2.1 Is the project on-track against financial forecasts: Yes
1. There are savings (Approx £875k) which would be sufficient to accommodate a no-cost extension for another 6 months to fill the gap between the current end of PRP and the start of the new SNG Programme. 2.2 Key cost drivers
1. Since the programme is largely funding technical assistance, the key cost drivers are fees of the consultants, their expenses and the cost of OPM’s project office in Peshawar. A financial aid of £2 million has been provided to the Government of Khyber Pakhtunkhwa to implement Output Based Budgeting in Districts Buner and D I Khan through conditional grants for Health and Education. The key cost drivers here are construction costs for classrooms and other missing school facilities, and the purchase of equipment, medicines and other supplies for immunisation and antenatal care in health centres.
2.3 Is the project on-track against original timescale: YES
1. The project was extended to accommodate additional work on output-based budgeting. The project ends on 31st March 2012 and is on track to achieve and in cases exceed output targets in that timescale. An extension would allow results that have been impressive to be made fully sustainable and further scaled up.
3. Evidence and Evaluation
3.1 Assess any changes in evidence and implications for the project
1. In the case of Khyber Pakhtunkhwa the original rationale and assumptions for the project have proved reasonably robust and survived changes in government and security. The new Aawaz and SNG business cases recognise that supply side governance interventions such as in this programme need to be balanced and dovetailed with building demand and systems from bottom up as well. In the case of the FATA Secretariat, some of the rationale and assumptions have not proved valid and have been overtaken by newly introduced reforms. New evidence and developments have informed the Peace Building Programme’s proposed approach in FATA.
3.2 Where an evaluation is planned what progress has been made?
1. A detailed evaluation of the programme will be carried out in late 2012 and the lessons will feed into the start up of the new SNG programme if approved. Some evaluation evidence will be available form third party validation of the OBB component before then.
4. Risk
4.1 Output Risk Rating: Medium 4.2 Assessment of the risk level
1. The risk rating remained medium during the last 12 months of the programme because of the strong buy-in by both the bureaucracy and the Government.
1. We have engaged an Independent Audit Firm for a continuous audit of the £2 million Financial Aid to Government of Khyber Pakhtunkhwa. The Government has also put in place an independent civil society organisation for third party validation. These measures are designed to ensure the funds are followed and are being used as intended. The first interim audit report and the third party validation reports have shown positive trends. Oxford Policy Management Group is the implementing organisation. DFID internal audit team looked at this programme in 2011 and assess OPM as minimum risk on financial accountability. Our scrutiny of their monthly reports and TA product documents, and verification with government departments, suggest that TA funds are used as intended and described. We have withheld funds where quality of product has fallen short until that has been rectified.
Climate and Environment Risk
1. There is no change from the original appraisal. As a technical assistance programme focused on provincial government, PRP is not affected by macro climate and environmental changes; nor does it create risks. It may reduce risk through better provincial planning.
5. Value for Money
5.1 Performance on VfM measures
Judged just on annual government budget savings generated this programme has given a positive return. For example, this programme has improved the efficiency of spending of around £4M (including in surplus posts, and non-existent or non-qualifying pensioners) and decreased throw forward in the budget in excess of 7.4 billion rupees (approx £..) per annum . This increased efficiency has already enabled the provincial finance minister to allocate an additional £1 million for health and education in our 2 focal districts for continuing output-based budgeting, and pledge a further £7 million to match any future DFID funding (under design) for 7 more districts.
Assuming final targets are achieved then this £8m programme, £2m of it in direct earmarked financial aid for OBB, will have achieved the result of … additional children enrolled in school and .. children immunised. This is a conservative attribution, the investment in government policy development and capacity will mean more children benefiting from better targeted government resources as they roll out and sustain OBB
1. Oxford Policy Management (OPM) is the sole contractor for the programme. OPM has been consulting DFID and sharing complete information on procurement and contracting of consultants so we can be assured they adhere to DFID’s Value for Money principles. The monthly invoice from OPM is scrutinised by DFID including though input from lead advisers on the results before releasing payments. OPM has provided global annual audited statements. We recommend future management agent contracts include a requirement for country-specific audits. 5.3 Role of project partners
1. OPM is the managing organisation and provides technical assistance to provincial government implementation and supports programme oversight and M&E. The OPM has a core team in Pakistan led by a Team Leader supported by short term input and quality assurance from Oxford office. Each full time adviser is embedded in government offices and is supported by visits from an international adviser where specific tasks require that. The deteriorating security situation did initially affect the quality of programme management but new arrangements have enable much better programme management even in periods of heightened insecurity. 2. Quarterly Steering Committee (SC) meetings have been held in Islamabad. The Additional Chief Secretary Khyber Pakhtunkhwa chairs the meetings. DFID participates in all SC meetings. The meetings make decisions on work plan priorities, resolve issues and monitor progress. Any re-appropriation to budget is done only with the approval of DFID. Regular more informal meetings happen with government officials in between steering committees. 3. An assets register has been maintained by OPM. We recommend DFID seeks independent verification where assets cannot be viewed prior to a decision being made on their disposal. 5.4 Does the project still represent Value for Money : Yes
1. As a technical assistance programme to reforms that focused on building policy and capacity in its earlier stages, value for money has become greater as capacity has grown and the full value is now kicking in as described above,
6.1 Update on specific conditions There are specific conditions on the release of £2 million financial aid for rollout of OBB. These include service delivery targets with 3 monthly milestones to be achieved by the 2 district governments. Funds were released in two equal tranches only after delivery of targets have been verified through TPV and the quality of decision making audited by the independent continuous audit.
7. Conclusions and actions
1. This programme has made very good progress in its final year in Khyber Pakhtunkhwa, building on earlier year’s work on the basic building blocks of the provincial reform programme. Progress on public sector reform has generally been slow. Successes here have grown out the province sticking with its reform plans through successive governments, and out of DFID’s long standing engagement through two successive provincial reform support programmes. Over the years there have been dips in performance, as governments have changed and when conflict, insecurity and other crises have deflected attention. But the basic commitment has survived these. As with most governance programmes the immediate successes have been in strengthened and more efficient systems and resource management, important but not dramatic work, but the headline success in this programme has been their translation into visible results for people – more pupils enrolled in better equipped schools, more children immunised, more women receiving antenatal care. DFID support has made this possible through direct investment in two of the poorest districts and in three sectors that particularly benefit the poor. In addition, by helping the government make savings through more efficient human resource management and by building knowledge and skills among government officials, DFID technical assistance has set the scene for roll out across the province. 2. Remaining actions are:
to complete third party evaluation and audit of the OBB pilots.
provide some preliminary technical assistance to other government departments to develop targets and prepare budgets based on OBB principles for the 2012/13 budget - a no-cost extension proposal will be submitted to ensure adequate support through the budget preparation process.
design and carry out a full evaluation of the programme in order to identify which interventions provided best value for money in terms better services for poor people, and to inform future investment.
8. Review Process
1. This review has been undertaken as a desk review drawing heavily on the Mid Year Review conducted in November and December 2011, which was a comprehensive review. The review also uses subsequent information provided by OPM, Government, Independent Auditors and Independent Third Party Validation in their reports.
