Title: Accountability of aid: making cash transfer programmes work for donors and recipients
1Accountability of aid making cash transfer
programmes work for donors and recipients
- ECHO partner meeting 9th 10th December -
Brussels
2Why now?
- Recent ECHO evaluation No evidence was found of
erroneous decisions about the use of cash, of
objectives not having been achieved, or of
negative impact - Development of ECHO policy on cash programming
- Cash based programming moving from theory in to
action - ECHO existing commitment to aid effectiveness
GHD - Insufficient breadth of donors accepting wide
scale use of cash programming
3Why use cash in emergencies?
- Principles
- Choice
- Dignity
- Empowerment
- Practically
- Cost effectiveness
- Flexibility
- Multiplier effects / economic recovery
- Effective in linking relief activities to
recovery and longer term development programming
(LRRD) - BUT these strengths can also be weaknesses,
highlighting the - need for Case-by-case feasibility studies!
4Assumed risks
- Misuse of cash
- Will money be spent wisely?
- How can we avoid money being spent on beer, wine
and women? - Diversion of cash
- Will the cash reach the correct beneficiaries?
- Will it benefit the most vulnerable in the
community / household? - Inflation
- Will the project have an inflationary affect on
local markets? - What if food prices surpass the value of the
transfer? - Accountability
- How can we account for the money?
- How do we know what the money is spent on?
5Feasibility assessment
- Scale of need and other interventions within the
area - Partner plans and capacity and coherence of
intended programme with other response activities
- Suitability of cash vs. vouchers
- implications on community and social structures.
Community capacity to manage programme - Financial infrastructure in country
- Availability of secure transfer system, i.e.
banking systems, mobile banking and post offices.
In country security - Market analysis
- Capacity / experience of in country team
- Number of programme and finance staff in country
team with specific cash based programming
experience. Level of technical / finance staff
available - Organisational technical capacity
- Technical support available / needed from head
office or the region for specific country /
project
6Project Design
- Modality of transfer (i.e. open cheque, bank
accounts, direct transfer) - Security and level of NGO engagement in transfer
modality strength, experience and reputation of
distribution partner cost effectiveness of
different modalities. - Number, frequency and value of transfer
- Suitability of available transfer systems to
deliver over proposed period, with limited set up
where necessary possibilities to streamline
processes - Scale of intervention
- Number of beneficiaries period of time
geographical area - Inflation
- Inflation rate trends in country over the
previous years / months. Trend forecast country /
region - Availability of experienced management staff
- Speed of recruitment / deployment of technical
and skilled staff
7Market-Led Livelihoods Recovery, Kashmir (SC and
Oxfam)
- Cash grants to facilitate recovery of 5,100
households - Cash to support 375 traders re-establish business
- Markets not seen as exogenous
- Diverse use of grants livestock, sewing
machines, road-building - Peer support via workshops helped minimise misuse
8Cash transfers in Drought Response Swaziland
(SC)
-
- Monthly cash grants to 7,500 households through
private bank accounts - Monthly transfer value based on market value of
essential food and non food items - Money was used by households to purchase many
items including food (ave. 75 of expenditure),
hygiene items, transport, education healthcare - Increase access to financial services for poor
illiterate rural population
9WV-Lesotho Cash Food Transfer Programme
- Monthly cash to 4.100 households cash and food
to 2.400 households through G4S - Monthly transfer value based on market value of
essential food items, increase after 4 months due
to price increases - Almost all (94 ) of cash only and 66 of cash
food households bought staple food - Increase flexibility for other priority needs
(grocery, healthcare, education, etc.)
10Appropriate staffing
- Projects dedicated finance manager skills
appropriate to scale and nature of intervention
i.e. specific banking skills if accounts will be
used, etc. - Monitoring staff with finance experience
- Careful and sufficient resourcing and realistic
time planning to avoid overburdening
inexperienced staff and early training
SWAZILAND Drought Response SCUK
DFID Recruitment of a financial manager with
previous corporate experience was crucial for
appropriately managing the partnership with
Standard Bank Partnership Agreement Working
relationship and shared lesson learning
11Segregation of duty
- Clear scheme of delegation, roles and
responsibilities of team - Assignment of different staff for identification
of beneficiaries and delivery of cash - Double checking of all financial transactions and
counting
Kashmir Earthquake Response Staff who registered
and identified beneficiary households were not
involved in monitoring or transferring
funds Roles and responsibilities were shared with
the community Community committees assisted in
the handling of complaints / enquiries
12Financial monitoring / verification
- Onsite monitoring of transfers
- Regular control of partner capacity
- Monitoring of household expenditure
- Community / beneficiary involvement in monitoring
- South Lebanon vouchers to 1.500 most vulnerable
families after the Israeli withdrawal (WV) - Vouchers for food (42,- ), for hygienic items
(37,- ) and for cooking gas (10,- ) per family
and month through local traders - Biweekly reports and reimbursement of stores
according to vouchers obtained - Complete files kept on each store and village
- Complete report on finances (as required by
donor) and family data compiled monthly - Random visits to families to report changes in
needs, and discover and eliminate irregularities
at stores
13Market and commodity tracking
- Budgeting to account for increase in costs over
time (inflation, food price rises) - Careful and systematic monitoring / tracking of
market prices and reviewing transfer value
LESOTHO World Vision 6500 households received
monthly payments over 6 months through direct
cash delivery Prices of a basket of commodities
was monitored over the 6 month period. When
prices rose over 20 of their original cost the
payment was amended
14Quality programming
- Sufficient investment in community training and
mobilising, careful targeting, community
involvement in project monitoring and development - Encourage appropriate use of funds through
detailed needs assessment prior to targeting and
ongoing visible monitoring - Financial literacy training to vulnerable
households
SWAZILAND Drought Response cash transfers
through bank accounts A detailed needs assessment
carried out nationally defined targeting criteria
existing community structures were used to
target beneficiary households and SC verification
supported this. Financial Literacy training was
carried out at community level a cardboard ATM
machine introduced people to accessing their
funds through the bank
15Internal Audit
- Adequate documentation of processes critical,
e.g. in WV Lesotho there was an operational audit
and a financial audit that covered the project
life - WV FPMG has set Audit guidelines and a standing
Audit team - Cash transfers systems were adapted from the food
systems, this gave the project a head start while
building on established controls - Monthly Financial reports to track cash-flows
were produced and reviewed by at least 3 senior
staff
16How do we move forward?
- Greater sharing of learning amongst donors and
agencies on accounting for cash based programming
and controlling risks - Stronger Monitoring and evaluation
- Getting targeting right for humanitarian
efficiency. - Minimum Standards feasibility study, clear
beneficiary information (including basic
financial literacy as part of awareness and
preparedness) - NGO / partner capacity building appropriate
investment - Clear and consistent donor policies and practices
- Country level preparedness
- Advance joined up work in areas prone to rapid
onset or chronic onset strengthens
appropriateness / timeliness of response /
capacity
17Resume
- Cash and Voucher programs should be seen as two
options among a number of options each of which
are appropriate in different contexts. The
tendency to think of cash and vouchers as
distinct and special has distracted attention
from an efficient way of helping households meet
their needs in a given context