Date: 2024-11-24 Page is: DBtxt003.php L0913-TVM-MMW-000038
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TrueValueMetrics ... Peter Burgess Manuscript
Making Management Work for Relief and Development |
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Chapter 38
Improving Projects and Programs |
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Projects
A critically important modality for implementation Projects are the dominant modus operandi in the relief and development sector. My experience suggests that projects have had a big role in constraining the relief and development progress, but they still remain the dominant way in which all the major organizations in the sector operate. There is not going to be an end to the use of “projects” in the immediate future, but there can be a big improvement in the performance of projects. Improving the performance of “projects” can have a big role in improving the overall performance of the relief and development sector. The project cycle can be tweaked The project cycle can be improved in a few modest ways that will substantially improve performance. Perhaps the most critical is to put more emphasis on the implementation stage, and building into this step, much more oversight with measurement, analysis, feedback and adjustment. The basic World Bank project cycle is: (1) Identification; (2) Preparation; (3) Appraisal; (4) Negotiation; (5) Implementation; and, (6) Evaluation. What needs to be done is to ensure that implementation is optimized around the realities that have to be faced operationally. Oversight and measurement The idea of oversight and measurement needs to be made an integral part of the project operations. The sort of measurement needed is simple normal rigorous accounting and timely reporting. The specifics will change from project to project. Just as they do from department to department in the corporate world ... but there should be timely accounting for all economic, that is financial, transactions. Every month, the oversight managers should get a simple report about what has been spent and what it has been used for ... basic management accounts. From time to time there should be reporting against key performance benchmarks ... whatever is appropriate. None of this is a change in project cycle and project design ... but it is a change in the way things have been done. Much more attention needs to be paid to accounting, to the professionals in accountancy and to the information that the accountants are presenting. Rather than being an unusual part of the oversight team, a professional accountant should be right in the middle of most of the oversight process. Mitigating shortcomings of the project cycle Some steps can be taken to mitigate the shortcomings of the project form of organization. Some of the issues include: (1) a short life; (2) issues of starting up; (2) issues of closing down; (4) an impermanent artificial structure; (5) all sorts of economic distortions, not least of which relate to personnel are pay scales; and, (6) excessive complexity. Some of the easy changes to make are: (1) make projects go on for a much longer period of time, especially extending the duration of existing projects that are demonstrating success (2) reorganize existing projects so that the implementation is within the main framework of the government organizations and civil service; and, (3) break down big complex projects into multiple simpler projects where the organization and the activities can be much better aligned. Terminate non-performing projects There are some great projects and some dogs. On average, relief and development has failed, and this is because there have been too many dogs. With decent oversight and accounting it is possible to identify the dogs, and do something about it. There are two ways to go: (1) fix the problem, which will often be a major change in personnel and maybe project design; or, (2) eliminate the problem, that is terminate the project. Neither are good options, but they are far better than continuing to use good money to do nothing or worse than nothing. Build on success Some projects do very well. If the project is going well ... learn from it and if possible extend it and replicate the model in other suitable places. When a project is designed right, and the staff are good, the scale of success is significant .. the socio-economic value is multiples of the cost. Replication of Success ... or Failure The Shenge Project (see Box page nnn) was a great success. But it ended because the relief and development sector has a narrow view of sustainability and does not have good projects that go on for ever. Everything closes down when the time is up. When I was asked if the Shenge Project was sustainable my response was absolutely yes at the community level, and no at the country level because nothing in Sierra Leone was sustainable if it required any foreign exchange or government funding at all. The FAO and the UNDP allowed this project to close even though its contribution to the community and the area was amazingly good ... I had the facts and the operational costs and the economic benefits well presented. But this was NOT a factor. Decisions were not going to be confused with these data about excellent performance. Around the same time a project that was failing ... costing more than expected, and doing much less than expected and totally falling behind in attaining its objectives ... was extended and allocated more money. The simplistic argument was that there was no need to extend a project where the objectives had been met ... perfect bureaucratic nonsense. In almost every project, there are things that are going well and adding to socio-economic development value, and elements that are not doing so well. By doing value analysis it is possible to improve implementation so that good things are replicated, and bad things terminated. This is not being done enough, and it has had devastating effect on performance over the years. Oversight of the development project portfolio Many countries in the “south” have development project portfolios that are funded in part by the government budget and in part by development grants and loans. The oversight of these projects can make a significant difference to socio-economic performance. Analysis of a Development Portfolio Some years ago (around 1994) I set up a PC database system to provide oversight to the development project portfolio of a “south” government. I was instructed to focus on the 10 largest projects, and not to bother much about the 2,000 odd other projects that were in progress. But, of course, a database system enables one to do simple analysis of everything in the dataset rather efficiently while it does not do very well with “deep” information about just a few items. We were able to get quite a lot of simple information about all the projects, and do this quite quickly based on various reports that the headquarters had asked of the projects and were in the files. There were all sorts of reports about the big projects ... favorable and unfavorable. Sadly the government did not have much money ... the big projects were consuming all the money and more, and were being driven by external donors (World Bank and bilateral lenders). There were cost overruns on the big projects and this was pulling funds from the small projects ... but our little Project Administration Office had absolutely no clout with anyone that mattered. The big projects were out of control, but the World Bank and the bilaterals did not have systems to take control or intervene in failing projects. Almost all the 2,000 smaller projects were cut back in funding to levels that allowed them to stay active, but ensured that they would take a very long time, if ever, to complete. Every one had senior staff on the payroll, even if there was little or no activity. Projects that were nearly completed were cut back the same as ones that were just starting ... so the value was delayed. The big driver was senior staff on the payroll and not how to get the most value from best use of resources. It was an interesting piece of work. I worked with two government officers who were academically bright and with considerable experience. They understood the analysis and the conclusions that were emerging ... and while I saw no impact of my efforts while I was working in the country, I think there will be prudent use of the analysis as time goes on. With strong value analysis and the database of project information referred to above, a better use of scarce resources could have been accomplished. Some projects generate value during their implementation, for example, a project to provide educational supplies, but a project to build a bridge only has value only when the bridge is complete and can be used. In this portfolio value could have been maximized by completing almost complete projects and cutting back on projects that were still in the study stage. This can be tough ... because politics and allegiances are involved as well as just simple financial analysis and economics. Multi-year planning can be helpful in optimizing value. Rather than canceling a project, adjusting the scheduling of projects can result in more value sooner, and more cost later. This is usually advantageous, and result in very much better results. Project accounting and accountability There also needs to be a strong framework of accounting and management information for the project and for the government of the country. The area of accounting has been a low priority, but it is the strongest tool available to address the epidemic of corruption that pervades almost all areas of economic activity. All projects funded and implemented through government should be integrated into the national accounting mechanisms ... usually a single treasury account system and be supplemented by good analytical accounting for project performance. The process of integrating projects into government structures and civil services cadres will reduce the distortion caused by “projects” recruiting good people out of the permanent government system. Project financing The rules of financing need to be made a lot more balanced, especially as regards exchange risks. The practice of only financing in a basket of currencies like the US dollar, the Canadian dollar, the UK pound sterling, Swiss franc, etc. should be changed so that repayment is based on the local currency value of the hard currency at time of negotiation. In this arrangement the economic performance in the “south” and the value of local currencies then becomes a matter of major concern to the lenders. This then becomes an incentive for really constructive engagement so that there is overall economic performance in the “south”. Action plan to improve project performance My immediate reaction to project performance was to advocate for a change to a different implementing modality that did not use the project structure. Reflection suggests that there will be more progress more rapidly merely by having rather modest incremental changes. In fact, the changes are not revolutionary at all, but merely practical application of what is ofter talked about. There needs to be improvement in the accounting so that all the stakeholders in project performance can have a factual base for dialog and decision making. Every good corporation can easily produce meaningful monthly accounts, and relief and development sector projects should be able to do the same. There needs to be improvement in the metrics about activities and results so that it is possible to tell how much the various activities are costing and the value of the results. To the extent that there are questions about what value to assign to value, that is, for example, what dollar value to assign to a child not dying from malaria, there needs to be a public dialog and eventually a set of “standard values” that anyone can use. Where it is apparent that a project is not performing to an acceptable standard, whether it is in respect of the accounting or relative to performance, then the project should be terminated with the least possible cost. There also needs to be much more ability to change a project to improve its performance. Every plan can be improved based on what one learns during implementation, but this requires both a learning cultures and an action culture. |
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