GLOBAL LESSONS: DESIGNING CDD OPERATIONS

Samantha de SilvaHDNSP

April 2005

OVERVIEW Direct Financing of Community Sub-Projects

FUNDING AGENCY

(Central Government Agency, Social Fund, NGO, Local

Government, etc)

COMMUNITY GROUP

(Project Management Committee)

Materials

Contractors

Skilled Labor

Technical Assistance

Financing Agreement (Contract)

Disbursement Procurement

Materials Services

Other Characteristics:

Community Contribution (Labor, Materials, Cash)

Community Participation (throughout project cycle)

Subproject Cycle PreparationFunding Agency:–Informs stakeholders–Facilitates communities–Assesses capacity of communities–Develops simple technical designs–Appraises subproject (Desk/Field)

Community:–Elects Project Management Committee–Prepares/submits subproject application and budget

Approval and LaunchFunding Agency: –Trains community–Prepares financing agreement–Hands over first check at launch

Community:–Mobilizes community contribution–Plans launch ceremony–Signs Financial Agreement

CompletionFunding Agency:–Conducts completion assessment–Provides completion certificate

Community:–Takes over operation and maintenance of asset

Monitoring and EvaluationFunding Agency:–Releases funds–Conducts participatory technical/financial audits–Beneficiary assessments

Community:–Develops own indicators/M&E plan–Provides day-to-day oversight–Conducts audits

ImplementationFunding Agency: –Provides technical support–Oversees implementation/financial management

Community:–Procures materials and services–Supervises construction–Manages labor contribution–Prepares progress reports–Manages funds

Key Design Elements

Base arrangements on past community experience Info campaign to inform all stakeholders of “rules of

the game” Develop targeting strategy consistent with PDO Develop simple, standard designs with input from

communities/sectoral agencies Design simple training packages for communities

DCA

PAD

OM

Key Documents

• Development Credit Agreement (DCA)• Project Appraisal Document (PAD)• Operational Manual (OM)• Community Manual• Financing Agreement (FA and Community)

Ensure consistency across documents.

Community Contributions

Community must establish who should contribute, when, how and where the contribution will be given.

FA must help community value contributions accurately.

Community must track contributions.

Disbursement Arrangements

How should Funding Agency disburse to communities?• Output or Lump-sum method for financing based on

physical progress• Ensure that adequate funds flow smoothly to

communities• Disburse to communities in tranches• Cost savings accrue to community• Facilitate community’s access to formal banking

system

Procurement Arrangements

Develop/update Unit Cost Database Encourage communities to use Local Shopping (3

Quotations) but use Direct Purchase as long as items are within rates in Unit Cost Database

Use Local Competitive Bidding or Direct Contracting for hiring of contractors.

Establish wage rates for hiring skilled labor

Provide active support to communities on prices and quality

Build incentives for efficiency of procure-ment

Monitoring and Evaluation

Conduct systematic post review Set up MIS early in the project (track

process, input, output and outcome indicators)

Conduct financial audits together with technical and social audits.

Keep in mind the PAD as well as the ICR!

Operation and Maintenance

Address issues to do with maintenance and recurrent costs early on, verify during appraisal

Include plan to cover maintenance and recurrent costs

Provide training on technical aspects as well as fundraising techniques

Conduct post completion visits/training

Completion

Emphasize completion of subprojects on a timely basis

Account for all subproject related funds Submit final completion report Issue Completion Certificate