ANNEX 1
DEVELOPMENT COOPERATION PROGRAM MANAGEMENT CYCLE

Development assistance programming is undertaken in the context of the program and project cycle management. The project cycle refers to the steps or stages that a project undergoes from the time it is only an idea until the time it is completed. The cycle is applicable to donor support as well as for the formulation of the donor country strategy and country program which provides the macro-perspective for donor assistance programming. An overview of the program/project cycle is presented in Figure 1 below.

FIGURE 1: PROGRAM/PROJECT MANAGEMENT CYCLE

The central role of country strategy indicates the overarching strategic framework within which a portfolio of projects funded by a donor is developed. The stages in the project cycle are:

Throughout the entire project cycle lessons learned and best practices are assimilated to refine and enrich the project design and implementation strategies. Successful experiences are scaled up, to inform policy debate and enable replication for wider coverage and scale.

ANNEX 2
KEY ISSUES AND AREAS TO BE COVERED IN A PROJECT DOCUMENT

The preparation of a project document should cover the following issues and requirements that must reflect the design of a development intervention.

• Context and situation analysis

• Capacity development requirement and assessment

• Strategy and objective of donor support

• Project description:

-	Project strategy
-	Outcome and partnership strategy
-	Outputs and activities
-	Inputs
-	Sustainability, risks and prior obligations
-	Management arrangements
-	Monitoring, review and evaluation with learning
-	Reporting

• Work plan

• Budget

• Annexes, such as:

-	Legal instruments for execution and implementation arrangements
-	Terms of reference of key consultants and experts
-	Strategy and scope of training
-	Equipment specification

CONTEXT AND SITUATIONAL ANALYSIS

This part of the project document should provide an analysis of the development problem being addressed. The content is based on the information gathered during the problem definition stage using the log frame, results analysis and other baseline studies. It should include:

1. The contextual issues of the national development problems that are being addressed in the project intervention.

2. Baseline information and measurable indicators of the problems that can be used to demonstrate that the proposed development intervention would solve/address the problems.

3. The population or target groups affected; and gender and environmental aspects of the problem.

4. Previous experiences and lessons learned from efforts of national and international partners.

5. The national program context of the project interventions should be briefly described. Alternatively, an implicit national program may exist and this may be identified through an analysis of government plans and policy and strategy statements. The description of the national program should cover objectives and strategies of the Government; structure and components; efforts currently being made by the Government and national institutions as well as international development agencies in support of the national program; institutional arrangements for the management of the program, including inter-ministerial coordinating arrangements, legislative requirements, etc; and resources allocated and expected. The Government may find the project intervention as providing an opportunity to develop a comprehensive national program.
    

CAPACITY DEVELOPMENT REQUIREMENT AND ASSESSMENT

Capacity development should be an overriding objective of development assistance. Project formulation exercise must therefore identify and analyse the capacity development issues and requirements as part of the solutions being proposed. Important aspects of capacity requirements are strategy and policy formulation, legislation, human resources, technology, management capacities, monitoring and evaluation capacities, learning and knowledge integration capacity, aid coordination and resource mobilisation. The project document should outline the precise areas of capacity that must be addressed for the successful implementation of the project intervention.

The present situation in Cambodia would warrant special attention to the following capacity building inputs:

1. Maximise utilisation of national experts. The Government-Donor TWG mechanism should be used to harmonise the “pricing” structure and terms and conditions of employment of national consultants/experts. These measures may also have to be placed in the context of developing capacity of the “knowledge industry” in Cambodia.

2. If monetary incentives must be given to counterpart staff their application must be done in a transparent and coordinated manner through consultation between donors and the Government. Government and donors must cooperate on arriving at a coordinated strategy of eliminating the incentive schemes in the context of sustainability of donor supported development interventions.

3. Training activities should be coordinated at the sector program or line ministry level. Ministries/departments should be encouraged to develop their respective competency plans in relation to their respective sector or cross-sectoral development programs. At the sector line ministry level, a database of training and some form of “skills registry” system should be maintained to track competency building activities and their effective application in the organisational system.
    

STRATEGY AND OBJECTIVE OF DONOR SUPPORT

This section should provide an explanation for donor support to the national program. It should offer a description of how the project support is consistent with the donor’s country strategy for Cambodia; the strategic advantages the donor possesses; and how the donor’s resources will be allocated to achieve the solution to the problem.

PROJECT DESCRIPTION

The core design of the project intervention should be presented in this section. Using a result-based approach to project intervention, the project description should cover the following areas:

1. Project strategy. The project strategy that should address:

   • project intervention approach and methodology,

   • specification of innovative models and concepts,

   • strategies and institutional mechanisms for up-scaling the models being pursued for validation under the project,

   • implementation arrangements including identification of roles and responsibilities of the institutions and partners,

   • aid coordination arrangements in the case of multiple donors involved in the project, and

   • exit strategy of the donors and sustainability of the development intervention.

   Host national institutions must ensure that new concepts and models pursued through donor-assisted projects are subject to coordination at the sector or program level. The objective is to have mechanisms in place for monitoring and learning and eventually up-scaling successful pilots. Care should be taken to prevent proliferation of pilot schemes that may exert considerable management burden on national institutions and result in misallocation of resources.
    

2. Outcome and partnership strategy. The development outcome to be achieved through the donor support. The time frame and measurable indicators for the achievement of the outcomes/effects should be stated. The partnership strategy should specify other Government agencies, bilateral and multilateral donors, NGOs, as well as private sector implementing partners whose involvement is critical to the successful outcome of the project intervention.
    

3. The Outputs of the project must be defined in measurable terms and organised according to the attainment of an outcome or effect of the project intervention. Indicators and time frame of attainment of each output must be stated to enable monitoring progress toward producing output.

4. Activities that must be carried out in order to produce each output must be described in substantive terms. Time frame for each activity should also be stated.

5. Inputs are experts/consultants, project administrative and management personnel, volunteers, training, equipment, etc. The inputs required for carrying out each activity should be specified.
    

SUSTAINABILITY, RISKS AND PRIOR OBLIGATIONS

The precise strategy and requirement for sustainability of the project intervention must be elaborated in terms of host institution’s capacity to sustain the effort initiated or extended through the project. Fiscal issues, human resources provision, recurrent budgetary issues, organisational capacity and other relevant factors that would determine sustainability of the project intervention should be described. Environmental risk assessment, where applicable, should also be undertaken.

The risks that is likely to undermine sustainability and effective implementation of the project activities should be clearly identified and outlined as part of the project design. In this case, the obligations of the Government and counterpart national institutions as well as cooperation of partners should to be stated.

MANAGEMENT ARRANGEMENTS

The management arrangements should spell out the institutions – national or international – responsible for execution or overall management of the project. Implementing partners – national or international – are drawn in a project to deliver the goods and services required for the attainment of project outputs. Implementing partners should be identified at the project design phase, however in certain cases the identification and selection of implementing partners may have to await commencement of project activities.
Other organisational and institutional arrangements for guiding project implementation may also be required for the effective and successful implementation of a project. These may include project steering committee and project implementation committee for projects which are not situated in the context of a SWAp.

THE OTHER ASPECTS OF PROJECT DESIGN INCLUDE:

• Monitoring, review and evaluation with learning

• Reporting

• Work plan

• Budget – with clear linkage between input and output required for the results framework of a project intervention.

• Annexes such as:

-	Legal instruments for execution and implementation arrangements
-	Terms of reference of key consultants and experts
-	Strategy and scope of training
-	Equipment specification

ANNEX 3
THE MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF)
HEALTH SECTOR CAMBODIA ¹⁰

This annex provides a sample description of the Medium Term Expenditure Framework (MTEF) developed at the sector level. Below is a reproduction of the conceptual framework of the MTEF for the Health Sector Strategic Plan 2003-2007.

WHAT IS AN MTEF?

An MTEF is a multi-year public expenditure plan based on sectoral financing needs and projections for the total resource envelop available from domestic and external resources. As information tool it serves to program all resources and expenditure together and helps in making resource allocation decision on priorities.

THE MTEF IN CAMBODIA

An MTEF in Cambodia is established for the first time in 2002 for the period 2003-2007. The process is being piloted for four ministries, health, education, rural development and agriculture and is anticipated to integrate with the public investment program (PIP).

The intention is to enable medium term allocations for increased public spending based on forecasts of financing needs for the social sector. In this regard, each line ministry is required to provide indicative forward projections by program area, broad line item (salary, non-salary and capital) and sources of funds.

OBJECTIVES FOR ESTABLISHING AN MTEF

The objectives of developing an MTEF are to:

• Fulfil government requirements in projecting resource needs for a sector;

• Produce a financial plan for the priorities in a sector strategic plan;

• Link budgetary allocations for investment and operational costs with medium term development plans;

• Enable government and partners to jointly make resource allocation decisions for better efficiency by reducing shortfalls and duplications.

THE MAIN COMPONENTS OF THE MTEF PROCESS

RISKS AND CONSTRAINTS TO IMPLEMENTING THE MTEF

One of the most fundamental problems is the release of funds. Experience with the MTEF process in the health sector showed that there is a tendency for expenditure to be concentrated into the last quarter of the year while only 1.5 percent of the budget for health was spent in the first quarter. The situation for the first quarter of 2002 had slightly improved but release of cash still has remained low.

Other risks to effective implementation of the MTEF are:

• Affordability - whether the national budget projections are based on a realistic macroeconomic framework, whether there is sufficient input against needs from external sources and whether objectives and priority areas are realistically defined;;

• Accountability - whether the responsibility for developing, implementing and monitoring plans are clearly designated among stakeholders;

• Transparency - the degree to how useful and clear is the budget classification system; to what extent is non-financial program performance measured?

• Comprehensiveness - does the MTEF capture extra budgetary funds? Is there consistency between national and external financing?

Many of the risks to successful implementation of the MTEF are outside the direct control of the Ministry of Health. They rely on broader fiscal reforms and wider attempts to reform the planning process within the health sector. Regular releases of cash are a pre-requisite for meeting the targets of both the MTEF plan and also non-financial targets of achievement set by the health sector. Other constraints concern inadequate coordination of external financing and the lack of information regarding donor expenditures that leads to difficulty in making strategic decisions.

ANNEX 4
PROGRAM/PROJECT PROGRESS REPORT

1. QUARTERLY PROGRESS REPORT

The quarterly progress report (QPR) should be prepared toward the end of the current quarter. The QPR should cover analyses of attainment of outputs as per project document and work plan, activities undertaken to produce the outputs, inputs mobilised and deployed, and expenditures incurred. A summary of actual expenditure against planned budget should be presented in the QPR; it should be accompanied by a summary estimate of expenditure budgeted for the next quarter as well as the remainder quarters of the current calendar year. The QPR is an instrument for the project management to obtain advance funds.

2. ANNUAL PROGRESS REPORT

The annual progress report (APR) should be prepared at the end of each calendar year. The APR would be considerably more analytical in content than the QPR. It should assess the project progress or performance in terms of both outputs and outcomes in a comprehensive manner. Lessons of development intervention that can be learned from the project for knowledge sharing amongst the development community and policy makers should be documented in the APR. The APR should provide future directions for the project (development) intervention – in terms of both strategy and scope of development cooperation. The APR should be accompanied by a financial report and revised budget estimates, including projection of resource requirement for the remainder of the project period.

The performance assessment dimension of the APR should address quality assurance of the project. The assessment should identify critical issues and problems of the project and offer suggestions for improvements in project management and implementation arrangements. Projects having serious implementation difficulties may be subject to serious consideration for discontinuity, as per decision reached in consultation between the relevant Government agencies, CDC and the donor(s).

The APR can be used for annual review of the sector program to which the project has been designed to contribute to.

3. FORMAT OF THE QUARTERLY AND ANNUAL PROGRESS REPORT

In an effort to simplify reporting, the Government will work with the Government-Donor Joint Technical Working Group to develop a standard format for the quarterly and annual progress reports that would be used by all agencies – government and development partners engaged in development cooperation in Cambodia.
Below is an example of a simplified format of a standard progress report which can be adapted for preparation of Quarterly and Annual Progress reports.

I. PURPOSE

This section includes:

• Project intended outcomes and planned outputs.

• Reference to how the project relates to national goals, priorities or programs.

• The implementing partner or contractor.

II. RESOURCES

This section includes total approved budget and summary of resources available for the project.

III. RESULTS

Information in this section includes:

• An assessment of progress towards the production of outcomes and outputs planned for the year.

• Main activities undertaken and achievements.

• Explanation of any variation from the work plan for the year.

• Lessons learned and knowledge gained project implementation and any evaluations and studies that have taken place during the year.

IV. FUTURE WORK PLAN

Information in this section includes:

• Work plan for the following year.

• Indication of any major adjustments in the original outcomes and outputs.

• Estimated budget required.

V. FINANCIAL IMPLEMENTATION

This section should include total approved project budget, current year budget and expenditures for the year.
 

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