregated by gender) using published official statistics from the PSLM
survey. This is a large-scale representative household sample survey conducted by the Pakistan
Bureau of Statistics, Pakistan’s official statistical bureau, which also serves as the government’s
main data source to measure progress toward the SDGs. The PSLM survey is undertaken on an
annual basis, and has been conducted regularly for several years without major issues in survey
design or execution being reported. The second indicator, pertaining to primary school
completion, will be measured by the completion rate at Grade 5 using official data collected at
school level, and compiled and analyzed by the PMIU as part of its M&E function for the SED.
These data are updated regularly and have been collected for several years without major issues
of reliability being reported. The third indicator, pertaining to the quality of teaching-learning
practices at primary level, will be a score constructed from observations using an observation
format that covers different domains of practice. The observations will be a representative
sample of primary teachers or classrooms targeted under DLI 6, undertaken by an independent
team of observers who will be trained and checked to collect reliable data. The data collection
exercise and determination of the indicator value will be conducted twice by independent,
contracted TA, to establish the baseline and final values. The fourth indicator measures the
child’s readiness for primary school. The indicator will be generated from measurements using a
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standardized and validated tool (for example, the MELQO tool). The administration of the tool
and the calculation of the indicator value will be undertaken by the contracted TA, working from
a representative and random sample of children who have completed the preschool year at
schools targeted under DLI 4.
106. Monitoring program implementation progress and performance. For monitoring

implementation progress of subcomponents against agreed targets (for both the results
framework and the DLIs), the GoPunjab’s established systems for monitoring of sector activities
will constitute key information sources. The monitoring system in Punjab has three pillars: (a) an
internal departmental monitoring system led by district education department officials; (b) an
independent, institutionalized school monitoring system reporting to the chief minister (CMMF);
and (c) the monitoring systems of other main implementing agencies, primarily the PEF, DSD,
PEC, and FD. As noted above (in the section on Implementation Arrangements), TA will be
mobilized to strengthen the PMIU, including its Research and Policy Wing; and this will serve to
strengthen the PMIU’s capacities to monitor and report on project implementation progress and
performance. Further, as explained below, these systems will be strengthened by TA, and their
capacities will be augmented through third-party data validation exercises and evaluations.
107. M&E information will also be derived from third-party data validations (TPVs) and
evaluations of subcomponent activities, to be contracted and overseen by the PMIU in close
collaboration (where relevant) with main implementing agencies. The Bank will support the
PMIU and implementing agencies to ensure that TPVs, evaluations and monitoring, reporting,
and QA systems strengthening are properly designed and administered. TPVs, evaluations, and
systems strengthening will be contracted to support the following subcomponents:
 Subcomponent 1.1(EVS), to strengthen PEF monitoring, reporting, and QAT, and to

evaluate impact
 Subcomponent 1.2 (PPP), to strengthen the PEF quality assurance system
 Subcomponent 1.4 (ECE), to strengthen DSD monitoring and reporting, and third-
party to validate data generated by the DSD, and evaluate impact
 Subcomponent 1.5 (human resources management for teachers), third party to

validate data on recruitment and reallocation policy implementation
 Subcomponent 1.6 (teaching quality and learning), to strengthen DSD monitoring

and reporting systems, third party to validate data generated by the DSD, and
evaluate interventions
 Subcomponent 1.7 (PEC), to strengthen capacities to analyze, report, and use data,
and third party to validate the status of DLIs in years 4 and 5
 Subcomponent 1.8 (NSB), to verify funds disbursements reported by the FD, and to
establish the baseline and target values for the NSB budget execution rate
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108. Further detail is provided in annex 1 (results framework notes on indicator definitions,
and DLIs table verification protocols) and annex 2 (Component 2 description).
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Annex 4: Systematic Operations Risk Assessment Tool (SORT)
SORT Details
Risk category Rating

4. Technical Design of Project or Program Moderate
9. Other: Security Substantial
OVERALL Moderate
Political and Governance
1. Political change/policy reversal. There is a substantial risk of sudden change to the

political landscape in Pakistan, and this political instability creates the risk of a shift or change in
government priorities. The current government has already completed half of its term and as it
starts preparing for the next elections, there may be less appetite to accelerate the pace of
ambitious reforms.
2. Country governance. Governance is a considerable concern for growth and

development in Pakistan. Institutions of accountability have not provided a strong framework for
holding the executive or service delivery agents accountable for results. The government has
taken initial steps to improve transparency, accountability, and participation, but with limited
impact. While the government has established a set of development priorities, they lack
coherence and deep political will. In addition, perception of corruption has increased in recent
years. Pakistan ranks 126th of 175 countries surveyed for Transparency International’s 2014
Corruption Perception Index.
Risk Management
 Continue strong dialogue and analytic work with all levels of government and
political parties to make the case for priority reforms and to position the Bank to
engage with different players, especially at the provincial/subprovincial levels
 Make disbursements for a significant part of the priority program contingent on

results, which may help mitigate the risk impact of policy reversal
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 Undertake operational risk assessment in sectors and improve governance risk
profiling in sectors and projects; and provide continued support for governance
reforms through project lending
 Incorporate capacity-building efforts into the project design
 Support strengthening of public accounting and auditing systems and reform of land
records administration and tax administration
 Provide support to sectors that are more susceptible to corruption, such as power,
highways, and social protection, with a strong focus on transparency
 Broaden/strengthen policy dialogue with the government on greater transparency

and public accountability in government transactions
Macroeconomic
3. The country’s fiscal situation remains highly vulnerable, particularly in light of

expansionary spending linked to security and the continuous natural disasters. The fiscal deficit
remains large and progress on revenue mobilization, power reforms, and SOEs restructuring is
slow. While the government has made some efforts through the International Monetary Fund
program and there is some improvement in the indicators, the overall macroeconomic institutions
remain weak and vulnerability to external shocks is high.
Risk Management
 Remain engaged in an active, high-level dialogue on macroeconomic, tax collection,

subsidy, and debt trends under a well-coordinated response with the International
Monetary Fund and other development partners
 Work together with the government and development partners to sustain momentum
for key reforms (for example, tax policy and administration, power sector, and so
on)
 Provide analytical work to support the government’s economic team in stabilization

and growth recovery policies, while preserving well-targeted pro-poor expenditures
Technical Design of the Project
4. This phase of support to education sector reforms in the province will focus on
accelerating the pace of improvement in education sector outcomes with a mix of interventions.
The project is designed to support (a) an increase in school participation, transition, and
retention; (b) actions at the provincial and school levels to improve school quality and
performance, including an emphasis on ECE programs; and (c) improvements in management
and evidence-based decision making at all levels of administration. Reform areas supported
under the project will include ongoing initiatives as well as new ones. Supporting these areas will
be technically complex but Punjab has had experience in implementing difficult reforms and will
continue to use lessons learned from the past programs to support project implementation.
90
5. Synchronized and sustained implementation of project actions will be required to fully
realize gains in outcomes. Intensive implementation supervision and support will be provided for
satisfactory implementation in a variable security environment. The actions also need to be
continued to be underpinned by sufficient technical, advisory, and capacity support.
Risk Management
 Phasing in challenging actions/interventions over the project implementation period;

feeding learning from early phases (and pilots) to inform refinements/adaptations
before further scaling
 Building complementarities across project actions in a given year in the design of

the project to ensure the fullest possible impact
 Regular consultations with stakeholders through the project implementation period,

with feedback used to inform refinements/adaptations
 Use of TA to provide technical and advisory support to subprograms, as needed
 Capacity building and institutional strengthening support for, for example, the SED,
PEF, PMIU, CMMF, DSD, PEC, and district administrators, district education
management, and teachers
 Regular, third-party reviews, validations, and evaluations at the school level,

embedded into the DLIs (supervision at the ground level)
 Use of DLIs to support program actions in every year
 Apart from standard supervision approaches, the use of short missions by small local
teams, consultants based in Lahore, audio/videoconferencing, email/phone
communications, and increased third-party monitoring during times when security
conditions deteriorate
 Use of ICT to support M&E and capacity-building services for service delivery
agents and local communities
Institutional Capacity for Implementation and Sustainability
6. Planning, implementation, and monitoring capacities are variable across public

stakeholders at the provincial level, as well as lower administrative levels. Staff changes at the
managerial level are frequent and recruitment of qualified persons to fill vacancies at leadership
levels can be slow. As a result of this, implementation can get hampered by delays in approvals
of activities.
7. The capacity of key organizations in the education sector, such as the SED, PEF, DSD,
PMIU, and PEC, among others, can affect their ability to perform their mandated functions
effectively, but have been bolstered with capacity strengthening. This project will continue to
support this.
91
8. The capacity of the education department at the district and sub district levels, schools,
and SCs is inadequate compared to those in the provincial capital. These levels and institutions
are instrumental for service delivery performance and will be strengthened through project
interventions. FM and procurement capacity is moderately satisfactory but will require
strengthening. Previous Bank projects have supported improvements to fiduciary capacity.
9. While there is efficient collection of relevant and credible data on performance, there is a
lack of use of data collected for decision making on improving performance. Performance
standards and the roles and responsibilities of various actors/agents in ensuring service delivery
at prescribed standards require further streamlining.
Risk Management
 Empowerment and capacity building of SCs to support and monitor schools and
teachers
 Measurement of program implementation progress and performance on a regular

basis through third-party reviews, validations, and evaluations, embedded into the
DLIs
 Regular delivery of information through different channels on program

implementation status, progress, and performance; consultations in the field to
gather feedback on issues; and strengthened institutional arrangements for grievance
redressal
 Open display at school of key information such as SC grants and expenditures,

school NSBs and expenditures, and school performance cards
 Systems will be established, in consultation with all stakeholders, for efficient use of
CMMF data for performance monitoring
 Discrepancy analyses by integrating databases from different sources and improved

database management at, for example, the PMIU, PEC, PEF, and district level
 Decentralization of administrative and financial powers to schools and school

clusters, coupled with necessary capacity development
 Continued strengthening of school operational capacity through adequate resourcing

through school budgets, and teacher capacity through regular advisory support to
teachers at the school
 Fiduciary. A procurement focal point at the PMIU, accompanied by necessary

training; provision of fiduciary guidelines to SCs and PPP schools under the PEF,
accompanied by necessary training; refresher of the training on the electronic
procurement planning tool at the sub district level to capture school needs for major
works and goods
92
 Finance focal point at the SED/PMIU to analyze data available through the PIFRA
terminal to help formulate proposals for improving sector expenditure performance;
awareness raising and capacity-building programs for the DDOs to enhance
compliance and strengthen controls in the sector
 Competitive recruitment from the open market to fill key positions in various
institutions such as the PMIU
 Regular capacity building and institutional strengthening of relevant departments at

the provincial level such as the PMIU, SED, as well as district-level officials
 Collection of survey and test data by a third-party organization as part of impact

evaluations, which can aid in evaluating the behaviors and impact of child
strengthening, early childhood learning, and incentives subprograms
93
Annex 5: Implementation Support Plan
Strategy and Approach for Implementation Support (IS)
1. The strategy for IS is informed by the lessons learned from supporting both PESP I and
II, the nature of supported project activities, and the risk profile of the project. It aims to make
the IS to the client flexible, responsive, and efficient. It focuses on the provision of strong
technical support, particularly to new support areas, and the timely formulation and
implementation of risk mitigation measures.
2. IS will consist of (a) IS missions; (b) regular technical meetings and field visits by the
Bank task team between the formal review missions; (c) implementing agency reporting based
on internal monitoring and built-in third-party monitoring; (d) independent third-party
verification; and (e) internal audit and FM reporting. IS will also rely on the review and analysis
of data and documentation submitted by GoPunjab following agreed formats, timetables, and
expected contents. Key data and documentation include those related to achievement of the
DLIs, progress on monitoring indicators, financial reports, and procurement documents and
contracts.
3. With respect to Component 1, as highlighted in the SORT, there are significant risks
associated with new, technically complex, and/or politically challenging reforms to be supported
under the project. To contribute to the mitigation of these risks, the Bank task team, which is
based in Pakistan, will provide prompt technical support to the client to facilitate smooth
implementation and use specific Lahore-based consultants to provide dedicated support to the
client as and when necessary.
4. To gather firsthand, qualitative information on the implementation status and

performance of the program, participation in GoPunjab consultations with stakeholders and field
visits to districts and schools are expected to be key elements of the overall IS strategy. This is
particularly important given GoPunjab's focus on improving service delivery at the school level.
The task team plans to join selected consultations and meetings with stakeholders in Lahore and
in the districts. The main semiannual missions will include field visits. Between the semiannual
missions, the task team plans to carry out dedicated missions to visit government schools and
government-supported, low-cost private schools and hold discussions with local administrators,
teachers, parents, children, and local communities at large. All visits to the field will be carried
out if the security situation permits and in full compliance with the security rules in effect at the
time.
5. The Bank, together with the implementing agency and its subdepartments, will formally
review project implementation semiannually (September and May).
Implementation Support Plan
6. The key members of the Bank task team will be primarily based in the Pakistan country
office to ensure timely, efficient, and effective IS to the client. Formal supervision and field
visits will be carried out semiannually, with more frequent technical IS missions during the
94
project. Detailed inputs from the Bank team are outlined in table 5.1. The listed personnel do not
include experts brought in as needed to advise and support the GoPunjab on specific reform
areas.
Table 5.1. IS Plan - Task Team

Number of Staff
Skills Needed Type Number of Trips Comments
Weeks
Overall policy dialogue, project
implementation
Task team
supervision and support
leader/ Field trips as Country office-
management, team 18 SWs annually
Education required based
management and coordination,
specialist
and internal
reporting
Assessment of education
systems and
performance and technical and
Education Field trips as Country office-
advisory support 16 SWs annually
economist required based
for any needed design and
implementation
improvements
Education Washington, DC-
Research and evaluation 6 SWs Two
economist based
Assessment of M&E
arrangements and performance
and technical Washington, DC-
M&E specialist 4 SWs annually Two
and advisory support for any based
needed design and
implementation improvements
Assessment of FM and Procurement Field trips as Country office-
3 SWs annually
procurement arrangements and specialist required based
performance and Field trips as Country office-
FM specialist 3 SWs annually
technical and advisory support required based
for any needed Social
Field trips as Country office-
design and implementation development 1 SW annually
required based
improvements specialist
95
Annex 6: Economic and Financial Analysis
1. This annex summarizes the economic rationale for PESP III by presenting (a) public
intervention rationale; (b) cost-benefit and fiscal impact analysis; and (c) the Bank’s value-add.
Public Intervention Rationale
2. The project aims to support the GoPunjab to improve participation completion and
quality of school education with a particular focus on low performing districts. In doing so, the
project will contribute toward higher completion rates and hence an increased number of years of
schooling, and consequently, increased probability of employment and higher adult labor
earnings. Additional benefits are expected from accountability-related reforms, which will
increase school and system accountability through increased awareness and access to
information. Therefore, public investments in primary and secondary education are warranted to
improve education and labor market outcomes in the province. Public investments in primary
and secondary education are warranted as economic benefits outweigh costs associated with such
investments, as reflected in the economic analysis presented below.
Cost-Benefit and Fiscal Impact Analysis
3. This economic analysis presents a cost-benefit analysis of PESP III using the present
discounted value method. Given that this project will offer sector budget support to the
GoPunjab to implement its education sector reform programs, costs include forecasts of the SED
NSB expenditure, the costs of new interventions to be introduced through PESP III, private costs
which include direct household outlays, and opportunity costs of schooling over the project
period. Economic benefits comprise three main components: (a) the number of additional
primary school completers and secondary school completers (both for public schools and private
schools supported by the project) earning higher wages relative to noncompleters;(b) improved
quality and relevance of education resulting in higher earning potential for all primary and
secondary school completers (both for public schools and private schools supported by the
project); and (c) lower repetition and dropouts yielding benefits in the form of reduced wastage
of public and private resources (for public schools).
4. The following assumptions and data sources were used to estimate the NPV of project
benefits, the benefit-cost ratio, and the internal rate of return (IRR) for the project:
(a) Public school enrollment (Grades 1–10) data are from ASC data 2014 and 2013.
Private school enrollment figures are from the targets to be achieved by the PEF
under the PPPs subreform program and the EVS. It is estimated that by the end of
the 5th year of the project, a total of 1 million children will be enrolled through the
PPP and EVS subreform programs.
(b) Data on primary school and secondary school completers are calculated from ASC
data 2013 and 2014. Figures 6.1 and 6.2 provide estimates for the number of
additional graduates under PESP III. It is assumed that the various project activities
under PESP III (enrollment incentives, improved teacher quality through teacher
96
PD, improved school environment due to NSB provision, and so on) will increase
grade promotion by 3 percent and reduce repetition by 3 percent relative to the
baseline. It is also assumed that without PESP III, the current promotion rates will
decrease by 3 percent and repetition rates will increase by 3 percent relative to the
baseline. In addition, given that the project will also support ECE, it is assumed that
the annual intake into katchi (pre-primary) will increase by 2 percent each year
under PESP III. The assumptions regarding promotion and repetition under PESP III
also apply to private enrollments under the PEF.
(c) PESP III project costs are forecasted using the SED NSB for 2016–17 and SED
expenditure over the past four years. New interventions to be introduced through
PESP III have also been costed and factored into the SED budget costs. It is
assumed that standard increases in the education budget and inflation will take place,
amounting to 10 percent annual increases in the SED budget expenditure. Because
the benefit streams are estimated using the differential impact of PESP III versus no
PESP III, the cost streams will also need to be estimated in the same manner. It
should be noted that public ‘investment’ to achieve the desired results in PESP III is
not the same as the cost of operating the entire SED. A large share of the current
SED costs will have to be met regardless of whether or not PESP III is introduced.
For the purpose of the economic analysis, there is a need to estimate (i) the ‘counter-
factual’ hypothetical situation of not having a PESP III project (a ‘business as usual’
scenario) and (ii) the higher costs needed to accommodate both the business-as-usual
case and the additional investments required for PESP III. This analysis assumes that
the non-salary expenditures of the SED budget are part of the additional investments
required to implement PESP III. The analysis also factors in the estimated PESP III
component costs. The total forecasted expenditure for the five years of the project is
forecasted as US$3.77 billion in nominal terms.
(d) Private per child household expenditures on education (enrolled in public schools)
are calculated using the PSLM survey data 2012–13 at two levels—primary and
secondary—by taking the average annual per child household expenditure on
education across respective grade levels (Grades 1–5 for primary and 6–10 for
secondary). On average, households spend less than US$29 per year for children
enrolled in primary grades and US$59 per year for children enrolled in secondary
grades. It is assumed that less than 7 percent of primary school age children and 22
percent of secondary school age children would be engaged in wage labor activity if
they had not enrolled in school, which are the current participation rates derived
from the PSLM survey data (2013–14). Based on these assumptions, it is estimated
that total household expenditure on education over the five years of the project is
US$399 million while the opportunity costs in the form of foregone wages is
estimated to be US$553 million (in nominal terms).
(e) Benefits due to increased lifetime labor earnings are estimated using the PSLM
survey data (2013–14) for both primary and secondary completers. The average
annual wage differential for primary completers relative to nonprimary completers is
approximately US$728, while for secondary completers relative to nonsecondary
completers the wage differential is approximately US$1,107. It is assumed that
97
primary and secondary completers will experience a 5 percent quality premium over
this wage premium (3 percent is assumed for the low case in the sensitivity analysis,
while 7 percent is assumed for the high case). Lifetime earnings are calculated for
five cohorts of primary and secondary completers over 20 years (although school
completers are likely to continue earning well beyond 20 years). 32 Three labor force
participation rate scenarios are utilized for this analysis: 57 percent for primary
completers and 58 percent for secondary completers (base case), 52 percent for both
primary and secondary completers (low case), and 62 percent for both primary and
secondary completers (high case).
(f) Efficiency benefits due to reduced repetition are measured as savings due to reduced
number of years to produce primary school completers and secondary school
completers. Based on the promotion and repetition assumptions mentioned above, it
is estimated that PESP III will reduce the number of student years to produce a
primary school completer by 1.3 student years and a secondary school completer by
1.2 student years.
(g) The discount rate assumed for this analysis is 12 percent, while inflation is assumed
to be 5 percent per year.
Figure 6.1. Total Number of Estimated Additional Primary School Completers with PESP III 2016/17–
2020/21
Additional Primary Completers under PESP III

400000
350000
300000
250000
200000
150000
100000
50000
0
2016-17 2017-18 2018-19 2019-20 2020-21
Public Private
32
‘Discounting’ will make the values insignificant beyond this time.
98
Figure 6.2. Total Number of Estimated Additional Secondary School Completers with PESP III 2016/17–
2020/21
Additional Secondary Completers under PESP III

160000
140000
120000
100000
80000
60000
40000
20000
0
2016-17 2017-18 2018-19 2019-20 2020-21
Public Private
5. IRR and NPV. Based on the assumptions mentioned above, the estimated NPV of
economic benefits under PESP III is US$4.25 billion with an IRR of 26 percent. Table 6.1
presents the results of the sensitivity analysis of NPV economic benefits, benefit-cost ratio, and
IRR under various scenarios (base, low, and high cases) with varying quality premiums and
employment rates. As evident from table 6.1, the NPV ranges from US$3.36–5.15 billion while
the IRR ranges from 23–29 percent under the different scenarios.
Table 6.1. Sensitivity Analysis under Various Scenarios

NPV (US$, millions) Benefit-Cost Ratio IRR (%)
Labor Labor Labor
Labor Labor Labor Labor
Force Labor Force Labor Force
Force Force Force Force
Participatio Force Participatio Force Participatio
Particip Particip Particip Participa
n Rate Participa n Rate Participati n Rate
ation ation ation tion
Base Case tion Rate Base Case on Rate Base Case
Rate Rate Rate Rate
(57% High (57% High (57
Low Low Low High
primary, Case primary, Case primary,
Case Case Case Case
58% (62%) 58% (62%) 58
(52%) (52%) (52) (62)
secondary) secondary) secondary)
Quality
Premiu
m base 4,250 3,604 4,861 2.29 2.10 2.48 26 24 28
case
(5%)
Quality
premiu
m low 3,980 3,359 4,569 2.21 2.02 2.39 25 23 27
case
(3%)
Quality 4,519 3,850 5,154 2.37 2.17 2.57 27 25 29
99
NPV (US$, millions) Benefit-Cost Ratio IRR (%)
Labor Labor Labor
Labor Labor Labor Labor
Force Labor Force Labor Force
Force Force Force Force
Participatio Force Participatio Force Participatio
Particip Particip Particip Participa
n Rate Participa n Rate Participati n Rate
ation ation ation tion
Base Case tion Rate Base Case on Rate Base Case
Rate Rate Rate Rate
(57% High (57% High (57
Low Low Low High
primary, Case primary, Case primary,
Case Case Case Case
58% (62%) 58% (62%) 58
(52%) (52%) (52) (62)
secondary) secondary) secondary)
premiu
m high
case
(7%)
6. The discounted present values of the various benefit and cost streams are presented in
table 6.2 using the base scenario. It is evident that majority of benefits are attributable to the
wage premium for primary and secondary school completers (about US$6.5 billion) followed by
benefits due to increased education quality (about US$0.68 billion) and benefits due to increased
efficiency (US$0.36 billion). The major costs associated with the project are the public
investments which amount to US$2.7 billion followed by private opportunity costs (US$0.363
billion) and private direct costs (US$0.27 billion).
Table 6.2. Discounted Present Values of Benefits and Costs under PESP III (Preferred Scenario)
Category US$, millions

Benefits due to wage premium for primary completers 4,095
Benefits due to wage premium for secondary completers 2,410
Benefits due to primary education quality premium 447
Benefits due to secondary education quality premium 231
Benefits due to reduced inefficiency (primary) 174
Benefits due to reduced inefficiency (secondary) 181
Total Benefits 7,538
Costs –
Public investments (SED, NSB + new interventions) 2,660
Private household direct costs (for additional primary enrolled) 117
Private household direct costs (for additional secondary enrolled) 148
Private opportunity costs (for additional primary enrolled) 51
Private opportunity costs (for additional secondary enrolled) 312
Total Costs 3,288
Net Benefits 4,250
7. The results from the economic analysis and the sensitivity analysis suggest that investing
in PESP III could yield relatively high returns (with an IRR ranging from 23–29 percent and the
NPV between US$3.4 billion and US$5.1 billion). These estimates are quite conservative given
that additional benefits and externalities may arise due to the project, such as improved health
100
outcomes (delay in marriage, reduced fertility, and so on) that have not been included in the
analysis. In addition, the analysis has not factored in additional benefits that could arise due to
higher levels of school completion (beyond primary and secondary) which could result in higher
wage premiums.
8. Financial analysis and fiscal sustainability. In the three-year period between 2012 and
2014, the annual increase in the SED (revised) budget was approximately 11 percent. It also
bears mentioning that over the last three years, education sector financing has amounted to 15–
17 percent of the provincial budget and budget execution rates have exceeded 90 percent during
the same period.33 In 2014–15, the SED received a (revised) budget allocation of PKR 206.41
billion constituting about 15 percent of the GoPunjab’s provincial budget. Out of this allocation,
the SED was able to spend about PKR 185.38 billion (90 percent).
9. Table 6.3 presents extrapolated funding projections for the five-year project period based
on revised budgets and budget execution trends over the last three years. Estimated costs of new
interventions being introduced under PESP III have also been projected over the five-year
project period. It is expected that the entire project (SED expenditure and new interventions
under PESP III) over five years will cost PKR 1.4 trillion in nominal terms. In each given year,
Bank financing is expected to constitute 2–3 percent of total forecasted expenditure. Given that
Bank financing is expected to be a small share of the overall education expenditure over the
project period, it is expected that the government will be able to absorb the long-term financial
implications associated with the project’s activities.
Table 6.3. Extrapolated Funding and Expenditure Projections (in PKR, millions)
Total 5-
FY 2020–
Cost FY 2016–17 FY 2017–18 FY 2018–19 FY 2019–20 Year
21
Cost
Estimated
1. SED (revised) 249,750 274,730 302,200 332,420 365,670 1,524,770
budget
Estimated
2. SED budget 224,300 246,730 271,410 298,550 328,400 1,369,390
expenditure
Estimated cost
of new
3. 2,185 4,953 5,271 9,385 9,889 31,683
interventions
under PESP III
Total
forecasted
4. 226,485 251,683 276,681 307,935 338,289 1,401,073
expenditure
(2+3)
Bank Value-Add
33
World Bank. 2015. Tracking the Flow of Public Money. Punjab: Expenditure and Quantity of Service Delivery
Survey (EQSDS) in Primary School Sector.
101
10. The Bank is well placed to provide support to the primary and secondary education sector
in Punjab, given its global and local operational experience and technical expertise in the
education sector. The Bank has a long history of supporting the GoPunjab’s education sector
reform programs through a succession of DPCs from 2004 to 2007 and two sector investment
loans from 2009 to 2015. This engagement has not only facilitated a sectorwide approach to
supporting education in Punjab, but has also provided the government with rigorous evaluations
of various programs. The Bank’s operational experience in Pakistan includes education projects
in Sindh and Balochistan, which can also bring useful lessons to policymakers in Punjab. In
addition, the Bank’s global experience in education can provide lessons learned from around the
world from countries that have overcome similar challenges as Punjab.
102
Annex 7: Education Sector Analysis
1. Pakistan has made progress in improving education outcome indicators over the past
decade. However, education facts and figures reveal persistent underperformance, particularly in
comparison to other countries in South Asia and other developing countries at its level of per
capita income. Pakistan has the world’s second-highest out-of-school population—6.7 million
(12 percent of the total in the world) and 56 percent of them are girls. This issue is made all the
more challenging by a population growth rate which has remained persistently higher than the
regional average (1.65 percent compared to 1.3 percent in 2013). Public spending for education
as a share of the country’s GDP is low at 2.5 percent in 2013. The primary education attainment
is among the lowest in the world, with less than half of the country’s population having
completed primary education. About 42 percent of people (ages 10 and above) cannot read and
write. Malnutrition rates are very high with 45 percent of children under age 5 stunted, 11
percent wasted, and 30 percent underweight.34 Despite the country’s lower middle-income status,
Pakistan’s social development indicators place it among the least socially developed countries in
the world. This is equally true for Punjab Province, and strikingly so for Punjab’s LPDs.35 Its
primary NER (72 percent for Punjab Province and 61 percent in the LPDs) is lower than for the
LDC (81 percent) and Sub-Saharan Africa (77 percent), including, among others, Ethiopia (87
percent) and Mozambique (90 percent). Its adult literacy rate (57 percent for Punjab Province
and 45 percent in the LPDs) is lower than the LDC (58 percent) and Sub-Saharan Africa (59
percent), including, among others, Angola (70 percent) and the Democratic Republic of the
Congo (61 percent).36
Table 7.1. Punjab and its Low Performing Districts in Comparison to the LDC and Sub-Saharan Africa
The Punjab and its Low-Performing Districts in Comparison

to the Least-Developed Countries (LDC) and Sub-Saharan
Africa (SSA)
Select Social Indicators
Adult
Stunting literacy Primary
(%) (%) NER (%)
Least-developed countries 37 58 81
Sub-Saharan Africa 38 59 77
Punjab 39.2 57 72
Low-performing districts 47.6 66.2
34
Pakistan Demographic and Health Survey 2012/13. National Institute of Population Studies.
35
As amplified below, in the context of this project, Punjab’s LPDs are among those districts with the lowest school
participation rate for children ages 6–15.
36
The figures for Punjab (with the exception of the previous footnote) are taken from the Pakistan Living Standards
Measurement Survey, 2012-13. The figures for the LDC, Sub-Saharan Africa and other countries are taken from
UNICEF’s State of the World’s Children Report, Statistical Annex 2014.
103
2. The past decade of education sector programming in Punjab has been characterized by an
ambitious systemic reform, Bank and other development partner support, and relatively
increased levels of financing (over the last three years, education sector financing has amounted
to 17 percent of the provincial budget, and budget execution rates have exceeded 90 percent
during the same period).37 From 2003 to the present day, the GoPunjab has implemented several
phases of the PESRP, sectorwide, medium-term education programs which support public and
low-cost private education at the primary and secondary levels (up to Grade 10).38 Under PESRP
I and II, supported by the Bank through PESP I and II, the GoPunjab has focused on systemic
improvements in the education sector for sustained results. These have included developing
administrative systems (for example, regular measurement of student achievement through
universal testing at Grades 5 and 8); improving the provision and quality of inputs (for example,
CPD of teachers); and developing interventions that strengthen incentives and accountability for
service delivery performance (for example, merit-based recruitment of teachers, provision of
school-specific NSBs to schools, improved school monitoring, and dissemination of school and
district performance cards). Some reform initiatives such as the provision of formula-based NSB
to schools and merit-based teacher recruitment have been incrementally scaled up to all 36
districts of the province (though some only in 2014/2015), and some encouraging results have
begun to materialize. However, these reforms would have to be implemented for another three to
four years for their full impact to be seen. Continued support of these initiatives would be
important to ensure that these are institutionalized and sustainable.
3. The scope of the PESRPs has been far-reaching: on the public sector side, the SED runs
over 52,000 schools in all 36 districts of the province, employing over 320,000 teachers and
enrolling almost 11 million students from katchi (pre-primary) to Grade 10. The low-cost private
schooling sector, which has emerged as a viable alternative to government schooling, now
enrolls almost one-third of children ages 6–10 and almost one-quarter of children ages 11–15.
The increase in private sector enrollments has not been restricted to the more wealthy
households, as 14 percent of children ages 6–10 in the poorest 40 percent wealth distribution are
enrolled in private schools.39 The GoPunjab has partnered with the private sector in education
delivery through the PEF,40 which reported almost 4,000 partner schools and 1.6 million student
beneficiaries in 2014.41 The quality of education provided by the low-cost private sector in
Punjab is reported to be higher when compared to that of government schools. For instance,
ASER 2014 found that learning outcomes for children in Grades 1, 3, and 5 in low-cost private
schools in rural Punjab are higher than those in government schools for language (both Urdu and
English) and arithmetic.
37
World Bank. 2015. Tracking the Flow of Public Money. Punjab: Expenditure and Quantity of Service Delivery
Survey (EQSDS) in Primary School Sector.
38
These reform programs have received financial and technical support from the Bank through four DPCs (2004–
2007) and two results-based specific investment credits (2009–2012 and 2012–2015), the second of which, PESP II,
is ongoing and draws to a close in June 2016. The PESRP has also been supported by the DfID.
39
Statistics derived from PSLM 2012–13.
40
The PEF, established in 1991, provides technical and financial assistance for the establishment, expansion,
improvement, and management of low-cost educational institutions, incentives to students and teachers, and
promotion of quality education in the province through public-private partnerships.
41
Punjab Education Foundation Annual Report 2014.
104
4. Improvements made in education indicators with regard to both enrollment rates
and learning outcomes over the past decade have plateaued, despite the sustained focus
that the sector has received over the same period. The NER at the primary level (ages 6–10)
has only increased by one percentage point from 71 percent in 2008/09 to 72 percent in 2013/14,
and by two percentage points at the middle level (ages 11–13), from 36 percent in 2008/09 to 39
percent in 2013/14. In the LPDs, the NER is only 61 percent. The NER at the high school level
(ages 14–15) has only increased over the last two years, and is still very low at 31 percent in
2013/14.
5. There is a mix of supply- and demand-side factors contributing to the stagnation in

enrollment rates. On the demand-side, the reasons cited for not sending children to school
include poverty, opportunity costs of schooling, low perceived returns to schooling, and poor
quality of school facilities.42 As the Implementation Completion and Results Report for PESP I
points out, exogenous shocks,43 which is beyond the scope of the reform program, also
contribute to weak demand for schooling, especially for children from poor and disadvantaged
backgrounds. On the supply side, the quality and availability of school facilities is a still major
issue. Although sector financing has increased during the past decade, the scale and efficiency of
sector expenditure and investment is still below what is necessary to fund an education system
that can accommodate an ever-increasing cohort of school-going age children (population growth
is an estimated 1.9 percent in Punjab).44
6. At a fundamental level, what needs to be recognized is that the challenges in the sector
range from those that are usually found in less developed education systems—access, regional
disparities, and equity issues (rural/urban, gender, and poverty)—to those prevalent in more
advanced systems, such as using data and learning outcome information for education
policymaking. This makes Punjab’s education system both complex and unique; in many ways
limiting the possibility in this third generation program to engage exclusively on third generation
reforms. With regard to learning outcomes, it does bear mentioning that although the previous
two projects have focused on improving learning outcomes through support to classroom
teaching and learning, global evidence suggests that the average learning outcome in the short
term, particularly in this context, may continue to go down since the system is still attempting to
enroll children from poor/disadvantaged backgrounds and first generation learners. It is
nonetheless clear that continued engagement in the sector is needed through supporting ongoing
reform initiatives, many of which will take time to bear fruit, and innovative interventions to
jumpstart stagnating indicators and push through transformative change.
7. Despite major systemic reforms over the past decade, Punjab’s education sector
faces a wide array of key challenges, contributing to low enrollment rates and poor
learning outcomes: (a) low access and coverage in ECE; (b) low levels of school participation
and high numbers of out-of-school children; (c) poor quality of education; and (d) weak
management, accountability, and evidence-based decision making.
42
ASER Policy Brief 2010–11.
43
Including a sluggish GDP growth rate (less than 4 percent over the last five years); a volatile macroeconomic,
political, and security situation; and natural catastrophic shocks (floods, earthquakes, and so on).
44
Punjab Welfare Department, GoPunjab. http://www.pwd.punjab.gov.pk/population_profile.
105
8. Low access and coverage in ECE. A wide range of evidence has demonstrated that the
quality of a child’s early learning experience makes a marked difference with regard to school
preparation, participation, completion, and achievement. Quality ECE programs increase child
development scores on one or more measures of child development (literacy, vocabulary, math,
and quantitative reasoning).45 Increasing access to ECE can also have a positive impact on
school participation and retention for older siblings, particularly girls, when they are freed up
from the responsibility of caring for younger children.46 Efforts to invest in ECE programs in
Punjab have started only recently, and the scale of these efforts is limited. In 2012, the GoPunjab
initiated a project in 1,00047 high-enrollment primary schools across 36 districts, with the
objective of introducing ECE across the province. As part of this project, ECE classrooms were
established, learning materials were developed, caregivers were recruited, and teachers and SC
members received ECE training.48 Although there is a national curriculum for ECE (2007) and a
scaling-up strategy for ECE in the Punjab, there is no comprehensive ECE policy for the
province. In addition to severely limited classroom spaces, there is a scarcity of qualified
teachers for ECE not to mention a gap in the policy on their recruitment, reflective of the lack of
emphasis this subsector receives in existing teacher development programs.49
9. Low levels of school participation and high numbers of out-of-school children. Under
PESP I and II, the Bank has supported the GoPunjab through the PEF to increase school
participation in the province through the use of PPPs. However, Punjab’s out-of-school
population of ages 6–15 is over 5.5 million.50 About 16 percent of children ages 6–15 have never
attended school,51 while 21.9 percent of children ages 6–15 are out of school. The figure for the
LPDs is 31 percent and goes as high as 47 percent (in Rajanpur).52 The province also accounts
for 43 percent of the total female out-of-school population in Pakistan.53 Out-of-school children
(ages 6–15 years) are more likely, among other characteristics, to be female, older, rural, poor,
have less educated parents, and be located further away from school than in-school children in
the same age cohort.54 Disparity in enrollment is observed across districts as well—10 out of the
province’s 36 districts account for more than half of the out-of-school population between the
ages of 6 and 15. For instance, in Sialkot, 93 percent of children between the ages of 6 and 15 are
enrolled in school, versus 56 percent of children in Rajanpur.55
45
Denboba, et al. 2014. Stepping Up Early Childhood Development: Investing in Young Children for High Returns.
46
Lokshin, M. M., E. Glinskaya, and M. Garcia. 2000. The Effect of Early Childhood Development Programs on
Women’s Labor Force Participation and Older Children’s Schooling in Kenya.
47
The total number of ECE centers now stands at 1,225.
48
Directorate of Staff Development (2015).
49
There is significant scope for the expansion of ECE in Punjab—according to the SED, almost 7.4 million children
fall within the ECE age bracket and only 30 percent of these children attend school. Furthermore, dropouts are also
an issue in this age group, as 40 percent of children drop out from pre-primary and do not transition to primary. It is
worth mentioning that ECE has been included as an area of focus in the Provincial Education Sector Plan (2013–17).
50
Calculated by applying the school participation rate (6–15 years) of the PSLM 2012–13 to the 2015 population as
estimated by GoPunjab's Population Welfare Department in 2011 (PWD: Population Situation of Punjab, 2011).
51
PSLM 2013–14.
52
PSLM 2012–13.
53
Pakistan Education Statistics 2013–14.
54
Carranza, E., and D. Raju. 2012. Measuring Vulnerability: An Application to School Enrollment in Punjab,
Pakistan.
55
PSLM Surveys 2012–13.
106
10. Access to schooling, particularly at the secondary level, remains limited in some parts of
the province, thus contributing to the challenges described above. About 32 percent of out-of-
school children (ages 6–10) still live more than 15 minutes away from the nearest primary
school.56 In some districts (especially those in the south of the province), this is more
pronounced: for instance, in Bahawalpur, 49 percent of out-of-school children ages 6–10 live
more than 15 minutes away from the nearest primary school. 57 Access to middle schools is even
more challenging—in fact, 28 percent of towns and villages in the Punjab are located more than
2 km away from the nearest government girls’ middle or high school, suggesting that access at
the middle level is especially challenging for girls. In addition, where schools are available, there
is suboptimal use of public school resources. Under PESP II, the SED reallocated teachers to
ensure more efficient use of teaching staff resources, with more than 31,000 teachers being
transferred to schools with teacher shortages on a needs-based formula. Despite these efforts,
there are (a) almost 16,000 primary government schools which have a student-teacher ratio of 40
to 1 or higher and (b) over 11,000 primary government schools with an STR of 15 to 1 or
lower.58
11. Student transition and retention. For those children who are in school, retention and
transition are serious challenges. Over the last ten years, efforts have been made by the SED to
address retention and transition for girls through the PSSSP, which offers stipends to girls
enrolled in secondary grades in public schools in target districts. The initial impact of this
program on female enrollment was positive, as findings from an evaluation indicate that the
average impact of the program was a 9 percent increase in female enrollment.59 However,
challenges relating to student retention remain, and are not confined to girls. Only 47 percent of
children have completed primary schooling by age 12 years, and secondary school completion
rates are even lower as only 37 percent of 18 year olds have completed Grade 10. The highest
dropout rate is seen in Grade 6, with 20 percent of 15–19 year olds dropping out of school. The
dropout rate is markedly higher for females than males in rural households— almost 30 percent
of females of ages 15–19 years drop out in Grade 6, compared to 19 percent of males in the same
age cohort. While there is little disparity in overall completion rates observed by gender, there is
substantial variation observed by wealth quintile—only 18 percent of 12 year olds and 6 percent
of 18 year olds in the poorest wealth quintile have completed primary and secondary schools,
respectively. In addition, while grade repetition is not a challenge in earlier grades, at Grade 9
repetition rates are as high as 8 percent.
12. While gender disparity is not as visible in overall school participation rates, it becomes
glaringly obvious for poor households. For instance, the participation rate for girls in the poorest
wealth quintile is 16 percentage points less than for boys (ages 6–10) and 26 percentage points
less than for boys in the 11–15 years age group. The gender gap at middle and secondary
education levels among the rural households is also evident—only 38 percent of rural girls (ages
56
The highest share of children ages 6–10 who live more than 15 minutes away from the nearest primary school
reside in the following districts: Mianwali (32 percent), Bhakkar (32 percent), Rajanpur (38 percent), Muzaffargarh
40 percent , D.G. Khan 32 percent, R.Y. Khan (29 percent), and Bahawalpur (34 percent) (PSLM 2012–13). The
PSLM reports time to nearest schools rather than distance.
57
In comparison, only 26 percent of in-school children ages 6–10 live more than 15 minutes away from school in
the same district.
58
ASC 2014.
59
Chaudhury & Parajuli (2006)
107
11–15 years) compared to 46 percent of rural boys within this age group attend middle or
secondary school.60 However, with respect to learning outcomes for language (both Urdu and
English) and mathematics at the primary level, boys perform only slightly better than girls.
13. Low quality of education. The quality of education in Punjab as measured by student
test scores is by all accounts low. Learning outcomes as measured by ASER show that learning
outcomes for Urdu have plateaued. Some improvement can be seen in mathematics and English
learning outcomes—for instance, the percentage of Grade 3 children who can perform two-digit
subtraction increased from 38 percent in 2010 to 48 percent in 2014, and the percentage of Grade
3 children who can read words in English (at a Grade 2 level) increased from 50 percent in 2010
to 59 percent in 2014.61 However, these levels of student learning are low in absolute terms. In
addition, the 2015 PEC results for Grade 5 show that average scores in the Urdu, mathematics,
and English tests were only 61 percent, 50 percent, and 49 percent, respectively, while the
overall pass rate for the exam was only 59.41 percent. Results were slightly better, but still very
low, for the Grade 8 exam. Factors contributing to the low quality of education in the province
are poor learning environment, poorly trained teachers, inadequate support in the classroom,
poor school management and leadership strengthening, lack of governance and accountability,
and ineffective multi-grade teaching.
14. Within the school environment. At the primary school level, multi-grade teaching is
prevalent in 67 percent of primary schools. While in many other contexts this would not
necessarily be a challenge, given the high STRs and the poor quality of teaching and support in
the classroom, this becomes a bottleneck to improving the quality of teaching and learning. For
example, there are almost 16,000 schools with STRs greater than 40 to 1.62 Although the
introduction of test-based recruitment and teacher placement policies have been solid steps taken
by the GoPunjab (and supported under PESP I and II) to meet school needs with regard to the
number and types of teachers, as well as tackling political interference in recruitment and
placement issues, the payoffs from these reforms will take time to be realized and would need
sustained political will and commitment. For instance, under the 2013–14 teacher reallocation
policy implemented by the GoPunjab, 19,000 of the 50,000 transfers were withdrawn. Teachers
continue to have low content knowledge and weak pedagogical skills—for instance, a sample-
based survey of teachers in Pakistan found that only 36 percent of teachers could explain two-
digit addition.63 In addition, there is still a strong focus on rote learning and repetition in the
classroom. Furthermore, as of Grade 3, the teaching/learning materials are in English, despite the
fact that there is little evidence to suggest that most teachers and students have the capacity to
teach and learn in English. A teacher’s time-on-task is also lower than required due to a variety
of factors which include teacher involvement in non-teaching activities such as engaging with
school monitors, enrollment drives, administering polio vaccines, exam invigilation, election
duty, emergency relief duties, and other administrative duties.64 Students also seriously lack
sufficient practice on learning tasks, and other than the textbook, there is very little exposure to
reading and other teaching-learning materials. The lack of well-qualified teachers, good
60
Statistics derived from PSLM Surveys 2012–13
61
Comparison of data from ASER reports from 2010, 2014.
62
The GoPunjab’s policy is an STR of 40:1.
63
Dundar, Beteille, Riboud, and Deolalikar (2014).
64
I-SAPS (2015) Manuscript under publication
108
teaching-learning practices, and adequate teaching-learning resources are all of serious concern
in light of their importance for student learning.65
15. Institutional factors. Institutional weaknesses in teacher training and assessment

systems also contribute to the poor student learning outcomes. Under PESP II, field-based PD
was strengthened to expand support to the poorest performing primary schools across the
province. However, the quality of teacher training, both pre- and in-service, remains inadequate.
As part of its efforts to address teacher quality, the GoPunjab established a system of field-based
support to teachers through the DTEs. However, the number of DTEs is insufficient, their
capacity needs to be strengthened, and their focus is more on teacher monitoring rather than
teacher support. The DTE model of support is predicated on single-grade classrooms and does
not address the needs of multi-grade teachers. Furthermore, data collected by the DTEs could be
better utilized and tailored to address teacher training and support needs. Existing teacher
development programs lack standardization and do not provide adequate incentives for the
improvements of the qualifications of candidates. Strengthening pedagogical support to teachers
is of vital concern given its impact—through improved teaching-learning practices—on student
outcomes.66
16. With regard to the student learning assessment, Punjab lacks an overarching assessment
policy framework or strategy that would clarify the role of assessment in the education system
and provide a basis for prioritizing and organizing assessment activities. Existing assessment
activities, though improved through both phases of PESRP, still require significant strengthening
with regard to administration, quality, and the use of results to improve system accountability,
teacher performance management, and teaching-learning processes in the classroom. The PEC,
which oversees the design, administration, and scoring of the mandatory annual Grades 5 and 8
examinations in public schools,67 lacks sufficient human, physical, and financial resources to do
this, and reporting and use of PEC exam results is seen by many as neither useful nor prompt.
The PEF also administers a biannual QAT to public and private schools with whom it has a
partnership arrangement, but the quality of test content and administration has not been reviewed
in many years.
17. Management, accountability, and evidence-based decision making. The management

capacity of education administrative staff at the district and sub district levels is low, and
performance management systems do not foster accountability. Inadequate leadership and
capacity at district and school levels dilute any potential benefits which may accrue from the
65
The importance of the teacher’s training, content knowledge, and quality of teaching-learning practices for student
learning has been repeatedly documented. See, for example: Rivkin, Hanushek, and Kain. 2005. “Teachers, Schools
and Academic Achievement.” Econometrica 73 (2): 417–458. The availability of teaching-learning resources has
been found to be a significant predictor of learning outcomes. See, for example: OECD (Organisation for Economic
Co-operation and Development). 2013. Volume IV of What Makes Schools Successful? Resources, Policies and
Practices.
66
There is ample evidence documenting the positive impact of in-service PD and support on student learning. See,
for example: Yarrow et al 2014; Cochran-Smith, M., and K.M. Zeichner, eds. 2005. Studying Teacher Education:
The Report of the AERA Panel on Research and Teacher Education. London: Lawrence Erbaum; Patrinos, H., et al.
2014. Learning in the Face of Adversity. The UNRWA Education Program for Palestine Refugees. World Bank
Group; and Piper, B., et al. 2011. EGRA Plus: Liberia. Program Evaluation Report. U.S. Agency for International
Development, RTI International and Liberian Education Trust.
67
PEC exams are optional for private schools in the province.
109
implementation of ambitious reforms designed at the central level. Promising reforms have taken
place at the school level—for instance, NSBs are now provided to schools on a needs-based
formula to ensure that nonsalary expenditures are met (for example, teaching materials, repair,
and maintenance). A TPV of the NSB reform which was conducted under PESP II showed that
the bulk of the funds have been spent on repair and maintenance, contributing to improving the
infrastructure environment in the school. However, more needs to be done at the school level and
the district level, where there is limited capacity to follow and implement FM guidelines which
serve as a critical component of the NSB reform. Moving forward, there is a need to place
greater emphasis on utilizing the nonsalary funds for procuring teaching and learning materials.
In addition, institutional arrangements for PFM in the education sector lack transparency, which
hinder planning and management in the sector.68 Furthermore, despite the presence of multiple
layers of robust monitoring in the province that produces good quality data on schools, teachers,
and students, there is a lack of evidence-based decision making at all levels, as data collected
regularly by several agencies is not always easily available or integrated.69 Data dissemination at
the school level, though started under PESP II through the provision of biannual school report
cards, needs to be strengthened to ensure effective outreach to parents and the community to
foster demands for school accountability. The capacity of SCs remains low in many schools,
despite efforts to build capacity and empower them over the last decade.
68
EQSDS. 2015.
69
A third-party audit of the monitoring data shows the data produced by the monitoring system to be reliable. The
system includes an EMIS manned at the PMIU and data being collected and fed into the system by the MEAs who
are part of the CMMF.
110
MAP: IBRD 42138
111

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Public Disclosure Authorized

Report No: PAD1641

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

PROJECT APPRAISAL DOCUMENT

ISLAMIC REPUBLIC OF PAKISTAN

THIRD PUNJAB EDUCATION SECTOR PROJECT

May 10, 2016

Education Global Practice

ABBREVIATIONS AND ACRONYMS

AGP Auditor General of Pakistan

Regional Vice President: Annette Dixon

I. STRATEGIC CONTEXT .................................................................................................1

II. PROJECT DEVELOPMENT OBJECTIVES ................................................................6

III. PROJECT DESCRIPTION ..............................................................................................7

IV. IMPLEMENTATION .....................................................................................................14

V. KEY RISKS ......................................................................................................................17

VI. APPRAISAL SUMMARY ...…………………………………………………………..18

Annex 1: Results Framework and Monitoring………….…………………..………………….…22

Annex 2: Detailed Project Description .......................................................................................38

Annex 3: Implementation Arrangements ..................................................................................57

Annex 4: Systematic Operations Risk Assessment Tool (SORT) ............................................89

Annex 5: Implementation Support Plan ....................................................................................94

Annex 6: Economic and Financial Analysis .…………………………………………………94

Annex 7: Education Sector Analysis ….……………………………………………….…….101

Report No.: PAD1641

Name Recurrent Due Date Frequency

2. Prospects for economic growth are beginning to improve, supported by increasing

3. To promote sustainable economic growth, accompanied by poverty reduction, the country

B. Sectoral and Institutional Context

7. Punjab’s out-of-school population (6–15 years) is over 5.5 million. Approximately 16

II. PROJECT DEVELOPMENT OBJECTIVES

C. PDO Level Results Indicators

25. The following PDO indicators will be used:

(b) Completion rate, Grade 5, disaggregated by gender

(c) Quality score of primary teaching-learning practices12

(d) Level of school readiness13

III. PROJECT DESCRIPTION

30. Component 2 will finance technical assistance (TA) to strengthen implementing

Component 1: Improved Access, Quality, and Education System Management (Bank

Subcomponent 1.1: Education Voucher Scheme (EVS)

Subcomponent 1.2: Public-Private Partnerships in Education

Subcomponent 1.3: Stipends for Secondary School Girls

Subcomponent 1.4: Early Childhood Education

Subcomponent 1.5: Effective Human Resources Management for Teachers

Subcomponent 1.6: Quality in the Primary Classroom

Subcomponent 1.7: Improved Education Assessments to Enhance Quality

Subcomponent 1.8: School Specific Non-Salary Budgets

42. The objective of this subcomponent is to improve learning environments through an

Subcomponent 1.9: Data Strengthening and Performance Management

43. The objective of this subcomponent is to improve evidence-based decision making by

Component 2: Capacity Building, Project Management, Monitoring, and Evaluation.

Table 2. Total Project Cost and Financing

Total 13,357.5 100

C. Lessons Learned and Reflected in the Project Design

A. Institutional and Implementation Arrangements

B. Results Monitoring and Evaluation

A. Overall Risk Rating and Explanation of Key Risks

Table 3. Summary of Risks

VI. APPRAISAL SUMMARY