Chapter 9 Part 2

9.7.2 Contents of the CIDA Project Management Strategy for Projects Over $500,000,
A CIDA Project Management Strategy on projects greater than $500,000 should include:

a) Project Description -
A concise description of the project as indicated in section 9.5 above (including a copy of the LFA to be used with the PAD) plus an indication of the Line of Business (i.e., Blueprint, Iterative, Quick Transfer, etc.) and any major issues, including financial management matters.¹ (This information will also be used in the PAD.)

Note:
As this is a strategic document, the budget is presented as part of the project description, rather than as a separate section of the Strategy.

b) Project Organizational Chart -
A Project Organizational Chart showing lines of authority and communication between the project's principal participants and decision makers.

c) CIDA Programming Priorities and Cross-Cutting Themes -
An outline on how CIDA intends to ensure that CIDA's programming priorities and cross-cutting themes (such as poverty reduction, Gender Equality , capacity development, participation and the environment) are adequately addressed throughout the implementation of the project.

d) Project Performance Measurement Framework (see section 9.8 below) - Results-Based Management (RBM) requires that a continuous monitoring of results be carried out to ensure that the project management approach optimizes value-for-money and that project planning and implementation activities are focused on the achievement of results.

The CIDA Project Management Strategy should, therefore, detail how the project's progress towards results achievement will be measured (i.e. major performance indicators from the LFA) and how this information will be gathered, analyzed and used. The CIDA Project Management Strategy should also describe how and when (under what circumstances) changes to performance indicators will be agreed upon and finalized.

The level of detail and the contents of the Project Performance Measurement Framework should be appropriate and cost-effective relative to the size, complexity and potential risks of the project.

Project Reporting - Project reporting is one of the key tools for information sharing on project progress, results and the status of risks. It is also the basis for controlling project resources. As such, project reporting is given a distinct heading in the section of the CIDA Project Management Strategy dealing with the Project Performance Measurement Framework.

The PM should clearly define all reporting requirements (see section 9.8.4 below) including the type of reports required (preferably "progress" reports including both narrative and financial information), the party responsible for producing each report and their frequency (i.e. quarterly, half-yearly, annual, etc.). This information is required for RFP purposes. A list of report recipients should also be provided.
Notes:
§ - The CIDA PM is also required to produce two reports with respect to performance monitoring and reporting: the Project Performance Reportand the Project Completion Report. These reports are more fully described in section 12.5 and Chapter 13. The timing of project reports from the various parties should allow the CIDA PM to prepare the Project Performance Report with appropriate input from the project EA or Implementing Organization.
§ - As with the Project Performance Measurement Framework in general, project reporting requirements should be appropriate and cost-effective relative to the size, complexity and potential risks of the project.

For the Project Performance Measurement Framework in general and project reporting in particular, the proposed roles and responsibilities of each project party (with respect to data collection, production, review and dissemination) and the proposed method of incorporating information into the decision making process should be defined (to the extent possible) in the section on roles and responsibilities of project parties which follows.

e) Roles and Responsibilities of Project Parties and Committees -
In keeping with the project description outlined in section 9.5 above, the CIDA Project Management Strategy should include a description of the proposed roles and responsibilities of the various principal parties and committees involved in project implementation. These include:

CIDA - CIDA has overall responsibility for the general direction and financial control of the project. In consultation with other project stakeholders, CIDA responsibilities would include: obtaining project approvals; contracting the appropriate organizations to implement, monitor and assess project performance; sound financial management; adjusting key project documents, including the LFA, the contract or contribution agreement, as required; contracting other project resources, as required; liaising with the recipient country, the EA and other donors; approving project workplans and all subsequent updates; and attending project meetings, all the above in a timely fashion.

Note:
CIDA project team members should, within the context of their own team operations, define the roles and responsibilities of each member of the team, and particularly the roles of HQ and the field. If this is quite detailed, it could be attached as an annex to the CIDA Project Management Strategy.

Recipient Country (RC) - Responsibilities of the RC may include: setting the general direction of the project; defining, managing and controlling its own contribution to the project; providing the necessary operational and policy linkages and guidelines for the successful implementation of the project; approving project workplans and all subsequent updates; liaising with CIDA and the EA; monitoring and assessing project performance; and attending project meetings.
Note:
As there may be more than one RC organization or institution involved in the project, the CIDA Project Management Strategy should clearly set out the proposed roles and responsibilities of each major RC party.

Project Committees - The mandate and the role of all project committees should be clearly defined. This could include a Project Management Committee, a Project Steering Committee (PSC), a Technical Advisory Committee, etc. It should be clear if the committee is a decision making or advisory body. Membership and frequency of meetings (which may vary by year) should be indicated. Particular responsibilities regarding chairing such committees or providing secretariat functions should be noted in this section and under the roles and responsibilities of the relevant project parties.

Executing Agency (EA) or Implementing Organization (IO) - The Executing Agency or Implementing Organization contracted or selected by CIDA will be responsible for implementing and managing the project, achieving results and accounting for all Canadian inputs referred to in the contract or contribution agreement.

The details as to how the project will be implemented will be set out and described in the subsequent Project Implementation Plan developed by the EA or IO at the start of the project (see section 12.3). The CIDA Project Management Strategy should summarizethe major responsibilities of the EA/IO and highlight some of the initial project milestones with respect to EA/IO (especially in the first year) and the role of the EA/IO in project reporting and in attending project committee meetings and providing secretarial services thereto.

Other Project Partners - Some projects may have other key parties involved, including other international donors, procurement and technical advisors, monitors and performance measurement advisors.
The roles and responsibilities of each of these additional project parties should also be specified in the CIDA Project Management Strategy. If other donors are involved in complementary or co-funding arrangements, it will be important to clarify their specific roles and responsibilities, list the resources they are to provide and for what purpose, and specify how they might strengthen and/or complement the work of the EA. It will also be important to describe the mandate and role of any joint co-ordination committees.

f) Participation and Sustainability Plan -
The CIDA Project Management Strategy should detail what mechanisms will be put in place to ensure the full participation of all project stakeholders, especially project beneficiaries, and how this and other activities will lead to the sustainability of outcomes from the project. While not all information may be available at the time of preparing the Strategy, all known information should be included and the section updated, as appropriate.

g) Contracting Plan -
The Contract ing Plan as described in section 9.9 below should be attached as an Annex to the CIDA Project Management Strategy and will form the basis for the selection of the EA and other required project resources.

The CIDA Project Management Strategy is approved by the PD. Much of the information contained in the Project Management Strategy is then included in the project MOU although the MOU will also make reference to the Project Implementation Plan to be prepared by the EA/IO (see section 11.3 below).

9.7.3 Abbreviated CIDA Project Management Strategy for Projects up to $500,000

As part of a general attempt to streamline project cycle requirements for projects up to $500,000, the PM, in consultation with other members of the project team, is required to produce an abbreviated CIDA Project Management Strategy. As CIDA's intended approach to project management, this document is not part of the PAD, but its existence is confirmed to the approval authority in Section C of the Decision Memorandum of the PAD (for projects up to $500,000). It is a key supporting document that will lead directly to the MOU and, when appropriate, to the RFP and implementation contract.

The PM is expected to review the requirements of the CIDA Project Management Strategy indicated in section 9.7.2 above (as if the project had exceeded $500,000) and to prepare a short Project Management Strategy in keeping with the key issues on the project and the size, complexity and potential risks of the project. The PM should bear in mind the requirements for the project MOU and the RFP, if appropriate, to which the Project Management Strategy will lead.

It is recommended that the abbreviated Project Management Strategy use the same project description text being prepared for the PAD and MOU and then provide:

a project organization chart (which will be used in the MOU);

reference to a summary Project Performance Measurement Framework (see below);

a description of the key roles and responsibilities (which will be used in the MOU); and

a Contracting Plan (see section 9.9 below).

The abbreviated Project Management Strategy is approved by the PD. Much of the information contained in the Project Management Strategy is then included in the project MOU although the MOU will also make reference to the Project Implementation Plan to be prepared by the EA/IO, if appropriate (see section 11.3 below).

9.8 Project Performance Measurement Framework

9.8.1 Introduction

Performance Measurement (Assessment) (see section 3.5) is the on-going review of programs/projects and is the primary responsibility of Program Branch staff. At the project level, Performance Measurement is the responsibility of the PM with appropriate support and input from other members of the project team (especially the technical specialists) and other project partners. It includes monitoring (section 9.8.2), operational reviews (section 12.4.3), end-of-project reports (Chapter 13) and institutional assessments, all within the context of Results-Based Management (RBM) and the Framework of Results and Key Success Factors which provides the factors against which CIDA projects will be assessed.

A Project Performance Measurement Framework is an RBM tool which includes:

a Performance Measurement Data Matrix;

a Performance Monitoring Approach; and

Project Progress Reporting.

Its purpose is to plan the collection, analysis, use and dissemination of project performance information.

The section of the CIDA Project Management Strategy dealing with the Project Performance Measurement Framework is a requirement of, and is drafted within the context of, CIDA's Policy for Performance Review (1994) and the subsequent Update of CIDA's Policy for Performance Review (1996).

Note:
If the CIDA Project Management Strategy is to be shared with the recipient country and/or included in the project MOU, the PM should review the Strategy to assure that any strictly internal information (such as any sensitive elements of the Contracting Plan (section 9.9)) are deleted or summarized in the version to be shared.

The CIDA Project Management Strategy is not a part of the PAD (see Chapter 10). As CIDA's intended approach to project management, it is a key supporting document that will lead directly to the RFP, MOU and implementation contract (see Chapter 11). Its existence is confirmed to the approval authority in Item c) of Annex A of the PAD.

As suggested above, the CIDA Project Management Strategy should be structured and written so as to allow for the transferring of information and text from the Strategy to the PAD and RFP documentation with a minimum amount of editing.

9.8.2 Performance Measurement Data Matrix

The Performance Measurement Data Matrix identifies qualitative and quantitative performance indicators (gender-sensitive whenever possible) for each expected result² . Like the LFA (see Chapter 5), the Performance Measurement Data Matrix should be developed by the stakeholders in a participatory process to ensure that the full range of stakeholder information needs, all potential sources of information, and all potential obstacles or constraints (to the collection of performance information) are identified.

At this time, the question of baseline data must also be discussed and agreed upon by stakeholders. There must be an appropriate relationship between the baseline data and the information obtained or collected during the life of the project on the various performance indicators.

The Performance Measurement Data Matrix should also document the following elements for each performance indicator selected³ as this information is not part of the LFA: data sources, the methods and techniques of data collection and analysis, the frequency of data collection, and who is responsible for data collection, analysis and report preparation. As a complement to the LFA, the Matrix serves as a detailed plan for using the approved performance indicators.

A sample Performance Measurement Data Matrix format for use in stakeholder discussions and in the Project Performance Measurement Framework follows.

Figure 9(1) - Performance Measurement Data Matrix

	Performance Indicators	Data Sources	Collection Methods	Frequency	Responsibility
Impact	w	w	w	w	w
Outcomes	w	w	w	w	w
Outputs	w	w	w	w	w
Beneficiaries (Target Group)	w	w	w	w	w
Resources	w	w	w	w	w

The Performance Measurement Data Matrix is presented as part of the Project Performance Measurement Framework which, in turn, is part of the CIDA Project Management Strategy.

The subsequent implementation of the Performance Measurement Data Matrix involving most, if not all, project stakeholders should generate performance reports (see section 9.8.4) which would not only describe results at the Output, Outcome or Impact levels, but would also assess progress and provide the basis for explaining variances between expected and actual results. In some cases, such as large, complex, innovative projects in risky environments, the Performance Measurement Data Matrix would also need to track critical assumptions through the use of risk indicators. (This involves project reporting by the EA and/or monitor, as appropriate.)

For further information of the Performance Measurement Data Matrix, contact your Branch performance review specialist.

9.8.3 Selecting a Performance Monitoring Approach

Performance monitoring (and the resulting learning) are critical to informing appropriate decisions and actions necessary to achieve development results in the inherently high risk environment of development assistance. Project monitoring yields knowledge on whether an activity continues to be relevant and whether objectives are being achieved. Learning through monitoring (and evaluation) involves the continuous process of assimilating relevant information and lessons, and transforming them into knowledge useful to conducting CIDA's business. In conjunction with the accountabilities assumed by CIDA staff, project monitoring contributes to increased effectiveness in the delivery of development assistance.

It is the responsibility of the PM and project team to define the most appropriate approach to measure and monitor project performance. However, it is also important and necessary to discuss these options with Canadian and developing country parties (and, later, the EA). Involving the major stakeholders early in the design of the Performance Measurement Framework enhances commitment to the performance monitoring function.

There aretwo basic approaches to performance monitoring which are described below:

internal monitoring alone or with external support; and,

external monitoring;

In all cases, the PM has overall accountability for performance monitoring.

It is important to select an approach which is cost-effective, appropriate and reflects the stakeholders' needs for timely performance information. Factors to consider are:

the magnitude of the investment;

the project's technical complexity;

the experience and capacity of potential Executing Agencies;

the commitment of project participants to self-assess;

the availability of appropriate in-house CIDA resources;

the degree of project "innovation";

the level of external risk;

the potential for the initiative to yield lessons-learned that may not otherwise be available;

the likely availability of suitable performance information from project sources; and

the availability of performance information from other sources, including other donors.

The choice of the performance monitoring approach should be documented and presented as part of the Project Performance Measurement Framework which, in turn, is part of the CIDA Project Management Strategy.

For further information on performance monitoring, contact your Branch performance review specialist.

a) Internal Monitoring Option

Internal monitoring is a form of continuous performance self-assessment. In this case, performance measurement and monitoring is the responsibility of those who are most closely involved in project delivery and each project delivery participant (i.e. the Canadian EA or Implementing Organization, developing country partner(s) and CIDA) takes responsibility for particular aspects of the project's continuous performance assessment (measurement).

Internal monitoring requires that the project delivery participants have the capacity, and accept the responsibility, to undertake their share of performance measurement and reporting.

Agreement is reached on the baseline data to be used or collected and information is then provided through the progress and financial reporting submitted by the EA, as well as reporting and feedback from the field, recipient country partners, other donors, etc. Other sources of information may also be identified, but collection of the information remains the responsibility of one of the project parties.

The reporting of the EA on progress towards results is reviewed by CIDA and the appropriate project committee (or other appropriate fora) which assess the project's performance based on all performance measurement information collected. Project activities may then be adjusted accordingly.

Internal monitoring may involve the use of external support. That is, the project delivery participants are responsible for the performance measurement function, but they are assisted by a Performance Measurement Advisor who is contracted to help build their capacity and to advise CIDA on the validity and reliability of the performance information being reported.

External support could involve a Canadian Performance Advisor, a Program Support Unit (PSU), a local Performance Advisor, or a combination thereof.

The Performance Advisor may assist project delivery parties in refining the Performance Measurement Data Matrix and strengthen their capacity to implement it by providing the following services:

training in Results-Based Management and performance measurement;

reviewing the selection of performance indicators;

reviewing information collection strategies, systems and instruments;

reporting on the validity and reliability of the information produced;

recommending needed improvements; and

coaching and advising project delivery parties.

Like the Project Monitor, the Performance Advisor could also provide advice on the technical implementation of the project and provide liaison and facilitation services, if deemed necessary by the CIDA PM and/or the appropriate project committee.

Even though the internal monitoring option may have been selected for the project, a formal review of project progress (independent or internal) could be requested by CIDA or one of the other project parties.

b) External Monitoring Option

The external monitoring option involves retaining the services of a Canadian project monitor, a Program Support Unit (PSU), or a local Project Monitor to independently review and report on performance to the CIDA PM, other Project Team members (through the PM) and the Project Steering Committee.

The project monitor would normally review the baseline data, project progress reports (narrative and financial), and performance information; undertake field visits; and participate in appropriate project committee meetings.

The project monitor would also provide advice on the technical implementation of the project and provide technical liaison and facilitation services, if deemed necessary by the CIDA PM and/or the appropriate project committee.

This option is normally used on large, complex projects; projects dealing with highly technical subject matters; or projects in fields where in-house expertise can not provide adequate technical review.

This option, especially involving a Canadian project monitor, must be suitably justified and seen as a cost-effective and appropriate approach.

9.8.4 Project Progress Reporting

a) Introduction

As the final step in project design, the PM and project team must prepare the CIDA Project Management Strategy. Project reporting is important for the sections dealing with both the Project Performance Measurement Framework and the Contracting Plan. The latter contains terms of reference for the EA contract which will lead to an RFP. The RFP should clearly indicate the project reporting requirements since the contents, frequency, timing and distribution of project progress reports (narrative and financial) will have to be costed by the firms and organizations submitting proposals and specified in the contract or contribution agreement signed with the Executing Agency or Implementing Organization (see Chapter 11 and the Contracting Guide for Managers in CIDA).

Project reporting is a key management tool. It is one of the most important means of information sharing amongst the various project participants and it is the main mechanism by which CIDA and the recipient country obtain information on progress towards results and the use of project resources. The analysis of the information provided in the progress reports should lead to specific decisions about any necessary remedial action on the part of the EA, CIDA and/or the recipient country.

Progress reporting provides three types of information at the activity/output or outcome levels:

accomplishment: progress towards achieving or accomplishing an expected result at the output and outcome levels (narrative information and estimated % completion) based on the performance indicators;

schedule: time elapsed on the output/activity against what was scheduled (days, weeks or months and %); and

cost: funds spent on the output/activity against what was budgeted ($ and %).
Note:
Unless a report compares actual accomplishment, schedule and cost information with planned information, it is not a Progress Report.

Regular and timely reporting on project progress and achievements is also an important element in ensuring that CIDA and EA accountabilities for the Canadian funds invested are met.

Although presented separately below, narrative and financial reports should be submitted and reviewed together (whenever possible) so that progress towards the achievement of results can be compared to the amount and percentage of the budget spent on the related activities.

The PM should prepare a reporting matrix including the type of reports required, the party responsible for producing each report, their frequency (i.e. quarterly, half-yearly, annual, etc.), and who receives each report. This is documented as part of the Project Performance Measurement Framework which, in turn, is part of the CIDA Project Management Strategy.

For further information on progress reporting, contact your Branch Strategic Management Division.

b) Project Progress Reporting

Progress reports should be on a quarterly or semi-annual basis (depending on the size, complexity and potential risks of the project) and must be delivered to CIDA (and other project participants, if applicable) in a timely manner (two to four weeks after the end of the reporting period).

Progress reports must identify and explain any variance between planned and actual figures and information. Failure to include variance information limits the utility of the report as a management tool and requires additional effort on the part of the Project Team to track actual project progress and assess the potential impact of problems and delays.

Helpful Hint:
It is useful that the reports clearly identify areas requiring CIDA action or intervention as well as clearly identifying any approvals required from CIDA upon receipt of the report or in the near future.

While reporting from the EA or Implementing Organization is often the major source of regular reporting on CIDA's contribution to the project, the PM may also receive reports on project progress from an external monitor, the CIDA field representative assigned to the project and from the recipient country itself.

Finally, the PM or other members of the project team may conduct field missions. All of these reporting sources, together with the analysis of other country and donor information, provide the PM with the information needed to monitor project performance.

As noted earlier, the contents, frequency and distribution of reports should be agreed upon, summarized in the CIDA Project Management Strategy and MOU, and detailed in the contract or contribution agreement. The contents, frequency and formats will vary depending on the size, complexity and potential risks of the project. (On all but the largest projects, semi-annual progress reporting normally represents the most cost-effective option.)

Helpful Hint:
In multi-donor situations, efforts should be made to coordinate reporting contents, frequency, etc. to reduce the complexity of such reporting for the recipient country, EA, etc. PMs should ensure, however, that all of CIDA's accountabilities can be met through these more "standardized" reports.

One important reporting issue is the question of what is the base project document against which progress reporting is made. "Current" project information evolves through the project design, the PAD, the MOU, the RFP and the contract or contribution agreement.

The first major report to be received from the EA or Implementing Organization (within two or three months of the arrival of the EA's team in the field) is the Executing Agency Project Implementation Plan as further described in section 12.3. This confirms the validity of the project's objectives, refines (or modifies) the key assumptions or risk indicators and provides a detailed plan, budget and workplan.

Once the Executing Agency Project Implementation Plan has been approved by CIDA and the recipient country (usually at a project committee meeting), the project workplan, and more specifically the annual workplans, provide the "baseline" against which Progress Reports are written and against which modifications to the project are made.

Note:
At times, it is important to note the distinction between two types of reporting from the EA. The EA is normally responsible for reporting on all project activities, including the inputs and activities of other project parties. Delays or problems in such activities are not the responsibility of the EA. However, the EA will also report on activities for which they are contractually responsible and accountable. During project implementation, the CIDA PM's approach to remedial action will be determined by who is responsible for the activity, not by who submitted the report.

c) Financial Reporting

While financial reporting is an integral part of progress reporting, it also serves a dual function on many projects where advances are provided to handle certain project activities. Financial reporting received from the EA (whether part of a progress report or on its own) is critical to the PM's understanding the project's use of its financial resources and is normally the means whereby the EA is paid. More information on financial management is contained in the document, The Financial Aspects of Project Management.

Financial reporting is often required on a quarterly basis for project advance purposes, although exceptions can be made depending on the size of the project, its financial structure or requirements. The format for the financial report should follow the structure of the Budget contained in the Executing Agency's contract or the Implementing Organization's contribution agreement.

Note:
Financial reports are distinct from the regular invoices for payment submitted by the EA or project Partner. Project financial reporting details project spending against the approved budget for each activity or Output (whether or not the EA is responsible for the activity or Output) while invoicing is an accounting of expenditures for EA billing purposes determined by the payment schedule of the contract. However, the payment of invoices is normally tied to satisfactory progress on the project which is demonstrated through progress reporting.

For ease of financial management, it is useful to always have the following elements in the financial report broken down by Output or activity:

the approved budget;

expenditures to date ($ and %);

expenses incurred during the period of the report;

the balance remaining in the budget and estimated cost to complete the activity or achieve the result (Output); and

a forecast of expenditures for the upcoming reporting period.

All of these elements provide the PM (and other members of the Project Team) with timely information on the use of the project's financial resources. This information is important for maintaining good financial control, and is necessary when considering the cost-options of various changes to the project's plans that may be required in order to ensure that the expected results are achieved.

Receipt and approval of the appropriate financial reports (as part of progress reports or otherwise) are normally necessary conditions to release payments (or advances) against the invoices submitted by the EA or Implementing Organization (see section 12.4.1).

9.9 Contracting Plan

Contract planning is an integral part of the project planning process. It is a process which allows the project team to consider, from the outset, the many contracting issues which must be addressed, and the contracting activities which need to be carried out, during the project life cycle in order to ensure the successful implementation of the project. Taking informed contracting decisions early on in the project planning process can expedite the contracting process, facilitate the efficient coordination between contracts (e.g. timing of engagement of monitors in relation to start of implementation activities) and ensure that an appropriate form of contractual arrangement is selected for the nature of the activity.

The Contracting Plan outlines all contracts, contribution agreements, administrative agreements etc. required to carry out all project elements, indicates any linkages between contractual components and identifies intentions for directed sourcing of subsequent phases. The true value of the Contracting Plan, however, is not the document itself but the thought process involved in developing the Contracting Plan.

A Contracting Plan is required when:

the total value of the project is estimated at $1M or more;

the complexity of the project, regardless of the value, justifies a contracting plan; and,

the project team envisages the possibility of directed sourcing with the same contractor for subsequent phases of the project.

The Contracting Plan provides input for the Project Management Strategy and must be consisten with the PAD, MOU and other project documentation.

Details on contract planning can be found in Administrative Bulletin 88-16, Contract Planning for Bilateral Projects.

¹ Refer to Financial Aspects of Project Management, Section 2.2.
² Refer to Section 6 of The Logical Framework: Making It Results Oriented.

³ There should be a limited number of indicators (maximum of three) for each Outcome level result.