ActionAid Value for Money Pilot Update by mSOkHM6


									ActionAid Value for Money Pilot

           May 2012
Origins of the VFM Pilot

- Measuring cost effectiveness approved in
  September 2010 as part of the new Global M&E
  System Requirements. Will become core
  component of monitoring of all ActionAid
  programmes from 2013.

- Original Aim of Pilot - define cost effectiveness
  in the ActionAid context as well as test
  appropriate methodologies and create
  recommendations for wider implementation.
In the Beginning…

Cost effectiveness defined as an analysis of the
relationship between effectiveness and costs (or

As a charitably funded organisation we know and
can show that we are achieving maximum results
for reasonable cost

Being able to demonstrate cost effectiveness
in a way that upholds our mission and values
should enable us to build a case that we
represent value for money
Ripping Up and Starting Over

BOND VFM Group helped us debate:

- What about Value for Money? Who decides

- What about cost efficiency?

- How do we understand and apply within our
  accountability system (ALPS)?

Cost Effectiveness Pilot becomes the Value
for Money Pilot
Agreed Definitions

Cost efficiency: Maximising the output with a
given level of inputs (this could include financial
and economic costs, such as volunteer time).

Cost effectiveness: Ensuring that you achieve
your intended objective/outcome with optimal use
of resources. Need to specify outcomes and link
M&E framework to financial and economic costs.
  Agreed Definitions
Value for Money (VFM):

   - Umbrella term, looks at how to manage costs,
     improve efficiency, and how to demonstrate
     that what we are doing is the right thing to do

   - ‘Value’ viewed in terms of what stakeholders,
     most notably rightsholders, value in terms of
     what we have promised to deliver – thereby
     ensuring accountability towards rightsholders
     as well as donors/public

   - VFM is about building and presenting a case
                Value for Money in Programme flow

                 Managing CE                      Improving CE                 Demonstrating CE

                  &             Inputs &
                               resources                                   Outcomes            Impact
               Strategic                             & outputs

ALPS process

                 programme       Implementation           Implementation         Review/Evaluation
                development,                               & monitoring
Application – Cost Efficiency
Application – Cost Effectiveness
 Plan for Integration
Include Key Questions in:
  • HRBA 2.0 – Programme Framework Guidance
  • Global Monitoring Framework
  • Revised ALPS
  • Evaluation TORs

Ensure Key Questions are addressed – compliance

Build capacity and cross-check systems
What about Assessing Value for Money?
Assessment methodologies and processes:

- Need to build on existing organisational
  participatory approaches

- Evidence-based, rigorous

- Aligned with mission and values

- Help to prove ‘Theory of Change’

- Not just assessing traditional programmes

But how? And with whom?
Partnership with the New Economics
 - Agree a common understanding and definition
   of Value for Money as it applies to ActionAid

 - Understand and be able to test methods for
   measuring cost effectiveness and cost
   efficiency, using tools adapted for ActionAid

 - Understand how to create a narrative using
   the results that would build the VFM case

 - Understand how to engage stakeholders in
   the assessment process – thus giving us the
   ultimate VFM
   Tools for Assessment
- Social Return on Investment (SROI): Cost effectiveness methodology
  that contrasts outcomes with full economic costs, incorporating
  externalities for all material stakeholders and using participatory

- Adapted SROI: analysing economic costs against outcomes. Not
  creating ratio but creating a narrative. Include existing data

- Cost Efficiency Analysis (CEA): Measurement of outputs relative to

- Cost Effectiveness Analysis: Measurement of single outcome relative
  to costs

- Adapted Cost Effectiveness Analysis: Measurement of outcomes
  relative to costs. Creating a narrative.

- Multi-criteria Analysis (MCA): A (participatory) decision making
  approach designed to quantify and assign weighting to competing values
  and criteria of different stakeholders when considering different courses
  of action
    Adapted SROI Template
Adapted SROI – analysing full costs against benefits. Not creating
ratio but creating a narrative.
            - COST BREAKDOWN
               - Financial costs
               - Economic costs

               - Key outcomes
               - Tangible
               - Intangible
               - An estimation of outcome incidence
               - Deadweight
               - Attribution
               - Displacement
               - External/indirect impacts
               - Benefit period
Pilot Testing Through December 2012
            Country                     VfM methodology                     Work stream
                                            MCA light
                                                                     Policy scenarios in strategy
                                            MCA plus
            Australia                                                   Productive resources
                                               SROI                        (Agri+land) (via
                                  Cost effectiveness light or cost
          Australia/UK                                                Campaigns (tax justice)
                                               SROI                  Schools, education, youth
                                                                        Undetermined (within
                                            SROI light               strategy and existing M&E
                                              Costs                           General
                                           SROI light                      M&E framework
                                      Template report (VFM
    International secretariat                                             Across the board
                                        programme cycle)
            Nigeria                        SROI light                 LRP (empowerment)
                                                                      ? (project with quality
            Ethiopia                           SROI
                                                                        quantitative data)
          Afghanistan                          SROI                  Women’s rights/advocacy
                                  Cost-effectiveness light or cost     Existing emergency
                                             efficiency                     evaluation
  AAI Finance, Regional office,
                                    Estimating economic costs            Finance - general

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