Planning, Monitoring and Evaluation in Development Organisations by De Coninck John. Catholic Organization for Relief & Development. ICCO (Organization)

Author:De Coninck, John.,Catholic Organization for Relief & Development.,ICCO (Organization)
Language: eng
Format: epub
Publisher: Sage Publications India Pvt, Ltd -- eBooks
Published: 2017-07-14T07:36:22+00:00

Cost allocation then provides the information required for effective evaluation at the main activity or programme level. It includes, for example, evaluation of the cost-effectiveness of achievements, bearing in mind, however, that cost-effectiveness is not cost-efficiency, as the lowest cost is not necessarily the best. Partner organisations often hesitate to focus on cost-efficiency or effectiveness and react defensively when asked about this. Nevertheless, such a focus can be a powerful aspect of PB(udgeting)ME, to strengthen teamwork between finance and other departments and to deepen learning within the organisation.

CONTRIBUTING TO ORGANISATIONAL SUSTAINABILITY

Finally, we have found that a good understanding of the role of financial policies and strategies in building the overall organisation can also enhance an appreciation of financial PME. Since donors usually restrict the use of their funds to a particular project, it is important for the organisation to ensure that this can be accounted for through well-documented and transparent internal controls. But organisational sustainability includes financial sustainability, even financial stability. Two financial strategies underpin this:

1. Charging fair and transparent overhead costs: Development organisations often need to improve their negotiation skills in dealing with donors and other parties interested in their products and services. This requires financial information that is not based on donor/financier needs, but on internal management needs. Financial reporting should in the first place be to oneself and of a wider nature than donor-reporting, which is a secondary need. We can help partner organisations negotiate so that donor reporting fits their activity structure as much as possible and so that donors and other ‘customers’ pay for most overhead costs, on the basis of a fair and transparent cost-allocation system (see Box 5.13). Not having such a system provides a valid excuse for donors and others to refuse paying their fair share of overhead costs that no quality product, or project, can do without. We return to negotiating donor conditions in the next chapter.

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