Lima City Poverty Strategy IDF Grant Development Objective. The objective of the Grant is to improve the Metropolitan Municipality of Limas (MMLs) capacity to implement its strategic planning efforts in designing and implementing a participatory City Poverty Strategy (CPS). In particular, the IDF will support efforts to strengthen capacity for monitoring and evaluation and for improvingpublic expenditure management by linking the CPS initiative to metropolitan- and district-level planning and budgetingefforts. Specifically, the Grant aims to support the: (a) design of a comprehensive set of poverty and service deliveryindicators through a participatory decision-making process; (b) institutionalization of a monitoring and evaluation program to reflect progress made in Limas efforts to improve the living standards of the poor and provide a credible feedback mechanism regarding ongoing strategic planning efforts; and (c) improvement of public expenditure management through increased accountability and transparency. Grant Components and Outputs.   Grant funds will be used to finance two main areas of work focusing on providing technical assistance and expertise to institutionalize the CPS approach and mainstream it and in particular the participatory monitoring and evaluation system into MML business practices.  The grant components support: (1) Development of a participatory monitoring and evaluation system. The objective of the component would be twofold, first to strengthen the capacity of the CPS implementation team to manage the participatory design of a comprehensive set of indicators, and second to strengthen local authorities and civil societys capacity to participate in monitoring and evaluation activities throughout the design and implementation of the CPS.  During the initial diagnostic phases of CPS preparation, IDF funds would support the CPS Technical Secretariat (located in the General Office of Planning) through technical expertise, a series of workshops, and a needs assessment to finalize and implement a strategy for designing a framework for participatory M&E of public service delivery and policy interventions. Later, in putting into effect a robust system to link the evaluation of ongoing policy actions to forward-looking policy making, the IDF grant would support the CPS Technical Secretariat and civil society partners (envisioned to be leverage from existing networks, including the  mesas de concertaciÃ³n) that have a complex set of responsibilities, including acting as catalysts across government levels and among diverse civil society actors to monitor and assess progress made towards CPS goals.  In sum, the grant component would finance a series of capacity building measures to include the development of technical solutions (including international training and reverse study tours for technical staff and civil society partners to learn fro m best practices and international experience in participatory M &E systems) and promote participatory dissemination of CPS activities and progress. The concrete outputs of the component would be (a) a set of indicators, determined through a broad participatory process but based on technical inputs from sector experts; (b) the design of a participatory monitoring and evaluation system, clearly identifying organizational roles and responsibilities and approaches to ensure that the CPS monitoring and evaluation procedures are mainstreamed into the metropolitan governments Â“business processÂ”; (c) a series of activities aimed at ramping up the capacity of civil society partners, including local NGOs, community organizations, and District Municipality administrations to report on financial performance, link outputs and outcomes and to support broad-based discussion on the findings and policy implications of such information.; (d) developing and executing a public outreach program on CPS activities and progress on the goals and indicators; and (e) strengthening of the capacity of the General Planning Office in cutting-edge data analysis methodologies, including approaches that combine various data collection methods and information sources, (i.e. management information systems, the Living Standards Measurement Survey and other specialized surveys, qualitative impact studies, expenditure tracking and input studies, etc.).  The expected outcome of the grant component is the institutionalization of a participatory monitoring and evaluation system for the CPS. (2) Linking the CPS to public expenditure management and financial accountability systems. The objective of the second component would be to build capacity for improving public expenditure management through the CPS. Though grounded in a tradition of strong local management and planning, the CPS represents a new way of doing business for the metropolitan authorities, moving from physical planning to strategic planning (in large part through involving local communities in designing, financing, and implementing solutions and through the formalization of demand-driven approaches for poverty reduction), focusing on the poor in the context of overall economic development, and linking participation and results-based orientation to the local development agenda. In light of the new approach and the recent decentralization of service provision in Peru, the Grant would support capacity building initiatives (including international training and reverse study tours for technical staff to learn from best practices and international experience in strategic planning and budgeting) to deliver technical assistance and expertise to support the General Planning Office of the MML and civil society improve public financial management and link it to the CPS process. The concrete outputs of the component would be: (a) coordinating a phased approach for the GPO to integrate the CPS into the formal budgeting and development planning processes of the MML, including the Plan Integral de Desarrollo; (b) undertaking outreach activities to improve and further mainstream the use of nascent participatory budgeting approaches at the district municipal level;  The district municipality of Villa El Salvador, in the Southern Cone of Lima, for example, has been implementing a highly successful participatory budgeting methodology for a number of years.  (c) explore options for enhancing fiscal transparency and reforming intergovernmental fiscal relations within the MML in the context of the newly decentralized service provision responsibilities of subnational governments in Peru; and (d) enhance the role of civil society in proving participatory input to the development planning initiatives at the Metropolitan level.  The expected outcomes of the grant component, to be measured by indicators elaborated in the first component of the grant, are: (i) mainstreaming of the CPS process and its outputs into the MMLs public expenditure and financial accountability systems; and (ii) increased fiscal efficiency, government transparency and accountability. The objective of the Grant is to improve the Metropolitan Municipality of Lima#s (MML#s) capacity to implement its strategic planning efforts in designing and implementing a participatory City Poverty Strategy (CPS). In particular, the IDF will support efforts to strengthen capacity for monitoring and evaluation and for improving public expenditure management by linking the CPS initiative to metropolitan- and district-level planning and budgeting efforts.