The five phases of PCM

The different phases of the Project Cycle Management are

• Programming
• Identification
• Formulation
• Implementaton
• Evaluation and Audit

Programming: defining the framework and establishing the general principles

Purpose

The purpose of Programming is to assess the main objectives and priorities of the sector, and thus to provide a relevant and feasible programming framework within which programmes and projects can be identified and prepared. The programming phase consists of an analysis of the situation at national and sector level to identify problems, constraints and opportunities. For the identified priorities, strategies are formulated based on the analysis and that take into account lessons learned.. Programming helps to: establish what other activities are ongoing and/or planned in the water sector, which are the sources of financing and in what areas; review existing water sector development policy; consider water-related activity across all development sectors; and identify the key areas for water-related projects.

Input

• National policies and strategies;
• Regional or transboundary policies, strategies and development plans (if relevant);
• Sector assessment studies with baseline data and situation analysis;
• Sector plans and strategy documents;
• Evaluations of policies, strategies and sector programmes;
• Case studies analysis of past projects;
• Demand analysis and resource assessment;
• Economic, financial, social, institutional and environmental analysis.

Activities

A national water resources study may be useful to assess national and/or regional constraints, opportunities and priorities as well as determining the role of the different national and international actors. The process shall be consistent with the major elements of the LFA:

• Identify key stakeholders and assess their needs, interests and capacities;
• Identify and analyse the priority of development problems/constraints and opportunities;
• Identify development objectives which address the identified priority problems possibly in a participative way with sector stakeholders and beneficiaries; and
• Identify a strategy for a possible intervention that takes account of the proceeding analysis, including capacity constraints, lessons learned from previous experience and the ongoing or planned activities of other stakeholders.

Outcomes

An indicative sector programme specifying:

• Global objectives
• Financial issues for each development area
• Specific objectives and expected results for each area
• How cross cutting issues are taken into consideration
• Programmes / projects to be implemented in pursuit of these objectives, including the targeted beneficiaries

Focus Areas Related:

• Water Resources (WR) Programming
• Basic Services (BS) Programming
• Municipal Services (MS) Programming
• Agricultural (A) Programming
• Energy Hydropower (EH) Programming
• Sector Performance (SP) Programming

Identification: identifying project ideas and verifying their feasibility

Purpose

The purpose of the identification phase is to:

• identify project ideas that are consistent with the sector national framework, the sector strategy, the sector programme (if existing) and partner development priorities;
• assess the relevance and likely feasibility of these project ideas consulting stakeholders (beneficiaries in particular) and other sector partners;
• assess the possibility of overlapping and other criticalities with other projects or programmes in the sector
• prepare a project identification document summarising the results of the ideas and the financial aspects; and
• determine the scope of the further work required for individual projects during the formulation stage.

Input

Most important information and data sources are from the national and local governments, non-state actors, universities and research centres, multi-lateral or regional development agencies. The priorities and targets identified in the relevant national sector framework and from relevant sector policy or sector programme objectives: local ownership of, and commitment to, potential projects are  key quality assessment criteria.

Key inputs and documents are:

• the framework established during the programming phase;
• results from any relevant sector study;
• results of participative consultations with stakeholders;
• sector financing strategy (if any);
• national sector policy or strategy (if any).

Activities

The following assessments shall be carried out:

• Assessment of policy and programming framework;
• Stakeholder analysis, including institutional capacity assessment;
• Problem analysis, including scoping of crosscutting issues (e.g. gender, governance, environment);
• Assessment of other ongoing and planned initiatives, and assessment of lessons learned;
• Preliminary objectives and strategy analysis;
• Preliminary assessment of resource and cost parameters;
• Preliminary assessment of project management, coordination and financing arrangements; and
• Preliminary assessment of economic/financial, environmental, technical and social sustainability issues.

Tools to be used are:

• Quality Assessment Criteria
• Logical Framework Approach
• Institutional capacity assessment
• Promoting participatory approaches and using facilitation skills.
• Economic and Financial Analysis

Outcomes

• Policy and programme context
• Stakeholder analysis
• Problem analysis, including scope of cross-cutting issues
• Lessons learned and review of other ongoing or planned initiatives.
• Preliminary project description – indicative objective hierarchy
• Indicative resource and cost implications
• Indicative coordination, management (including financial management/control) and financing arrangements
• Preliminary assessment of economic/ financial, environmental, technical and social sustainability
• Follow-up work plan for the Formulation stage

Focus Areas Related:

• Water Resources (WR) Identification

• Basic Services (BS) Identification
• Municipal Services (MS) Identification
• Agricultural (A) Identification
• Energy Hydropower (EH) Identification
• Sector Performance (SP) Identification

Formulation: the detailed planning and preparation of the project

Purpose

The purpose of the project formulation stage is to:

• Confirm the relevance and feasibility of the project ideas as proposed in the identification phase;
• Prepare a detailed project design, including the management and coordination arrangements, financing plan, cost-benefit analysis, risk management, monitoring, evaluation and audit arrangements; and
• Prepare a proposal including all the documents above mentioned to be submitted to the funding organisation or to the government.

Input

• the project identification document defining key components of the proposed project;
• Terms of reference for detailed project design studies,
• Other assessments documents produced during Identification

Activities

The following shall be carried out:

• confirm consistency with the policy and national programming framework;
• stakeholder analysis, including institutional capacity assessment;
• problem analysis, including crosscutting issues (e.g. gender, governance, environment);
• complementarities with other ongoing and planned initiatives, incorporating lessons learned;
• strategy assessment;
• objective hierarchy assessment (objective, purpose, results and indicative activities);
• assessment of resource needs and cost requirements;
• assessment of management, coordination and financing procedures and arrangements (including financial management and internal control/reporting);
• assessment of monitoring, evaluation and audit arrangements;
• sustainability and risk assessment, including economic/financial, environmental, technical and social.

Proposed tools are

• Quality assessment criteria
• The Logical Framework Approach, including the preparation of the Logframe;
• Institutional capacity assessment, building on previous analysis undertaken in the identification stage;
• Risk management matrix;
• Guidance on promoting participation and the use of facilitation skills;
• Guidance on preparation of TORs;
• Guidance on financial management, control framework and reporting requirements;

Outcomes

• A Final project proposal; and/or
• Terms of Reference/Technical and Administrative Provisions for implementation.
• The main information elements that should be available by the end of Formulation (in order to effectively guide and support implementation) are:
  • Situation Analysis/Key Assessment;
  • project Description;
  • management Arrangement;
  • feasibility and Sustainability

Decision options can be:

• What further design / formulation work is required before the start of implementation?
• What are the final implementation / contracting modalities to be used?

Focus Areas related:

• Water Resources (WR) Formulation
• Basic Services (BS) Formulation
• Municipal Services (MS) Formulation
• Agricultural (A) Formulation
• Energy Hydropower (EH) Formulation
• Sector Performance (SP) Formulation

Implementation including monitoring and reporting

Purpose

The purpose of the implementation stage is to:

• Deliver the results and contribute effectively to the overall objective of the project;
• Manage the available resources efficiently; and
• Monitor and report on progress of activities.

The implementation stage of the project cycle is in many ways the most critical; as it is during this stage that planned benefits are delivered. All other stages in the cycle are therefore essentially supportive of this implementation stage.

Monitoring, as well as evaluation, are both concerned with the collection, analysis and use of information to support informed decision-making. For the sake of clarity it is useful to understand the differences between the monitoring and evaluation in terms of who is responsible, when they should occur, why they are carried out.

Monitoring is usually the systematic and continuous collection, analysis and use of management information to support effective decision-making. Monitoring is an internal management responsibility, although it may be complemented by ‘external’ monitoring inputs. Monitoring can be seen as a picture of the project shot at any given time. It does not give a complete overview but it is useful to identify issues while they can still be addressed in a timely fashion.

Evaluation is usually a more complete analysis of the relevance and fulfilment of objectives, developmental efficiency, effectiveness, impact and sustainability. It is carried out with external inputs at fixed timings such as the project “mid-term” or at the end of the project in order to feed the new programming phase of the PCM with lessons learnt.

Regular reviews of project progress should involve key stakeholders with direct responsibilities for implementation on the ground (i.e. the project management team and even the beneficiaries) as they provide a structured opportunity to discuss and agree on the content of progress reports, build a common understanding of key issues/concerns and of actions that need to be taken.

Input

The information required depends on the scope of the project: purpose, results, activities and resource requirements, budget and by the management arrangements. Information required and reporting schedule will vary according to the level of management.

The following documents might be required:

• Key indicators and source of verification as per LFA;
• Quality criteria and standards;
• Logframe matrix;
• activity/work programme schedules and resource/budget schedules;
• risk management matrix;
• checklists for planning short-visits;
• terms of reference;
• contractual documents;
• project implementation plan with calendar;
• detailed designs and tender documents.

Activities

• Monitoring and regular review
• Planning and re-planning
• Reporting aiming to:

• Inform stakeholders of project progress;
• provide a formal documented record of what was achieved during the reporting period;
• document any changes in forward plans;
• promote transparency and accountability.

• Ongoing assessment of the following:

• Continued relevance and feasibility of the project;
• progress in achieving objectives and resources used;
• quality of management including risk management;
• prospect of sustainability of benefits;

Outcomes

Projects are executed as far as possible according to plan; with adjustments to ensure that project assets can be operated successfully to maintain a sustainable flow of benefits.

The key documents required/produced during the implementation stage usually include:

• Operational work plans (usually annual);
• periodic but regular progress reports;
• specific reviews/study reports (e.g. mid-term evaluation); and
• completion reports (at end of project).

Focus Areas Related:

• Water Resources (WR) Implementation
• Basic Services (BS) Implementation
• Municipal Services (MS) Implementation
• Agricultural (A) Implementation
• Energy Hydropower (EH) Implementation
• Sector Performance (SP) Implementation

Evaluation and Audit: Analysis of outcomes and activities

Evaluation

Purpose

The approach to Evaluation in this section is based on the OECD-DAC Quality Standards for Development Evaluation (OECD, 2010).

The purpose of evaluation is to make an “assessment, as systematic and objective as possible, of an ongoing or completed project, programme, strategy or policy, its design, implementation and results. The evaluation purpose will be in line with the learning and accountability function of evaluations such as:

- Contribute to improving sector policies, strategies, procedures or techniques;

- consider a continuation or discontinuation of a project/programme;

- accountability for expenditures to stakeholders and tax payers;

Amongst the most important objectives of an evaluation the OECD-DAC cites:

- To ascertain results (output, outcome, impact) and assess the effectiveness, efficiency and relevance of a specific development intervention;

- to provide findings, conclusions and recommendations with respect to a specific policy, programme etc.

The evaluation scope can include the time period, funds spent, geographical area, target groups, organisational set-up, implementation arrangements, policy and institutional context and other dimensions to be covered by the evaluation. Identifying discrepancies between the planned and actual implementation of the interventions are among the main results of an evaluation.

In the planning of the Evaluation a certain number of issues can be considered such as stakeholder involvement, consideration for joint evaluations with other sector actors, evaluation questions, selection and application of evaluation criteria, selection of approach and methodology, resources, governance and management structures, document defining purpose and expectations.

Input

• Terms of reference for the evaluation mission;
• the project’s Logframe matrix;
• project documents clearly defining activities, objectives, results, indicators, etc.;
• monitoring reports (internal and external), produced during implementation;
• annual plans;
• the Evaluation Report format (if relevant).

Activities

• Identifying the specific needs for the evaluation and selecting the topics/themes to be evaluated;
• Designing the evaluation, including preparing the Terms of Reference for the evaluation study and selecting the evaluator according to the relevant procedures;
• Briefing the evaluation team and the parties involved, supporting the evaluation mission; and
• Ensuring the production of a high quality evaluation report and of the dissemination of evaluation findings and recommendations.

Outcomes

The key documents produced during this stage of the cycle are the:

• Terms of Reference designing the evaluation work to be carried out, and
• Inception report usually following a preliminary desk study
• Draft Evaluation Report for inputs from the implementing organisation and other relevant stakeholders such as beneficiaries and authorities.
• Final Evaluation Report. The evaluation report should mirror the structure of the main evaluation criteria, taking into account the nature of the project, the stage at which the evaluation is carried out, and the users for whom the report is prepared.

Audit

Purpose

Audit is a very important activity when addressing public expenditures management. It provides assurance and accountability to stakeholders and recommendations for improvement of current and future projects.

The purpose of an audit is to:

• Assess an activity/subject that is the responsibility of another party against identified suitable criteria, and
• Express a conclusion (i.e. qualified opinion) that provides the intended user with a level of assurance about the activity/subject being audited.

The objectives of audits are to enable the auditor to express a conclusion on:

• The legality and regularity of project expenditure and income i.e. compliance with laws and regulations and with applicable contractual rules and criteria; and/or
• Whether project funds have been used efficiently and economically i.e. in accordance with sound financial management; and /or
• Whether project funds have been used effectively i.e. for purposes intended.

Inputs

• Terms of reference for the audit mission;
• the Logframe matrix - to help assess what has been achieved against plan;
• monitoring reports (internal and external), produced during implementation;
• evaluation reports, mid-terms or final;
• methodological guidance provided; and

Activities

• Planning
  • Identifying the need for an audit and establishing audit objectives and scope.
  • Designing the audit, including drafting the TOR, usually on the basis of standard formats.
  • Selecting the audit firm according to the relevant procedures (national law, donors’ procedures, international cooperation agencies rules, etc.).
• Conduct
  • Monitoring of the conduct of the audit by external audit firms
• Reporting
  • Obtaining and reviewing copies of ‘Aide Memoires’ (memorandum with findings and conclusions), draft and final audit reports and ensuring their dissemination.
  • Arranging procedures (meetings or written procedures) between donor agency, the audit firm and the audited.
• Follow-up
  • Monitoring the follow-up of audit findings and recommendations including reporting on the follow-up.
• Outcomes
  • Terms of Reference for the audit engagement; and
  • The final Audit Report.

The audit report should mirror the structure of the main audit criteria, taking into account the nature of the project, the stage at which the audit is carried out, and the users for whom the report is prepared.

Focus Areas Related:

• Water Resources (WR) Evaluation and Audit
• Basic Services (BS) Evaluation and Audit
• Municipal Services (MS) Evaluation and Audit
• Agricultural (A) Evaluation and Audit
• Energy Hydropower (EH) Evaluation and Audit
• Sector Performance (SP) Evaluation and Audit