Value For Money 

  

WaterAid uses the 4 E’s of Equity, Effectiveness, Efficiency and Economy to frame its
approach to Value for Money (VfM). VfM is built into the organisation’s standard policies
and procedures making it a key consideration feeding into everyday decision making across
the organisation. WaterAid uses its Global Performance Framework to successfully deliver
VfM through analysing project level outputs and independently evaluating outcomes to
demonstrate impact and the degree to which it meets agreed standards. In addition to this
is WaterAid’s VfM Toolkit which embeds VfM in programmes in ways that are: appropriate,
value-driven, self-sustaining, agile, uses best practice, learns and improves, catalytic and
collaborative. WaterAid’s approach to VfM has a strong track record having achieved
an ‘A’ grade rating for organisational VfM in the final 2012 Programme Partnership
Arrangement (PPA) report with DFID. In addition, in 2016, WaterAid was one of the first
UK INGOs to undergo a rigorous commercial expertise review by DFID’s procurement
department which confirmed that VfM is embedded across all our strategies and work: “the
six Operational Goals all contribute to delivering VfM” and there are “clear indicators
that it is an area that WaterAid is looking to expand its knowledge and performance”.

• Economy: WaterAid’s approach to VfM is based on a clear understanding of cost

drivers and robust procurement policies and processes. WaterAid's procurement
processes are detailed in the Commercial Expertise Review undertaken by DFID in
2015/16. These procedures ensure that WaterAid purchases goods and services
at the right quality and price. Policies will be applied across all programmes to
ensure VfM, such as a strict Expenses Policy with spending limits, and WaterAid's
Low Value Purchasing Guidelines.
• Efficiency: WaterAid invests annually in software to support planning and
consolidation of procurement across projects, improving management information,
and the visibility of the supply chain for better management decision making. VfM is
embedded in WaterAid’s way of working, and on average within our programmes,
two-thirds of the programme budget sits with country teams to enable contextually
relevant VfM. WaterAid's Continuous Improvement Programme drives efficiencies in
WaterAid's business processes and in the business process culture within the
organisation. 
• Effectiveness: Each year WaterAid carries out Reviews on a randomly selected
number of mature projects to measure their impact and demonstrate WaterAid's
effectiveness across five global outcome areas. With a wealth of over 20 impact
evaluations conducted since 2010, WaterAid is also now able to learn from the
cumulative evidence from these studies by conducting meta-analysis and meta-
reviews. In addition to feedback loops to drive programme quality, WaterAid is
committed to transparency and we openly publish the results of the global
performance framework and speak to, and learn from, the impact of our work.
 • Equity: Equity is a key VfM consideration for WaterAid, and the organisation aims to
deliver value for the individuals we work with. This means programming decisions
are contextually and circumstantially appropriate. ‘Value for whom’ is a critical factor
in WaterAid’s decision making; as such, the individuals that WaterAid works with are
central to every decision it takes.
WaterAid also ensures that a gender sensitive and disability approach is hardwired
into all its programme design as this is critical to our efforts to achieve equity across
all programme components and to implement a VfM strategy that prioritises support
to marginalised groups.

Operational Measures

Counter-Fraud: WaterAid operates under robust counter-fraud and counter-corruption strategies to

ensure VfM. These strategies are governed by policies (including due diligence for high risk
contexts, monitoring processes and guidance form investigation) that are implemented by the
Counter-Fraud team in our Internal Audit Department. Strategies to prevent fraud and corruption
include capacity building visits, risk assessments, compliance training, separation of duties and
raising awareness of whistle blowing policies. High risk contexts receive focus on due diligence,
with processes for monitoring and guidance for investigations. WaterAid publishes its number of
suspected fraud cases in its Annual Report and Accounts, including how a suspected incident of
fraud and corruption would be investigated. To strengthen this measure, WaterAid recently
launched an industry-leading third-party whistleblowing hotline and case management system,
Speak Now. Available in 5 languages, the system is available to anyone connected to our work,
WaterAid staff, agency workers, contractors, consultants, volunteers, partners and supporters.
Concerns can be reported on fraud and corruption, as well as sexual harassment, sexual
exploitation or abuse; bullying and discrimination; health and safety or anything else that may not
fall into these categories as part of a robust approach to getting the utmost best in VfM for our
programmes and projects.

Financial Reporting: WaterAid has a depth of understanding of reporting, forecasting and auditing
requirements having managed complex, multi-year and multi-million pound programmes. We have
the systems, policies and practices in place that are necessary to ensure compliance and that we
are able to respond effectively and efficiently to incidents of financial misuse. WaterAid’s financial
reports ensure that we are able to demonstrate VfM in a transparent fashion, with measurable
indicators and accountability.

Fee rate construction and benchmarking

Benchmarking our cost of employment:
 Matching experience and skills to salary bands: WaterAid carefully assesses the
precise nature of the role and responsibilities for each job, benchmarking each
against the skills and competencies required for other jobs across our pay scale.
This process is subject to rigorous quality assurance through the management line
and by WaterAid’s international human resource function.
 Benchmarking of partners’ fees and costs: While fee rates charged by our partner
organisations are commercially sensitive, we proactively endeavour to assess the
 comparability of their rates through a combination of comparison to rates we have
been offered in other consortia; assessing tender feedback; and benchmarking costs
and margins as described above.
 Benchmarking national and global pay scales: WaterAid undertakes annual global
and national reviews of its pay and benefits structures, basing adjustments on
rigorous pay market research. For global staff, the organisation aims to maintain
remuneration at around the median of the combined US and European development
NGO market. Similar approaches are used to adjust national pay structures, which
also incorporate an analysis of the cost of living in a particular country. Our
benchmarking of pay scale ensures an appropriate and continual balance between
competitiveness of WaterAid personnel and optimal value to our clients.
Benchmarking our overhead costs:
 WaterAid maintains low indirect organisational overheads. WaterAid actively
manages its overheads at all levels, benchmarking against those of other UK INGOs,
while at the same time maintaining strong quality assurance and due diligence
capability. The proportion of management costs to programme costs is a key
organisational performance indicator, monitored at quarterly and annual intervals at
national, regional and global levels. WaterAid has developed an interactive cost
analysis tool to aid benchmarking and comparisons, which holds three years of data
to show a mix of indices for comparison across all countries where WaterAid invests.
The tool looks at core country costs, infrastructure costs, partner costs, staffing costs
and MEAL costs. The tool allows comparison on a geographical basis or by type of
programme (e.g. comparison of fragile/conflict affected states).
 Competitive Tendering. All purchases in excess of £30k per annum are subject to a
competitive tendering process which ensures VfM to WaterAid and its beneficiaries.