ActionAid Value for Money Pilot Update May 2012. Origins of the VFM Pilot -Measuring cost...
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![Page 1: ActionAid Value for Money Pilot Update May 2012. Origins of the VFM Pilot -Measuring cost effectiveness approved in September 2010 as part of the new.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649dc65503460f94abacf5/html5/thumbnails/1.jpg)
ActionAid Value for Money Pilot Update
May 2012
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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.
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In the Beginning…
Cost effectiveness defined as an analysis of the relationship between effectiveness and costs (or inputs)
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
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Ripping Up and Starting Over
BOND VFM Group helped us debate:
-What about Value for Money? Who decides Value?
-What about cost efficiency?
-How do we understand and apply within our accountability system (ALPS)?
Cost Effectiveness Pilot becomes the Value for Money Pilot
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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.
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Agreed DefinitionsValue 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
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Value for Money in Programme flow
Appraisal &
Strategic
Planning
Inputs & resources
(costs)
Activities & outputs Outcomes Impact
Implementation Implementation & monitoring
Review/EvaluationAppraisal,
programme development,
baseline
ALP
S pr
oce
ss
Managing CE Improving CE Demonstrating CE
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Application – Cost Efficiency
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Application – Cost Effectiveness
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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
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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?
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Partnership with the New Economics Foundation
- 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
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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 approaches
- 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 costs
- 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
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Adapted SROI Template
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Pilot Testing Through December 2012Country VfM methodology Work stream
Australia
MCA light Policy scenarios in strategyMCA plus
SROIProductive resources
(Agri+land) (via Kenya/Uganda)
Australia/UKCost effectiveness light or cost
efficiencyCampaigns (tax justice)
UK
SROI Schools, education, youth
SROI lightUndetermined (within
strategy and existing M&E framework)
DenmarkCosts General
SROI light M&E framework
International secretariatTemplate report (VFM
programme cycle)Across the board
Nigeria SROI light LRP (empowerment)
Ethiopia SROI? (project with quality
quantitative data)
Afghanistan SROI Women’s rights/advocacy
PakistanCost-effectiveness light or cost
efficiencyExisting emergency
evaluation
AAI Finance, Regional office, Thailand
Estimating economic costs Finance - general