warning a new financial regulation applicable to the ...€¦ · assistance (accounting for 10% of...

WARNING

A new Financial Regulation applicable to the general budget of the EuropeanCommunities is scheduled to enter into force on 1 January 2003 and will lead to

amendments to some parts of this guide.

Table of Contents

INTRODUCTION................................................................................................................................................................... 1

1. EUROPEAID COOPERATION OFFICE........................................................................................................................ 21.1 Improving external aid management: a key component of the Commission reform.................................................. 21.2 A single department handling the Commission's external aid ................................................................................... 21.3 How the EuropeAid Cooperation Office operates ..................................................................................................... 21.4 EuropeAid organigramme ......................................................................................................................................... 31.5 Information activities of the EuropeAid Cooperation Office..................................................................................... 4

1.6 DECONCENTRATION TOWARDS DELEGATIONS................................................................................................................. 52. COFINANCING WITH NGO AND DECENTRALISED COOPERATION ................................................................. 5

2.1 Cofinancing with NGO .............................................................................................................................................. 52.2 DECENTRALISED COOPERATION ...................................................................................................................................... 73. THE INFO GUIDE .......................................................................................................................................................... 9

3.1 Purpose of the InfoGuide........................................................................................................................................... 93.2 Content of the InfoGuide ......................................................................................................................................... 103.3 How to use the InfoGuide ........................................................................................................................................ 11

A. PROJECT CYCLE MANAGEMENT ........................................................................................................................... 16

1. THE PROJECT CYCLE MANAGEMENT CONCEPT ............................................................................................... 171.1 Purpose of PCM ...................................................................................................................................................... 171.2 An integrated approach ........................................................................................................................................... 18

2. MAIN CHARACTERISTICS OF THE PROJECT CYCLE ......................................................................................... 202.1 Phase 1: Programming............................................................................................................................................ 202.2 Phase 2: Identification............................................................................................................................................. 222.3 Phase 3: Appraisal .................................................................................................................................................. 232.4 Phase 4: Financing.................................................................................................................................................. 242.5 Phase 5: Implementation ......................................................................................................................................... 252.6 Phase 6: Evaluation................................................................................................................................................. 252.7 The Project Cycle and an Integrated Monitoring System........................................................................................ 27

3. PCM IN COFINANCING WITH NGO AND DECENTRALISED COOPERATION................................................. 283.1 Distribution of tasks according to the project cycle ................................................................................................ 283.2 Major documents and key decisions ........................................................................................................................ 32

B. HOW TO PREPARE AND SUBMIT A PROJECT PROPOSAL............................................................................... 33

1. INTRODUCTION.......................................................................................................................................................... 342. SETTING THE PROJECT BASELINE......................................................................................................................... 34

2.1 Purpose of the baseline............................................................................................................................................ 342.2 Steps in setting the baseline..................................................................................................................................... 34

3. THE LOGICAL FRAMEWORK................................................................................................................................... 374. INDICATORS................................................................................................................................................................ 42

4.1 Guidelines for indicators ......................................................................................................................................... 434.2 Use of indicators: different levels............................................................................................................................ 46

COUNTRIES INVOLVED IN THE PRSP PROCESS (POVERTY REDUCTION STRATEGY PAPERS) ............................................... 47

GOALS AND TARGETS ..................................................................................................................................................... 48

INDICATORS ....................................................................................................................................................................... 48

GOAL 1. ELIMINATE EXTREME POVERTY AND HUNGER .................................................................................. 48

GOAL 2. PROVIDE PRIMARY EDUCATION FOR ALL............................................................................................. 48

GOAL 3. PROMOTE GENDER EQUALITY AND EMPOWER WOMEN................................................................. 48

GOAL 4. REDUCE CHILD MORTALITY (CHILDREN UNDER 5) ........................................................................... 48

GOAL 5. IMPROVE MATERNAL HEALTH................................................................................................................. 48

GOAL 6. COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES ...................................................................... 48

GOAL 7. ENSURE ENVIRONMENTAL SUSTAINABILITY...................................................................................... 48

GOAL 8. DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT............................................................. 49

4.3 Monitoring the implementation and performance of Community-financed actions ................................................ 504.4 List of sectoral objectively verifiable indicators...................................................................................................... 524.5 List of indicators for decentralised cooperation...................................................................................................... 54

5. DESCRIPTION OF THE OPERATION........................................................................................................................ 565.1. Introduction ............................................................................................................................................................ 565.2 How to prepare the project proposal and complete the grant application form ..................................................... 585.3. The Budget of the Operation................................................................................................................................... 65

C. HOW TO IMPLEMENT A PROJECT ......................................................................................................................... 69

1. INTRODUCTION.......................................................................................................................................................... 692. PROJECT IMPLEMENTATION PHASES................................................................................................................... 70

2.1 The start-up phase ................................................................................................................................................... 702.2 The execution phase................................................................................................................................................. 702.3 The final project phase (closedown)........................................................................................................................ 71

D. REPORTS......................................................................................................................................................................... 72

1. REPORTS: CONCEPTS................................................................................................................................................ 722. REPORTING FORMAT................................................................................................................................................ 73

2.1. Introduction ............................................................................................................................................................ 732.2 Format ..................................................................................................................................................................... 732.3 Presentation model for financial reports................................................................................................................. 76

E. FINANCIAL AND MANAGEMENT AUDITS............................................................................................................. 81

1. FINANCIAL AND MANAGEMENT AUDITS............................................................................................................ 811.2. IMPLEMENTATION OF THE AUDIT.................................................................................................................................. 82

F. EVALUATIONS............................................................................................................................................................... 83

1. OVERALL EVALUATION............................................................................................................................................. 83

1.1 Objective of the evaluation ...................................................................................................................................... 831.2 Evaluation criteria................................................................................................................................................... 841.3 Key questions for a project technical and methodological assessment ................................................................... 841.4 Standard evaluation format ..................................................................................................................................... 87

G. DEFINITIONS ................................................................................................................................................................. 93

Financing proposal........................................................................................................................................................ 96

ANNEX I: INTERNET LINKS AND DOCUMENTS ..................................................................................................... 100

Intro 1

INTRODUCTION

This module describes EuropeAid, the EC Cooperation Office of the, provides an overview of itshistorical background, outlines the Cofinancing with NGO and decentralised cooperation objectives,

and explains the role of the InfoGuide for projects related to the cofinancing of European NGOsand to decentralised cooperation in developing countries.

Table of contents

1. EuropeAid Cooperation Office

1.1 Improving external aid management: a key component of the Commission reform1.2 A single department handling the Commission's external aid1.3 How the EuropeAid Cooperation Office operates1.4 EuropeAid Cooperation Office organigramme1.5 Information activities of the EuropeAid Cooperation Office1.6 Deconcentration towards the Delegations

2. Cofinancing with NGO and decentralised cooperation

2.1 Cofinancing with NGO2.2 Decentralised cooperation

3. InfoGuide for NGO and DC projects

3.1 Purpose of the InfoGuide3.2 Content of the InfoGuide3.3 How to use the InfoGuide

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1. EUROPEAID COOPERATION OFFICE

1.1 Improving external aid management: a key component of theCommission reform

The Common Service for External Relations (SCR) was set up in 1998 as a first step towardsthe unification of services responsible for implementing aid programmes to countries outsidethe EU and improving their management. The SCR strove to end payment delays, clearbacklogs, harmonise and simplify contract and grant award procedures, and rationaliseinformation systems.On 16 May 2000, the European Commission decided to take its reform a step further bycarrying out an ambitious programme to improve the quality of projects and the speed of theirimplementation. The aims are:

• to improve significantly the quality and responsiveness of project management ;• to reduce substantially the time taken to implement approved projects;• to ensure that financial, technical and contractual management procedures are in line with

the highest international standards of propriety and accountability;• to improve the impact and visibility of EU cooperation to development.

The new EuropeAid Cooperation office is central to efforts to improve management systemsand enable the European Commission, one of the main providers of official developmentassistance (accounting for 10% of ODA worldwide), to help strengthen the EU's presence andinfluence on the international stage.

1.2 A single department handling the Commission's external aid

As part of its efforts to reform the management of external aid the Commission formally set upthe EuropeAid Cooperation Office on 1 January 2001.EuropeAid Cooperation Office's mission is to implement the external aid instruments of theEuropean Commission which are funded by the European Community budget and the EuropeanDevelopment Fund. It does not deal with pre-accession aid programmes (Phare, Ispa andSapard), humanitarian activities, macro-financial assistance, the Common Foreign and SecurityPolicies (CFSP) or the Rapid Reaction Facility.

The Office is responsible for all phases of the project cycle (identification and appraisal ofprojects and programmes, preparation of financing decisions, implementation and monitoring,evaluation of projects and programmes) which ensures the achievement of the objectives of theprogrammes established by the Directorates-General for External Relations and Developmentand approved by the Commission.

It is also involved in initiatives to improve programming systems and their content, to establishpolicies evaluation programmes and to develop mechanisms for feeding back evaluation results.

1.3 How the EuropeAid Cooperation Office operates

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EuropeAid Cooperation Office is a department of the Commission, and is subject to the normaloperating procedures of the Institution. It is supervised by a Board comprising:

• Chris Patten, Commissioner for External Relations (Chairman),• Poul Nielson, Commissioner for Development and Humanitarian Aid (Chief Executive),• Günter Verheugen, Commissioner for Enlargement,• Pascal Lamy, Commissioner for Trade,• Pedro Solbes Mira, Commissioner for Economic and Monetary Affairs.

The political responsibility for the activities of the Office lies with the Chairman and the ChiefExecutive, based on their respective roles within the College of Commissioners.

The Chairman supervises the Board's strategic approach.

The Chief Executive sees to the appropriate implementation of the policy guidelines laid downby the Board.

The Board approves the Office's annual work programme and the annual report of its activities,the annual budgetary programme (including the European Development Fund annual forecasts)and the annual evaluation programme. It takes note of evaluation results and draws uprecommendations on the basis of them.

The Directorate-General of the Office is responsible for the overall resources entrusted to itfrom the general budget of the European Communities budget and the European DevelopmentFund.

1.4 EuropeAid organigramme

The organigramme of the EuropeAid Cooperation Office is structured into eight Directorates(see the annex in Part H). It comprises six Directorates responsible for operations (fiveDirectorates for geographical programmes and one Directorate for horizontal programmes) andtwo functional Directorates (one for operational support and the other for organisationalsupport).

Directorates A, B, C, D and E are responsible, within the framework of multiannualprogrammes designed by the Directorates-General for External Relations and Development, forthe effective and efficient management of the entire project cycle from identification toevaluation, and for methodological and thematic consistency in their regions. In conjunctionwith the Directorates-General for External Relations, they are also required to prepare andimplement the devolution of management to the Delegations of the European Commission andsupervise that devolved management.

• Directorate A has six units and is responsible for programmes in Europe, the Caucasus andcentral Asia (including Mongolia).

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• Directorate B has seven units and is responsible for programmes in the SouthernMediterranean and Middle East.

• Directorate C has seven units and is responsible for programmes in the African, Caribbeanand Pacific countries (including South Africa and Cuba).

• Directorate D has six units and is responsible for programmes in Asia.

• Directorate E has six units and is responsible for programmes in Latin America.

• Directorate F has six units and is responsible throughout the cycle of operations for themanagement of horizontal programmes and Cofinancing with NGO. Directorate F is also incharge of deciding on intervention methods for new subject areas and for providingtechnical support to the geographical Directorates where it has specific expertise.

• Directorates G and H are responsible for providing the resources and tools needed by theOffice to do its job, rationalise its operations, report on its activities and ensure its visibility.

1.5 Information activities of the EuropeAid Cooperation Office

The transparency of activities and management practices is one of the key priorities ofEuropeAid.

The EuropeAid website (http://europa.eu.int/comm/europeaid) is a central source of informationon which working partners and anyone interested, especially in the field of cooperation, will beable to monitor the implementation of programmes.

The website contains full details of contract procedures and all the relevant documentation:application forms, standard contracts, procurement notices, calls for proposals, etc. Anyoneinterested (firms, NGOs etc.) can download these documents directly.

The website also contains final evaluation reports on projects and programmes carried out withCommission funding and will soon provide information on projects under way.

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1.6 Deconcentration towards delegations

According to the Communication on the reform of the management of external assistance, dated16 May 2000, "anything that can be better managed and decided on the spot, close to what ishappening on the ground, should not be managed or decided in Brussels". Accordingly,Delegations must be provided with the necessary human, technical and financial resources toreally “better manage and decide on the spot”. Devolution of tasks and responsibilities alsorequires the creation (if necessary) and dissemination of methodological approaches, proceduresand guidelines and the training of staff using these techniques, in order to ensure thatdeconcentration does not lead to an even greater disparity in procedures and a deterioration inthe quality of management, thus becoming an inconsistent and random process.

This InfoGuide on "Cofinancing with NGO and Decentralised Cooperation" is consistent withEC policies to shape a modern and efficient organisation which is able to use new informationtechnology to strengthen human resources at all levels and improve quality standards.

The devolution of responsibilities to the delegations begun in 2001 will be continued in 2002and 2003.

2. COFINANCING WITH NGO AND DECENTRALISED COOPERATION

2.1 Cofinancing with NGO

2.1.1 Historical background of Cofinancing with NGO

Cofinancing with NGOs is part of the EU's commitment to combating poverty, promoting therule of law and respecting fundamental freedoms, enshrined in Article 177 (former Article130u) of the EC Treaty.

Budget heading B7-6000 (Cofinancing with NGO) was created in 1976 (when it carried anallocation of EUR 2.5 million) to enable the Commission to back activities proposed byEuropean NGOs specialising in development cooperation, as part of its own developmentcooperation policy. These activities were intended to make a direct and lasting contribution toimproving the living conditions and development prospects of disadvantaged and marginalisedsections of the population in developing countries.

In 1979 a component for raising the awareness of the European public was added.

The allocation for heading B7-6000 has grown over the years, reaching EUR 200 million in2001.

Usually, 90% of this heading's funds is allocated to the cofinancing of various activities indeveloping countries undertaken by NGOs and their partners, and the remaining 10% is

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allocated to the cofinancing of activities to educate and raise the awareness of the Europeanpublic in regard to development issues.

On 17 July 1998 the Council adopted Regulation (EC) No 1658/98 (OJ L 213, 30 July 1998 p.1-5) providing the Commission with a formal legal basis to manage the increasing funds ofheading B7-6000. The Commission approved the General Conditions for cofinancing currentlyin force since 7 January 2000 (see annex, Part H).An overall evaluation of cofinancing with NGOs was carried out in 2000 (seehttp://europa.eu.int/comm/europeaid/evaluation/program/multirep.htm).

2.1.2 Purpose of Cofinancing with NGO

The chief purpose of the Cofinancing with NGO policy under budget heading B7-6000 is toreduce poverty by providing disadvantaged sections of the population in developing countrieswith support to help them meet their basic needs, improve their living conditions and strengthentheir development capacity. Cofinancing with NGO also aims to increase European publicawareness of development issues.

Cofinancing with NGO complements the main funding instruments for developmentcooperation, such as the European Development Fund (EDF) for developing countries in Africa,the Caribbean and the Pacific (ACP), bilateral technical and economic cooperation between theEU and Latin American, Asian and Mediterranean countries (ALAMED) and cooperation withthe New Independent States (NIS).

2.1.3 Implementation of Cofinancing with NGO

For the implementation in 2002-2003 of projects cofinanced with NGOs and carried out in thedeveloping countries under budget heading B7-6000 (see Guidelines 2002-2003 in Annex H).

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2.2 Decentralised cooperation

2.2.1 Historical background of decentralised cooperation

The Decentralised Cooperation (DC) budget line (heading B7-6002) was created in 1992 for thepurpose of involving a broader range of stakeholders in the development process and to betterintegrate the concept of decentralised cooperation into official EC cooperation programmes(ACP, ALA, MED, N).

The decentralised cooperation approach seeks to put stakeholders at the centre of thecooperation process and contributes significantly to the achievement of the EC cooperationpolicies objectives set out in Article 177 (former 130 u) of the European Community Treaty(Maastricht, Amsterdam).This type of approach was strengthened in a number of EU programmes, in particular in theEU-ACP Cotonou Agreement signed on 23 June 2000.

The Introductory Note to decentralised cooperation of 23 December 19991 describes in detailthe Commission' strategy in this respect.

2.2.2 Purpose of decentralised cooperation

Poverty alleviation, enhanced quality of life and increased development capacities ofbeneficiaries are the EU's overarching objectives for development cooperation, particularly inthe Least Developed Countries (LDCs).

Poverty is not only defined by the absence of income and financial resources. It alsoencompasses the notion of vulnerability and factors such as inadequate access to food,education and health, natural resources and drinking water, the use of the soil, employment andcredit, information and political participation, services and infrastructures.

All these aspects must be combined to allow disadvantaged groups to be involved in their owndevelopment, to have equitable opportunities and to live in a safer environment.

Ownership by beneficiary countries of their own strategies is the key to the success ofdevelopment policies. The greatest possible participation of all segments of society musttherefore be encouraged in order to create an environment for more equitable conditions, ensurethe participation of the most disadvantaged groups in the benefits of growth and strengthen thefabric of society.

1 The Introductory Note to decentralised cooperation is available on the EuropeAid Cooperation Office website.http://europa.eu.int/comm/europeaid/projects/index_fr.htm

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In that context, Decentralised Cooperation heading B7-6002 mainly acts as the catalyst andlever for the promotion of political and social dialogue, for support for local development andthe involvement of local stakeholders in development cooperation and its programmingprocess.2

2.2.3.Implementation of decentralised cooperation

Regulation (EC) No 1659/98 of the European Parliament and of the Council (OJ L 213, 30 July1998 p. 6-8, annexed in Part I), which provides an official legal basis for heading B7-6002,states that "decentralised cooperation is intended to help bring about a real change in the longterm of the Union's development cooperation procedures."

Note: Regulation (EC) No 955/2002 of the European Parliament and of the Council of 13 May2002 (OJ L 148, 6 June 2002, p. 1 and 2) extends and amends Council Regulation (EC) No1659/98 on decentralised cooperation.

For the implementation of decentralised cooperation programmes in 2002-2003, see“Orientations 2002-2003” and “liste des pays prioritaires pour 2002-2003” in annex H.

2 For more information, the Technische Universität of Berlin published in 2001 the results of work to capitalise on decentralisedcooperation projects financed by the Decentralised Cooperation budget heading; Capitalisation on experiences with decentralisedcooperation projects financed from budget heading B7-6430; Berliner Beiträge zu Umwelt und Entwicklung; 2001.

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31998R1658&model=guichett


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3. THE INFO GUIDE

3.1 Purpose of the InfoGuide

In an ever-changing world, the Institution must constantly update its policy guidelines on thebasis of new requirements (procedures, rules, etc.)

The availability of information and relevant knowledge-sharing is vital to encourage economicand social development and thus combat poverty in the world, especially in developingcountries.

The "Cofinancing with NGO and Decentralised Cooperation" InfoGuide is intended for the useof all partners or stakeholders concerned by the aforementioned instruments, mainly:

• European NGOs and their local partners, in regard to Cofinancing with NGO;• local public authorities, NGOs, local trader's associations and citizen's groups, cooperatives,

trade unions, women's and youth organisations, teaching and research institutions, churchesand any non-Governmental associations likely to contribute to development.

The guide is divided up in separate modules, reflecting the common essence of projectmanagement techniques such as the six phases of the project cycle, the standard grant contracts(decentralised management), standard terms of reference for evaluations and audits as well asaction plans and technical and financial (invoicing of expenses) reports.

The guide was designed with the aim of clarifying the procedures to be followed fromprogramme design through to evaluation via identification, appraisal and implementationphases. It is based on the Project Cycle Management Manual1 and seeks to ensure goodmanagement throughout the project cycle. The attention of beneficiaries is drawn to the fact thatCommunity development aid is usually supplied after a call for proposals.2

If a project proposal is submitted in response to a call for proposals, the guidelines given by theCommission or implementing agency established for each specific call for proposals should bestrictly adhered to. Module B on “How to draft a project and apply for financing” containsgeneral advice on how to apply for Community aid, the specific features of which are laid downmore precisely in the documents for each call for proposal.

Where the proposal is not a response to a call for proposals, this guide is also of relevance sinceit shows how to structure the project proposal correctly. It contains a description of each stage

1 “Manual - Project Cycle Management - Integrated Approach and Logical Framework”, Commission of the European Communities,Evaluation Unit Methods and Instruments for Project Cycle Management, No 1, February 1993. This manual was revised and updated inMarch 2001. This updated edition may be downloaded from the following address:http://europa.eu.int/comm/europeaid/evaluation/methods/pcm.htm

2 This means the public invitation advertised by the contracting agency requesting clearly identified categories of applicants to proposeprojects under a specific EU action programme, which can be consulted in the Official Journal (OJ) of the European Communities and onthe Internet site (http://europa.eu.int/comm/europeaid/tender/index_en.htm).

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of the project cycle, from the preparatory phases through implementation and evaluation. Itdemonstrates the link between the different phases, which are components of an integratedwhole. The standardised formats and documentation presented in the InfoGuide and its annexeswill ensure that a clear focus is placed from the outset on the achievement of the project purposeand results (and on the evaluation of the activities undertaken).

3.2 Content of the InfoGuide

The InfoGuide is divided into separate modules:

� The introduction describes the EuropeAid Cooperation Office, gives an overview of itshistorical background, outlines the objectives of Cofinancing with NGO and decentralisedcooperation, and explains the role of the InfoGuide for projects related to the cofinancing ofEuropean NGOs and decentralised cooperation in developing countries.

� Part A provides an outline of the project cycle, describing the six phases of the project cycleand explaining the role and purpose of cooperation stakeholders within the framework ofoverall cooperation as well as of Cofinancing with NGO and decentralised cooperationprojects.

� Part B deals with how to draft and submit a project to the EC for financing and is gearedspecifically towards potential beneficiaries.

� Part C deals with project implementation. It describes the various phases involved inimplementing a project.

� Part E gives reporting instructions. It explains the relevance of reports and provides astandard format for drawing up technical and financial reports.

� Part E covers the financial and management audit. It sets out the main components involved.

� Part F concerns project evaluation. It describes the characteristics of the evaluation andoutlines the main evaluation criteria, including the key questions to be asked while assessingCofinancing with NGO and decentralised cooperation projects. A standard evaluationformat is fully described in this part.

� Part G contains a glossary of useful terms and definitions. It includes updated definitions ofthe terminology used in this guide.

� Part H refers in annex to the main documents and Internet links which will help optimise theuse of the InfoGuide for Cofinancing with NGO and DC. These annexes containCommission documents and useful examples for the preparation and implementation ofprojects in the field.

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3.3 How to use the InfoGuide

Each module starts with a brief introduction of its contents. The InfoGuide contains a wealth ofpractical information. This information should be of assistance to project partners/plannersoutside the EC and project managers within the EC in preparing and implementing a relevantproject in the spheres of Cofinancing with NGO and decentralised cooperation. If the readerwishes to obtain an overview of the preparation, implementation, monitoring and evaluation ofa project, (s)he should examine the whole InfoGuide including the annexes.

If the reader is particularly interested in the steps needed for the preparation of a project, it isrecommended that (s)he concentrates on Part A and B.

If the reader wants to know more on the implementation of a project that has already started (oris about to start), it is recommended that s(he) focuses on parts C-F.

If the reader is unaccustomed to working with the EC in the field of cooperation anddevelopment, it is particularly recommended that (s)he goes through the introduction and looksat the glossary, Part G, to better understand the specific terminology used in the InfoGuide.

If the reader is willing to strengthen his/her capacities in terms of information and projectmanagement tools, (s)he should refer to the annexes in Part H and consult the sites where anumber of useful documents can be found.

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A. PROJECT CYCLE MANAGEMENT

This module provides an outline of the six phases of the project cycle and the role of stakeholders indevelopment cooperation as a whole, and more specifically in Cofinancing with NGO and

decentralised cooperation projects.

Table of contents

1. 1. The Project Cycle Concept

1.1 Purpose of the PCM

1.2 An Integrated Approach

2. Main characteristics of the Project Cycle

2.1 Phase 1: Programming

2.2 Phase 2: Identification

2.3 Phase 3: Appraisal

2.4 Phase 4: Financing

2.5 Phase 5: Implementation

2.6 Phase 6: Evaluation

2.7 The Project Cycle and an integrated monitoring system

3. 3. PCM in Cofinancing with NGO and decentralised cooperation

3.1 Distribution of tasks according to the Project Cycle

3.2 Major documents and key decisions

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1. THE PROJECT CYCLE MANAGEMENT CONCEPT3

1.1 Purpose of PCM

Development cooperation involves often-complex processes that require the active support ofmany parties. Experience among the main donors has shown that too many decisionsconcerning projects have been taken without sufficient consultation with beneficiaries andstakeholders and often without all the necessary information. The purpose of the project cyclemanagement (PCM) is to ensure that the stakeholders CAN take decisions at any stage of thecycle and that decisions are based on relevant and sufficient information.

In 1992 the Commission adopted “Project Cycle Management” (PCM). This manual updates theoriginal 1993 version. PCM is frequently mentioned in EU communications as a method toimprove the quality of the design and management of projects with a view to increasing theeffectiveness of EC aid. In essence, PCM is the framework within which all EU-financeddevelopment projects should fit.

The objective of PCM was, and remains, to improve the management of external cooperationactions - projects and programmes of all kinds - by taking better account of essential issues andframework conditions in both designing and implementing projects and programmes.

The three pillars of the PCM are as follows:

• Clear and realistic objectives for projects and programmes• “Quality” factors to enhance project benefits in the long run• Consistency with and contribution to “overarching policy objectives” by projects and

programmes

PCM seeks to consider these issues from the very beginning of the project cycle, trying toensure that projects/programmes are consistent with and contribute to these “overarching policyobjectives” of the Community's external cooperation.

Compared to 1993, the PCM approach has been widened to cover not only the traditionalproject approach, but also sector programmes for which its principles are equally applicable.

On a more operational level, PCM seeks improvements by providing for properfeasibility/design studies, monitoring and evaluation, and informed decision-making at keystages in the preparation and implementation of projects and programmes. It entails the activeparticipation of stakeholders (target groups, beneficiaries, local institutions and decisionmakers) throughout the project or programme cycle.

3 For further information, see "“Manual - Project Cycle Management - Integrated Approach and Logical Framework”, Commission of theEuropean Communities, Evaluation Unit Methods and Instruments for Project Cycle Management, No 1, February 1993. (2) the updatedversion of the PCM manual finalised in March 2001: http://europa.eu.int/comm/europeaid/evaluation/methods/pcm.htm; and (3)instruction documents drawn up by the "EC HCM Helpdesk".

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Like all concepts and tools, the usefulness of PCM depends on the quality of informationavailable (especially from intended beneficiaries and target groups), and on how well it is used.

1.2 An integrated approach

PCM is a methodology based on an integrated approach to project management.

• Its key principles are: the project cycle divided into six phases to ensure a clear andinformed decision-making process.

• It uses the Logical Framework Approach as a central project design and managementtool to ensure a complete and coherent analysis

• it emphasises the consultation and involvement of beneficiaries in decision making

• it incorporates the key quality factor of viability in project design

• it uses a standard format to plan activities and resource schedules and to presentdocuments transparently and fully at all phases of the project cycle.

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The six phases of the project cycle are:

a

The rest of this module defines the activities that correspond to each phase, the people ororganisations engaged in carrying them out and the documents which should be produced, for aproject financed (or to be financed) by the Community. The section referring to the standardframework of the PCM is for information only.

Note: PCM features specific to Cofinancing with NGO and decentralisedcooperation can be found under point 3-A-28.

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2. MAIN CHARACTERISTICS OF THE PROJECT CYCLE2.1 Phase 1: Programming

2.1.1 Content and concept

The aim of programming is to define, in a harmonised framework, the level of Community aidfor all developing countries benefiting from the ALA and MED programmes and the EuropeanDevelopment Fund. The exercise should be applied progressively to the other countries thatreceive financing aid from the Community.

Programming country by country is an essential management tool to boost the effectiveness ofCommunity aid, promote its strategic direction, define a coherent approach and enhancecoordination and complementarity within the European Union and with all other donors andpartner countries.

The partner country plays a crucial role in ensuring complementarity with its own developmentstrategy, which serves as a departure point for the country strategy paper. In using thisinstrument the value added by the partner must be optimised in the cooperation implemented onthe basis of the national indicative programme.

The Country Strategy Papers (CSP) are an instrument of political dialogue between theCommunity and the partner country and should be placed wherever possible in a widerframework, in particular that provided by the Poverty Reduction Strategy Paper (PRSP), theIntegrated Development Framework (IDF) and the United Nations Development AidFramework.

Country Strategy Papers may be consulted on the sites of the Development DG (ACP countries)and the Relex DG (other countries).

“Country Strategy Paper National (CSP)”(DG DEV) /

“Country Strategy Paper Regional (CSP)”(DG DEV) /

le Document de Stratégie par Pays ou le “Country Strategy Paper (CSP)”(DG RELEX)

Note: Individual NGOs, NGO consortia or networks that submit proposals for projects orprogrammes of a geographical or sectoral nature for cofinancing under budget lines B7-6000and B7-6002 must ensure that projects/programmes are consistent with the nationaldevelopment strategy developed by the country in question and supported by the Commission.

In regard to the European Development Fund or EDF (financial instrument of the LoméConventions and the Cotonou Partnership Agreement), the guidelines for involving non-state

http://europa.eu.int/comm/development/strat_papers/index_country_fr.htm

http://europa.eu.int/comm/development/strat_papers/index_region_fr.htm

http://europa.eu.int/comm/external_relations/sp/index.htm

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actors and local Government actors in programming5 stresses that the involvement of non-actorsis not limited to support for local project implementation. Participation has to begin at the levelof dialogue on national development strategy, sectoral policies and programming. Non-stateactors are to be involved in the process leading to the definition of ACP-EC country strategiesaccording to each country's individual circumstances. This implies that non-state actors must beinvolved upstream, very early in the programming process.

A two-track approach is called for.

• Firstly, the aim should be to encourage a wide involvement of non-state actors in the publicdebate on setting national development objectives and reinforcing good governance and therule of law. Where a PRSP (Poverty Reduction Strategy Paper) process exists, the extent ofthe involvement of non-state actors and the quality of the process should be evaluated. Itwill also be important to assess the extent to which national parliaments or other localrepresentative structures can be considered to represent the voice of civil society.

• Secondly, at the level of detailed programming discussions, the focus should be oncategories of non-state actors which are directly involved in or concerned with the specificsectors/focal areas envisaged for the EC response strategy. This should include civil societyactors that have assumed a specific advocacy role on crosscutting issues (i.e. poverty,gender equality and environment). This approach would have the advantage of helping toconcentrate EC support more clearly on those non-state actors likely to be directly involvedin EC programmes and of making the process of dialogue more manageable.

In operational terms, there are five levels at which non-state actors will have to be involved in theprogramming process:

1. Consultation on the National Development Strategies and PRSP (EC to assess quality of thisprocess);

2. Consultation on EC Country Support Strategy (CSS);3. Consultation on sectoral strategies once the priority focal sectors have been agreed upon by

the EU and the partner country;4. Direct access to financial resources, either as actors in the implementation of programmes or

in the framework of decentralised cooperation activities;5. Participation where relevant in the review (annual, mid-term and end-term) of

implementation progress and performance.

5 Programming guideline note n°6: The new actors in the partnership - update; DG Development, European Commission; 9 March 2001.

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2.1.2 Responsibilities

On prior dialogue with EuropeAid, DG Development transmits to the Council and the EuropeanParliament the principles of the EC policies and strategy to apply.

National and sectoral priorities are defined in a process of dialogue between Government,donors and other stakeholders at the national level.

2.1.3 Documents to produce

These are:

le Document de Stratégie par Pays6 ou le “Country Strategy Paper (CSP)”(DG DEV) /

le Document de Stratégie par Pays ou le “Country Strategy Paper (CSP)”(DG RELEX)

2.2 Phase 2: Identification


The Country Strategy Paper analyses the problems, needs and interests of the stakeholdersinvolved. Ideas for projects and other operations are identified and examined with a view topossibly being studied more closely.

Sectoral, thematic or “pre-feasibility” studies may be done to help identify, select or investigatespecific ideas, and to define what further studies may be needed to formulate a project or action.A decision is then made on whether or not to study the ideas in more detail, giving rise to anidentification report. The identification phase is thus an initial development of the project ideas,expressed in terms of objectives, results and activities, with a view to determining whether ornot to go ahead with a feasibility study. If it is decided to go ahead, the terms of reference of thestudy must be drawn up.The identification of a project is based on the guidelines and priorities defined in theprogramming phase.


6 Country Support Strategy.

http://europa.eu.int/comm/development/strat_papers/index_en.htm


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The Government and the EC are responsible for the launching and monitoring the pre-feasibilitystudy.

This study is to be carried out as a participatory process in order to involve as much as possiblethe stakeholders of the various regions concerned.


The identification or pre-feasibility study helps to determine if the project idea is to be furtheranalysed.

2.3 Phase 3: Appraisal


All significant aspects of the project idea are studied, taking into account the results of the pre-feasibility study, the quality factors and the views of the main stakeholders.

It involves the design (as exact as possible) and establishment of an agreement on theimplementation arrangements.

At this stage, it is necessary to:

• Draw up a Logical Framework, identifying the expected results, activities to carry out,monitoring indicators and assumptions on which the project is based;

• Finalise the implementation arrangements, the project management structure and/or theproject management mechanisms;

• Draw up an overall budget by heading;• Finalise an estimated activity schedule.

The relevance of the project idea to the problems and its feasibility are important issues to beanalysed.

Participatory surveys are also an essential component of this phase.

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2.3.2 Responsibilites

Beneficiaries and other stakeholders should participate actively in the detailed description of theproject idea.

A planning workshop involving all potential stakeholders is a good way to place the futureproject in the national context and strengthen its relevance and feasibility.

The EC and the Government decide on whether or not to finance the project.


The Feasibility study provides the elements necessary to make a decision during the Financingphase.

At this stage, a draft financing proposal is drawn up.

2.4 Phase 4: Financing


The financing proposal is completed and examined by the appropriate internal or externalcommittee and a decision is taken whether or not to fund the project.In the framework of cooperation with the beneficiary countries' governments, a formalagreement setting out essential financing implementation arrangements with the partnerGovernment or another entity is then signed by both parties.


After the financing decision is taken by the EC, it and the government of the beneficiarycountry sign a financing agreement.


The Financing phase culminates in the signing of the Financing Agreement by the EC and thegovernment of the beneficiary country. The Financing Agreement sets out the technical andfinancial provisions for the implementation of the project.

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2.5 Phase 5: Implementation


The agreed resources are used to achieve the project purpose (= the target group(s) receive theplanned benefits) and the wider, overall objectives. This usually involves contracts for services(e.g. studies, technical assistance), supplies or works. Progress is assessed (= monitoring) sothat the project can be adjusted to changing circumstances. At the end of implementation, adecision should be taken to close or extend the project.During the Implementation phase, the sector programme is implemented under the public sectorexpenditure programme. Under joint funding arrangements, the follow-up of expenditure is notlimited to the EC contribution only but extends to the entire sector financing, includingGovernment and other donors' funds. Indicators of sector programmes are often linked tointernationally set targets (OECD/DAC International Development Goals).


The Beneficiary (Contractor) is responsible for project implementation.


The Contractor submits progress and monitoring reports necessary to assess the relevance,efficiency, effectiveness, impact and sustainability of the project.

Note:Audits can be carried out any time during the implementation phase and even aftercompletion of the project. (see module E, p. E81)

2.6 Phase 6: Evaluation


Evaluation is an assessment, as systematic and objective as possible, of an ongoing orcompleted project, programme or policy, its design, implementation and results. The aim is todetermine the relevance and fulfilment of objectives, developmental efficiency, effectiveness,impact and sustainability. An evaluation should provide information that is credible and useful,enabling the incorporation of lessons learned into the decision-making process of bothrecipients and donors.7

7 OECD/DAC, 1991.

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An evaluation can be done during implementation (“mid-term”), at its end (“final evaluation”)or afterwards (“ex-post evaluation”), either to help steer the project or to draw lessons for futureprojects and programming. An evaluation should lead to a decision to continue, rectify or stop aproject and the conclusions and recommendations should also be taken into account whenplanning and implementing other similar future projects.

External evaluations:

• are always carried out by consultants external to the project.

Note:1. Confusion sometimes surrounds what is meant by the term "external consultants". In fact,this means that the consultant should be genuinely independent and have no prior contractuallink with the implementing agency or with the project in question. It must be ensured that the"external consultant" is not subordinated to the implementing agency.

2. The evaluation is a "mandatory" phase since it allows lessons to be drawn for the future.


It is up to the beneficiary country's government and the EC to decide on whether to haveexternal evaluations and to put the conclusions of such evaluations to good use.Stakeholders must contribute to the evaluations.


The documents required at this stage of the process are the evaluation reports.The two standard documents used during the evaluation phase are the terms of reference forprogramme evaluation and the standard format for evaluation reports.

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2.7 The Project Cycle and an Integrated Monitoring System

The following scheme shows the major documents to be produced and the various decisions tobe made at each phase of the project cycle.

Decision how to use results in future programming

Draft Draft Financing Financing ProposalProposal

Evaluation Evaluation studystudy

Decision to continue as planned or to re-orient project (mid-term evaluation)

Decision to fund

The Project Cycle: Major Documents and Key Decisions

Financing Financing ProposalProposal

Financing Financing AgreementAgreement

Priority areas, sectors, timetable

Country Country Strategy PaperStrategy Paper

Decision which options to study further

Decision whether to draw up a formal financing proposal

PrePre--feasibility feasibility studystudy

Feasibility Feasibility studystudy

Decision about the need for extension

Progress and Progress and Monitoring Monitoring ReportsReports

a

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3. PCM IN COFINANCING WITH NGO AND DECENTRALISEDCOOPERATION3.1 Distribution of tasks according to the project cycle

The planning and implementation of projects takes place according to a clear sequence:

Phase 1: Programming

This mainly involves the formulation of policy guidelines on Cofinancing with NGO anddecentralised cooperation.In accordance with the accord inter-services, DG DEV, along with EuropeAid, determines thestrategic guidelines and priorities for Cofinancing with NGO and DC.

Phase 2: Identification

EuropeAid launches a call for proposals in the Official Journal of the European Communitiesand on Internet (see tenders and grants). The call for proposals states the strategic guidelinesand priorities determined by the EC and the procedures to be followed. In response to the callfor proposals and in line with its specific instructions, the grant applicant submits a project forEC financing.

The grant applicant is responsible for drafting a future project in response to the call forproposals. Please refer to the above-mentioned website for official calls for proposals publishedby EuropeAid.

Phase 3: Appraisal

EuropeAid is not involved at this stage. The responsibility to formulate the project proposalrests on the Grant Applicant. Where there has been a call for proposals, EuropeAid F/6 Unitprovides the relevant information on request. At the end of the Appraisal Phase, the GrantApplicant submits the documents of the project proposals to EuropeAid in accordance with theinstructions stated in the call for proposals.

Phase 4: Financing

At this stage, the procedure greatly differs from the standard project cycle.

Following examination of the project proposal, EuropeAid, after consulting the otherdepartments (Delegations, DG DEV, DG RELEX) and in accordance with the EvaluationCommittee's recommendations, decides whether to finance or reject the project proposal. Wherenecessary the Member States are also consulted within the Cofinancing with NGO Committee.If it is agreed to finance the project, the Grant Applicant and EuropeAid sign a grant contractcomprising the following documents:

http://www.cc.cec/EUROPEAID/pagesdg/pdf/accordcoop.pdf

http://europa.eu.int/comm/europeaid/tender/index_en.htm

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A- Special Conditions (the body of the contract),B- Five annexes :

B-1 Description of the Action, including a logical framework and indicators(Annex I);B-2 General Conditions (Annex II);B-3 Budget of the Operation (Annex III);B-4 Contract-award procedures (Annex IV);B-5 Standard request for payment and Financial Identification Form (Annex V)

The contract is prepared by EuropeAid F/2 and F/6.

Phase 5: Implementation

Implementation consists of managing the resources provided for in the standard grant contractwith a view to achieving the results and objectives (project purpose and overall objectives) ofthe project.Contractual obligations and liabilities of beneficiaries are clearly described in Part C.Implementation of Cofinancing with NGO and decentralised development projectscan last several years and is divided into the following phases:

• start-up phase• execution phase• The final project phase (closedown).

In order to ensure a certain degree of flexibility to adjust the action plan to the reality of thefield, implementation is divided up into several steps, each covered by an Annual Action Plan.

During implementation of a project, the contractors submit technical and financial monitoringreports.

Reports should provide sufficient information about project implementation to enable ECofficials to gauge progress in the light of:

• the objectives (overall and specific),• expected results,• and planned activities.

These reports not only show progress in terms of project activities but also give exact details ofbudget use (budgeting by budget item and by financing source). They specify the budget fundsnecessary for the period covered by the following report.

A final report is presented at the end of the implementation period. Please refer to Part E of thisInfoGuide for more information on reports to be produced and their contents.

The Contractor alone is responsible for the implementation of the project.

The Contractor will submit intermediate reports, annual reports, and a technical and financialaudit report. See module E, p. E 81 for further details.

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Phase 6: Evaluation

The Evaluation phase consists in analysing the results and effects (impacts) of the projectduring and after implementation to make any adjustments necessary and/or to formulaterecommendations for similar projects in the future. If the standard grant contract provides forseveral implementation phases, the launch of a further phase will in principle depend on theresults of the evaluation of the previous phase.It is the responsibility of the Beneficiary (Contractor) to ensure that external evaluations arecarried out.

Reports on the external evaluations are to be transmitted for information to the relevantEuropeAid departments (see Part D for further information on the nature of and procedures forevaluations).

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Main aims and activities at each phase of the project cycle for Cofinancing with NGO and decentralised cooperationprojects

Phase 1: ProgrammingDG Development - EuropeAid

a

a

Main aims/activities/responsibilities:

Define the strategic guidelines and priorities in terms of the management of budgetheadings (to be submitted to the Council Committee for Cofinancing with NGO, inaccordance with priorities established by the Budget Authority and the Commission) -Budget headings B7-6000 and B7-6002-(DG DEV along with EuropeAid)

Define financing arrangements in line with Council Regulations N°1658 and 1659 andthe guidelines for grant application - Budget headings B7-6000 and B7-6002- (DG DEValong with EuropeAid)

Phase II: IdentificationApplicant - EuropeAid

a

a

Main aims/activities/responsibilities:Draw up and publish the call for proposals/call for tender (EuropeAid)Identify the priorities of the organisation (Grant Applicant)Gather information on national priorities and policies in the different intervention areas(Grant Applicant)Identify possible partners to implement projects (Grant Applicant)

Phase III: AppraisalApplicant - EuropeAid

a

a

Main aims/activities/responsibilities:Undertake a baseline study of target groups (Grant Applicant)Finalise partner agreements (Grant Applicant)Draw up the project document (Grant Applicant)Submit the financing request (Grant Applicant)Provide information (EuropeAid)

Phase IV: (Co)financingApplicant - EuropeAid

a

a

Main aims/activities/responsibilities:Receive and register financing requests (EuropeAid)Make a pre-selection of the financing requests (EuropeAid)Assess the relevance, feasibility and sustainability of the projects (EuropeAid)Make a Financing Decision (EuropeAid)Finalise the draft contract (EuropeAid)Launch the procedure of financial commitment (EuropeAid)Sign the contract (EuropeAid and Contractor)

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Phase V: ImplementationApplicant - EuropeAid

a

a

Main aims/activities/responsibilitiesImplement the action (Contractor)Monitor the action (Contractor and EuropeAid)Analyse the activity reports (EuropeAid)Release or delay payments (EuropeAid)

Phase VI: EvaluationEuropeAid - DG DEV

a

a

Main aims/activities/responsibilitiesOrganise and carry out the evaluation (EC and Contractor)Put the experience to good use (EC and Contractor)Integrate lessons learned into Commission strategies and programmes (EC)

3.2 Major documents and key decisions

The following graphic shows the main documents to be produced and the key decisions to be made ateach phase of the project cycle.

Decision how touse results infutureprogramming

DraftDraftFinancingFinancingProposalProposal

EvaluationEvaluationstudystudy

Decision to continueas planned or to re-orient project (mid-term evaluation)

Decision tofund

The Project Cycle Cofinancing with NGO and DecentralizedCooperation Projects: Major Documents and Key Decisions

FinancingFinancingProposalProposal

GrantGrantContractContract

Priority areas,sectors,timetable

Guidelines;Guidelines;IntroductoryIntroductoryNoteNote

Decision to finalise afinancing proposal

Decision apply forfinancing (respondto call for proposals)

Call forCall forproposalsproposals

FeasibilityFeasibilitystudystudy

Decision aboutthe need forextension

Progress andProgress andMonitoringMonitoringReportsReports

a

Pre-Pre-feasibilityfeasibilitystudystudy

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B. HOW TO PREPARE AND SUBMIT A PROJECT PROPOSAL8

This module deals with how to prepare and submit a project for EC financing and is gearedspecifically towards applicants for Cofinancing with NGO and decentralised cooperation

Table of contents1. Introduction

2. Setting the project baseline

2.1 Purpose of the baseline

2.2 Steps in setting the baseline

3. The Logical Framework

4. Indicators

4.1 Guidelines for indicators

4.2 Use of indicators: different levels

4.3 Monitoring the implementation and performance of Community support

4.4 List of objectively verifiable sectoral indicators

4.5 List of indicators for decentralised cooperation

5. Description of the operation

5.1 Introduction

5.2 How to fill out the grant application form

6. Budget

6.1 Introduction

6.2 How to establish means and costs

6.3 Budgeting details and tips

6.4 Budget format

8 For projects initiated through a call for proposals, the specific guidelines and conditions of the call for proposals, as published in theOfficial Journal of the EC (OJ) or on the Internet site (http://europa.eu.int/comm/europeaid/tender/index_en.htm), are applicable in full.

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1. INTRODUCTION

The preparation of a project proposal and submitting it for possible funding is an essential stepin the Project Cycle Management process. It requires work to be carried out in the analysis,conceptualisation, formulation and presentation of a project.

The project proposal documents submitted to the EC for projects under budget lines B7-6000and B7-6002 must contain the following principal elements:

1. Description of the Operation, including the logical framework and the relevant indicators(Annex I);2. Budget of the Operation (Annex III);

2. SETTING THE PROJECT BASELINE2.1 Purpose of the baseline

The purpose of the baseline is to develop a participatory approach among the projectstakeholders. The baseline defines the factors ensuring the relevance, feasibility andsustainability of the project.These factors and the planning documents must appear in the logical framework. Theseactivities must be carried out in close collaboration with the beneficiaries/stakeholders, and theirrespective contribution clearly defined.

2.2 Steps in setting the baseline

The consultation process is divided into several steps:

Step 1: Carrying out an institutional analysisBefore starting development programmes, a detailed analysis of the institutions involvedshould be carried out in a participatory manner (involving stakeholders) and shouldcover:• an inventory of the various stakeholders, interfaces and institutions concerned;• the capacities and level of commitment of the various stakeholders; B-23• the local resources that could be mobilised;• existing interfaces, networks or other intermediate structures, along with their

degrees of representativeness and action capacity;• the tasks and functions to be carried out;• the political environment in the broad sense; the institutional analysis must also

analyse the hierarchical structure, so as to identify political and administrativeopportunities and/or obstacles.

Step 2: Drafting different intervention strategies according to the strengths and skills of thepartner(s)

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A number of criteria can be used to assess the partner's degree of competence: thenumber of years of collaboration between the partner and the interface structure, thenumber of projects successfully run, the partner's reputation, representativeness,participatory approach, etc. Different strategies are possible depending on the outcomeof this assessment:

• Weak partner: Intervention should first be geared to an institutional analysis toidentify whether other competent associations exist, step up the links betweenexisting associations, boost the competence of the partners and emphasise conditionsto ensure projects are viable, both at the partner and beneficiary level. Projectsfinanced will tend to involve small amounts and monitoring will be closer to thepartner and the beneficiaries. In this case, the development activities will form aninstrument of social restructuring, leading the partner to organise itself.

• Middling partner: Intervention must primarily be geared to strengthening thepartners, with the emphasis on eliminating their present weaknesses. Trainingactivities will be important. Projects financed may involve large amounts.Monitoring will be mainly at partner level, with a small amount at beneficiary level.A programme approach may be envisaged at municipality/village level, draftingpartnership agreements between the village/municipality and the interface structureand setting up a consultation system.

• Strong partner: Intervention will be geared to financing sub-programmes as part ofa local or regional development plan. The identification phase will be shortened. Thepartner will be given a global amount to be accounted for subsequently. A longer-term partnership and programme financing over a number of years might also beconsidered. The role of the structure monitoring the partners will be to ensure thatthe criteria for eligibility and participation are met.

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Step 3: Establishing mechanisms for consultation or support for networks

Once the stakeholders and their characteristics (skills, experience, and weaknesses) have beenidentified, a space and mechanisms for consultation and action must be created for the purposeof:

• identifying certain functions essential to the management of decentralised cooperationprogrammes (design, facilitation, implementation, monitoring, coordination, etc.)

• distributing these functions according to each stakeholder' strengths;• working out a monitoring/steering system that will help to ensure that management is

transparent, activities are complementary, intervention is coherent both at a given level andbetween different levels of consultation (macro-, meso-, and local), and that responsibilitiesand financial and technical resources are transferred to local level (subsidiarity).

There are several ways of tackling this:

• focus first on the local level and then move upwards, ensuring that intermediateorganisations are representative;

• test the stakeholders' capacities at different levels, and build up the capacities (ofconsultation) of the weakest;

• rely on existing consultation structures and build them up or open them up to otherstakeholders;

• have different consultation forums - formal and informal, ad hoc and permanent, etc.

In most cases, the aim will be to create an interface (or strengthen an existing interface). Thekind of interface (external or internal) does not matter so much as the ultimate objective (ofstrengthening the local capacity for managing initiatives in a framework of consultation)and the participatory process. The interface will of course depend on a reading of thevarious contexts and will have to generate a process capable of moving beyond the currentsituation to the ultimate objective of the programme.

Step 4: Setting up a transparent management system

This step requires a substantial change in the attitudes, behaviour and roles of the differentstakeholders (particularly the interface and technical assistance) and in the management systemand procedures.

The management system should:

• be worked out by the partners;• allow collegial management of the process;• enable the different stakeholders to reach agreement on performance criteria;• specify the roles and functions of committees (programming, steering, financing, etc.); ;• allow responsibility, including financial responsibility, to be delegated to the decentralised

stakeholders closest to the field (subsidiarity principle);• enable central agencies to adopt a new role of facilitation and control of results;• set out arrangements for access to financing;

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• enable the final beneficiaries also to control the performance of the interface (throughtransparent management);

• allow flexible and rapid adjustment to any obstacles encountered.

3. THE LOGICAL FRAMEWORK

The logical framework was developed in the 1970s and has been used by a variety ofdevelopment agencies. The method consists of an analytical process and a way of presenting theresults of this process, which makes it possible to set out systematically and logically theproject/programme's objectives and the causal relationships between them, to indicate how tocheck whether these objectives have been achieved and to establish what assumptions outsidethe scope of the project/programme may influence its success.9

Thus, in addition to its role during programme and project preparation, the Logical FrameworkApproach is also a key management tool during implementation and evaluation. It provides thebasis for the preparation of Action Plans and the development of a monitoring system, and aframework for evaluation.The Logical Framework Approach (logframe) is a tool for improving project appraisal andimplementation. Many other factors will also influence the project's success: factors ofrelevance, feasibility and sustainability (e.g. involving stakeholders in the design andmanagement of the project), taking the political and institutional background into account, andthe organisational and financial capacities of the team or organisation in charge ofimplementation.

The logframe must not be considered as a mere set of mechanical procedures but rather as adynamic tool for thinking, which must be re-assessed and revised as the project itself developsand circumstances change during implementation. It is a tool to structure and direct projectplanning and budgeting, and not a rigid and restricting environment.

The Logical Framework Approach encourages stakeholders involved in the analysis phasewhere problems, objectives and strategies are discussed, to concentrate on own expectations andthe way to meet them. With clear objectives presented in a "hierarchy of objectives", thelogframe provides the necessary elements to specify the internal logic of the draft project andrelate activities to results and objectives. It brings planners to identify the main assumptions andrisks likely to affect the feasibility of the project, and to specify the verifiable indicators of thespecific objectives, expected results and means of checking the project's progress.This process leads them to establish the modalities of monitoring and evaluation of the projectfrom an early stage. All critical information is therefore summarised in a single document - thelogical framework.

Drawing up a logframe has two stages:

• An analysis phase divided into four steps:� Stakeholder Analysis

9 Project Cycle Management manual updated in March 2001: http://europa.eu.int/comm/europeaid/evaluation/methods/pcm.htm

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� Problem Analysis (image of reality)� Analysis of Objectives (image of an improved situation in the future)� Analysis of Strategies (comparison of different options to address a given situation)

• The Planning Stage is when the project idea is further developed into a practical, operationalplan ready to be implemented. In this stage, the logframe is drawn up, and activities andresources are defined and scheduled.

The basic preparation steps are as follows:

1. To analysis stakeholders;2. To identify the existing problem or series of problems to be tackled;3. To determine the objectives to be achieved (by the project) from the problems that have

been identified;4. To identify a strategy by which the problem(s) can be overcome;5. On the basis of the identified strategy, to define the hoped for results of the project, and the

activities to be undertaken in order to achieve these results;6. To identify the Objectively Verifiable Indicators (OVIs) as well as the sources of

verification which will allow the project to be evaluated in terms of how it is achieving itsobjectives;

7. To define the physical and non-physical means needed for the project activities to be carriedout and managed and to identify the sources of funding;

8. To define the risks and assumptions - "those external factors which are outside theimmediate control of the intervention but which are important for the project objectives tobe attained";

9. To demonstrate the relevance, feasibility and viability of the project and therefore toestablish that the project is capable of resolving the identified problem (or problems) andachieving its stated objective (or objectives).

It is vital that the Logical Framework presented to EuropeAid for funding be drawn up in adialogue process of analysis and planning carried out in close collaboration with thebeneficiaries.

If the project has not passed through these basic preparation steps, it is unlikely to receive ECfunding since projects are selected on the basis of the criteria of relevance, feasibility andsustainability.

On the other hand, if the project has been prepared using a logical framework approach, itshould be relatively simple for the EC to assess the relevance of the analysis and the strategyadopted. If necessary, this instrument can also be used to modify the existing project proposal tomake it more coherent and improve its quality.

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17

a

aL’Approche du Cadre LogiquePHASE PLANIFICATIONPHASE ANALYTIQUE

Iden

tifier

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es � Analyse des parties prenantes –identifier et caractériser les principales parties prenantes, groupes cibles & bénéficiaires, définir le(s) groupe(s) dont les problèmes seront abordés par une future intervention

� Analyse des problèmes - identifier les problèmes-clés, les potentialités et les contraintes; déterminer les relations causes-effets

� Analyse des objectifs - élaborer les objectifs en partant des problèmes identifiés; identifier les relations entre les moyens et les fins

� Analyse des stratégies - identifier les différentes stratégies pour atteindre les objectifs; choisir la/les stratégie(s) les plus appropriées; arrêter les objectifs majeurs (spécifique et globaux)

� Cadre logique - définir la stratégie du projet/programme, tester sa logique interne et formuler des objectifs en termes mesurables, définir les moyens et les coûts de façon globale

� Planification des activités (calendrier des activités) - déterminer la séquence et les interdépendances entre les activités; estimer leur durée; fixer les étapes principales du processus, attribuer les responsabilités

� Planification des ressources(calendrier des ressources) - en partant du calendrier des activités élaboration du calendrier des ressources, et du budget

Choi

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For more information on the formulation of a project on the basis of a logical framework, pleaserefer to official documents elaborated by the PCM Helpdesk (see "The Logframe Approach -Analysis phase and Planning phase").

The terminology used in the Logical Framework on the next page is the standard terminologythat should always be used when preparing EC-funded projects.It should be noted, however, that different terms and categories are sometimes used by otherdonors.• In particular: “Overall objectives” are sometimes known as "General objectives";• “Project purpose” is sometimes known as “specific objectives” or "project goal";• “Results” are sometimes known as “outcomes” or “outputs”.

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You will find below:

(a) The table of criteria to be taken into account.

SummaryBackground

Overall EC and Government policy objectives, and links with the Commission's country programme or strategy,commitment of partner Government to overarching policy objectives of the EC such as respect for human rights

Sectoral and problem analysis, including stakeholder analysis

Project/programme description, objectives, and the strategy to attain them

Including lessons from past experience, and linkage with other donors' activities

Description of the intervention (objectives, and strategy to reach them, including project purpose, results and activities andmain indicators)

Assumptions, Risks and Flexibility

Implementation Arrangements

Physical and non-physical means

Organisation and implementation procedures

Implementation schedule

Estimated cost and financing plan

Special conditions and accompanying measures by Government/partners

Monitoring and Evaluation

Quality factors

Participation and ownership by beneficiaries

Policy support

Appropriate technology

Socio-cultural aspects

Gender equality

Environmental protection

Institutional and management capacities

Economic and financial viability.Annex

Logframe (completed or outline, depending on the phase)

b) The logical framework gives a clearer overview of the content of each cell of the matrix (thelogical framework is also a presentation of the results of an analysis made in a participatory wayin collaboration with the various stakeholders and beneficiaries).

An example (of a health programme) of what the Logical Framework should look like is givenon the following page. Another example is available at annex (see Part I "WorkingDocuments/Manuals").

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41

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)?

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proj

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purp

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ities

:1.

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4. INDICATORS

There is currently considerable confusion over the purpose, methodology, terminology andtypology of indicators. It shows up the various documents drawn up by donors and beneficiarycountries (PRSP, HIPC, PRGF, PRSC and CSP).10.

To date, the "Millennium Development Goals", adopted by 189 countries in September 2000(see table below), represent the only agreed point of reference among all those active in thisfield.

The EC has recently produced a document identifying key principles and a typology on whichthe use of indicators in development policy should be based, especially in the programmingdocuments. A process has been launched which should lead to the definition of high-qualityindicators. These would be used by the Commission services and could serve as a basis fordiscussion with other donors and with beneficiary countries. These indicators will then beprogressively integrated into the Country Strategy Papers, before presentation to themanagement committees for documents still in preparation, and when reviews are held wherethe documents already adopted are concerned.

Indicators provide objective information on the resources employed and results obtained, aswell as their progress over the long term. However, they are only alarm signals. It is importantto bear in mind that indicators are only instruments to measure the degree of progress towardsobjectives previously defined by the Government.

Monitoring indicators is only useful if it allows an analysis of the results and leads (ifresults are unsatisfactory) to policy or project adjustments. This examination of results(outcomes) must be illuminated by the analysis of other types of indicators (inputs, outputs, andimpact) and by more detailed analyses or research that may need to be financed.

The InfoGuide sets out the main elements of this document, designed for the monitoring ofcountries' macro-economic and sectoral policies rather than for monitoring projects financedunder budget lines.

10 Poverty Reduction Strategy Papers, Heavily Indebted Poor Countries, Poverty Reduction Growth Facility,Poverty Reduction Support Credit, Country Strategy Papers.

11 For further information see "Guidelines for the use of country-performance indicators", March 2002.

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4.1 Guidelines for indicators

4.1.1 Choice of indicators

• It is necessary first to classify the indicators according to a clear typology. The followingclassification is proposed:

InputsInput �

Direct resultsOutput �

ResultsOutcome � Impact

• Indicators of input enable the financial, administrative and regulatory resources providedby the Government and donors to be measured. It is necessary to establish a link betweenthe resources used and the results achieved in order to assess the efficiency of the actionscarried out.e.g.: Share of the budget devoted to education expenditure, abolition of compulsory schooluniforms

• Indicators of output measure the immediate and concrete consequences of the measurestaken and resources used:e.g.: Number of schools built, number of teachers trained

• Indicators of outcome measure the short-term results at the level of beneficiaries. The term'results indicators' is used as well.e.g.: school enrolment, percentage of girls among the children entering the first year ofprimary school

• Indicators of impact measure the long-term consequences of the outcomes. They measurethe general objectives in terms of national development and poverty reduction.e.g: Literacy rates

These various types of indicators are all relevant for policy makers, i.e. for Governments.However, they are not all similarly relevant for donors, who should concentrate on the results ofpolicies.The conclusions of the pilot exercise on the reform of conditionality12 clearly showed the needfor donors to lay particular weight on result (outcome) indicators. Past practice however wasrather focused on input or output indicators, whose improvement gives no guarantee ofimprovement of services: there are, for example, numerous examples of an increase in budgetsor even in the number of health centres, which go along with a drop in attendance at thesecentres. Impact indicators are slow to respond, complex to measure and depend on numerousfactors other than the Government's policy.

Focusing on result indicators (outcome) should allow increased ownership by Governments ofthe policies to be implemented in order to attain these results.

12 Led in Burkina Faso by the European Commission in the framework of the SPA, with 12 other donors.

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A focus on these indicators will inevitably also enhance the credibility of developmentassistance, in beneficiary countries as well as in donor countries.

• It is necessary that each country and its main donors agree to use common result indicators.• It is useful to disaggregate indicators by:

� Gender� Public/private sector� Geographic (by distinguishing in particular the poorest regions)� Rural/urban� Income level (although that is seldom possible)

In all cases the level of disaggregation should be specified when the indicators aredefined. This disaggregation allows a better focus on the target populations of thedevelopment and poverty reduction policies.

• It is preferable to restrict the list to a limited number of essential indicators. Amultiplicity of indicators of all kinds creates great difficulties of interpretation. It alsomakes it difficult to focus on the essentials. These indicators have to be defined clearlyand very precisely (e.g. for vaccination, to specify which vaccines this involves, what isthe target population etc.).

• It is imperative to consider the degree of measurability of indicators as a key criterionwhen selecting which indicators to follow. When defining each indicator, it is essentialto pay attention to the time and costs necessary to collect the data and the frequencywith which these data can be obtained. However, an indicator may be technicallymeasurable on a yearly basis, but only present significant variations over the medium-long term. Policies and financing dating back several years therefore influence thedevelopment of these indicators.

• It is important to express the statistical data for the indicators not only in percentageterms but also in absolute value. This enables errors due to uncertainties in estimatingthe population to be excluded from the analysis. It is also preferable to work on trendsrather than just on isolated data. Accordingly, it is important to review existingdatabases when selecting the indicators.

The data over the last five years should be provided systematically. If this is not possible, clearreasons need to be given.

4.1.2 Reliability and quality of data

It is necessary to keep a watchful eye on the reliability and representativeness of thestatistical data on which the indicators are based. In case of doubt, it is preferable to use a"proxy", i.e. indirect indicator that is easier to measure and which gives a good approximation

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for other indicators that are more difficult to measure. It is then essential to adopt anevolutionary approach and to check regularly the validity of the indicators in relation to theobjective they are assessing.

4.1.3 Setting targets to the indicators

The Government or those in charge of the project in the country in question will set the targetvalues for the indicators in a manner coherent with recent trends and policy orientations. Theyshould be discussed with the donors who plan to support the country or project. TheGovernment should define the targets for at least the next 3 years.

Discussion of the target values has to avoid two difficulties: excessive optimism (oftenconnected with the fact that the indicators are used as a slogan rather than as a decision-makingtool) and excessive prudence (showing a lack of ambition). The best way to avoid these twoexcesses is to ensure transparency, especially in regard to civil society, in the discussions whichlead to the definition of indicators and their monitoring. This transparency also affords thetargets greater visibility.

4.1.4 Analysis of the evolution of indicators

The analysis of the evolution of performance must never be confined to a mechanicalinterpretation of indicators, but rather be accompanied by an in-depth policy dialogue withthose responsible for the project and its beneficiaries, taking into account the influence of anyinternal or external factors.

It is necessary to keep in mind the potential distorting effects of the use of each indicator.Focusing on a limited number of indicators, in particular when target values determine thelevels of financial support from donors, can alter reporting behaviour and bias the analysis ofthe statistical data.

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4.2 Use of indicators: different levels

As far as Commission activities are concerned, the use of indicators meets three distinct andcomplementary needs, each requiring the monitoring of a separate set of indicators:

1. Measure the performance of the country's development policies in terms of economic growth,increasing standard of living and poverty reduction in the short, medium and long term.2. Measure the performance of sectoral development policies.3. Monitor the implementation and impact of Community-financed measures.

The three needs outlined above constitute in fact three complementary degrees of detail, whichwill have to be analysed in a coherent way. As a donor, the Commission has therefore to makesure that it will have the data to enable it to meet each of these needs.

Only the first two levels correspond to the framework of the Country Strategy Papers.Monitoring of the performance of the Commission's action must be developed and deepened inthe longer term. However, for budgetary support and sectoral programmes, in which theCommission's work is integrated with that of the Government and other donors, monitoringcannot be restricted to the performance of only Commission aid. It must assess the overallperformance of public spending (financed by the State and by donors) on the achievement ofsector objectives, and the contribution of the latter to poverty reduction.

This must not contradict the principle of ownership. It is important that it be done within theframework of very close cooperation with the Governments of the beneficiary countries andwith other donors.

For monitoring the medium and long term, the Commission uses the 48 indicators selected inthe context of the "Millennium Development Goals" by the Secretariat of the UN and therepresentatives of the IMF, the DAC and the World Bank, which constitute the only point ofagreement on the monitoring of countries' performance. The statistical data for these indicatorscome from the "World Development Indicators" of the World Bank. They are on the Internetsite www.developmentgoals.org. The list of the indicators defined under the MDG is givenbelow.

These indicators allow the monitoring of the long-term aims defined in the IDGs and acceptedby the international community (including by the Commission) as the way forward for povertyreduction. They have the advantage of being centralised in the World Bank and followed bynumerous donors, in particular through the PRSP.

www.developmentgoals.org

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Countries involved in the PRSP process (Poverty Reduction StrategyPapers)

An examination of country performance in combating poverty should be based on just one set ofindicators per country, specified by the Government, ideally in a transparent and participatoryprocess.

Where one exists, the PRSP provides an ideal framework for such coordination. However, thecurrent indicators in the PRSP are still far from satisfactory (with some rare exceptions). It is thusimportant to ensure, through discussion with the Government and other donors, that the indicatorslaid down in the PRSP correspond to donors' needs. It is in order to facilitate this dialogue thatthis document aims to define a common approach between donors.

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Annex 1: Millennium Development Goals Indicators

MMiilllleennnniiuumm DDeevveellooppmmeenntt GGooaallssGOALS AND TARGETS INDICATORSGOAL 1. ELIMINATE EXTREME POVERTY AND HUNGERTarget 1. Halve, between 1990 and 2015, the proportion of

people whose income is less than one dollar aday

1. Proportion of population below 1 dollar a day2. Poverty gap ratio [incidence x depth of poverty]3. Share of poorest quintile in national consumption.

Target 2. Halve, between 1990 and 2015, the proportion ofpeople who suffer from hunger

4. Prevalence of underweight children (under 5 years of age)5. Proportion of population below minimum level of dietary energy consumption

GOAL 2. PROVIDE PRIMARY EDUCATION FOR ALLOBJECTIVE 3. Ensure that, by 2015,all children

everywhere, boys and girls alike, will be able tocomplete a full course of primary schooling

6. Net enrolment ratio in primary education7. Proportion of schoolchildren starting grade 1 who reach grade 58. Literacy rates of 15-24 year olds

GOAL 3. PROMOTE GENDER EQUALITY AND EMPOWER WOMENTarget 4. Eliminate gender disparity in primary and

secondary education preferably by 2005 and toall levels of education no later than 2015

9. Ratio of girls to boys in primary, secondary and tertiary education10. Ratio of literate females to males of 15-24 year olds11. Share of women in wage employment in the non-agricultural sector12. Proportion of seats held by women in national parliament

GOAL 4. REDUCE CHILD MORTALITY (children under 5)Target 5. Reduce by two-thirds, between 1990 and 2015,

the under-five mortality rate13. Under-five mortality rate14. Infantile mortality rate15. Proportion of 1 year old children immunised against measles

GOAL 5. IMPROVE MATERNAL HEALTHTarget 6. Reduce by three-quarters, between 1990 and

2015, the maternal mortality ratio16. Maternal mortality ratio17. Proportion of births attended by skilled health personnel

GOAL 6. COMBAT HIV/AIDS, MALARIA AND OTHER DISEASESTarget 7. Have halted by 2015, and begun to reverse, the

spread of HIV/AIDS18. HIV prevalence among 15-24 year old pregnant women19. Contraceptive prevalence rate20. Number of children orphaned by HIV/AIDS

Target 8. Have halted by 2015, and begun to reverse, theincidence of malaria and other major diseases

21. Prevalence and death rates associated with malaria22. Proportion of population in malaria risk areas using effective malaria prevention and

treatment measures23. Prevalence and death rates associated with malaria24. Proportion of TB cases detected and cured under DOTS (Directly Observed Treatment

Short Course)GOAL 7. ENSURE ENVIRONMENTAL SUSTAINABILITYTarget 9. Integrate the principles of sustainable

development into country policies andprogrammes and reverse the loss ofenvironmental resources

25. Proportion of land area covered by forest26. Land area protected to maintain biological diversity27. GDP per unit of energy use (as proxy for energy efficiency)28. Carbon dioxide emissions (per capita)

Plus two figures of global atmospheric pollution: ozone depletion and theaccumulation of global warming gases

Target 10. Halve, by 2015, the proportion of peoplewithout sustainable access to safe drinkingwater

29. Proportion of population with sustainable access to an improved water source

Target 11. By 2020, to have achieved a significantimprovement in the lives of at least 100million slum dwellers

30. Proportion of people with access to improved sanitation31. Proportion of people with access to secure tenure[Urban/rural disaggregation of

several of the above indicators may be relevant for monitoring improvement in thelives of slum dwellers]

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GOAL 8. DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENTTarget 12. Develop further an open, rule-based,

predictable, non-discriminatory trading andfinancial systemIncludes a commitment to good governance,development, and poverty reduction – bothnationally and internationally

Some of the indicators listed below will be monitored separately for theLeast Developed Countries (LDCs), Africa, landlocked countries and smallisland developing states.

Official Development Assistance32. Net ODA as percentage of DAC donors’ GNI [targets of 0.7% in total and 0.15% for

LDCs]33. Proportion of ODA to basic social services (basic education, primary health care,

nutrition, safe water and sanitation)Target 13. Address the Special Needs of the Least

Developed Countries

Includes: tariff and quota free access for LDCexports; enhanced programme of debt relieffor HIPC and cancellation of official bilateraldebt; and more generous ODA for countriescommitted to poverty reduction

34. Proportion of ODA that is untied35. Proportion of ODA for environment in small island developing states36. Proportion of ODA for transport sector in land-locked countries

Market access37. Proportion of exports (by value and excluding arms) admitted free of duties and

quotas38. Average tariffs and quotas on agricultural products and textiles and clothing

Target 14. Address the Special Needs of landlockedcountries and small island developing states(through Barbados Programme and 22ndGeneral Assembly provisions)

39. Domestic and export agricultural subsidies in OECD countries

Target 15. Deal comprehensively with the debt problemsof developing countries through national andinternational measures in order to make debtsustainable in the long term

40. Proportion of ODA provided to help build trade capacityDebt sustainability

41. Proportion of official bilateral HIPC debt cancelled42. Debt service as a percentage of exports of goods and services43. Proportion of ODA provided as debt relief44. Number of countries reaching HIPC decision and completion points

Target 16. In co-operation with developing countries,develop and implement strategies for decentand productive work for youth

45. Unemployment rate of 15-24 year olds

Target 17. In co-operation with pharmaceuticalcompanies, provide access to affordable,essential drugs in developing countries

46. Proportion of population with access to affordable essential drugs on a sustainablebasis

Target 18. In co-operation with the private sector, makeavailable the benefits of new technologies,especially information and communications

47. Telephone lines per 1000 people48. Personal computers per 1000 peopleOther Indicators TBD

The selection of indicators for Goals 7 and 8 is subject to further refinement

The Millennium Development Goals and associated targets come from the Millennium Declaration signed by 189 countries, including147 Heads of State, in September 2000 (www.un.org/documents/ga/res/55/a55r002.pdf - A/RES/55/2). Other selected indicators fordevelopment not related to specific targets include population, total fertility rate, life expectancy at birth, adult literacy rate, and grossnational income per capita. Where relevant, the indicators should be calculated for sub-national levels -- urban and rural areas, regions,socio-economic groups, and by age and gender.

The list of MDGs does not undercut in any way agreements on other goals and targets reached at the global conferences of the 1990s. Theeight goals represent a partnership between the developed countries and the developing countries determined, as the Declaration states,“to create an environment – at the national and global levels alike – which is conducive to development and the elimination of poverty.”

http://www.un.org/documents/ga/res/55/a55r002.pdf

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4.3 Monitoring the implementation and performance of Community-financed actions

Implementation monitoring must be distinguished from performance monitoring.

4.3.1 Implementation monitoring

Implementation monitoring must be regular and systematic. It allows knowledge of inputs(budgetary, regulatory and administrative) and of the immediate results from these inputs.Implementation monitoring is essential for good management of activities financed by theCommunity, but this type of monitoring is not covered by this InfoGuide.

4.3.2 Projects/programmes results monitoring

In the 1990s some donors developed result (or outcome) monitoring of projects andprogrammes, allowing periodic assessment (once or twice a year) of the results of developmentprojects compared with those expected.

In 2000 the Commission developed a harmonised methodology for this kind of project/programme monitoring for all external cooperation investments financed in third countries. In2001, monitoring in the field was launched and the majority of current projects should becovered by this type of monitoring by the end of 2002.The first overall fruits of this results-monitoring should be available by the end of 2002. For thistype of monitoring, other donors' experience shows that it is not possible to define physicallyquantifiable indicators but that we can obtain information on the relevance, effectiveness,efficiency and sustainability of projects and programmes.

4.3.3 Indicators for project monitoring

The baseline set during the identification and appraisal phases will serve as a basis to define thekey indicators for project monitoring and progress measuring. Indicators set out hereafter mustbe developed and integrated in the logical framework before implementing the project activities.

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Special Note on Objectively Verifiable Indicators (OVIs)

OVIs describe the project's objectives and results in operationally measurable terms and allowassessments to be made to determine the project's performance. These indicators act as a checkon the sustainability of objectives and form the basis of the project monitoring system. Toachieve this, OVIs must be S-M-A-R-T:- Specific in terms of quality, quantity and time- Measurable at acceptable cost- Available from existing sources or with reasonable extra effort- Relevant to objectives & sensitive to change- Timely to ensure usefulness to managers.

On the basis of these indicators, the project staff, stakeholders and beneficiaries will be able toassess the project performance throughout the project implementation period. These basicindicators show whether or not the project achieves its objectives. It also indicates the technicalquality and, if relevant, brings adjustments to the project to ensure its success.

Part 4.5 presents specific indicators for decentralised cooperation (also applied to Cofinancingwith NGO by NGOs of the North in view of partnership with stakeholders of the South).

How to set the Baseline Indicators

To establish the Baseline Indicators, the "master" logical framework must be used (alwaysfollow the sequential order of documents!). Column 1 of the logframe contains objectives andresults to achieve. Column 2 shows the elements to measure while column 3 indicates thesources of verification available.

Setting the baseline of Cofinancing with NGO and decentralised projects (according to theadditional workload required) usually involves several tasks, such as data analysis, participatorysurveys, interviews, questionnaires, seminars and planning workshops, etc.

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Example of presenting OVIs in a logical framework

Results Objectively Verifiable Indicators (OVIs) Sources of verification

Quality &efficiency ofsecondaryhealthcareimproved.

• Number of patients treated increasedfrom X to Y by end of projectimplementation

• Average cost of treatment per patientreduced from X to Y by end of project

• Increased patient satisfaction withstandards of care

• Hospital records, analysedquarterly

• Client satisfaction survey,conducted annually

Note: As indicated above, wherever possible OVIs should be chosen thatare based on readily available, affordable and easily attainable data.Indicators that require extensive additional development work incurringhigh costs in terms of money and time should be avoided as this willdeflect the efforts of the project staff from the core tasks of implementingthe project.

It is important to clearly identify indicators during the drafting of the project. Please note thatthe whole logical framework (including indicators) must be verified during the start-up phase,and on a regular basis through the project cycle.

4.4 List of sectoral objectively verifiable indicators

Poverty reduction has become the central objective of EC and Member State cooperation, inparticular for the Least Developed Countries.The EC and other EC donors seek to achieve this objective via sectoral aid. Areas and sectorsmost suited, by definition, to this approach are the large social sectors (health, education, genderequality), and the agricultural sector: policies for food security, rural and urban developmentand the environment. It is recognised that support for the above-mentioned basic sectors is anessential strategy to combat poverty reduction. EC-financed projects cover a large number ofthese sectors.

To measure the progress and impact of operations in terms of benefits for the poorest groups, itis vital to choose the relevant monitoring and result indicators.

Grant applicants should refer to documents, communications, manuals and other sourcespublished by the Commission (microfinance, poverty reduction, transport, water resourcemanagement, etc.) to obtain more information on indicators likely to be used.

Just a few examples are provided here. These examples must be filled out according to thecontext (who, how, why, over what period, what target group(s), etc.).

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4.4.1 Urban development

Outcome (Oc) Level of citizen satisfaction with a particular measureInput (It) Increase in municipalities' financial resources and budget analysis

Output (Ot) Number of amenities put in place in line with quality standards by the endof the project

Outcome (Oc) Use of amenities by target groupOutput (Ot) Number of successful micro-investments by the end of the programmeOutput (Ot) Degree of involvement of stakeholders in the financial management of the

amenities

4.4.2 Rural development

Outcome (Oc) Level of satisfaction of farmers with particular measuresOutput (Ot) Number of associations and groupings trained by the projectImpact (Ip) Increase in income of rural stakeholdersOutcome (Oc) Extent of implementation of training topicsOutput (Ot) Number of equipment devices/machines made in line with quality

standards by the end of the projectOutcome (Oc) Use of equipment

Outcome (Oc) Level of involvement of women (as beneficiaries and as committeerepresentatives)

Outcome (Oc) Level of use of services by the various social, economic or ethnic groupsInput (It) Number of development plans drawn up in a consultation process

4.4.3 Health13

Input (It) Evolution of national budget allocation to the health sectorImpact (Ip) Prevalence of common diseases and evolutionImpact (Ip) Mortality/morbidity rate for most common diseasesOutcome (Oc) Percentage of children under one year old who received the DTT vaccineOutcome (Oc) Proportion of health districts providing accurate information on basic

indicatorsOutcome (Oc) Status of sales and stocks of drugs in health centresOutput (Ot) Percentage of the population living farther than 5 km from a primary

health centreInput (It) Percentage of expenses spent on health by homeOutput (Ot) Number of centres comprising the necessary staff to supply quality

services (according to official standards)Outcome (Oc) Level of satisfaction with the health system

13 Examples taken from "Health sector-wide indicators. Indicators for monitoring the health strategic plan nationally". Source: DG DEV.

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Outcome (Oc) Use of health servicesOutcome (Oc) Cost of services

4.4.4 Training14

The first two are more education than training:Outcome (Oc) Variation in rate of use of training centresImpact (Ip) Literacy rate by social and economic categoriesImpact (Ip) Average rate of students who found a jobOutcome (Oc) Level of satisfaction with the school/ university systemOutput (Ot) Number of teachers and books per studentInput (It) Training cost for the government per graduated studentOutcome (Oc) Cost for usersInput (It) Percentage of national budget allocated to education and training

4.4.5 Microfinancing and poverty reduction

Outcome (Oc) Entry rate of financial servicesOutput (Ot) Charge-income ratio of local funds and networkOutcome (Oc) Indicators of delayed and outstanding paymentsOutcome (Oc) Indicators of incurred expensesOutcome (Oc) Coverage rate of financial services per regionOutcome (Oc) Number of affiliates and affiliate-funds ratioImpact (Ip) Impact of credit at economic and social level

4.5 List of indicators for decentralised cooperation

Decentralised cooperation can have various forms and implementation procedures according tothe wide range of local situations. However, each case should cover the following fiveprinciples, which can each be assessed through a number of indicators. These indicators will bespecified according to the project context (differentiate by groups of stakeholders and by region;specify periods selected; identify measures based on what reference population group, whattype of change, etc.)

14 Result indicators for an education sector programme. Source: DG DEV.

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4.5.1 Principle No 1: Active involvement of all the various groups of stakeholders

Number of stakeholders informed of the project (and increase compared to baseline situation)Number of stakeholders involved in the project designNumber of stakeholder groups involved in the project decision-making processNumber of representatives of stakeholders marginalised in decision proceedingsOutcome (Oc) Rate of involvement of stakeholders (time and resources)Outcome (Oc) Level of stakeholder satisfaction with their participation in programme

design and management

4.5.2 Principle No 2: Seeking consultation and complementarity between stakeholders

Input (It) Number of meetings to pool knowledge and experience amongstakeholders

Quantity of information disseminated per stakeholderNumber of collaboration agreements between stakeholdersNumber of agreements to distribute tasks/intervention areasAverage rate of operations covered by agreed development plansNumber of regions represented at planning meetings

4.5.3 Principle No 3: Decentralised management

Outcome (Oc) Level of satisfaction of stakeholder groups in terms of programmemanagement

Op Level of distribution of management tasks among several stakeholdersOp Number of debriefing and public validation meetingsOp Ratio of local expertise to international expertiseOp Frequency of project selection committee meetingsOp Total amount that can be managed by decentralised structures

4.5.4 Principle No 4: Introducing a “process” approach

Outcome (Oc) Change of attitudes in accompanying community-based organisationsOp Listening capacity of support staffOutcome (Oc) Level of maturity of ideas and projects (level of relevance, feasibility and

sustainability of projects to finance)Input (It) Average budget allocated to support the process of ownershipOutcome (Oc) Quality (representativeness and broad range of stakeholders) and

frequency (number of meetings) in the consultation process

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4.5.5 Principle No 5: Giving priority to capacity building and institutional development

Outcome (Oc) Average rate of stakeholders who were trained and have a moreparticipatory approach in the projects they support (number of planselaborated in consultation with the groups concerned)

Input (It) Number of training courses run; level of application of acquiredknowledge

Op Change in number of affiliates to entities built and developedOutcome (Oc) Representativeness of federated structuresOutcome (Oc) Level of satisfaction of target groups with the provision of services by

trained people

5. DESCRIPTION OF THE OPERATION5.1. Introduction

The description of the operation (project proposal) is drawn up15 after the logical framework hasbeen completed. It is a narrative version of the logical framework complemented by additionaladministrative, managerial and financial information.

For projects in the spheres of Cofinancing with NGO and decentralised cooperation, thecontents of the project proposal should be presented in line with the Grant Application Form(formulaire de demande de subvention) provided in the respective calls for proposals.

Besides the information on the operation itself, the application form provides a list of pointsconcerning both the grant applicant (identity, experience, management capacities) and itspartners (experience, partnership statement) in project implementation. For more information,please refer to the grant application form.

A checklist (see example below) is contained in each call for proposals.

Before sending your proposal, please check that your application is complete:

15 By derogation from Article 14(1) of the General Conditions, the costs of preparing the Programme are eligible costs. This provisionapplies only in grant agreements financed from budget line B7-6000, NGO Cofinancing.

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_a_fr.doc

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The application form

the proposal is complete and filled out in accordance with the application form

one original and […] copies of all documents

the proposal is typed and is in [language]

the Partnership statement is signed by the applicant and all partners

the budget and the expected sources of funding are presented in the format of the application form (Annex

B)

in the budget the Contracting Authority's contribution is identified and is maximum […]% of total eligible

project costs

in the budget the administrative costs are no more than 7% of total eligible project costs

(see also annex on NGO derogation

in the budget the contingencies are no more than 5% of total eligible project costs

the declaration by the applicant (Section IV) is signed

the logical framework for the project is complete (Annex C)

Annexes

the statutes or articles of association of the applicant and of all the partners are included

the most recent annual report of the applicant is included

the most recent accounts of the applicant are included

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5.2 How to prepare the project proposal and complete the grantapplication form

The project proposal is presented in accordance with the grant application form.16

You are advised to fill in the form's key points with the greatest possible care.

5.2.1 The project

5.2.1.1. Title/place/amounts/summary

5.2.1.2 Objectives

The objectives of the programme are derived from the problem analysis. Once the problemshave been analysed, the following need to be defined:

• overall objective(s)• project purpose

5.2.1.3 Overall objectives

These are the more general development objectives, based on macro-economic and sectoral orsub-sectoral policy considerations, the project is to help achieve. They must be consistent withthe guidelines laid down in the Country Strategy Paper.

5.2.1.4 Project Purpose

Throughout the project cycle, care should be taken to ensure that the project purpose isconsistent with the overall objective(s). The points below are intended to help define theproject purpose (which should in no way be confused with the results or the activities of theproject).

• the purpose should be conceived as a sustainable flow of benefits for the target group(s) thatare maintained without additional aid this means that all costs - operating, maintenance anddepreciation - must be covered;

• There should be only one purpose per Logical Framework. Where there are several (as inthe case of a highly complex project or programme, for example) a number of LogicalFrameworks should be drawn up.

16 Note that the format of the grant application form does not follow the structure of the project/programme documents presented in thePCM manual.

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5.2.1.5 Justification

(a) identification of perceived needs and constraints in the target country or countries

point (a): The description should be confined to the features of the sector or sub-sector (in termsof potential and constraints, including demographic and gender issues) necessary to understandthe nature of the problems the project is attempting to solve.

• Environmental protection - The importance of environmental considerations is now widelyrecognised if environmental protection measures are necessary in the context of the project.

• Socio-cultural aspects - In most cases the social and cultural factors are of crucialimportance in the active participation and accepting of responsibility by stakeholders andtarget groups. If measures need to be taken to stimulate participation, they should bedescribed here.

• Gender equality - Special attention should be paid to the involvement of women inimplementation and their sharing of the benefits of the project, especially access to decision-making, factors of production and support services - land, labour, credit, extension services,technology and training - and their rights such as land ownership and inheritance.

• Institutional and management capacity - Evaluation reports show that weak institutions areone of the main reasons for the failure of "people-oriented" projects. If possible, the projectshould include activities to alleviate these deficiencies and to generate institutional andmanagement capacity building. Particular attention should be paid to the capacity ofinstitutions to address and involve women.

(b) list of target groups and estimated number of direct and indirect beneficiaries

(c) reasons for the selection of the target groups and activities

Points (b) and (c): interests of the target group(s) (direct and indirect beneficiaries, or othergroups involved in the project) will be analysed with their participation. The analysis is acrucial step towards proper understanding of the problems to be tackled, the objectives and theaction needed.

(d) relevance of the project to the target groups

(e) relevance of the project to the objectives

(f) relevance of the project to the priorities.

Points (d), (e) and (f): description of the relationship between the project purpose(s), its resultsand its effects in relation to the real problems, needs and priorities of beneficiaries and the mainconstraints of the physical, political, economic and social environment.

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5.2.1.6 Activities (detailed description)

The activities are the measures that have to be taken (and means that have to be provided) toproduce the results. They summarise what will be undertaken by the project.

Details should be provided about the main activities to be carried out in order to obtain thedesired results. Each result will require a number of different activities to be carried out (forexample, making administrative changes, conducting training seminars, giving refreshercourses) to achieve the result (for example, health care providers with better skills).

5.2.1.7 Methodology

The following points must be described in detail:

• method of implementation• reasons for the proposed methodology

Appropriate technology - This heading covers the technical ways and means of carrying outactivities. Among other things, the different needs and capacities of women and men shouldbe taken into account. Only after plausible alternatives have been examined for the bestsolution, should the choice of the most appropriate technology for the project interventionarea(s) be made.

• how the project intends to build on a previous project or previous activities (whereapplicable)

• procedures for internal evaluation• level of involvement and activity of other organisations (partners or others) in the project

The choice of types of organisation/partner institutions, their structure and cooperation/co-ordination and the distribution of responsibilities between the project partners (who doeswhat?) merit particularly close attention.

• reasons for the role of each partner• team proposed for implementation of the project (by function: there is no need to include the

names of individuals here)

The following points should be dealt with in detail.

Physical and non-physical means

Means or inputs, namely investments in the broadest sense, including technical assistance, needto be specified in detail (see section on the budget).

Organisation and implementation procedures

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Implementation procedures and the responsibilities of the people and public/private bodiesinvolved are described under this heading. Proper planning and regular checks onimplementation (monitoring reports) are essential (see Part E).

Special conditions and accompanying measures taken by the Government

This point is particularly important because it summarises the commitments the Government inquestion has made to ensure the success of the project.The special conditions are the initiatives or decisions that have to be taken before the projectcan start up (for instance, administrative decisions concerning, say, a decentralisation policy).Accompanying measures are measures that the government takes during and afterimplementation of the project.All these measures should be timetabled in a verifiable manner.

Monitoring indicators

Monitoring (either internal or external) must be accurate and effective. Key indicators have tobe established to compare actual achievements at various levels against the objectives. Themethod for collecting relevant information must be specified (national or regional statistics,surveys, etc.). Monitoring must integrate the perceptions and experiences of the variousstakeholders concerned by the project. The periodic monitoring reports produced must adhere tothe formats outlined in Part E.

Reviews/evaluation

Provision should be made for independent evaluation of projects during implementation (oftenmid-term), at the end of the external financing and/or ex-post (i.e. some years after completion).It depends on the project duration.

The evaluations are carried out with the full cooperation of the project staff by independentexternal consultants. It is important to carry out participatory surveys in order to integrate theviews of stakeholders in the evaluation process. Part F provides detailed information on thenature and format of evaluations to be carried out for each project.

Assumptions at different levels

This point defines the external factors which are outside the immediate control of the project butwhich are important for its success.Having established the preconditions required in order to start the activities, thought has to begiven to other, external factors that may be important for the success of the project but are notunder the control of those financing and/or implementing it. Assumptions might exist at thelevels of activities, results and the project purpose and they include the preconditions andaccompanying measures taken by the Government.Where possible, indicators should be established to check periodically whether suchassumptions, which are crucial for the project's sustainability, are indeed being realised.

Risks and flexibility

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Any project entails natural, political, social, financial and economic risks that must be spelledout where possible. To deal with unforeseen situations or uncontrollable factors there has to besome degree of flexibility and the machinery for making any necessary changes, for which thereshould be provision for financing if need be.

5.2.2 Duration and action plan

Project implementation should be presented in the various phases of implementation (the start-up phase, the execution phase and the closedown phase - see Part C). The implementationschedule should be realistic and verifiable.

OVERALL ACTION PLAN

The Overall Action Plan covers the whole of the project implementation phase (start-up,execution and closedown). Its main purpose is to constitute a complete and coherent"instrument panel" designed to assist with the process of project implementation.

Reminder: the principle of cascade linking of documents!The design of standardised formats for the Overall Action Plans, Annual Action Plans andthe various reports should allow the project teams to devote more time to projectimplementation rather than paperwork.

ANNUAL ACTION PLANS

The Annual Action Plans are more detailed versions of the Overall Action Plan. They coverconsecutive 12-month periods of project implementation. They perform at least two mainfunctions:

1. Administrative: they are important basic documents for the monitoring of progress andaccountability (use of funds).

2. Management: whereas the Overall Action Plan provides a general overview, summarisingall aspects of project implementation, the Annual Action Plan provides precise details aboutwhat activities are to be carried out, when they are to be carried out and how much they willcost, and the financing plan. It also provides a complete overview of all the activities to beexecuted during the 12-month period covered, helping to improve the planning of activitiesand avoid any duplication.

The format of the Annual Action Plan is similar to that of the Overall Action Plan (alwaysadopting the principle of cascade linking of documents).

Note: The indicative Action Plan must not include real dates but refer to “Month 1”, “Month 2”,etc. The Grant Applicant should foresee a security margin in the Action Plan. The Action Plan

B - 63

should not describe activities in detail. Only the respective heading of each activity should bementioned.

The action plan for the first year of implementation should be sufficiently detailed in order tohave an overview of the preparation and implementation of each activity. The action plan tocover each of the following years (according to the project duration) can be more general andshould indicate only the main activities planned for those years.17

The action plan must be drawn up on the basis of the following format:

Year Activities Place (city) Implementation agency(example) (example)

Year 1Month 1 Preparation of activity 1 Main organisation

Preparation of activity 2 Partner 1Month 2 Implementation of activity 1

Preparation of activity 3

Year 2Month 1 Implementation of activity

…

Note: a version in the form of a chronogram of global and annual action plans, as presentedin annex H, may be used.

5.2.3. Expected results

5.2.6.1 Expected impact on target groups

Two questions are to be answered:

• how will the project improve the situation of target groups• how will the project improve the technical and management capacitates of target groups or

partners (where relevant)

5.2.3.2 Publications and other results

Results will be detailed and quantified as much as possible.

5.2.3. 3 Multiplier effects

17 A more detailed action plan for each of the following years will be required for the payment of interim payments in accordance withArticle 2(2) of the General and Administrative Provisions for Grant Contracts for external aid (see Annex H).

B - 64

Possibilities of reproducing and extending the project results should be described under thisheading.

5.2.3.4. Short and long-term impact

Three aspects of the short and long-term impact should be distinguished:

• The financial aspect (how will activities be financed when the EC contribution ends?)• The institutional aspect (will there be structures ensuring that activities will be continued

beyond the project duration?) Will there be local " ownership" of the project results?)• The political aspect (what will be the structural impact of the project - for instance, will it

bring better laws, codes of conduct, methods, etc.?)You are advised to make a detailed analysis of quality factors.It is important to analyse factors ensuring sustainability in detail:

• Participation and ownership by beneficiaries - are crucial components of sustainability. Theparticipation of beneficiaries must not be limited to surveys but must imply a real decisionpower.

• Support policy/policies - These are a set of support policies that must be carried out inaddition to the project-specific measures.

If assistance is required for the drafting or implementation of such policies, it should bespecified under this point.

• Economic and financial viability - It is essential to forecast realistically the economic andfinancial sustainability of the project after its implementation (coverage of running,maintenance and renewal costs) and the distribution of surplus revenue among beneficiarygroups and institutions, including the Government.

B - 65

5.3. The Budget of the Operation

5.3.1 Introduction

This section provides details of how to prepare the Project Budget in a clear and transparentmanner so as to facilitate:1) Project evaluation2) the use of project funds by the Contractor (and other stakeholders)3) the monitoring of the use of those funds by the relevant services of EuropeAid.

In order to do this it is necessary to identify the costs of the component parts of the project insufficient detail to allow the relevant services in EuropeAid to understand how the Contractorsintend to use the funds placed at their disposal.

In the project appraisal phase (and beyond), it is important to finalise action plans covering themain activities to be carried out.

It is particularly important to ensure that the budget is drawn-up with a significant amount ofdetail to facilitate the project assessment. Only the main budget headings are required for small-budget projects. For projects of larger amounts, it is necessary to break down the main budgetheadings into several sub-headings.

5.3.2 How to establish means and costs

The main steps to follow are:

1. Work out the human, material and financial means necessary to carry out the plannedactivities including those involved in the start-up and management of the project (e.g.setting up of a co-ordination office, administrative and accounting staff, etc.);

2. Calculate the cost of these resources; prepare the overall budget;

5.3.3 Budgeting/budget format

It is particularly important to ensure that the budget is drawn-up in a transparent manner.EuropeAid requires a significant amount of detail in order to ensure the coherence andrelevance of the budget.

5.3.4 Budget format

The budget must be presented in accordance with the standard grant contract annexed to the callfor proposals, available at the following address:http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_fr.htm

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_en.htm

B -

66

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C -69

C. HOW TO IMPLEMENT A PROJECT

This module deals with project implementation. It describes the different implementation phases of aproject and presents a number of tools to set the baseline and identify indicators for project

monitoring.

Table of contents1. Introduction

2. Project implementation phases

2.1 Start-up phase

2.2 The execution phase

2.3 The final project phase (closedown)

1. INTRODUCTION

This module has been designed to assist contractors in achieving a project's stated objectives.

Apart from the task of actually implementing a project, the Beneficiary has to carry out or fulfila series of contractual obligations and requirements. These are designed to provide the EC withinformation about the implementation of a given project. On the basis of this information theEC assesses project progress and approves or rejects the contractor's requests for payment.

These contractual obligations and requirements are designed to ensure that all projects:• are carried out according to the standards stated in the contractual documents;• can demonstrate financial, administrative and technical feasibility.

For the whole duration of the project, the project manager(s) should take great care to ensureoverall coherence in the presentation of the various project documents involved:• the Overall Action Plan must follow the format presented in Part D;• the Annual Action Plan must be based on the Overall Action Plan and follow the same

format; the same applies to the all other reports involved.

This principle of drawing up in cascade documents following the same basic format:• contributes towards the effective and transparent management of the project;• facilitates the work of project managers since it enables comparative analysis and the

standardised presentation saves time.

C -70

2. PROJECT IMPLEMENTATION PHASES

Project implementation is divided into the following three sequential phases: (i) the start-up phase, (ii)the execution phase and (iii) the closedown phase.

2.1 The start-up phase

Project implementation begins with the start-up phase.

Once the project staff has been recruited and the offices are available, the dialogue process between theproject partners is launched and the project baseline study checked.

It is very important, at this stage, to confirm and specify the logical framework prepared during theappraisal phase and presented in the call for proposals.At start-up, administrative, financial and technical responsibilities are established. The mechanisms andtools developed for this purpose are then used throughout the execution and closedown phases of theproject.

The start-up phase consists of the following elements:

• Set-up of the project office and staff recruitment;• Discussions with project partners to complete the Logical Framework, following the baseline

study at the start of the project;• Organisation of the planning workshop;• Additional surveys carried out, if necessary;• Verification of the Overall Action Plan (incorporating the project's internal Monitoring and

Evaluation Plan);• Verification of the first Annual Action Plan.

2.2 The execution phase

The execution phase begins with the implementation of the First Annual Action Plan.By virtue of its contract, the contractor will have particular responsibility for:

• the preparation of action plans covering each year of the project;• The presentation of technical and financial reports in line with the contractual obligations;• the submission of payment requests• the collaboration with the external consultants responsible for financial audits, performance

reviews and external technical evaluations.

C -71

Integrated approach:

The Annual Action Plan is not only a contractual administrative document, it is also animportant management tool both for the Commission and for the implementing agency.Great care should be taken in drawing it up. It is worked out on the basis of the OverallAction Plan, itself based on the logical framework.

The reporting and External Review requirements are designed to:

• Provide the relevant services of the EC with sufficient information about projectimplementation to enable them to gauge progress and release or delay financial instalmentson the basis of the information received;

• Help the project managers in the field to stand back and take an objective view of theproject and, possibly with the help of the external consultants, gain new perspectives andgenerate new ideas to take the project forward;

• Provide key information so that if necessary, appropriate decisions can be taken to adapt theproject to any important changes that may have occurred in its context.

2.3 The final project phase (closedown)

The execution phase is followed by the closedown phase which, as its name suggests, involvescarrying out all the necessary steps to finalise the project.In terms of contractual obligations, the closedown phase consists of the following elements:

• Collaboration with the external consultants responsible for carrying out the final externalfinancial audit or the final performance review of the project.

• The preparation and submission to the EC of the final reports (technical and methodologicalreport as well as financial audit report.

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D. REPORTS

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Table of contents

1. Reporting format1.1 Introduction1.2 Reporting format1.3 Presentation model for financial reports1.4 Presentation model for Overall Action Plan1.5 Presentation model for Annual Action Plan

1. REPORTS: CONCEPTS

At the project implementation level, the process of internal evaluation prior to the production ofreports is a principal priority for all project staff as they need to know whether they areachieving the objectives of the project and if not, why not.

At the operational level within the European Commission, systematic project reporting is also apriority as this enables officials to ascertain which projects are working well (and can justifyreceiving funds for on-going and future activities) and those that are working poorly (andrequire modification to the workplan or termination).

It is important to try to ensure that the format of reports is as similar as possible to the one usedfor the other documents (principle of cascade linking). This facilitates the task of evaluatingprogress made in achieving the project purpose and results. The activity schedule milestonesestablish a timetable for the completion of reports.

As with preparation of the Action Plan, the Logical Framework is the basic reference documentfor the preparation of reports. It should include the following information:

• Column 1 - “Results” = what should be achieved• Column 2 - “OVIs” = which must be verified to determine level of progress• Column 3 - “Source of verification” = where the source of information for verification of

progress is found

In summary:

D -73

The progress reports are intended to provide up-to-date information on a project's state ofprogress and to compare this progress with the indicators and milestones already established,using the formats described below.

They provide a critical analysis of the progress made towards achieving the project's objectives,and of the likelihood that it will provide lasting benefits to the target group(s) after its lifetime.These reports should bring to light any significant threat to the sustainability of the project, andif a serious risk is found, it should recommend remedial action.

2. REPORTING FORMAT

This format guideline applies to projects in the fields of Cofinancing with NGO anddecentralised cooperation financed by the European Commission.

2.1. Introduction

The reports describing the projects should meet a number of basic requirements and criteria thatare to a large extent applicable to any project, regardless of its specific activities. The presentedformat should be used as a helpful guideline for the writer, and will make it easier for the readerto understand the essentials of the project described.

2.2 Format

2.2.1 Title page

Mentioning:• “Report for the European Commission”• title of the project• project number and total amount• region/country• type of report: annual or final• time period and amount covered by the report• name of the Beneficiary• the author(s) and their affiliations• month and year of submission of the report• standard clause: “Draft Report. This document has been drafted with the assistance of the

European Commission. The views expressed herein are those of (name of contractor) andtherefore in no way reflect the official opinion of the Commission."

2.2.2 Table of abbreviations

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2.2.3 Table of contents

2.2.4 Project summary (2 pages max.)

The structured summary is an outline of the different components of the project (maximum of 2pages). It is limited to objective data, described in more detail in the following chapters. Thesummary should enable the reader to situate the project, its activities and its relevance in thebroad context of the projects financed by the EC. Technical data and detailed figures should beavoided in this section.

The EC can use this section for a catalogue of its projects, annual reports, internet site, or otherrelevant publications. The following headings should be considered:

• title of the project, contracting agency (and partners): institution, department,responsible personnel, contact address

• project number and total amount• project site: region/country• time period covered by the project• objectives• main results (or those hoped for in the case of a new project)• main activities• main constraints• conclusion

The structured summary should be designed so that it can be completed after each phase of theproject. Each annual report should include the structured summary, updated and preferably on aPC-compatible disk, in a widely used wordprocessor programme.

2.2.5 Summary of current report (1 page max.)

The executive summary describes in narrative form how the project has been implementedduring the period covered by the report. It gives a brief overview of the context of the project,the activities that were carried out, the findings, successes, constraints and problems and howthey were solved or why they were not solved. It summarises the most essential information onthe project over a maximum of one page.

2.2.6 General context (1 page max.)

Describes the background and general context in which the project takes place. The informationprovided should make clear the origin and rationale of the project. This part should not be morethan one page in length.

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2.2.7 Enumeration of the project's objectives (1 page max.)

A brief enumeration of the overall objectives of the project and project purpose as they werestipulated in the Description of the Operation in annex I to the contract between the EC and thecontractor.This part should not be more than one page in length.

2.2.8 Implementation/activities/results (5 pages max.)

Progress towards results

This is the main body of the report, describing in narrative form the various activities that havebeen carried out during the period covered by the report. This section should follow the sameformat, plan and order as used in Annex I (or Terms of Reference) of the contract. If a differentformat is adopted, it is likely that the evaluation of the report will take considerably more time.The structure of this chapter depends largely on the contents of the project, its principlefeatures, the activities undertaken, research carried out or any other programme as agreed in thereport. Detailed information, figures and statistics should be included to give full insight intothe different components. Comments should be added if necessary to clarify the results,achievements, constraints, etc.

2.2.9 Progress towards project purpose and overall objectives

Ideally the logical framework should form part of the “Description of the Operation” in Annex Ito the contract between the European Commission and the Beneficiary. In this case this chaptershould indicate progress in terms of achieving the project purpose (expressed in indicators ofthe project purpose) and if the assumptions at results level have been or will be achieved. If not,this chapter should indicate what steps were taken by the project managers towards achievingthe project purpose.This chapter will state whether it is probable or obvious that the project contributes to theoverall objective, and whether the assumptions at the level of the project purpose have held trueor will become true.

2.2.10 Quality factors

This section will provide a detailed description of the project's quality factors in the light of thefirst experiences.

It is important to carry out a participatory study to assess the "reality" of the various factorsensuring the overall sustainability of the project:

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• Participation and ownership by beneficiaries (level of satisfaction of stakeholders with theirinvolvement in project management);

• Support policy or policies (technical, financial and institutional commitment of theGovernment);

• Appropriate technologies (degree of socio-technical relevance of project activities andsustained mechanisms and process);

• Environmental protection (quick assessment of environmental impact); - first screening);• Socio-cultural aspects (change in attitudes of each stakeholder and among stakeholders;• Gender equality (how women and men see their roles in the project and the impact of the

project);• Management and institutional capacity (capacity building and development);• Economic and financial viability (how far the project can cover the administrative costs of

the institutions or infrastructures set up).

2.2.11 Conclusions/recommendations/lessons learned

Depending upon the characteristics of the project (pilot, operational research, implementationprogramme, etc.), this chapter should summarise the main findings and conclusions found,stemming logically from what has been written in the previous sections.

2.2.12 Annexes

The Logical Framework and the organigramme of the project as well as the documents likely toallow better understanding of the general context are to be annexed.The minutes of the planning workshops could also be included.

2.3 Presentation model for financial reports

2.3.1 Introduction

With the aim of helping to ensure a more efficient level of financial management,governments/partners as well as the EC are increasingly concerned with the efficiency,effectiveness, accountability (use of funds made available for the projects) of the projects. Inthis context, it is important to count on systems that permit an adequate level of monitoring andcontrol of budgets.

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2.3.2 Budget monitoring system

A good budget monitoring system is able to detect at the earliest stage the moment when realcosts no longer correspond with the expenditure foreseen in the budget. Such a system requiresthat comparisons between the budget and real costs are systematically made when theimplementation reports have been delivered.

To this effect, the following instructions must be rigorously followed by the implementingagencies:

1. Whatever accounting system and results presentation format is being used, the report shouldcontain a summary table following the format of the grant contract budget.

2. The budget should be updated to take riders into account.

2.3.3 Annex 1 to the financial report

The aim of this table is to detect rapidly, and in any case before payment of the final balance,any derailments in projects. This table can also be used to make a comparison of the situation ina number of different projects as long as they follow the same budget structures and thefinancial reports comply with these structures. The following table must be completed by thecontractor.

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Contracting partner:

Project:

Duration:

Budgetheadings

Budget Implementation Difference

(1)

Original budget

(2)

Adjusted budget

(3)

Previousexpenditures

(4)

Expendituresduring the period

covered by thepresent report

(5)

Totalexpenditures

(6)(7)

(3-6)

(1) the title of each budget heading

(2) the budget as stated in the contract

(3) the budget as modified by riders approved by the Commission

(4) expenditures relating to the previous financial report

(5) expenditures incurred over the period (more detail can be incorporated outside of the summary table)

(6) total expenditure = 4 + 5

(7) difference between expenditure and total budget: col. 4-7

An example is given at annex in part I.

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E. FINANCIAL AND MANAGEMENT AUDITS

This module deals with the auditing of projects.It sets out the main components involved.

Table of contents

1. Financial and management audits

Main characteristics

Financial and management audits are to be carried out by auditors who are members of arecognised national body of auditors authorised to sign audit reports in an EU Member State orin the country in which the project was carried out. The audit must comply with the standardsof the Internal Federation of Accountants.

1. FINANCIAL AND MANAGEMENT AUDITS

The objectives of the audit are to ensure that:

• financial management of the project is sound;• system of internal control and the procedures established are adequate and can prevent in a

reasonable manner any risk of errors, irregularities and frauds;• project funds are recorded in the financial report;• assets have been acquired and used in accordance with the contract;• project funds are accounted for and verifiable in accordance with the rules;• the EC financial contribution is safeguarded and used exclusively for the project;• all parties have fulfilled obligations stemming from the contract.• the expenditure declared is correct and relevant to the project.

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1.2. Implementation of the audit

The exact rules relating to audit and accounts are laid down in Article 16 of the GeneralConditions applicable to European Community-financed grant contracts for external aid.

Where the grant is EUR 100 000 or more, a final audit is carried out when the operation ends.If the project's duration exceeds 18 months, an annual audit will be carried out for every 12-month period of implementation after the start of the operation.

There are two possibilities depending on whether or not the NGO's accounts are auditedannually. If so, the relevant body's annual report can serve to certify the accounts. If not, onlythe auditor can certify the accounts for the operation. However, it is essential that the certificatecover all the objectives listed above.

The project contractor appoints independent external auditors. It is recommended appointingthe auditors as soon as the project proposal is drawn up. They must be appointed before theCommission signs the contract. In principle the same audit firm's services should be used forthe full duration of the project. The contractor must inform the Commission in writing of anychange in auditor. The Commission reserves the right to refuse such a change. The localmanagers must cooperate with the auditors and give them access to all information relating tothe project.

It is advisable not to wait until the end of the period to be audited but to request the auditors toaudit the internal management and monitoring systems put in place. If mistakes or weaknessare detected at this stage, it will be possible to take remedial action without jeopardisingpayment of the grant.

The contract will in all cases provide for the possibility for the Commission or Court ofAuditors to carry out an audit at the project site.

Continuation of the project will depend on the findings of the audit.

Should the beneficiary contest the audit report, it should inform the Commission which willdecide on action to be taken.

The format standard des termes de référence pour l’audit financier (to be adjusted according tospecific needs) is attached to part H of this document.

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F. EVALUATIONS

This module deals with the evaluation of projects. It describes the main criteria for projectevaluation and the key questions to be answered for Cofinancing with NGO and decentralised

cooperation. It also presents the standard evaluation format.

Table of contents

1. Overall evaluation1.1 Objective of the evaluation1.2 Evaluation criteria1.3 Key questions for technical and methodological assessment of a project1.4 Standard evaluation format

Evaluations are to be carried out by independent consultants in a participatory way by involvingstakeholders and beneficiaries in the evaluation process. The consultants are to be external tothe project team, with whom they nevertheless have to work in close cooperation. Theconsultants should not have been involved in or worked on the identification, design orimplementation phases of the project.

For the project managers, the overall evaluation (technical and methodological) constitutes aforum for the exchange of views and provides an opportunity to leave day-to-day managementpreoccupations to one side in order to concentrate on the project's quality factors: relevance,feasibility, impact and sustainability.

1.1 Objective of the evaluation

1. To evaluate the relevance, feasibility and sustainability/quality of the project;2. To evaluate the impact of the project and examine the way in which it has contributed to its

stated objectives;3. To formulate recommendations for the continuation of project implementation or for post-

implementation follow-up.

Evaluations are carried out at the following times:

• the mid-term evaluation - in the middle of the implementation period of the project• the final evaluation - at the end of the project• the ex-post evaluation - up to several years after the end of the project

Notes:

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• the number and type of evaluations to be carried out must be stated in the description of theoperation;

• evaluations must mention remedial action to be taken (e.g. to improve future performance,the concept of forthcoming seminars could be changed - longer seminars, less participantsper trainer, better designed surveys, wider use of local experts, etc.)

1.2 Evaluation criteria

the main evaluation criteria are the relevance, effectiveness, efficiency, impact andsustainability of the project. The following definitions are taken from the PCM manual:

Efficiency and effectiveness

Relevance The appropriateness of project objectives to the real problems, needs andpriorities of the intended target groups and beneficiaries that the project issupposed to address, and to the physical and policy environment within whichit operates.

Efficiency The fact that the results were obtained at reasonable cost, i.e. how well meansand activities were converted into results, and the quality of the resultsachieved.

Effective-ness

An assessment of the contribution made by results to achievement of theproject purpose, and how Assumptions have affected project achievements.

Impact The effect of the project on its wider environment and its contribution to thewider sectoral objectives summarised in the project's Overall Objectives, andon the achievement of the overarching policy objectives of the EC.

Sustainabi-lity

The flow of benefits for beneficiaries and for society as a whole, likely tocontinue after the EC external aid ends.

Recommendations should be made concerning either the project in question or similar projectsin the future. The evaluation report should take into account the nature of the project and thestage at which evaluation is taking place. It should focus on the soundness of the choices madein relation to the content, objectives, means, likelihood of sustainability, etc. The G-93evaluation report must also include brief remarks on any adjustments made in response todevelopments up to the moment of evaluation. Key issues to consider in the performance reviewof a project can be found below - and on the following page a standard format for an evaluationreport.

The standard terms of reference for an Evaluation Study can be found at annex, in Part I.

1.3 Key questions for a project technical and methodological assessment

1) What is the overall relevance of the project?

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How did stakeholders participate in the project design? To what extent are the target groupsclearly identified? To what extent are they taken into account? How does the project fit inthe national context? How does the project comply with the mechanisms of the civil societyand the major needs and interests of the poorest and disadvantaged groups; how does it fit inthe Government policy in terms of decentralisation?

2) What was the overall efficiency of the project?

Are programme organisation, management and monitoring flexible, autonomous anddecentralised (in accordance with the subsidiarity principle)? Was there a transfer offinancial responsibilities and other duties to local bodies? What is the role of centralagencies? Is the role of leader in the process changing into a role of facilitator of localinitiatives? Is a broad range of stakeholders involved in the project? Were these stakeholderschosen and supported efficiently? How well do they contribute to the project/programmeimplementation, monitoring and evaluation? Are their contributions complementary? Arethere participatory measures (involving stakeholders) and consultation and dialoguemechanisms (and fora)? What is the quality of the stakeholders' participation? Are theirexperiences valued? Is the project/programme linked to the ongoing decentralisation anddemocracy process? Do the methods and techniques applied allow the capacity developmentof local stakeholders? how and for which stakeholders? Does the project budget match themeans to be implemented? How much do the programme support and managementstructures cost? What is the added value of these support and management structures? Whatare the respective roles of stakeholders in the programme monitoring system and theircapitalisation capacity?

3) What is the overall effectiveness of the project?

Did the assumptions necessary to translate results into project purpose hold true? If not, whyand what consequences does that have on the project? Will assumptions become true in thefuture or do they have to be revised? Indicators: were they appropriate? If not, did theproject implementation team modify them? Unexpected results: how did they affect thebenefits that were obtained? Who were the real beneficiaries of the different results?

4) What is the overall impact of the project?

how does the project purpose contribute to the overall development objectives of theproject/programme? How does the project/programme contribute to the overarchingobjectives of EC development policies? How did the ownership by stakeholders ofdevelopment processes improve in terms of coherence and sustainability?

How effective are the strengthening of the target groups' and local stakeholders'participation in the different intervention phases, the improvement of their negotiationcapacities and their involvement in the development process? What are the changes in termsof consultation and dialogue mechanisms and fora with stakeholders? How were thedecentralised stakeholders involved in the phases of formulating and implementing

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international cooperation policies (with the EU and other donors), in the formulation ofmacro-economic and sectoral policies and in programme evaluation and management?What was the change in the attitudes of central public structures regarding the participatoryprocess? What were the new consultation mechanisms and structures involvingdecentralised stakeholders at the meso level? What were the links created between the localand national level? What is the participation of the decentralised stakeholders in theformulation and implementation of local development? How much did the level of controlby the local development stakeholders increase? What were the capacities developed? Whathave been the improvements and changes in the living conditions?

5) What is the overall sustainability of the project?

What is the level of ownership by stakeholders and beneficiaries? How consistent are theinterventions between the stakeholders? How consistent is planning at the different levels(macro, meso, local)? How much is the partner country committed to the project(strengthening of expression framework for civil society stakeholders, decentralisationpolicy, financial and human commitment)? What is the level of involvement of stakeholders(women, ethnic groups, vulnerable groups, etc.) in the development process? Are benefitsshared in an equitable manner among the stakeholders? How were the participation of localstakeholders and target groups, their negotiation and expertise in the development processstrengthened in the various phases of the project/programme (and G-95 of other similarprogrammes)? Are the social and technical choices adapted to the situation (problems to beaddressed, sociocultural, organisational, technological, management skills of beneficiariesand technical assistance, etc.)? Will beneficiaries of projects be able to adapt and ensure thecontinuity of the services after the EC external aid ends? What is the continuity andrepresentativeness of the consultation structures? What are the capacities of decentralisedstakeholders to manage the rather complex process which involves several stakeholders andto ensure their involvement? How do the financial flows resulting from the contributions ofbeneficiaries or of the Government and the decreasing EC support change? To what extentare the capacities to cover the running costs, the maintenance costs and the costs to renewinstallations taken into account? What are the nature, relevance and equity of the collectionsystems? What are the sustainable effects on income and expenditures ofhomes/stakeholders? To what extent are the project activities integrated into localinstitutional structures and into the decentralisation process? What is the level of (technical,financial and management) skills/training of local counterparts/stakeholders to take over theproject or ensure the continuity of its activities? What are the project's effects on theenvironment?

6) What are the main lessons learned?

What are the errors to avoid? What actions should be better disseminated? What are theessential factors to ensure the success of similar projects? What are the possibleconsolidation measures? What are the action plans/recommendations for the variousstakeholders?

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1.4 Standard evaluation format

EuropeAid's Evaluation Unit has produced a format standard des termes de référence (Annex H)for project evaluation.

It is important to follow the main structure and adapt sections according to the scope andrespective features of each project.

As a general rule, the main sections of an evaluation report should be as follows:

I. Executive summary: drawn up in a condensed, precise and comprehensive form. It is anessential part of the report. The summary should be short (a maximum of five pages). It shouldfocus on the objective and the key questions of the evaluation. It must describe the mainelements of the analysis, indicate clearly the main conclusions, set out the lessons learned andmake specific recommendations. Links should be made to the corresponding pages orparagraphs of the main body text.

Body text: the body text should start with an introductory description of (i) the project orprogramme being evaluated, (ii) the objectives of the evaluation. The body text should followthe five evaluation criteria (assess them by describing the facts, interpreting them and analysingthem on the basis of the key questions to be answered for each criterion).

III. Conclusions and Recommendations: these two points should be part of a separate finalchapter. As much as possible, there should be a recommendation for each conclusion. The mainpoints of the conclusions will vary according to their nature, but will often cover some aspectsof the key evaluation criteria (including performance indicators):

i. Relevance - was the project initially relevant to the real needs and problems of the targetgroups? Is it still relevant to the real needs and problems of the beneficiaries?

ii. Effectiveness - could the same results have been achieved at lower costs?Are there other possibilities to achieve the same results?

iii. Efficiency - when expected benefits are shared by beneficiaries, do beneficiaries changetheir attitudes/behaviour? Did the lack of consideration of cross-cutting issues preventthe project from achieving its purpose?

iv. Impact - what are the overall results for the target groups or the society as a whole? What arethe successes and failures of the projects in terms of overall objectives, and what are themain reasons for them?

v. Sustainability - is the flow of benefits for beneficiaries and the society as a whole likely tocontinue after the EC external aid ends? Why/why not?

The value of an evaluation depends on the quality and credibility of the recommendationsstated. Recommendations should therefore be as realistic, operational and pragmatic as possible.They should also take into account the project background and the resources available locallyand at EC level to implement them. They could concern: (i) policies, (ii) organisational andoperational aspects for local partners and the EC, (iii) pre-conditions likely to relate to financingdecisions for other similar projects. They can also deal with general issues resulting from theevaluation such as policies, technologies, instruments, institutional development, regional,national and sectoral strategies.

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Recommendations should be classified according to the different publics it is addressed to at alllevels, in particular within the structure of the Commission (the project/programme managerand evaluation manager can provide their input/advice in this respect).

It is important that evaluations be based on the existing and revised Logical Frameworks (whichare to be attached to the evaluation reports).However, these logframes should not serve as a rigid basis for the reporting format.

The format of an evaluation report should mainly be determined by its purpose and the reportaddressee.

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G. DEFINITIONS

This module contains a glossary of useful terms and definitions. It gives updated definitions of theterminology used in this guide.

Action Plan The schedule that sets out the activities and resources necessary to achieve aproject's results and purpose.

Activities The actions (and means) that have to be taken or provided to produce theresults. They summarise what will be undertaken by the project.

Activity schedule A graphic representation setting out the timing, sequence and duration of projectactivities. It can also be used to identify milestones for monitoring progress andto assign responsibility for achievement of milestones.

Analysis ofobjectives

Identification and verification of future desired benefits to which thebeneficiaries attach priority. The output of an analysis of objectives is theobjective tree/hierarchy of objectives.

Analysis ofstrategies

Critical assessment of the alternative ways of achieving objectives, andselection of one or more for inclusion in the proposed project.

Appraisal Analysis of a proposed project to determine its merit and acceptability inaccordance with established criteria. This is the final step before a project isagreed for financing. It checks that the project is feasible against the situation onthe ground that the objectives set remain appropriate and that costs arereasonable. Term often synonymously used: Feasibility study/Ex-ante evaluation.

Appraisal phase The third stage of the project cycle. Determination of all detailed aspects of aproject on the basis of a feasibility study; internal examination by the EC of theproject's quality and consistency with sectoral policies.

Assumptions External factors which could affect the progress or success of the project, butover which the project manager has no direct control. They form the fourthcolumn of the logframe, and are formulated in a positive way, e.g. "Reform ofpenal procedures successfully implemented."

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Beneficiaries (PCMversion)

Are those who benefit in whatever way from the implementation of the project.Distinction may be made between:(a) Project partners/direct beneficiaries: those who are supported by EC funds

in order to manage design and implementation of a project, i.e. usually:ministries, implementation agencies, etc;

(b) Intermediate beneficiaries: those who are supported within the project inorder to better perform services to the target group(s), e.g. agriculturalextension staff, benefiting from training measures to better perform theiradvisory services to female and male members of farm households;

(c) Target group(s): the group/entity who will be positively affected by theproject at the Project Purpose level and with whom the project will workvery closely, as well as for whom, e.g. the "female and male members offarm households" in the case of the above extension project;

(d) Final beneficiaries: those who, beyond the level of the target groups, benefitfrom the project in the long term at the level of the society or sector at large,e.g. children due to increased spending on health and education, consumersdue to improved agricultural production and marketing, or "the state" assuch due to increased export earnings from improved agricultural productionand marketing.

Call for proposals A "call for proposals" is a specific procedure: it is advertised by the EuropeanCommission or the implementing agency of a grant or programme (in generalthrough publication in the Official Journal (OJ) of the European Communities,or through any other means deemed practical, including the Internet sitehttp://europa.eu.int/comm/europeaid/tender/index_en.htm. The publicationincludes the guidelines for drafting and submitting a proposal and the selectioncriteria and conditions for a Community grant. If awarded, the grant will takethe legal format of:(a) either a standard grant contract, if the EC itself is granting the aid. (b) or a standard grant contract for decentralised aid, if the aid is granted by theagency implementing a project financed by the Community.

Commission The European CommissionCommitment Formal decision taken by the Commission to set aside a certain amount of money

for a particular purpose. No expenditure can be incurred in excess of theauthorised commitment.

Contractor The public or private organisation, consortium or individual with whom thecontracting authority enters into a contract. The firm, individual or consortium towhich a contract is awarded.

http://europa.eu.int/comm/europeaid/tender/index_en.htm

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Country StrategyPapers (CSP)

Country Strategy Papers (CSPs) are an instrument for guiding, managing andreviewing EC assistance programmes. The purpose of CSPs is to provide aframework for EC assistance programmes based on EU/EC objectives, thePartner Country government policy agenda, an analysis of the partner country'ssituation, and the activities of other major partners. CSPs are drawn up for allACP, MEDA (except Cyprus, Malta and Turkey) and ALA countries.

Country SupportStrategy

Term used as a synonym for Country Strategy Papers (CSP).

DecentralisedCooperation Approach which seeks to put stakeholders at the centre of a development

process and is characterised by a wide range of stakeholders; decentralisedmanagement; process-based approach; capacity strengthening and programme-based approach.

Delegation The diplomatic office representing the European Commission accredited tocountries or international institutions.

Effectiveness An assessment of the contribution made by results to achievement of the projectpurpose, and how Assumptions have affected project achievements.

Efficiency The fact that the results were obtained at reasonable cost, i.e. how well meansand activities were converted into results, and the quality of the results achieved.

EuropeanCommission

The executive arm of the European Union. It initiates European Union policyand implements programmes and policies established by the EU legislative andbudgetary authorities.

Evaluation A periodic assessment of the efficiency, effectiveness, impact, sustainability andrelevance of a project in the context of stated objectives. It is usually undertakenas an independent examination of the background, objectives, results, activitiesand means deployed, with a view to drawing lessons that may guide futuredecision-making.

Evaluation phase The sixth and final phase of the project cycle during which the project isexamined against its objectives, and lessons are used to influence future actions.

Feasibility Addresses the issue whether the project objectives can be really achieved.Feasibility study Study conducted on the basis of the terms of reference established at the

identification phase and which, if its findings are positive, should enable thefinancing proposal to be drawn up without requiring further studies.

Financing Agreement The document signed between the European Commission and the partnercountry or countries subsequent to a financing decision. It includes a descriptionof the particular project or programme to be funded. It represents the formalcommitment of the European Union and the partner country to finance themeasures described.

Financing phase The fourth phase of the project cycle during which projects are approved forfinancing.

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Financing proposal Documents submitted by the Commission's services to the decision-makingauthority, possibly after the relevant Financing Committee has given its opinion(this is necessary for Cofinancing with NGO and DC projects costing EUR 2million or more).They describe the general background, nature, scope, objectives andimplementing arrangements of the proposed project or programme and indicatethe funding foreseen.

Gender The social differences that are ascribed to and learned by women and men, andthat vary over time and from one society or group to another. Gender differsfrom sex, which refers to the biologically determined differences betweenwomen and men.

Gender equality The promotion of equality between women and men in relation to their access tosocial and economic infrastructures and services and to the benefits ofdevelopment is vital. The objective is reduced disparities between women andmen, including in health and education, in employment and economic activity,and in decision-making at all levels. All programmes and projects shouldactively contribute to reducing gender disparities in their area of intervention.

Hierarchy ofobjectives

A diagrammatic representation of the proposed project interventions plannedlogically, following a problem analysis, and showing a means to endsrelationship. Synonym: objectives tree. Synonym: objectives tree.

Identification phase The second stage of the project cycle. It involves the initial elaboration of theproject idea in terms of objectives, results and activities, with a view todetermining whether or not to go ahead with a feasibility study.

Impact The effect of the project on its wider environment and its contribution to thewider sectoral objectives summarised in the project's Overall Objectives, and onthe achievement of the overarching policy objectives of the EC.

Implementationphase

The fifth phase of the project cycle during which the project is implemented andprogress towards achieving objectives is monitored.

Indicativeprogrammes

These are prepared by the European Commission in coordination with partnercountry governments. They provide general guidelines and principles forcooperation with the European Union. They specify focal sectors and themeswithin a country or region and may set out a number of project ideas.

Inputs See "Means".Integrated approach The continuous examination of a project throughout all the phases of the project

cycle, to ensure that issues of relevance, feasibility and sustainability remain infocus.

Intervention logic Strategy underpinning the project. Description of the project at each of the fourlevels of the "hierarchy of objectives" set out in the logframe.

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Legal basis A Council Regulation, Commission Decision, Agreement with a Third Countryof group of countries, or any other source of Community law which governs theconditions for awarding financial aid. Regulations listed in Annex A arecurrently in force They are likely to be amended. The user is therefore advisedto check the provisions in force before making use of the present document.As a general rule, there is a legal basis for each budget heading. Should there bean amendment or a change in the title, the user is invited to check the relevantregulation or legal basis applicable to the new budget heading.

Logframe Matrix representing the intervention logic, assumptions, objectively verifiableindicators and sources of verification of a project.

Logical FrameworkApproach (LFA)

A methodology for planning, managing and evaluating programmes and projects,involving stakeholder analysis, problem analysis, analysis of objectives, analysisof strategies, preparation of the logframe matrix and activity and resourceschedules.

Means The boxes "Means" and "Costs" replace OVIs and SOVs at the level ofActivities. Means are physical and non-physical resources (often called "Inputs")that are necessary to carry out the planned activities and manage the project. Onemust differentiate between human and material resources.

Monitoring The systematic and continuous collecting, analysis and using of information forthe purpose of management and decision-making.

Objective Description of an aim of a project or programme. In its general sense it refers toactivities, results, project purpose and overall objectives.

ObjectivelyVerifiable Indicators(OVIs)

Measurable indicators that will show whether or not objectives have beenachieved at the three highest levels of the logframe. OVIs provide the basis fordesigning an appropriate monitoring system.

Overall objectives They explain why a project is important to society, in terms of the longer-termbenefits to final beneficiaries and the wider benefits to other groups. They alsohelp to show how the programme fits into the regional/sectoral policies of thegovernment/organisations concerned and of the EC, as well as into theoverarching policy objectives of EC cooperation. The Overall Objectives will notbe achieved by the project alone (it will only provide a contribution to theachievement of the Overall Objectives), but will require the contributions ofother programmes and projects as well.

Pre-conditions Conditions that have to be met before the project can commence.Pre-feasibility study The pre-feasibility study, conducted during the identification phase, ensures that

all problems are identified and alternative solutions are appraised, and selects apreferred alternative on the basis of Quality Factors. The study will provide theEuropean Commission and partner government with sufficient information tojustify acceptance, modification or rejection of the proposed project for furtherappraisal.

Problem analysis A structured investigation of the negative aspects of a situation in order toestablish causes and their effects.

Problem tree A diagrammatic representation of a negative situation, showing a cause-effectrelationship.

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Programme A series of projects with a common overall objective.Programming phase The first phase of the project cycle during which the indicative programme is

prepared. See also "Indicative Programme".Project A series of activities with set objectives, designed to produce a specific outcome

within a limited time frame.Project cycle The project cycle follows the life of a project from the initial idea through to its

completion. It provides a structure to ensure that stakeholders are consulted, anddefines the key decisions, information requirements and responsibilities at eachphase so that informed decisions can be made at each phase in the life of aproject. It draws on evaluation to build the lessons of experience into the designof future programmes and projects.Document setting out the indicators for the project's short-term objectives(usually for activities) and which facilitates the evaluation of progress duringthe project rather than only at the end. It also indicates the time at whichdecisions must be taken.

Project cyclemanagement

A methodology for the preparation, implementation and evaluation of projectsand programmes based on the integrated approach and the logical frameworkapproach.

Project InterventionArea (PIA)

The geographical area or areas in which the project is carried out.

Project purpose The central objective of the project. The purpose should address the coreproblem, and be defined in terms of sustainable benefits for the target groups(s).The purpose should also express the equitable benefits for women and menamong the target group(s). There should only be one Project Purpose per project.

Quality factors Criteria that are known to have had a significant impact on the sustainability ofbenefits generated by the projects in the past and which have to be taken intoaccount in the design and implementation of each project: ownership bybeneficiaries, policy support, economic and financial factors, socio-culturalaspects, gender, appropriate technology, environmental aspects, and institutionaland management capacity. (previously: Sustainability Criteria)

Relevance The appropriateness of project objectives to the real problems, needs andpriorities of the intended target groups and beneficiaries that the project issupposed to address, and to the physical and policy environment within which itoperates.

Resource schedule A breakdown of the project budget where means and costs are linked to activitiesand detailed per time period selected.

Results The "products" of the activities undertaken, the combination of which achieve thePurpose of the project, namely the start of enjoyment of sustainable benefits forthe target groups.

Risks See also "Assumptions". External factors and events that could affect theprogress or success of the project and that are not very likely to hold true. Theyare formulated in a negative way, e.g. "Reform of penal procedures fails".

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Sources ofverification (SOV)

They form the third column of the logframe. They indicate where and in whatform information on the achievement of the Overall Objectives, the ProjectPurpose and the Results can be found (described by the Objectively VerifiableIndicators).

Stakeholders Any individual, group, institution or firm which might have a link with a givenproject/programme. Stakeholders may, directly or indirectly, positively ornegatively, affect or be affected by the process and results of projects orprogrammes. Usually different sub-groups must be taken into account.

Start-up phase Period from the signing of the contract to the beginning of implementation of thestart-up report. It usually lasts two to three months.

Sustainability The likelihood of a continuation in the stream of benefits produced by the projectafter the period of external support has ended.

Target group(s) Target group(s): the group/entity who will be positively affected by the project atthe Project Purpose level and with whom the project will work very closely, aswell as for whom.

Terms of Reference Terms of Reference define the tasks required of a contractor and indicate projectbackground and objectives, planned activities, expected inputs and outputs,budget, timetables and job description.

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Annex I: Internet Links and Documents

This module gives as annexes the main documents and Internet links which complement use of theInfoGuide for Cofinancing with NGO and DC. These annexes contain Commission documents and

useful examples for the preparation and implementation of projects in the field.

CD-ROMlinks

wwwlinks

Title/references

About EuropeAid

- Internet EuropeAid Organigramme (July 2001)

Mission.pdf Internet Mission: EuropeAid Cooperation Office

General Budget of the Commission - subsection

B7-6 Other cooperation operations

Budget heading B7-6000

Community participation in operations in favour of developing countries

implemented by NGOs.

-Internet LEGAL BASIS

Budget heading B7-6000

Council Regulation (EC) No 1658/98 of 17 July 1998 on co-financing

operations with European non-governmental development organisations

(NGOs) in fields of interest to the developing countries. Official Journal

L 213 , 30/07/1998, p. 1-5

General conditions (7 January 2000)

keydoc3_en.pdf Internet General Conditions for the co-financing of Development operations

undertaken by European NGOs in developing countries (entry into force 7

January 2000) VIII/505/EN

http://www.europa.eu.int/comm/europeaid/general/org_en.htm

http://www.europa.eu.int/comm/europeaid/general/mission_en.htm


http://europa.eu.int/comm/development/sector/ngo/files/keydoc3_en.pdf

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keydoc4_en.pdf Internet General Conditions for the co-financing of operations to raise public

awareness of development issues undertaken by European NGOs (Entry into

force 7 January 2000) VIII/504/99/EN)

Guidelines 200 -2003

guidelines_ngo_cofin_en_final_20nov2001.doc

Developing countries - guidelines 2002-2003

guidelines_ngo_cofin_dev_edu_en_final_20nov2001.doc

Education and development - guidelines 2002-2003

- Internet LEGAL BASIS

Budget heading B7-6002 - Decentralised cooperation in developing

countries

Council Regulation (EC) No 1659/98 of 17 July 1998 on decentralised

cooperation. OJ L 213, 30/07/1998, p. 6-8.

Internet Regulation (EC) No 955/2002 of the European Parliament and of the

Council of 13 May 2002. OJ L 148, 06/06/2002, p.1 and 2.

Guidelines.pdf DC guidelines 2002 and 2003

priority_countries_2002.doc List of priority countries for 2002-2003

Documents:

keydoc5_en.pdf Internet Introductory Note Decentralised Cooperation [DG DEV 23/12/99]

pgn6_new_actors.doc Programming Guideline Notes No 6: "The new actors in the partnership -

update"; DG Development, European Commission; 09/03/2001

Documents on grants for external aid

pg_en.doc Internet Practical Guide to EC external aid contract procedures

A01_en.doc Internet Annex A - General - Glossary





http://europa.eu.int/comm/europeaid/tender/gestion/pg/pg_fr.doc

http://europa.eu.int/comm/europeaid/tender/gestion/pg/a01_fr.doc

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Internet Annex E - Practical Guide to EC external aid contract procedures

e01_fr.doc Internet E1 Call for proposals notice

e02_en.doc Internet E2 Standard advertisement for local Calls for Proposals

- Internet E3 - Standard Call for proposals documentse03_en.doc Internet Guidelines for applicants for grants

- -Annexes to the Guidelines

e03_a_en.doc Internet Annex A - Grant application forme03_b_en.xls Internet Annex B - Budget

e03_c_en.xls Internet Annex C - Logical framework

- Internet Annex D - Standard Contracts/External Aid

cp_en.doc Internet Special conditions - Grant contract for external aid

Special conditions: Annexes 1-5

- - Annex 1 Description of the operation - (to be provided by the beneficiary)

cg_en.pdf Internet Annex 2 General conditions

e03_b_en.xls Internet Annex 3 Budget of the operation

ppm_en.pdf Internet Annex 4 Contract-award procedures

dp_en.docfin_en.xls

Internet Annex 5 Standard request for payment and Financial identification form

e04_en.doc Internet E4 Acknowledgement of receipt - hand delivery

e05_en.doc Internet E5 Example of opening session report

e06_en.doc Internet E6 Acknowledgement of receipt

e07_en.doc Internet E7 Grid for administrative compliance and eligibility

e08_en.doc Internet E8 Request for missing documents

e09_en.doc Internet E9 Rejection letter for ineligible applicants

e10_en.doc Internet E10 Evaluation grid

http://europa.eu.int/comm/europeaid/tender/gestion/pg/pg_en.pdf

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e01_en.doc


http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_en.htm


http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_a_en.doc

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_b_en.xls

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_c_en.xls

http://europa.eu.int/comm/europeaid/tender/usedoc/cont_typ/c_index_en.htm

http://europa.eu.int/comm/europeaid/tender/usedoc/cont_typ/cp_en.doc

http://europa.eu.int/comm/europeaid/tender/usedoc/cont_typ/cg_en.pdf

http://europa.eu.int/comm/europeaid/tender/gestion/pg/e03_b_en.xls

http://europa.eu.int/comm/europeaid/tender/usedoc/cont_typ/ppm_en.pdf

http://europa.eu.int/comm/europeaid/tender/usedoc/cont_typ/dp_en.doc








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e11_en.doc Internet E11 Evaluation reporte12_en.doc Internet E12 Letter to unsuccessful applicants

e13_en.doc Internet E13 Letter to successful applicants

e14_en.doc Internet E14 Contract award notice

e15_en.doc Internet E15 Letter from Commission Headquarters to delegations

a07_en.doc Internet Standard contract addendum

Perdiem_info Internet PER DIEM List

Examples:

Example budget .xls - Example of budget

- - Example of completed logical framework see additional tools

en_plans_action.xls - Overall Action Plan

en_plans_action2.xls - Annual Action Plan

- - Standard format for financial report - example - see page D-82

Indicative format for Terms of Reference

F-format standard ToRfaisabilite.doc

- Terms of reference for feasibility study

ecofintors_en_17_05_01.doc

- Terms of reference for economic and financial analysis

evalguidelines.pdf - Terms of reference for evaluation

Toren_m1.doc - Financial audit

Working documents/Manuals:- Additional tools

E-Ecofin HealthCase.pdf

- Case study on health project (June 2000)quality assessment

tool.doc- Assessing the quality of a financing proposal

Pcm_manual.pdf InternetPCM Manual - March 2001






http://www.europa.eu.int/comm/europeaid/tender/gestion/pg/a07_en.doc

http://europa.eu.int/comm/europeaid/perdiem/liste1_en.htm

http://europa.eu.int/comm/europeaid/evaluation/methods/pcm.htm

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bbue18_cd.pdf - Bilan et orientations D.C. - T.U. Berlin 2001

Useful linksInternet sites and documents

- Internet EuropeAid site (homepage)

Internet EuropeAid F 2 site

- Internet Council Regulation (EC) No 2493/2000 of 7 November 2000 on measures

to promote the full integration of the environmental dimension in the

development process of developing countries OJ L 288,15/11/2000, p. 1–5.

- Internet Council Regulation (EC) No 2836/98 of 22 December 1998 on integrating

of gender issues in development cooperation OJ L 354, 30/12/98, p. 5–9.

Internet Council Regulation (EC) No 975/1999 of 29 April 1999 laying down the

requirements for the implementation of development cooperation operations

which contribute to the general objective of developing and consolidating

democracy and the rule of law and to that of respecting human rights and

fundamental freedoms. OJ L 120, 08/05/1999Internet Council Regulation (EC) No 976/1999 of 29 April 1999 laying down the

requirements for the implementation of Community operations, other than

those of development cooperation, which within the framework of

Community cooperation policy, contribute to the general objective of

developing and consolidating democracy and the rule of law and to that of

respecting human rights and fundamental freedoms in third countries.

- Internet DG DEV site (homepage)

- Internet DG DEV site - Web referencesdev\CSP.htm Internet DG DEV site (country strategy paper National)

Internet DG DEV site (country strategy paper Regional)Internet DG RELEX site (homepage)Internet DG RELEX site (country strategy paper)Internet DG TRADE site (homepage)

http://europa.eu.int/comm/europeaid/index_en.htm

http://europa.eu.int/comm/europeaid/projects/ong_cd/index_en.htm

http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_288/l_28820001115en00010005.pdf

http://europa.eu.int/infonet/library/d/283698/en.htm

http://europa.eu.int/comm/europeaid/projects/eidhr/pdf/975_99_en.pdf

http://europa.eu.int/comm/europeaid/projects/eidhr/pdf/976_99_en.pdf

http://www.europa.eu.int/comm/development/index_en.htm

http://www.europa.eu.int/comm/development/theme/en/index.htm

http://europa.eu.int/comm/development/strat_papers/index_country_fr.htm

http://europa.eu.int/comm/development/strat_papers/index_region_fr.htm

http://europa.eu.int/comm/external_relations/index.htm


http://trade-info.cec.eu.int/europa/index_en.php

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Internet DG ELARG site (homepage)

- Internet General Directorates and services of the European CommissionHdi.pdf Internet UNDP site (Human Development Indicators)

daclst2000.htm Internet OECD site (The DAC List of Aid Recipients)

- Internet Precod site (Support Program for Decentralised Co-operation)Internet Infokit: Cotonou Agreement - ECDPM site (European Center for

Development Policy Management)

http://europa.eu.int/comm/dgs/enlargement/index_en.htm

http://europa.eu.int/comm/dgs_en.htm

http://www.undp.org/hdr2001/english/indicateurs.pdf

http://www1.oecd.org/dac/htm/daclst2000.htm

http://www.precod.com/

http://www.ecdpm.org/

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LIST OF ABBREVIATIONS

ACP African, Caribbean and Pacific countriesPDB Preliminary Draft BudgetODA Official Development AssistanceDC Decentralised CooperationEC European CommissionCSP Country Strategy PaperDG Directorate-GeneralEDF European Development FundPCM Project Cycle ManagementOVI Objectively Verifiable IndicatorNGO Non-Governmental OrganisationNIP National Indicative ProgrammePRECOD Programme de Renforcement de la Coopération Décentralisée (Support

Programme for Decentralised Cooperation)EuropeAid Cooperation OfficeEU European Union