PROJECT PLANNING AND

MANAGEMENT
ECQ 2205

DEVELOPMENT PROJECTS
DTS2202
Course Content

1. Introduction to Project Planning and Management.

2. Project Planning and Control
3. Project Appraisal, Selection and Analysis.
4. Project Stakeholder Responsibility Analysis and Communication
5. Project Implementation, Operations and Management.
6. Project Monitoring and Evaluation.
7. Project Documentation, Reporting and Review
8. Project Proposal writing
9. Project Cost and Financial Management

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 MODULE ONE: INTRODUCTION TO PROJECT PLANNING AND
MANAGEMENT

1.1.WHAT IS A PROJECT?

A project is a one –shot set of activities with definite beginning and ending point. It is an endeavor
in which human, material and financial resources are organized in a particular way to undertake a
single scope of work, of a given specification, with commitment of cost and time, so as to achieve
beneficial change, defined by qualitative and quantitative objective.

A project is an interrelated set of activities that has a definite starting and ending time and results
in the accomplishment of a unique often major outcome within a specified budget.

A project is a unique set of coordinated activities with definite activity start and ending points
undertaken by an individual / organization to meet specific performance objectives with defined
schedule, cost and performance parameters.

1.1.1 Project Planning

Project planning is a special case of general planning which includes all those activities that result
in developing a course of action. It involves setting goals, definition and forecast of resources to
be committed, establishment of start and completion times, and assignment of responsibilities.

Project management is an integral part of planning which refers the process of application of
knowledge, skills, techniques and tools in project execution.

1.1.2. Project Management

Project management is the application of knowledge, skills, tools, and techniques to project
activities in order to meet or exceed stakeholder needs and expectations from a project. Project
Management is the discipline of Planning, organizing, controlling and managing resources to bring
about the successful completion of specific project goals and objectives.

Project management has a primary/ unique challenge of achieving all of the project goals and
objectives while adhering to classic project constraints—-usually scope, quality, time and budget
(as indicated in the project triangle). The secondary and more ambitious challenge is to optimize
the allocation and integration of inputs necessary to meet pre-defined objectives. Projects are
composed of sets of activities that use resources (money, people, materials, energy, space,
provisions, communication, motivation, etc.) to achieve the set goals and objectives.

Project management is the planning and control of events that together comprise the project.
Project management aims to ensure the effective use of resources and delivery of the project
objectives on time and within cost constraints.

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A task is the smallest unit of work effort within the project and consumes both time and resources
which are under the control of the project manage.

A project is a sequence of activities that has a definite start and finish, an identifiable goal and an
integrated system of complex but interdependent relationships. The purpose of project planning
and management is to achieve successful project completion with the resources available. A
successful project is one that:

• Has been finished on time

• Is within its cost budget
• Performs to a technical/ performance standard which satisfy the end user

1.1.3. Project Characteristics

a) Objectives: A project has a set of objectives or missions once the objectives are achieved
the project is treated as completed.
b) Life cycle: A project has a life cycle where it consists of the following
• Conception stage: where project ideas are conceived
• Planning stage: where detailed design of different project is worked out.
• Implementation stage: where the project is implemented as per the design
• Closing/Commissioning stage; where the project is commissioned after
implementation commissioning of the project indicates the end of its life cycle.
c) Definite time limit: A project has a definite time limit; it cannot continue forever. What
represents the end would normally be spelt out in the set of objectives.
d) Uniqueness: every project is unique and\ no two projects are similar even if the plants are
exactly identical or are merely duplicated the location the infrastructure the agencies and
the people make each project unique.
e) Team work: A project normally consists of delivered areas there will be personnel
specialized in their respective areas any project calls for the services of experts from a host
of disciplines. Coordination among the diverse areas calls for team work. Hence a project
can be implemented only with a team work.
f) Complexity: A project is a complex set of many components. The varieties are in terms
of technology of equipment and materials, machinery and people work culture and ethics
but they remain interrelated and unless this is so they either do not belong to the project
or will never allow the project to be completed.
g) Sub- contracting: some of the activities may be entrusted to sub- contractors to reduce
the complexity of the project. Sub-contracting will be advantageous if it reduces the
complexity of the project so that the project manager can co-ordinate the remaining
activities of the project more effectively. The greater the complexity of the project, the
larger will be the extent to which subcontracting will be resorted to.
h) Risk and uncertainty: Every project has risks and uncertainty associated with it.
i) Customer specific nature: A project is always customer specific; this is because the
products produced on services offered by the project are necessarily to be customer
oriented. It is the customer who decides upon the product to be produced or services to be
offered and hence it is responsibility of any organization to go for projects / services that
are suited to customer needs.

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 j) Change: Changes occur throughout the lifespan of a project as a natural outcome of many
environmental factors. The changes may vary from minor changes to major changes which
may have a big impact or ever change the very nature of the project.
k) Forecasting: Forecasting the demand for any product/services that the project is going to
produce is an important aspect. All projects involve forecasting and in view of the
importance attached to forecasting they must be accurate and based on sound
fundamentals.
l) Optimality: A project is always aimed at optimum utilization of resources for the overall
development of the organization economy. This is because resources are scarce and have
a cost.
m) Control mechanism: All projects will have pre-designed control mechanism in order to
ensure completion of projects within the time schedule, within estimated cost and to save
time; achieve the desired level of quality and reliability.

1.14. Characteristics a good Project Manager

An effective project manager will require the following skills and abilities:

a) Planning and organization skills

b) Personnel management skills
c) Communication skills
d) Change orientation
e) Ability to solve problems in their totality
f) High energy i.e., levels work under pressure
g) Ambition for achievements
h) Ability to take suggestions
i) Understanding the views of the project team members
j) Ability to develop alternative actions quickly
k) Knowledge of project management methods and tools
l) Ability to make self-evaluation
m) Effective time management
n) Capacity to relate current events to project management
o) Ability to handle project management software tools /packages
p) Initiative and risk-taking ability
q) Familiarity with the organization
r) Tolerance for difference of opinion, delay ambiguity
s) Knowledge of technology
t) Conflict resolving capacity

1.1.5. The Role of a Project Manager

The role of a Project Manager is to "Deliver the project on time, within budget and to
specification". So, in other words, you need to specify clearly upfront what must be delivered by
the project, and then you need to produce it within the schedule and budget assigned.

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But it's not that simple. You might meet this objective but totally fail as a "top notch Project
Manager". The role of a project manager is much more than that. It is also...

To recruit the best: Great projects are delivered by a great team. Your role is to recruit the best
people you can find and make sure that their skill sets are perfectly complimentary so that you
have all of the experience you need to deliver the project successfully.

To motivate and lead: You need to be the one "cracking the whip" so that everyone knows what
is to be done and by when. You need to be strict and make sure that every task is done on time and
doesn't slip. If it does slip, then you need to identify the slippage immediately and have
contingency plans so you can get back on track.

As well as cracking the whip, you need to be positive and supportive towards your team so they
know you also care. You need to lead by example and motivate others to do the same. If you want
others to work hard, then you need to work harder than they do.

Lead by giving them direction, motivating them to work hard and showing you care along the
way.

To manage the finances: Every project has a budget, whether it's clearly defined or not. You need
to ensure that you don't spend more than you're entitled to, or your sponsor / client will be
dissatisfied with the end result. Manage finances carefully by listing every expense and ensuring
that they are budgeted upfront. If unbudgeted expenditure takes place, tell your client as soon as
possible to avoid complications down the track. If you need more budget, then don't be afraid to
ask for it!

To control change: You need to be the one who controls all change to the project scope, tightly.
"Scope creep" kills projects. Define the scope of the project upfront and then review it each week
to make sure that you're not doing un-authorized work at any time. Your customer will ask for
change throughout the project. Don't always give in. Stay your ground and when this happens, ask
for more time or budget to cater for it. Remember— no matter how many changes they ask you
for, they will still beat you up if you’re late or over budget. So, control change when you see it.

Communicate: It's your job as a Project Manager to communicate the status of the project
regularly. If people know it's on track it will motivate them. If they know it's late it will motivate
them even more. But they will only know if it's on time or late if you communicate this to them.

You need to communicate the project status to your team, project sponsor and client every week
of the project life cycle. Never miss a week. Always document the status accurately. Never
exaggerate. Communicate the right messages t the right people at the right time.

1.1.6. Sources of Projects

1.1.6.1. Demand driven Projects (Bottom-Up-Approach)

Demand-driven approaches, such as many social funds and other community driven

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Development projects (CDD) have become increasingly common in developing countries

As a strategy for delivering basic services down to the local level. These demand-driven
approaches help to finance the construction and rehabilitation of social infrastructure,

Such as schools, health posts and water points; the delivery of basic social services;
and the implementation of community-level economic investments, such as the
rehabilitation Of irrigation systems and the construction of local markets.

The demand-driven approach relies on a participatory process, whereby residents of a

Community or village assess their needs and identify the community investments that they see as
their top priorities. Often communities compete at the municipal level for financial Support for
their proposed projects. One of the risks of this approach is that the priorities Expressed by a
community are likely to reflect the needs of the majority, while the needs. Of more vulnerable
members of the community, such as orphans, female-headed households, disabled, and elderly,
may not be heard. Likewise, the needs of a small, remote village populated by a traditionally
excluded ethnic group may not fare well in competing for funds at the municipal level with the
‘majority’ population.

In some Countries, such as Peru and Ecuador, the so-called ethnic ‘minority’ may, in fact, be in
the majority, but a traditionally silent majority whose needs have been historically ignored.

Advantages of Demand Driven Projects

The three main advantages to DDSN as a supply chain strategy are:

a) Participants in the demand driven are all able to take part in shaping demand as
opposed to merely accepting it. Where businesses traditionally had little or latent
visibility into market demand, the collaborative technologies employed in
implementing DDp have the overall effect of reducing and even eliminating the gap
between upstream businesses and the end customer. This gives them an more accurate
and timely insight into market trends to increase the accuracy of their forecasts and
hence their ability to interpret and respond to demand fluctuation.

This type of market intelligence impacts more than just a business' ability to plan
operations; it translates directly into reduced inventory holdings across the supply
chain, which, in turn, means an overall reduction in the amount of capital invested
therein and the associated risks.

b) The demand driven approach, as opposed to the supply driven accepts that product
design and ongoing product innovation are key requirements in creating competitive
advantage and shaping demand. Early feedback from customers can help product
designers better understand what customers like and don't like about their products. In
addition, product designers can also interface more readily with manufacturing

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 facilities to assist in solving production problems that may arise, especially in the early
stages of production setup.
c) Deterministic optimization is replaced with probabilistic optimization that uses
stochastic optimization methods to handle variability. Probabilistic models do a better
job of accounting for the uncertainties that exist in the supply and demand equation.
Probabilistic modeling also enables simulation of "what-if" scenarios so managers can
randomly vary their initial conditions.

Disadvantages of Demand Driven Projects

Although demand-driven interventions represent progress over top-down approaches to

development operations, consideration must be given to the risks involved. In light of available
experience, certain design traps should be avoided, i.e.

a) Demand-driven approaches bear an inherent risk in terms of fragmenting and

scattering activities. With the benefit of hindsight, it is clear that geographical planning
and synergies among the components should not be overlooked during the preparatory
phase.
b) There is an obvious need for both top-down and bottom-up infrastructure planning to
allow for combining heavy and light investments within the framework of local
development plans at various levels. Integration with the decentralization process is
crucial, particularly for social or community-based projects.
c) Productive micro projects are better designed in consultation with professional
organizations, private-sector enterprises and competent technicians rather than during
plenary village meetings. Development programs aimed at the commodity chain
(taking account of competitiveness, processing and marketing issues) may help
improve the profitability of income-generating interventions.
d) The development of local production dynamics presupposes that any investments
made will bebacked up by credit on a sustainable basis. This will call for the expansion
of microfinance components and their integration with other components. Case:

The Indian Maharashtra Rural Water Supply and Sanitation Project in order to reach tribal
populations in the Maharashtra state in India, the Rural Water Supply and Sanitation Project
worked directly with clusters of tribal households, instead of the traditional panchayat village
governance structure. Members of tribal populations are often geographically separated from the
main villages and view panchayats as influenced by wealthier members of a community who
ignore the needs of tribal populations in their decision-making. Thus, when attempting to increase
access to potable water and improve sanitation at the community level for tribal populations, it
made sense to work directly with clusters of about 30-50 tribal households. All tribal households
in a targeted district are eligible to participate in the project, and these clusters or “Tribal Paras”
are responsible for planning, procuring, constructing, operating and maintaining water supply and
sanitation activities.

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1.1.6.2. Supply Driven Projects (Top-Down)

This is a source of project which is influenced by availability of resources. It is a very systematic

source of project idea since most of those involved are Technocrats and widely experienced
development partners it is also called top-down approach.

Top-down project planning is focused on keeping the decision-making process at the senior level.
Goals and quotas are established at the highest level, and those at the top are not often willing to
take advice or any guidance from lower-level employees. Senior-level managers need to be as
specific as possible when laying out expectations since those following the plan are not involved
in the planning process. Because employees are not included in any of the decision-making
process and are often only motivated through either fear or incentives, moral can become an issue.

With top-down planning, management must choose techniques to align projects and goals.
Management holds the sole responsibility for the plans set forth and for the end result. This way
of thinking assumes that management knows best how to plan and carry out a project, thus not
taking advantage of talented employees who may have more experience with certain aspects of
the project.

Some see the top-down planning process as a way to make a plan, and not about who develops
the plan. It allows management to divide a project into steps, and then into still smaller steps. This
continues until the steps can be studied, due-dates can be accurately assigned, and then parts of
the project can be assigned to an employee. However, the focus is on long-term goals, and the
here-and-now goals can get lost. Often, this approach is applied best to very small projects.

Advantages of supply driven projects

a) Your organization realizes a focused use of resources from the individual managed
application.
b) The first implementation becomes a showcase for the identity management solution.
c) When the phases are completed for the managed application, you have implemented a
deeper, more mature implementation of the identity management solution.
d) Operation and maintenance resources are not initially impacted as severely as with the
bottom-up approach.

Disadvantages of supply driven projects

a) The solution provides limited coverage in the first phases.

b) A minimal percentage of user accounts are managed in the first phases.
c) You might have to develop custom adapters at an early stage.
d) The support and overall business will not realize the benefit of the solution as rapidly.
e) The implementation cost is likely to be higher.

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 Combining top-down and bottom-up sources of projects

Top-down and Bottom-up Project Management: Leveraging the Advantages of the Two
Approaches:

Significant changes are taking place in management and especially project management today. We
hear that organizations, like the New York Times switched from the so-called top-down
management style to bottom-up management. Others, including some of the world’s biggest
corporations, such as Toyota implemented bottom-up management style elements in some of
their departments. The popularity of the bottom-up approach to management is growing. In spite
of this fact, the discussions about the two major approaches are still hot. Why have organizations
become so anxious about changing their management style? If we compare the two management
approaches, the answer to this question will be clear.

Managing projects top-down

The top-down approach remains extremely popular in contemporary project management. The
phrase “top-down” means that all the directions come from the top. Project objectives are
established by the top management. Top managers provide guidelines, information, plans and fund
processes. All of the project manager’s expectations are clearly communicated to each project
participant. Following this approach, ambiguity opens the door for potential failure, and the
managers should be as specific as possible when communicating their expectations. Process
formality is very important for this approach.

Examples of the top-down approach applications can be found in many organizations. One of
such examples is the New York Times, a leader in the newspaper industry. Several years ago,
American Journalism Review reported that The Times’ executive management felt that they were
far from what was necessary for creation of a vibrant workplace and a successful organization.
Power was centralized and masthead editors experienced overall control. Editors introduced the
same management pattern in the projects for which they were responsible. One person’s emotions
and opinions influenced all the project decisions, and this person was the project manager. What
was the result? Team members felt that they weren't listened to, that their voices didn't count.

There was no effective collaboration between the journalists. They were not morally motivated to
do their jobs. The managing executives then realized that they needed to give more freedom to
the teams and change their management style. It took quite a while to introduce bottom-up
management to the organization. But obviously, it was worth the time and effort, as New York
Times employees say that collaboration became much more efficient, and team members now
work together more productively.

1.1.7. Why Projects fail

There are a variety of reasons why projects fail. The good news is that they are often within your
control. The top 10 reasons for project failure and what you can do about them.

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 Insufficient resource: The Project Manager was given insufficient resources and budget at the
start of the project. If you don't have the level of resources or budget you need, then tell your
Project Sponsor quickly.

Impossible deadlines: The deadline for the project was always impossible to achieve. The
Project Manager should have told the sponsor at the start of the project and fought to have the
deadline extended. You not only need to have sufficient time to deliver your project, but you also
need contingency in case things take longer than expected.

Poor communication: The Project Manager fails to communicate the status of the project to the
team and sponsor. So, everyone thinks the project is going smoothly until the deadline is missed.
You need to tell people early if it’s slipping. Don't hide it. By telling people you're running late,
you give them the opportunity to help get it back on track.

Lack of focus: The team don't really know what is expected of them, so they lack focus. They are
given a job to do but not told what is required and by when. Everyone in your team should have
regular goals to meet, they should have deadlines and you should be monitoring their progress at
every step in the journey.

Low morale: The project team lack motivation, so nothing is delivered on time. If you want
someone to deliver within a set timeframe, then you need to motivate them to do it through reward
and recognition. And you need to be highly motivated yourself. Only by being healthy, relaxed
and truly motivated can you inspire others to be.

Sponsor support: The Project Manager gets very little support from their sponsor. There is no-
one available to help solve problems or provide further resource or money when it's needed. If you
lack sponsor support, then you need to tell your Project Sponsor about it. Be open and frank with
them. Tell them what you need and by when.

Scope creep: The scope of the project keeps changing, so you never really have a fixed set of
deliverables. Every time it changes, you lose time and resource, so Change Control is critical. The
scope needs to be clearly defined and then a process put in place to ensure that change requests are
formally approved.

Lengthy timeframes: The project timescale may simply be too long. Over time your customer's
requirements will change, so you need to break your project into smaller chunks and deliver each
as a project on its own.

Lack of tools: Not having the right tools to get the job done can also be a problem. Using good
quality tools such as templates, processes and a project methodology will lead to project success.

Customer involvement: Lack of customer involvement has proved fatal on many projects. You
need to involve your customer throughout the project to ensure that what you are building will

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meet their requirements. Remember, only if your customer is truly satisfied will your project be a
success.

1.1.8. Tips for Project Success

a) Clear targets: Make sure that when you start out your customer defines their
requirements in depth. You need to know exactly what it is that must be
delivered, to who and when. Make it specific, write it up formally and get them
to sign it off. This document will become the basis upon which to measure your
success.
b) Customer involvement: Involve your customers throughout the entire project life
cycle. Get them involved in the analysis and planning, as well as execution. You
don't have to seek their approval, just keep them informed. The more you involve
them, the greater their level of buy-in and the easier it is to manage their
expectations.
c) Timeframes management: Keep your delivery timeframes short and realistic.
Never agree to lengthy timeframes. Split the project into “mini-projects” if you
need to. Keep each mini-project to less than 6 months. This keeps everyone
motivated and focused.
d) Clear Milestones: Break your project timeframe into "Milestones" which are
manageable pieces of work. Add delivery deadlines to your milestones and try to
deliver on every deadline, no matter what. If you're late, tell your customer about
it as early as possible.
e) Good Communications: Make sure you keep everyone informed by providing
the right information at the right time. Produce Weekly Status Reports and run
regular team meetings.
f) Scope management: Only authorize changes to your project scope if there is no
impact on the timeline. Get your customers approval to important scope changes
first and then get their buy-in to extend the delivery dates if you need to.
g) Quality management: Keep the quality of your deliverables as high as possible.
Constantly review quality and never let it slip. Implement “peer reviews” so that
team members can review each other’s deliverables. Then put in place external
reviews to ensure that the quality of the solution meets your customer's needs.
h) Risk management: Jump on risks and issues as soon as they are identified.
Prioritize and resolve them before they impact on your project. Take pride in
keeping risks and issues to a minimum.
i) Deliverables/objective management: As each deliverable is complete, hand it
formally over to your customer. Get them to sign an Acceptance Form to say that
it meets their expectations. Only then can you mark each deliverable off as 100%
complete.
j) Team management: Great projects are run by great teams. Hire the best people
you can afford. Spend the time to find the right people. It will save you time down
the track. Remember, good people are easy to motivate. Show them the vision
and how they can make it happen. Trust and believe in them. Make them feel
valued. They will work wonders.

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1.1.9. How to start a new project

When starting a project, one need to ensure the following:

a) Sponsorship:

You need to have a highly motivated sponsor who understands the criticality of
the project on the business and is motivated to making it a success. They need to
have the resources available to support you, and the right level of "influence" in
the business.

b) Targets:

Sit down with your sponsor and agree specific targets. Make sure they are
realistic. Perform a feasibility study to ensure that what is discussed is feasible
to achieve. Only agree to the targets if there is sufficient contingency. Add an
extra 20% to the budget and timeline if you can.

c) Scope:

Keep your scope to a minimum. If you can't get the contingency you need, then
try and negotiate to deliver less than you have to. And if that doesn't work,
identify any deliverables that are not on the critical path and negotiate to produce
these items after the project deadline has been reached.

d) Resourcing:

Find the best people you can afford. Then find extra people to assist, as further
contingency. You will always need more people than you plan for, so you need
to identify additional help as a “backup” should you need it. This could include
people from other teams in your business, contractors or suppliers.

e) Planning:

Your success will be measured against your ability to deliver against the plan.
So, plan wisely. Only plan in detail the next few months. After that, plan at a
summary level. Never “over-plan” by listing every tiny task for the entire length
of the project, as people will hold you to it. Then, stick to the plan.

f) Processes:

Implement processes for managing time, cost, quality, change, risks and issues
upfront. Communicate these processes to your entire team and make sure that
everyone follows them rigorously.

g) Tracking:

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 With your plan complete, you need to start tracking progress against it. Track
your progress against budget and schedule. Track your risks and issues. Track
your work efficiency and your overall percent complete.

h) Reporting: Report on your project status weekly. Keep your reports brief and 100%
accurate. Report the summary level to your Sponsor and the detailed level to your
team. Focus on the current issues to hand. Remember that your project report can be
a great motivational tool to rally everyone behind the project and focus them on the
outcome. With the whole team motivated to achieve the goals, you have the best
chance of success.

1.1.10. Kick Starting a Project

a) Stop and get a grip

Projects are always ahead in some areas and behind in others. Stop and take the
time to get a firm handle on the project progress. Make a list of all of the areas
that you're behind in. Then prioritize the list and calculate the amount of effort
needed to get them back on track. Are there any tasks that can be completed by
others outside your team? If there are non-critical tasks that you can outsource,
then now is the time to consider it. Use whatever resources you can find to
complete these late tasks as soon as possible.

b) Rework the plan

Once you've caught up, revisit your Project Plan. Update every task in the plan and
recreate your schedule ahead. You need to revitalize your team and to do this; you
need a newly worked project plan that shows how you're going to deliver the rest
of the project on time. This will boost motivation and enthusiasm for completing
the revitalized plan. Especially if your team can see that it's actually achievable.

c) The Road Ahead

Now that you have a crystal-clear plan ahead, you're ready to get the team behind
it. Walk your team through the remaining challenges and the timeframes in which
they must be achieved.

Always be positive and focus on the road ahead

d) Individualization

The trick now is to make each person feel like they are a critical cog in the
wheel. Meet them individually, reward their successes and recognize
achievement whenever you see it.

e) Quick wins

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 A winning team like to know they are winning right from the start. Focus on
delivering a couple of critical tasks early, and then shout about the success. Then
get more quick wins under your belt and shout out about your successes again.
This creates the feeling of achievement and it creates momentum in the team.
Sure, the project may not be finished until you've crossed the finishing line, but
half the fun should be in getting there.

1.2.THE PROJECT LIFECYCLE

All projects have to pass through the following five phases:

i. Identification, conception and definition phase

ii. Planning and organizing phase

iii. Implementation phase

iv. Project clean-up phase

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Fig 1 The Project lifecycle

1.2.1. Project Identification phase

This is the phase during which the project idea is developed, sources of ideas may include:
a) Finding a solution to certain problems
b) Non-utilization of the available funds, plant capacity, expertise or simply
unfulfilled aspirations) Surveying the environment
d) Ideas put across by well wishers
The ideas need to be put to shape before they can be considered and compared with
competitive ideas. The ideas need to be examined in light of objectives and constraints.
If this phase is avoided or truncated, the project will have innate defects and may
eventually become a liability for the investors. A well-conceived project will go a long
way for successful implementation and operation of the project; ideas may undergo
some changes as the project progresses because pertinent data may not be available at
inception.

Project Definition
The idea generated during the conception phase is further developed to produce a
document describing the project in sufficient details covering all aspects necessary for
the customer and for financial institutions to make up their minds on the project idea.
Definition examines the following areas:
a) Raw materials: quantitative and qualitative evaluation

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 b) Plant size /capacity enumeration of plant capacity for the entire plant and for the
main deportments
c) Location and site: description of location supported by map.
d) Technology/process selection: selection of optimum technology, reasons for
selection and description of selected technology.
e) Project layout; selection of optimum layout, reasons for selection and
appropriate drawings.
f) Utilities –fuel, power, water, telephone, etc
g) Manpower and organization pattern
h) Financial analysis
i) Implementation schedule: This clear some of the ambiguities and uncertainties
associated with the formation made during the conceptual phase this phase also
establishes the risk involved in going ahead with the project in clear terms. A
project can either be accepted or get dropped at this stage.

1.2.2. Planning and Organizing Phase

This phase includes the following:
a) Project infrastructure and enabling services
b) System design and basic engineering package
c) Organization and manpower
d) Schedule and budgets
e) Licensing and governmental clearances
f) Finance
g) Systems and procedures
h) Identification of project manager
i) Design basis, general conditions for purchase and contracts
j) Site preparation and investigations
k) Work packaging

Thus, this phase is involved with preparation for the project to take off smoothly.
This phase is often taken as a part of the implementation phase since it does not
limit itself to paperwork and thinking but many activities including field work it is
essential that this phase is completely done as it forms the basis for the next phase
i.e. implementation phase.

1.2.3. Implementation Phase

Preparation of specification for equipment and machinery, ordering of equipment
lining up construction contractors, trial run, testing etc. takes place during this
phase. As far as the volume of work is concerned 80-85% of the project work is
done in this phase only. The bulk of the work is done during this phase therefore
the need to complete this phase as fast as possible with minimum resources.

1.2.4. Project closure/termination and Clean –Up Phase

This is a transition phase in which the hardware built with the active involvement
of various agencies is physically handed over for production to a different agency
who was not so involved earlier. Drawing, documents, files, operation, and

17
 maintenance manuals are catalogued and handed over to the customer. Project
accounts are closed, materials reconciliation carried out, outstanding payments
made and dues collected during this phase. Essentially this is the handing over of
the project to the customer.

Fig 3: Time required of the project team in the project cycle.

Fig2: Effort required of the project team in the project lifecycle

1.3.PROJECT VS PROGRAMME:

18
A Programme is diverse set of activities which progress over a long period of time in order to
fulfill a variety of development needs e.g., the Aids Control Programme, UPE with projects like
Scholastic materials provision, Classroom construction, etc.

A Project is hence a subset of a programme with a short time frame, specific resources and output,
designed to solve a specific problem.

1.3.1. Project Characteristics

• Uniqueness
• Finite undertaking
• Use multiple resources
• Dynamisms
• Discrete end objectives. Projects are undertaken to meet identified objectives /
constraints specified in terms of scope, time, and cost requirements.
• Defined start and finish dates.
• Focus is more on delivering products. Rather than benefits.
• Simpler; only have to focus on delivering defined products.
• Projects are ‘ring fenced’.
• Change control is a more structured and easier activity.
• Micro view, will fight against others which threaten their success

1.3.2. A programme is characterized by:

• Contain many projects, drive operational change.
• Exist in a world that is constantly changing.
• Macro view; have to consider the combined effect of a portfolio of projects.
• Less well-defined end date.
• Focus is on delivering benefits and requires involvement after projects have
ended.
• Every programme must directly benefit the organization in some way.

1.3.3. Order of Tasks for Project Management

A project manager executes a project a certain order. The following order shows how a
project manager can order the tasks of project planning and implementation:
i. Get a project charter
ii. Create the project scope statement
iii. Create the WBS with the project team
iv. Create the activity list from the WBS
v. Sequence the activities in the order in which they must – or should –
happen
vi. Estimate the time of the activities based on which resources you have to
complete the activities g) Assign the needed resources to the activities
vii. Get it done.

19
 Key areas of Project Management
• Scope Management
• Issue Management
• Cost Management
• Quality Management
• Communications Management
• Risk Management
• Change Control Management
• HR Management
• Time management
• Resources management

1.4.THE PROJECT TRIANGLE

Managing the Triple Constraint

Every project manager has to contend with the triple constraints of all projects: time,
scope and cost. These are known as the project triangle.

Fig: 4 Project Triangle

20
 Time
• A project's activities can either take shorter or longer amount of time to
complete. Completion of tasks depends on a number of factors such as the
number of people working on the project, experience, skills etc.
• Time is a crucial factor which is uncontrollable. On the other hand, failure
to meet the deadlines in a project can create adverse effects. Most often, the
main reason for organizations to fail in terms of time is due to lack of
resources.

Cost
• It's imperative for both the project manager and the organization to have an
estimated cost when undertaking a project. Budgets will ensure that project
is developed or implemented below a certain cost.
• Sometimes, project managers have to allocate additional resources in order to
meet the deadlines with a penalty of additional project costs.

Scope
• Scope looks at the outcome of the project undertaken. This consists of a list
of deliverables which need to be addressed by the project team.
• A successful project manager will know to manage both the scope of the
project and any change in scope which impacts time and cost.

Quality:
Quality is not a part of the project management triangle, but it is the ultimate objective of
every delivery. Hence, the project management triangle represents implies quality. Many
project managers are under the notion that 'high quality comes with high cost', which to
some extent is true. By using low quality resources to accomplish project deadlines does
not ensure success of the overall project.

Like with the scope, quality will also be an important deliverable for the project.

1.5.TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT

1. Project selection techniques
• Cost benefit analysis
• Risk and sensitivity analysis

2. Project execution planning techniques

• Work breakdown structure (WBS)
• Project execution plan (PEP)
• Project responsibility matrix
• Project management manner
3. Project scheduling and Coordinating techniques
• Bar charts

21
 • Life cycle charts
• Line of balance (LOB)
• Networking techniques (PERT/ CPA)

4. Project monitoring and progress techniques

• Project measurement technique (PROMPT)
• Performance monitoring techniques (PERMIT)
• Updating, renewing and reporting techniques (URT)

5. Project cost and Productivity Control Techniques

• productivity budgeting techniques
• value engineering (VE) and
• Cost/ WBS

6. Project Communication and clean-up Techniques

• Control room and
• Computerized information systems.

Review Questions:
1. Projects are unique undertakings. Discuss the various ways in which projects differ
from organizations.
2. As a newly appointed project manager, what activities would you expect to perform?
3. With the aid of a diagram, discuss the project cycle.
4. Why is the project triangle an important concept to the project manager?
5. Compare and contrast demand driven projects and supply driven projects
6. Most international NGO projects are supply driven projects. Do you agree?
7. As a project manager working on developing a community water project, what
participatory approaches would you use to participate all the stakeholders in project
definition, planning and implementation? Which stakeholders would you target to
participate?
8. Distinguish between a programme and a project.
9. What are the advantages of doing projects instead of setting up organizations to deliver
the work?
As a member of a recruiting panel seeking to recruit a project manager, what skills and
competences would you look for?

22
 MODULE TWO

PROJECT ANALYSIS

2.0. Introduction:

This lesson seeks to introduce the learner to the concepts and methods used to analyze
projects as a way of assessing project viability.
• Project identification
• Identification of investment opportunities
• Market and demand analysis
• Technical analysis
• Financial analysis
• Institutional analysis,
• Economic analysis
• Other analysis

2.1. Project Analysis

Project analysis is a process of detailed examination of several aspects of a given project
before recommending the same. The institution that is going to fund the project has to satisfy
itself before providing financial assistance for the project. It has to ensure that the investment
on the proposed project will generate sufficient returns on the investments made.

Project analysis is at times referred to Project Appraisal.

Development projects impose a series of costs and benefits on recipient communities or

countries. Those costs and benefits can be social, environmental, or economic in nature, but
may often involve all three. In addition to being financially viable, a development project
cannot usually be considered acceptable unless it is economically, technically and
institutionally sound. It should be the least-cost feasible solution to the problem being solved
and should expect to produce net economic and/or social benefits. For example, irrigation
projects may facilitate the growing of cash crops in one locality, but cause water shortages,
and hence economic, social and environmental pressures in another.

Analysis checks that the project is feasible against the situation on the ground that the objectives
set remain appropriate and that costs are reasonable.

The following analyses are done:

1. Technical analysis
Technical appraisal broadly involves a critical study of the following aspects of a project:
a) Scale of operations: Scale of operation is signified by the size of the plant. The
plant size mainly depends on the market for the output of the project.

23
b) Selections of process/technology: the choice of technology depends on the
number/ types available and also on the quality and quantity of products proposed
to be manufactured.

c) Raw materials: Products can be manufacture using alternative raw materials

and with alternative process. The process of manufacture may sometimes vary
with the raw materials chosen.

d) Technical know-how: When the technical know-how for the project is provided
by expert consultants, it must be ascertained whether the consultants has the
requisite knowledge and experience and whether he has already executed similar
projects successfully, care should be taken to avoid self- styled, inexperienced
consultants.

e) Product mix: Consumers differ in their needs and preferences. Hence variations
in size and quality of products are necessary to satisfy the varying needs and
preferences of customers. In order to enable the project to produce goods of
varying size nature and quality as per requirements of the customers, the
production facilities should be planned with an element of flexibility. Such
flexibility in the production facilities will help the organization to change the
product mix as per customer requirements, which is very essential for the survival
and growth of any organization.

f) Selection and procurements of plant a machinery: when selecting plant

machinery several factors need to be considered they include output planned,
machine hours required for each operation, machine capacity, machine
available in the market etc plant and machinery form the backbone of any
industry the quality of output depends upon the quality of machinery used in
processing the raw materials.

g) Plant layout: This is the arrangement of various production facilities within

the production area, plant layout should be so arranged as to ensure steady
flow of production and minimizes the overall cost. Some of the consideration
include: future expansions, supervision required, inspection, safety requirements
etc.

h) Location of projects: Several factors need to be considered in choosing the

location of project they include, regional factors – raw materials, proximity to
market, availability of labor, availability of supporting industries availability of
infrastructure facilities, climatic factors etc.

i) Project scheduling: this is the arrangement of activities of the project in the

order of time in which they are to be performed.

24
 2. Commercial/market Analysis
This is concerned with the market for the product /service. Commercial appraisal (or
market appraisal of a project) is done by studying the commercial successfulness of the
product/service offered by the project from the following perspectives:
a) Supply position for the product
b) Distribution channels
c) Pricing of the product
d) Government policies
e) What is the aggregate demand of the proposed projects product
f) What would be the projects market share

The following information is analyzed:

g) Cost structure
h) Imports and exports
i) Structure of competition
j) Elasticity of demand
k) Distribution channels
l) Past and present supply position
m) Production possibilities and constraints

3. Economic Appraisal
Economic appraisal measures the effect of the project on the whole economy. In the
overall interest of the country, the limited stocks of capital and foreign exchange
should be put into the best possible use, hence policy makers are concerned as to where
the scarce resources can be directed to maximize economic growth of the country, the
policy makers make a choice based on economic returns.

Here the appraisers will also seek to establish how well the project fits in the economic
times of the day e.g. a luxury product project is less likely to succeed in the market at
times of economic recession but more likely to succeed during times of economic
boom.

Economic analysis will also look at:

• Social cost -benefit analysis
• Direct economic benefits and costs in terms of shadow prices
• Impact of project on distribution of income in society
• Impact on level of savings and investments in society
• Impact on fulfillment of national goals:-

Ø Self-sufficiency
Ø Employment and
Ø Social order

25
 4. Financial Appraisal
Financial analysis looks at whether the project is financially viable? Will the
project be able to: Service debts
• Meet return expectations
The following aspects are also examined:
• Means of financing
• Cost of capital
• Project profitability
• Breakeven point
• Cash flows
• Level of risks
• Projected financial position
These include appraising the project using financial analysis tools which include but are
not limited to the following:

Discounted cash flow techniques

• Net present value methods
• Internal Rate of return
• Profitability index methods
• Benefit cost ratio method

Non-discounted cash flow techniques

• Payback period method
• Accounting rate of return method

The selection criteria is as follows:

Criterion Accept project if : Reject project if :
Pay back period (PBP) PBP< target period PBP> target period
Accounting rate of return (ARR) AAR>target rate AAR<target rate
Net present value (NPV) NPV>0 NPV<0
Internal rate of return (IRR) IRR>cost of capital IRR<cost of
capital
Benefit cost ratio (BCR) BCR>1 BCR<1
Table 2.1 financial selection criteria

To apply these criteria suitably Cut off values have to be specified. This will be the
standards against which the projects are evaluated and are computed from a
combination of risks and financing costs prevailing in the market. Such cut off values
include: hurdle rate, target rate and cost of capital.

26
 5. Management Appraisal
Management is the most important factor that can either make a project successful or a
failure. A good project at the hands of poor management may fail while not-so-good
project at the hands of an effective management may succeed. Banks and financial
institution that lend money for financing project lay more emphasis on management
appraisal.

Lending institution looks at two points before committing their funds to project financing.
a) Capacity of project to repay the loan along with the interest within stipulated period
of time.
b) Willingness of the borrower to repay the loan

While the capacity to repay is assessed by technical, commercial and financial

appraisals, the willingness to repay is assessed by way of management appraisal.

Whereas other appraisal techniques are quantitative and objective in nature,

management appraisal is purely qualitative and subjective in nature. Integrity,
foresightedness, leadership qualities, inter-personal relationship, technical and financial
skills, commitment, perseverance etc. are some of the parameters that needs to be
studied in management appraisal.
The following are some of the factors that will reflect the managerial capabilities of person
concerned.
a) Industrial relations prevailing in that enterprise
b) Morale of employees, the prevailing superior-subordinate relationship
c) Labour turnover
d) Labour unrest
e) Productivity of employees etc.

6. Social Cost Benefit Analysis

There are some projects that may not offer attractive returns as far as commercial
profitability is concerned. But still such project are still undertaken since they have
high social benefits e.g. Roads, Railway, Bridge, Irrigation, power projects etc.

The objectives of socio-cost benefit analysis include:

a) Assessing the Contribution of the project to the GDP (Gross domestic product) of the
economy.
b) Assessing the Contribution of the project to improve the benefit to the poorer section
of the societyand reduces the regional imbalances in growth and development
c) Justifying the use of scarce resources of the economy by the project.
d) Assessing the Contribution of the project in protecting/improving the environment
conditions.

This is the kind of appraisal used for government utility projects. Even if the
government may at times use such methods as Net present value and Internal rate of

27
return (see lesson 3) to appraise some projects, ultimately the cost benefit analysis and
its variation: cost benefit ratio will be used for decision making.

7. Ecological Analysis
In recent years, environmental concerns have assumed a great deal of significance-and
rightly so. Ecological analysis should be done particularly for major projects which
have significant ecological implications (like power plants and irrigation schemes) and
environment-polluting industries (like bulk drugs, chemicals, and leather processing).
However, today the law requires that virtually all projects go through environmental
impact assessment. The key questions raised in ecological analysis are:

• What is the likely damage caused by the project to the environment?

• What is the cost of restoration measures required to ensure that the damage to the
environment is contained within acceptable limits?
• Is the company able to pay for such damage?
• Analysis of Impact of project on quality of :- Air, Water, Noise, Vegetation, Human
life
• Done for Major projects ,such as these, cause environmental damage eg Power plants,
irrigation schemes, fertilizer factories e.t.c

8. Social and Gender Analysis

What will be the effect of the project on different groups, at individual household
and community levels? How will the project impact on women and men? How
will they participate in various stages of the project cycle? Will the social benefits
of the project be greater than the social costs over the life of the investment when
account is taken of time?

9. Institutional Analysis:

Are the supporting institutions in place? Can they operate effectively within the
existing legislative and policy environment? Has the project identified
opportunities for institutional strengthening and capacity building?

10.Political Analysis:

Will the project be compatible with government policy, at both central and regional
levels?

11.Sustainability and Risk Analysis:

Will the project be exposed to any undue risks? Will the project benefits be
sustainable beyond the life of the project?

28
Review questions:

1. Why is it important to analyze proposed projects before planning and

implementing then?

2. Which stage of the project cycle does ‘project analysis’ belong? Discuss.

3. Discuss the various project analyses that need to be carried out before a
project can be selected for planning and implementation.

4. Why is institutional and political analysis important for a new project?

5. Market analysis and financial analysis are important and yield a ‘go’ or ‘no
go’ decision. Explain.

29
 MODULE THREE:
PROJECT PLANNING, SCHEDULING AND CONTROL

3.0. INTRODUCTION
Scheduling is a process which tries to organize activities in logical sequence. While it is not
possible to know with certainty how long a project will take, there are techniques that can increase
your likelihood of being close. If you are close in your planning and estimating, you can manage
the project to achieve the schedule by accelerating some efforts or modifying approaches to meet
required deadlines.
One key ingredient in the scheduling process is experience in the project area; another is
experience with scheduling in general. In every government organization area there will be a body
of knowledge that associates the accomplishment of known work efforts with time duration. In
some industries, there are books recording industry standards for use by cost and schedule
estimators. Interviewing those who have had experience with similar projects is the best way to
determine how long things will really take.
When preparing a schedule estimate, consider that transition between activities often takes time.
Organizations or resources outside your direct control may not share your sense of schedule
urgency, and their work may take longer to complete. Beware of all external dependency
relationships. Uncertain resources of talent, equipment, or data will likely result in extending the
project schedule. Following activities shows the lifecycle of the project development.

3.1. WHAT’S PROJECT PLANNING ABOUT?

Project planning is about:

ü Confirming the project scope and objectives-

§ What do you want to achieve?

§ What are the boundaries; what is to be included or excluded?

ü Determining the expected outcomes/results/ results

ü Determining resources /inputs needed to carry out activities in order to deliver the
outcomes
ü Assessing risks

Steps to planning a project

30
 ü Break the work down into manageable tasks, according to objectives (these
must have a clear sequence)
ü Set the outcome /deliverable expected from each stage
ü Set milestones- key points that show whether project is going according to plan
(act as measure of progress)
ü Identify the resources to be used at each level/ for each deliverable.
ü Identify who will carry out the work involved I each deliverable

Projects as tasks involving creation of outcomes with predetermined objectives (qualitative and
quantitative) involve use of resources. These resources are: Human, material, Financial and Time
resources. Achievement and realization of set objectives also depends on clear management and
control of these resources.

The processes which are required to ensure that projects are completed with in the approved limits
/boundary. It involves budgeting (cost control), proper timing/ scheduling and human resource
management (performance control)

The Project Planning and Control flow Chart

3.2. PROJECT PLANNING, SCHEDULING AND CONTROL TECHNIQUES

These include:

1) The Gantt charts

2) Work breakdown structures
3) Network Analysis (PERT and CPA)
4) The Logical Framework.
5) Budgets
6) Time and resource schedules
7) Procurement plans

31
3.2.1. The Gantt Charts

Taking its name from ear ly project management innovator Henry L. Gantt, the basic Gantt chart
or now one know it as Bar Chart is an easy way to document schedules. It is a horizontal-bar
schedule showing activity start, duration, and completion. I t shows the connect ion between events
and the calendar, and provides a graphical analogy of the activity duration.

The Gant t schedule can illustrate the relationship between work activities having duration, events
without duration that indicate a significant completion, and milestones that represent major
achievements or decision points. Various comments can be used to communicate the progress of
the project effort compared to the baseline plan, as well to depict in a graphical way areas where
there are modified expectations from the baseline plan.

Once a Gantt schedule has been established for a project, progress should be periodically plot ted
against the baseline schedule. I f different functional areas are involved in a project, each area may
need its own detailed schedules to support the project master schedule. In such cases it is important
that working schedules be linked to a common master schedule in a way that they can be easily
updated.

Each activity or event on the schedule should have a responsible individual assigned, so there is
clear ownership and so schedule status can be updated without a lot of argument. Here one
should know meaning for two words “activity” and “event”.

“Activity” - An activity is a part of the project denoted by an arrow on the network. The tail of
the arrow indicates the star t of the activity whereas the head indicates the end of the activity.

“Event” – Event is the stage or point where all previous jobs merging in it, are completed and
jobs bursting out, are still to be completed.

Here 1 and 2 denotes the event form where the activities A, B, C, D can merge of burst out
scheduling process needs duration of the activity.

Table: 2.1 Activities for a project with duration

32
But for scheduling these tasks each should have start date and completion date. So, all the duration
of above activities should be specified by start date and end
date presented in table 2.2.

Table 2.2: Activities for a project with time schedule

These activities can be explained by bar char t also and presented in table 2.3. It is important to
note that Gantt Charts are useful at low levels of complexity; however, many projects have higher
degrees of sophistication and methodology which needs complex analysis methods.

Table 2.3: Bar Chart of a project progress

33
In any government organization the progress of the project is being explained be the bar chart.
Above shown bar chart has been drawn manually. One can use software like “Microsoft Project”
to draw the bar char t which is very easy to use.

3.2.2. Work Breakdown Structure

A Work Breakdown Structure is a results-oriented family tree that captures all the work of a
project in an organized way. It is often portrayed graphically as a hierarchical tree; however, it
can also be a tabular list of "element" categories and tasks or the indented task list that appears in
your Gantt chart schedule. As a very simple example, above project activities can be done as Work
Breakdown Structure (WBS).
Large, complex projects are organized and comprehended by breaking them into progressively
smaller pieces until they are a collection of defined "work packages" that may include a number
of tasks. The Work Breakdown Structure (WBS) is used to provide the framework for organizing
and managing the work.

In planning a project, it is normal to find oneself momentarily overwhelmed and confused, when
one begins to grasp the details and scope of even a modest size project. This results from one
person trying to understand the details of work that will be performed by a number of people over
a period of time. The way to get beyond being overwhelmed and confused is to break the project
into pieces, organize the pieces in a logical way using a WBS, and then get help from the rest of
your project team.

34
Figure 2.1. A Sample WBS
Taking a case of Rajkot DPR, individual component of the WBS can be explained as in table 2.4
below.

Table 2.4: Detailed Activity Schedule of Water Supply Project

Sanction Date &

Sr. Sanctioned Cost (Rs.
Name of Project Tentative Completion
No. in Millions)
Time
27 /03/2006 &
1 ESR & GSR at ward No.6 6.75
Dec. 2006
27 /03/2006 &
2 ESR & GSR at ward No.7 4.31
Dec. 2006
27 /03/2006 &
3 ESR & GSR at ward No.17 8.44
Dec. 2006
27 /03/2006 &
4 New Head works at Raiyadhar 31.20
Dec. 2008
27 /03/2006 &
5 Water supply scheme based on Nyari reservoir 7.41
Sep. 2006
27 /03/2006 &
6 Water supply scheme based on Bhadar reservoir 24.70
July 2007
27 /03/2006 &
7 GSR at Sojitra ward -12 0.16
April 2006
GSR & Pumping machinery at Bajarangwadi at ward no.14 27 /03/2006 &
8 0.90
Sept. 2006
27 /03/2006 &
9 GSR & rising main at Dudhsagar 1.64
June 2006

Scheduling for all these projects can be explained by bar chart also which is shown below in
table 2.5.
Table 1.5: Scheduling for Water Supply Project
3.2.3 Network Analysis

To achieve the objectives of project management network techniques is widely used. It is

commonly known as PERT (Programmed Evaluation and Review Technique), CPA (Critical Path
Analysis). PERT is used in Research type of projects whereas CPA is used in all of non-research
type projects.

Evolution of Network Techniques

By the end of 18th century, the decision-making process was mainly depended on the managerial
capabilities, experiences and academic background of managers. In the early stage of 19th century,
the pioneers of scientific management started developing the scientific management techniques.
During World War I, Henry L. Gantt developed Gantt Chart for production scheduling which was
later on modified to bar chart for the purpose of project and production scheduling.

The network techniques of PERT and CPA were concurrently developed in 1957. In the
beginning, CPA was used for planning and scheduling of constructional projects. It was also used
for scheduling the maintenance shutdown. The construction industry in general and the petrol-
chemical industry in particular were the major areas of CPA applications.

PERT was developed by US Navy for scheduling the research and development work for the
Polaris Fleet Ballistic Missiles Programmed whose activities were subject to a considerable degree
of uncertainty. Initially, this technique was named as “Programmed Evaluation and Review
Technique” after 1958, this technique was used by Russian Scientists for the utilization and
management of their huge ammunition. But after 1960, this technique came up as a revolutionary
technique for the purpose of decision-making.

With the passage of time, PERT and CPA applications started over-lapping and now they are used
almost as single technique and the difference between the two is only of the historical and
academic interest.

Network techniques show the interrelationship of the various tasks of the project. It helps to
provide planning and control information on time, cost and resource aspects of project.

Networks are important where projects are:

Ø Complex i.e. contain many interrelated; and interdependent activities; and/ or

37
 Ø Large, i.e. where many types of facilities, high capital investments, many personnel are
involved; and/or
Ø Where instructions exist i.e. where projects have to be completed within stipulated time
or cost limits, or where some or all of the resources (material, labour) are limited.

3.2.3.1. The Critical Path

This denotes the shortest time possible in which the whole project can be completed. It shows the
chain of activities with the biggest duration.

Critical path is established by the following.

• Earliest start time (EST): The earliest possible time at which a succeeding activity can
start.
• Latest short time (LST): The latest possible time at which a preceding activity can finish
with out increasing the project duration.
• Slack time: The spare time associated with activities which are not on critical path.
• Predecessor Activity: One that must be completed before another in started

Example:

A project consists of a series of activities as shown below

(a) Draw the project network and

b) Find the critical path.

Activity Immediate Activity duration

predecessor (Months)
A - 7
B - 7
C A 2
D A 3
E B 5
F B 1
G C 4
H D,E 5
I F 5

Solution:

38
 (a):

The critical path is one with biggest duration.

A-C-G: 7+2+4 =13 months.

A-D-H: 7+3+5 =15 months.

B-E-H: 7+5+5 =17 months.

B-F-I : 7+1+5 =13 months.

The critical path is B-E-H (17 months)

Other Types of Networks:

1. AOA Network: Activity on Arrow Network

2. PDM/AON Network: Precedence Diagram Method / Activity on Node
Network

3.2.3.2. The AOA Network

The AOA diagram below represents a project with three activities A, B, C. It is important to note
that Activity B can start after activity A is completed whereas Activity C can start after activity B
is completed

39
Alternatively, the logical framework can be drawn as;

Rules for AOA Network

1. There should be only one start node and only one finish node
2. At the starting node no activity enters but many can start
3. At the finish node many activities can merge but no activity start
4. At intermediate node many activities can merge and many activities can start
5. Two nodes should not be connected with two different activities

In above case an extra activity (known as Dummy Activity) is added to correct the network and
An Event is said to be completed when all activities ending at that event are completed

40
3.2.3.3. The PDM Network

The AOA network has limitations in planning. It assumes that all preceding activities must be
100 percentage complete to start the new activity. This results in inefficient project planning.
PDM network overcomes above limitation.

Type of Dependencies

(1) Finish to Start

A B

Activity B can start after n days (units) from finish of activity A. “n” is called the lage after
finish of “A”

(2) Start to Start

A B

Activity “B” starts n days (units) after start of activity “A”

(3) Finish to Finish

A B
Activity “B” must finish n days (units) after the finish of activity “A”

(4) Start to Finish

n

A B

Activity b must finish n days (units) after the start of the activity “A”

41
A PDM Example:

The PDM Network:

42
3.2.4. The logical Framework

The Log frame Matrix is a participatory Planning, Monitoring & Evaluation (and control) tool
whose power depends on the degree to which it incorporates the full range of views of intended
beneficiaries and others who have a stake in the programme design. It is a tool for summarizing
the key features of a programme and is best used to help programme designers and stakeholders
realize achievement of intended objectives.

The main concept underlying the Logical Framework is means and end. The better the means and
end linkages between each level of aims, the better the programme design.

By definition, each programme has an “if-then” or “means-and-end” logic embedded in it. If we

produce certain results under certain conditions, then we can expect to achieve

Log frame matrix serves the following functions

• A tool for planning a logical set of interventions

• A tool for appraising a programme/project
• A concise summary of the programme
• A tool for monitoring progress made with regard to delivery of outputs and activities
• A tool for evaluating impact of Programme outputs, e.g. progress in achieving purpose and
goal

Framework Components

Rows:

• Goal: The higher-level objective towards which the project is expected to contribute
(mention target groups)

43
 • Purpose: The effect which is expected to be achieved as the result of the project.
• Outputs: The results that the project management should be able to guarantee (mention
target groups)
• Activities: The activities that have to be undertaken by the project in order to produce
outputs.

Columns

a) Objectively Verifiable Indicators (OVIs)

The quantitative, qualitative, and time-bound measures that constitute evidence of the extent
to which the aims have been met at the four levels of the hierarchy.

• Indicate how to recognize success at each level of aim

• Assist to refine and clarify aims
• Facilitate monitoring and take remedial actions if required
• Facilitate end of programme evaluation to determine delivery of outputs and progress
made in achieving goal and purpose.
• Indicators help to verify to what extent the results are achieved.
• Specify how the achievement of an objective can be verified or demonstrated
• Provide a basis for Monitoring and Evaluation

OVIs have dimensions of indicators

• Quantity
• Quality
• Time

The process of defining indicators forces us to clarify our objectives. A good indicator is,
a. reasonable- measuring what is important in the project
b. Attributable to changes caused by the project
c. Cost-effective involving data that may be collected and analyzed inexpensively
d. Independent, not inherent to the project
e. Targeted to how much..., what kind of.., by when
f. Verifiable to reach agreement

b) Means of verification

The specific sources from which the status of each of the indicators can be ascertained. Each source
has a cost, either direct and short-term or indirect and long-term

c Assumptions and risks

Assumptions and risks are external conditions that are outside the control of the program
me/project. The achievement of aims depends on whether or not assumptions hold true and the
risks do not materialize.

44
 If cause and effect is the core concept of good programme design, necessary and sufficient
conditions are the corollary. The sufficient conditions between the levels in the hierarchy of aims
are the Assumptions. This is the external logic of the programme.

When working on a programme, we make assumptions about the degree of uncertainty between
different levels of aims. The lower the uncertainty that certain assumptions will hold true, the
stronger the programme design. Any experienced manager will agree that the assumptions - the
failing assumptions - can derail a programme as often as poorly executed outputs.

Log frame demands that all hypotheses, assumptions and risks relevant to a programme are made
explicit.

By implication, this then further demands that the appropriate action is considered (and if
necessary, taken) before problems materialize.

• How important are the assumptions

• How big are the risks
• Should the programme be redesigned?
• Should elements of the proposed programme be abandoned?

45
 MODULE FOUR:

PROJECT APPRAISAL, SELECTION & ANALYSIS.

Project evaluation helps to undertaken authorized future projects. Investment in projects (covering
short and long periods) involves capital expenditure /capital investment.

Project evaluation and analysis involves.

• Forecasting capital (Financial) requirements

• Identifying suitable feasible projects
• Appraising potential projects /assessing costs and benefits of the project over
its life.
• Selecting and approving the best alternative
• Making a capital expenditure.
• Comparing actual and planned spending investigating deviations and
monitoring project benefits.

Evaluation also involves other aspects ie the social and economic viability e.g. if the project’s
implementation leads to socio-economic development, it may be undertaken even if it is financially
unviable.

The process of appraising potential projects requires the planning (as stated in the proposal).

1) Detailed statement of cash flow and inflows

2) Assessment of tax impact.
3) The discount rate to account for the time value of money.

Project evaluation Techniques include:

a) Those that don’t consider time value of money (non-discounted cash flow methods).
b) Those that consider time value of money (Discounted cash flow methods).

A) Non-Discounted cash flow methods:

1) Pay back method (Pay back period).

This is the period that a project takes to pay back /return the money spent on it from the net cash
flows (net operating income after taxes and deprecation)

Decision rule: Only projects that pay back within the specific time period are viable and should
be undertaken.

46
i) Projects with constant annual cash flows:

When future project cash flows are expected to be constant overtime, pay back is given by: Initial
investment cost divided by the Annual cash flow

Example:

An initial project expenditure of $2 million is expected to generate net cash flow of $500,000 for
the next 7 years. What is the pay back period for the project?

PBP = Initial investment /Annual cash flow

= 2,000,000 / 500,000

= 4 years

ii) Projects with uneven annual cash flows

It is rare for project cash flows to be necessarily constant. Where cash flows are not constant, pay
back is calculated by working out the cumulative cash flow over the life of the project

Example:

A project is expected to generate the following cash flow

Year Cash flow ($000)

0 (1900)
1 300
2 500
3 600
4 800
5 500

The payback period is given by:

Year Cash flow ($000) Cumulative cash flow

1 300 300
2 500 800
3 600 1400
4 800 2200
5 500 2700
PBP = 3 years + (500 / 800) x 12

= 3 + (0.625) = 0.625 x 12 months

47
 = 8 months.

PBP = 3 years and 8 months

Advantages of PBP method:

• It is a simple technique, easy to calculate and useful in rapidly changing technologies.

• It puts emphasis on quick returns, so that they may be put in other use.
• It uses cash flows, not profits.

Disadvantages:

• It ignores reforms after the pay back period (Post –pay back cash flows)
• It ignores timing of cash flows (time value of money).
• Doesn’t explicitly consider risk.
• Ignores project profitability.
• Doesn’t give good investment decision since there is no strict pay back time for all projects.

2. Return on Capital Employed (ROCE) /Accounting Rate of Return (ARR).

This is a non-discounting project approach model.

ROCE /ARR = Average Annual profit after depreciation

Initial cost.

ROCE /ARR O-D =

I
O= Average annual incremental cash flow from operations

D= Incremental average annual deprecation

I =Initial investment.

But Depreciation = Original investment – Scrap value

Useful life

Decision rule: If the expected ROCE/ARR for the project is greater than the target/hurdle rate,
the project is accepted.

Example:

48
A project involves the purchase of machinery costing $110,000. This project is expected to
generate annual cash flows of $ 24400 for 5 years. The machine would have a scrap value of $
10,000 at the end of 5 years. Find its ARR /ROCE.

ROCE /ARR = Average Annual profit after depreciation

Initial cost.

Depreciation = Original investment – Scrap value

Useful life

= 110,000 – 10,000
5 years.

= 100,000
5
= $ 20,000

Average Annual profit = Annual cash flows - Annual depreciation

= 24400-20,000

= $ 4,400

ROCE /ARR = 4400

110,000

= (0.04 X 100)

= 4%

Advantages of using ARR

• It is simple to calculate
• Each year is involved in calculating the profitability of the project.
• It is expressed as a %age making it easy to understand.

Disadvantages

• It ignores the timing of cash flows (Time value of money)

• Has different methods of calculation giving different figures
• There is no investment signal. Decision to invest remains subjective

49
B) Discounted Cash flow Methods

It is the method of evaluating projects that recognizes that a dollar received immediately is
preferable to a dollar received at future time.

In this method, the cash flows are discounted to their present values using relevant discount rate
or required rate of reforms on investment

It includes:

1) Net Present Value method (NPV)

2) Internal Rate of Return (IRR)
3) Profitability Index (PI)

Note: For purposes of this course, only the first and third will be considered.

1). Net present value method

Net Present Value refers to the difference between the present value of the projects cash inflows
and the PV of its cash outflows.

It represents the surplus funds that are earned on the project after funding the investment.

Formula:

! 𝐴𝑖 − 𝐼𝑜
𝑁𝑃𝑉 = %
!"# (1 + 𝑟)
!

Where:

Ai = Net cash flow in period i

r = Required rate of return /Cost of capital

Io = Initial investment cost.

n = Number of months/years/time period

Decision Rule:

50
 • If NPV is positive, the project is financially viable.
• If negative, the project is unviable
• If the investment has two or more mutually exclusive projects, the one with highest NPV
is chosen

Example: An organization is considering on investment in a new project. The estimated cash flows
are as below:

Year Cash flow ($000)

0 (240)
1 80
2 120
3 70
4 40
5 20
The organization’s cost of capital is 9% per annum. Calculate its NPV and advise on whether its
is viable.

Solution:

Year Cash flow Discount factor (9%) PV

0 (240,000) 1.00 (240,000)
1 80,000 0.917 73360
2 120,000 0.841 101040
3 70,000 0.772 54040
4 40,000 0.708 28320
5 20,000 0.650 13000
NPV 29760

Advantages of NPV

- It considers time value of money.

- It is based on cash flow, not profit
- It considers the whole life of the project.

Disadvantages

- It is difficult to explain NPV values to managers.

- It may be hard to fore-cost or estimate future cash flows for project investment since the
future is always uncertain.

- Solutions figures not in percentage, hard to compare.

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2. Profitability index (PI)

This is sometimes called the Benefit –cost ratio or the PV index. It is reached by computing the
ratio /value of cash inflows and present value of cash out flows.

Decision Rule: Accept a project with the profitability index (P1) greater than one.

𝑁𝑒𝑡 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑐𝑎𝑠ℎ𝑓𝑙𝑜𝑤𝑠

𝑃𝐼 =
𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐶𝑜𝑠𝑡

In using PI it is assumed that the reforms from the project are generated in exact proportion as
amount invested i.e PI gives returns in the present terms per unit invested.

Hence, projects will be ranked from one with highest PI to one with lowest, and projects are
selected in order of ranking up to the point where the budget is exhausted.

NB: PI method is simple:

However, it cannot be used except where there are multiple constraints, not only capital. It looks
at projects individually, doesn’t take into account the overall portfolio where correlation of
project’s return is important.

Review questions

1. What do you understand by Discounted and Non discounted project evaluation techniques?

2. What is project payback period? What are the advantages and disadvantages of the payback
period method?

Capital Rationing:

Share holders/project and company wealth is maximized where a company has undertaken all
positive NPV investment capital rationing.

This is done by specifying a limit on the total budget capital spending on projects especially where
there are insufficient funds.

Capital rationing is undertaken where an organization/company has move amounts of capital

projects to invest in with positive NPV than it has money to invest in them. Hence some projects
that should have been accepted are excluded.

This is called ‘Artificial constraint’ because the company management may decide the amount to
be invested.

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Types of rationing

a) Hard capital rationing: Where the limit on the amount of finance is imposed by lending
institutions.

Reasons

• Industrial factors on limiting funds i.e if a project is within an industry that is taken to be
highly risk.
• Company specific factors such as poor historical record on company’s performance.

b) Soft capital rationing

This is where management internally composes limits on investment expenditure. It is however

against the rational view of share holder profit maximization, which requires share holders to
invest in all viable projects.

Reasons

• Human resource/management skill limitation ie lack of strong middle management to

handle bigger projects.
• Desire to maximize returns of a limited range of investments.
• Divisional constraints: upper management allocates fixed amount for each division as
corporate strategy.
• Debt constraints: Earlier debt issues which prohibit increase in the firm’s debt beyond
certain level.

Rationing and Divisible project

As noted earlier, divisible projects are ranked using profitability index (PI), where:

𝑁𝑒𝑡 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒

𝑃𝐼 =
𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑖𝑚𝑒𝑛𝑡 𝑜𝑢𝑡𝑙𝑎𝑦

Procedure for Rationing Divisible Projects.

• Calculate the PI for cash project.

• Rank the project according to PI magnitude
• Allocate funds according to the ranking until all available funds are used up and make a
selection of projects

Example:

A company has $ 100,000 available for investment and has identified the following 5 divisible
projects.

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 Project Initial cost ($) NPV
C 40,000 20,000
D 100,000 35,000
E 50,000 24,000
F 60,000 18,000
G 50,000 (10,000)

Determine the project that should be undertaken

Solution:

NB: Project G is not viable because has negative NPV

Computation of PI

Projects NPV/IC PI Ranking

C 20,000/40,000 0.5 1ST
D 35,000/100,000 0.35 3RD
E 24,000/50,000 0.48 2ND
F 18,000/60,000 0.3 4TH

Rationing

Available funds ($) Project selected NPV earned ($)

100,000 (40,000) C 20,000
60,000 (50,000) E 24,000
10,000 (10,000) 10,000 of D (10% of D) 10% of 35,000 = 3500

Project selection

C, E, and 10% of D. NPV=20,000 + 24,000 + 3500 $ 47500.

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Rationing Indivisible Projects

In this case, projects can’t be divided. It is either wholly undertaken or not.

Example:

MTN Ltd, a Telecom Company has $ 150,000 available for investment in 5 projects. Preliminary
evaluation indicates the following.

Project Initial cost ($) NPV ($)

C 40,000 20,000
D 100,000 35,000
E 50,000 24,000
F 60,000 18,000
G 50,000 (1,800)

Determine the optimal project selection

Solution:

Alternative investment mix Initial cost required NPV

C&F 40,000 + 60,000 = 100,000 20,000 + 18,000 = 36,000
D 100,000 35,000
C&E 40,000 + 50,000 = 90,000 20,000 + 24000 = 44000

C & E is the best investment mix because it has the highest NPV.

NB. The unused funds 10,000 (100,000-90,000) will earn a return equivalent to the cost of capital
and will not affect NPV. Ie their NPV is zero.

Rationing Mutually Exclusive Projects

Projects are said to be mutually exclusive if investment in one would mean that another cant be
undertaken. This may be because the two require some type of resources.

Example

A company has identified four divisible Projects as below:

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 Project Initial cost NPV
A 50,000 100,000
B 10,000 (50,000)
C 10,000 84,000
D 15000 45,000

The firm has only $ 50,000 for investment and projects C & D are mutually exclusive.

Determine the optimal project selection.

Solution: Computation of PI

𝑁𝑒𝑡 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒

𝑃𝐼 =
𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐶𝑜𝑠𝑡

Project
A 100,000/50,000 = 2.0 3RD
C 84,000/10,000 = 8.4 1ST
D 4,5000/15,000 =3 2ND

Rationing

Investment Alternative Initial cost NPV

C & 40,000/50,000 of A 10,000 +4/5 of A 84,000 + 80,000 =
16400
D & 3500/50,000 of A 15000 + 70% of A 45000 + 70,000 =
115,000

Therefore, the best alternative is C & 80% of A,

NPV = 84,000 + 80,000 = 164,000.

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 MODULE FIVE

PROJECT STAKEHOLDER ANALYSIS AND COMMUNICATION

Stakeholder analysis in Project Management is the process of identifying the individuals or

groups that are likely to affect or be affected by a proposed action, and sorting them according to
their impact on the action and the impact the action will have on them. This information is used to
assess how the interests of those stakeholders should be addressed in a project plan, policy,
program, or other action. Stakeholder analysis is a key part of stakeholder management.

A stakeholder is any person or organization, who can be positively or negatively impacted by, or
cause an impact on the actions of a project or organization.

They are the entities (individuals, institutions and organizations) within or outside the organization
project who/ which sponsor a project or support it or that are actively involved in it, or whose
interests may be affected as a result of project execution and /or completion

Types of stakeholders are:

• Primary stakeholders are those ultimately affected, either positively or negatively by a

project organization's actions.
• Secondary stakeholders are the ‘intermediaries’, that is, persons or organizations who are
indirectly affected by an organization's actions.

They may include:

a) Civil Society organization projects: Donors/ sponsors/ funders, management, beneficiaries,

Government, etc.
b) Private/ profit-oriented projects: Shareholders, management, customers, creditors and
debtors, etc

Summarily

Civil society projects Private projects

ü -Donors/ funders ü Share holders
ü Project ü Management
management ü Staff/ project team members
ü Beneficiaries ü Customers
§ Direct ü Suppliers
§ Indirect ü Government
ü Government ü Family members
ü Partner ü Finance providers
Organisations ü General public
ü Trade Associations
ü Partners

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 ü Competitors

Stakeholder management involves two major issues

ü Stakeholder analysis and planning

ü Stakeholder mapping.

Stakeholder planning is, like any other form of planning, an activity which involves efforts to
analyze, identify and prioritize the needs/ objectives of the different interest groups and laying
strategies to meet them.

Note: Like it is hard to plan a project problem that is not known, it is equally difficult to plan/
prioritize needs of stakeholders which we are not certain of and how they can support or affect
our projects. Hence, it is vital for project management to adopt a ‘stakeholder-based approach’
and have it integrated with other planning strategies if success is to take its route.

Benefits of a Stakeholder- based approach

ü Helps understand the project’s major influencing bodies and plan for them. The opinions
of the most powerful stakeholders are used to shape the project at an early stage.
ü Gaining support of the powerful stakeholders can help to win more resources- makes it
more likely that the project will succeed.
ü Communicating with your stakeholders early will make them know what one intends to
achieve- the project benefits.
ü Helps anticipate what people’s reactions to your project may be, and build into your plan
the actions that will win their future support.

Steps in Stakeholder Analysis include:

§ Identifying your stakeholders- Involves brainstorming and thinking of all the

individuals, groups, institutions that may be affected by or can affect your work;
have influence or power over it, or have interest in its successful or unsuccessful
completion. It is important to take a lot of care because identification of a wrong
stakeholder may have a number of consequences like wastage of resources planning
for a wrong holder, and disclosure of confidential information in attempting to
communicate to them which may affect project operations.

58
 § Prioritizing- Having a list of people and institutions that may affect your project
and putting them in order of influence basing on their power either to advance or
block the project.
§ Understanding the key stakeholders- Having identified and prioritized the project’s
key stakeholders, it is vital to carry out a further analysis and know more about
them. Attempts should be made to know how they are likely to feel about and react
to your project. You need to know how best to engage them in your project and
how best to communicate to them. Some of them, one should note, may be against
the project’s success and their hidden attempts need to be known, while others will
be so much interested with a lot of power and interest hence their priorities will
need to be put first.

The key questions one may use to understand stakeholders may include:

• Who are the major parties with interest and influence on the project? Is their
interest genuine
• What motivates their interest most towards the project?
• What do they need from the project in terms of information and other
tangible deliverables?
• How do they want to receive the information? What is the best way of
communicating to them?
• What is their current opinion of your work? Is it based on good information
generated by yourself?
• Who influences their opinion generally, and who influences their opinion
of you? If influencers are external, do some of them form part of your
stakeholder influential body in their own right?
• If they do, what will you do to win them around to support your project?
• If you don’t think you can win them around, how will you manage the
project with their opposition?
• Who else might be influenced by their opinions? Do these people become
stakeholders in their own right?

Avery good way of answering the above questions is to talk directly to these parties, having carried
out a separate assessment/ analysis. People are often quite open about their views, needs and
opinions hence asking, dialoguing and discussing with them is often the better step in building
successful relationship with them.

Stakeholders need to be very well known and the appropriate way of analyzing and understanding
their needs is ‘Stakeholder mapping’ what does it mean?!

During a Stakeholder analysis process, it is often useful to categorize the various stakeholders by
drawing further pictures of what the stakeholder groups are, which interests they represent, the
amount of power they possess, whether they represent inhibiting or supporting factors to the
project’s objective achievement, and methods in which they should be dealt with.

59
Stakeholder mapping is the process of creating such pictures to clarify the position of the
project’s major influencing parties.

A number of models can be developed and used for this purpose. A more recent one is the Power,
Legitimacy and Urgency model developed by Mitchell, Agle and Wood (1997, 1999). This model
involves mapping of stakeholder behaviour into 7 types, depending on the combination of three
characteristics:

• POWER of the stakeholder to influence the project

• LEGITIMACY of the relationship and actions of the stakeholders with the project in terms
of desirability, properness, or appropriateness.
• URGENCY of the requirements being set for the project/ organization by the stakeholder
in terms of criticality and time-sensitivity for the stakeholder.

The stakeholders who show only one of the three characteristics (1, 2, and 3 in the diagram) are
defined as Latent stakeholders. They are sub classified further as Dormant, Discretionary or
Demanding stakeholders.

The stakeholders who show two of the three characteristics (4, 5, and 6 in the diagram) are defined
as Expectant Stakeholders. They are sub-Classified as Dominant, Dangerous or Dependent
stakeholders.

The stakeholders who show all 3 characteristics are called Definitive Stakeholders.

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The project management has a task of assessing the position of each stakeholder. It is the subjective
perception of management that will ultimately decide the way in which the project/ organization
will act towards each stakeholder.

Another model/ method that can be used to analyze the project / organization stakeholders is the
Power/ Interest matrix. Stakeholders are classified in relation to the power they hold and extent
to which they are likely to show interest in the strategies of the project and its continued existence.
This map can help to indicate what type of relationship the project/ organization should / will have
with each of its stakeholder groups

Example: The Premier League

Level of Interest

LOW HIGH

LOW A: Minimal Effort B. Keep Informed

No need to engage Stakeholder engagement:
/participate Stakeholders:
Stakeholders: - Fans and Supporters
- Broadcasters - Banks
- Premier league - Shareholders
Power - Sponsors
Possessed
HIGH C. Keep Satisfied D. Key Players
Stakeholder Engagement: Stakeholder participation
Stakeholders: Stakeholders:
- Met Police - Directors
- Transport of London - Sponsors and Partners

§ The stakeholders in group A require only minimal effort and monitoring.

§ The stakeholders in group B should be kept informed. They can inflict influence to the
more powerful stakeholders.
§ Stakeholders in group C are powerful, but their level of interest is in the project objectives,
strategies and activities is low. They are generally relatively passive, but may suddenly
emerge as a result of certain events, moving to group D. They should be kept satisfied.
§ The stakeholders in group D are both powerful and highly interested in the project
objectives, strategies and activities. The acceptability of the project’s goal, objectives and
strategies to these key stakeholders should be made an important consideration.

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 MODULE SIX

PROJECT IMPLEMENTATION AND OPERATIONS MANAGEMENT

Projects, as earlier noted are formulated as solutions to problems/needs and must be implemented,
than keep plans on paper. Implementation is a multidimensional stage/phase with a number of
challenges mostly presented by changes in the environment. Therefore, care needs to be taken to
monitor the operational procedures. This is what we refer to as ‘operations management’.

Project Implementation and operation needs clear understanding of the implementation

cycle which involves:

Preparation of activities i.e. establishing

• Recruitment or staffing procedures

• Financial management system
• Work plans development
• Reporting system

Project implementation Activities such as

• Site management
• Communication
• Reporting
• Stores and supplies management

Project completion such as

• Completion reports by project managers

• Commissioning of projects
• Operation and Maintenance arrangements for sustainability.

Project Supervision Cycle

The cycle covers;

• Start –up activities for supervision

• Activity implementation supervision
• Completion activities

Preparatory Activities

62
 • Collection and study of project documents e.g contracts, plans, budgets, work plans.
• Assembling a supervision team
• Developing supervision framework
• Development supervision instrument and arrange for logical support.

Supervision of Activities

• Supervision for time, quality and cost

• Discussion of findings and recommendations
• Remedial actions suggested or taken
• Supervision for cross cutting issues
• Production and dissemination of supervision reports.

Project Completion Activities

Liability analysis
Commissioning
Operation and Maintenance arrangements.

Cross cutting issues in supervision of project implementation

• Gender
• HIV/AIDS
• Poverty eradication
• Safety and Welfare consideration
• Environment protection

The integration of cross cutting issues enhances total value for money by paying attention to:

• Gender concepts and mainstreaming

• Ratio of women to project personnel
• Generating and use of gender disaggregated data in project implementation.

Project Operations Management

Operations management as according to Chandan (2000) is the management of activities

specifically related either directly or indirectly to the organization project’s production of goods
and services.

It involves the performance of activities of selecting, designing, operating/implementing and

controlling, and updating project production systems.

In brief, O.M is an efficient tool for managing the transformation of inputs – people’s efforts,
materials, financial resources and tools to valuable output which can satisfy human needs.

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Steps in Operations Management

The planning and management of operations must be integrated with the entire project/
organization and must be in line with its objectives. The major phases of operations management
include:

-Selecting: Involves making choice of specific processes by which selected activities are to be
carried out/ implemented to realize set goals. Includes choice of technology, resources (human),
sequence of activities, and how work is to be routed/ organized

Designing: Arrangement of tasks as well as facilities that will use the technology and processes
selected. Tasks/ jobs should be designed in such a way that they are challenging and self satisfying.
Routine and monotonous tasks hamper morale and achievement and is evidenced by excessive
absenteeism, high labour turn over, low quality work, and general dissatisfaction and discontent.
In designing work, it is vital to pay attention to facility lay out. Well planned and laid facility helps
to:

-Reduce resource wastage and costs.

- Increase worker safety
- Increase quality of output since resources are better utilized.
- Reduce work delays and stoppages
- Increase services to beneficiaries

-Operating: Project operation planning, selection and designing are estimation techniques which
involve forecasting. The operation phase is a special one involving scheduling work operations
and allocating workers in such a way that they will perform up to standard (long and short term
fore casts/ bench marks).This phase is the hardest since plans are put to the ground (into practice).
Success of implementation depends on proper planning.

-Controlling: Control mechanisms are developed during planning and designing phases-the two
must be integrated if they are to yield. Major areas of control include: material utilization, quality
and price of purchases, inventory levels (materials and finished goods), number and quality of
workers, time, quality and quantity of output. Bench marks for each of these is predetermined,
operation carefully watched, and immediate action taken to avoid deviations.

-Updating: Continuous revision of operations in line with political, economic, social and
technological changes (externally) and making necessary internal adjustments mainly to:

-Suit customer demands, tastes and preferences

- Match with competition levels
- Retain the expert workers. Employees tend to move from projects/ organisations
which are not able to meat their expectations in terms of creating good working
conditions and providing ground for advancement.

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Materials Management: Materials/ inventory refer to the goods /services that a project holds
/uses including: -

• Materials and components- Essential items needed to create/make other finished items e.g.,
consider the in-puts for manufacturing poultry feeds- maize flour, snail shells, bones etc.
• Work in progress (WIP) -partially completed items on their way to getting finished.
• Finished products- final products, ready for use.

There are several different ways of handling inventory. Keeping track of inventory can be a
complex activity. The term for watching inventory is called Logistics management.

Reasons for keeping/carrying inventory

• To have a smooth activity run.

• To protect the organization/project against errors, shortages and stock outs. Stock outs
have a cost because projects may stop or ‘customers may get diverted.
• To level production activities and stabilize employment labour relations i.e in case of
system breakdown, use inventories and keep workers on board.
• Hedging: Inventory is used to hedge against price increases and inflation (unstable
economic conditions).
• Provide the means of obtaining and handling materials in economical cost sizes, thereby
allowing the project to gain from quantity discounts

Inventory Management Systems

a) The Two –Bin System

The project will have two bins Inventory quantity equal to the re-order level is put in 1st bin and
filled. The reminder is put in bin 2. When the stock in the store is used up, one bin is opened. At
this level an order is placed, in case the project operations are still going on.

b). The Periodic Review System

Involves periodic monitoring of stock so that it doesn’t fall to level lower than the usage during
lead time. The technique used to prevent breakdowns from affecting the entire project is
decoupling. Decoupling means breaking project operations apart so that each operation stage is
independent of the others.

Purpose for Decoupling

• Improves on smooth running of project activities.

• Allow independent scheduling of operations for the same end product e.g a Car may have
engine, body, seats, etc.

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NB: Service organization/Projects differ from materials processing/handling projects because they
deal in intangible products (services) which are offered directly.

The modern approach to materials management is based on: Procurement, Logistics and
Warehousing.

A) Project Procurement:

This is concerned with getting the right item of the right size/quantity and quality, at the right time,
from the right place,

The procurement process involves

1. Materials specification: Giving a detailed prescription of the item to be purchased. It

includes giving physical characteristics, chemicals analysis, part number etc.
2. Purchase requirements: Originates from the department which will use the materials
to the purchases department. Requisitions include specification of:

- What is to be purchased: quality, quantity, size, etc.

- Delivery date (in relation to use date).
- Account where cost is to be charged.
- Approval by right person/officer in charge.

3. Inquiries about where to get right product from and price.

4. Request for Quotations: Prepared by the procurement section to the supplier and
Include specification of;

- Delivery dates
- Quantity available in relation to what is required
- Terms of payment, etc

5. Purchase Order: Acts as the basis for the supplies authority to supply goods and
services. Also represents the buyer’s obligation to pay for the goods and services.

B) Project WareHousing

This involves management of project’s materials from the point they appear on its property
list. It includes aspects like: receipt of items, storage systems, controls and ordering for
replacement.

The main issues of concern under warehousing are:-

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 a) Ensuring security of stocked project stems.

b) Ensuring security and safety of the human resources in ware houses through:-

-Ensuring that stores /ware houses are well organized- gang ways, clear and
proper lighting, cleanliness, etc.

-Assigning responsibilities for accountability e.g checking boxes, analyzing

Chemicals, loading and off loading, etc.

Project Material / Inventory costs management

This involves determining the amount of material requirements and expenses in relation to the
production plan.

Material/inventory costs include;

1. Ordering costs: Costs for placing orders, faxing, emailing inspecting, expediting
(change of shipment or transport means).
2. Ordering costs = cost per order x Demand/Quantity
3. Holding/carrying/handling/storage costs. Includes expenses like insurance, lightening,
shrinkage, obsolescence costs, pilferage, costs of personnel (stores personnel), heating,
cooling, etc.

Holding costs = Holding cost per unit x Average inventory

= CH× Q/2

4. Purchase costs: include the price paid for items or labour material.

Purchase cost = Price per unit x quality items

= P x Q.

Supervision of Time Control and Remedial Action during project implementation

The time taken to implement project activities is an important measure of successfulness of

supervision of project implementation amongst others.

The supervisors of project implementation have to pay particular attention to time control
measurers, time scheduling and its supervision, time extension and postponement, damages for
non-completion, partial completion and handover, practical completion, defect /warranty liability
period.

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Time is a major supervision function within projects implementation. When a project
implementation runs out to time, it develops strain and puts an additional stress on resources from
the various parties to sustain the extension. On almost every party involved, there is additional
operation expenditure into the extension period.

Time Element and Value

Project implementation time deals with setting start, implementing /duration and end times that
are useful to supervisors.

These characteristics have got special values individually and collectively. There are events and
activities in project implementation that must either start, or take a certain specific duration or end
on certain dates. Other wise it may crate a problem with the project implementation process
quality, costs and time frame, causing possibilities of poor quality, extra costs, delays and losses.
Therefore, time supervision in project implementation is about focusing on the start date,
duration/period and the end dates of component and the entirety of the project implementation
activities.

The delay of a ‘start’ or ‘end’ of some part of project activities or prolongation of specific activities
duration, propagate distortion in the entire project time frame and brings about consequences. The
time element value of project implementation may make the project fully or partially succeed or
fail, in terms of delivery, usefulness and development effect.

It may worsen the whole viability of the project or loss or even life of people. For example, a
delay in completing health facilities can make people who would otherwise have been saved by
the health services from the facilities to die.

‘Detailed project implementation time supervision must both anticipate and overcome possible/
problems in advance and help provide satisfactory solutions to delays.

The inevitable problems, even in the best supervised project implementations need to be controlled
by:

• Planning and setting targets

• Choosing method to achieve such goals and targets
• Monitoring and evaluating progress
• Taking corrective action immediately when problems have been identified and as they are
necessary.

The supervisor should ensure continual and optimal setting, monitoring, evaluation and revision
as the ultimate ways to cope with time supervision.

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Time Scheduling

Time scheduling is the assigning of starting dates and completion dates to the various activities
that go in the project implementation. The important things for the supervisor of project
implementation to note are:

§ The earliest time that an activity can start

§ The latest time that an activity may be completed without delaying the project completion.
§ The lee way or float or degree of freedom available in scheduling an activity and the critical
path.

Most often, project supervisor does not develop the time schedule directly but has to be done by
the project implementer. The supervisor checks whether it is realistic and achievable within the
available means and meeting the expectation.

Supervision of implementation of time schedule

This involves a set of checks and balances to ensure that the schedule is being adhered to. It is
continual through comparing the actual on–the-job daily progress with that which was anticipated
and previously scheduled.

This covers the process of making decisions based on this comparison. It covers keeping current
the information that is required in re-scheduling.

The supervisor’s role:

§ List all the activities that are to get under way on any given day to look ahead and to ensure
that all activities are started on schedule.
§ List all finish/completion dates of all scheduled activities. The supervisor needs to note
that if an activity is not completed in its time, they become critical to the completion of the
entire project implementation. The latest finish time of any activity is the latest that it can
be completed without interfering with the planned completion of the overall project
implementation.

Project Activity Time Listing Supervision Table

Activity Activity Activity Activity Earliest Activity Latest Progress

Code Description Duration time time Remarks
Start Finish Start Finish

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In supervision of project implementation time, the most troublesome aspects are matters of claims
for time-related extra costs and extensions of time by the implementer and the disputes that result
there from. The supervisor of project implementation needs to take care on behalf of the other
stakeholders and protect their interests.

Time Extension and Postponement

If a project implementation was well planed and executed, without occurrence of any drastic
events, there should be no need and justification for extension or postponement.

Project implementation time supervision, often, runs out of control. Delays of the whole or partial
project implementation process by parties to the implementation process or outside factors may
cause disruption and loss that can result into disputes that may subsequently ruin the course of the
project implementation. Therefore, there is sometime need for time extension and postponement.

Supervisor needs to ensure that a fair and reasonable extension/postponement of time is granted.

A fair and reasonable extension of time is the measure of the extension to be granted, which
must mean fair and reasonable in relation to the cause. And supervisor is also to ensure that,
the cause for the time extension is fair and reasonable. The initiative for obtaining an extension of
time beyond the original or amended date for completion is to come from the project implementer
and incumbent on them.

Dealing with Delays

The cause of delays in project implementation may be of a continuing natural or intermittent nature
or its interaction with some other causes- internal/ external.

The implementer is therefore not necessarily required to state at once the length of delays
occasioned, although he may well consider it prudent to give opinion. However, the implementer
must set out in his initial notice the material circumstances, which are to include the cause or causes
of delay and which, by implication, should cover any uncertainties and interacting matters. At the
same time any relevant events to sustain the claim for an extension should be identified.

Damages for Non-completion and Extra payment

The causes of delays are normally referred to as ‘Relevant Events’, that give rise to extension of
time. They may in some cases also give rise to claim for extra payment or to termination of project
implementation or for payment of damages for non-completion.

Damages for non-completion permit the claiming of liquidated and sustained damages from the
project implementer/contractor for failure to complete the works on time. The sum usually is
calculated at a flat rate per unit time either in days, week or months.

The supervisor should note that damages for non-completion payment or a liquidated damage is
not a penalty. If the amount can be illustrated to be a penalty, then it is not enforceable. Liquidated

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amount payable and enforceable is a compensation for loss incurred due to the delay in completion
of the project implementation.

Practical Completion

Practical completion is the substantial completion of project implementation to a level which full
utilization of the project out put can be initiated. It is considered that the project implementation
is nearly complete with the remaining activities to be considered as snag/defect lists to address
during defect/warranty liability basis. The effects of practical completion are:

• The beginning of the defects liability period

• The ending of insurance of the works
• The end of liability to further liquidated damages.
• The end of regular interim valuation and certification.
• Final adjustment of the project implementation costs/sum
• Project implementer/contractor is no longer obliged to accept instructions requiring fresh
work even on modified terms.

CROSS –CUTTING ISSUES / INTEGRATIVE ISSUES AND REMEDIAL ACTION

Any project, whether human development or infrastructural development, is implemented within

a context of a broader social, political and economic environment and should therefore take into
consideration cross cutting issues such as gender, HIV/AIDS, labour welfare and environment.
However, the extent of supervision for these issues should be on the basis of the extent to which
they are in line with the project /organization objectives.

Supervision of project implementation should, among other things, assess project considerations
for labour welfare and motivation, designs and practices for HIV/AIDS prevention and care,
implications for men and women, as well as the ecological biological, socio cultural, political and
economic environment, for sustainable development.

Projects and HIV/AIDS

HIV/AIDS has for a long time become a great concern for Government, therefore, project
supervisor must ensure that issues relating to HIV/AIDS have to be put into consideration during
project implementation because a majority of people are either infected or affected.

During Project Start

What plans have been put in place to address HIV/AIDS epidemic in regard to prevention,
care and advocacy?

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During project implementation

a) Prevention

a) What is the level of HIV/AIDS awareness?

b) What strategies (Structures and mechanisms) have been put in place for prevention
education?
c) How effective are these strategies?
d) What are the indicators for behavioural change?

b) Care

• How many are living with HIV/AIDS in the project?

• How may people are affected (Lost close relatives) with HIV/AIDS?
• What type of care is provided to those living with HIV/AIDS?
• How adequate is the care provided?

3) Advocacy

Is there local capacity to deal with issues of stigma, rights of workers, women and men etc.Is there
an effective method of liaising with various authorities and partner?

During project handover;

a) To what extent have the strategies in place caused impact on the lives of project stakeholders?

b) What recommendations could be implemented to ensure that HIV /AIDS strategies do succeed
in project implementation?

Projects and Environment

Due to the great threat of environmental degradation worldwide, concern is focused on how to
safeguard further degradation of the environment especially by the projects. Therefore, project
managers should ensure that they have an environmental management plan in place while
implementing various projects. Government has put environmental laws in place, which should
be followed.

Project start

1. Was an Environmental Impact Assessment conducted?

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 2. What are the likely impacts of the project on the environment?
3. What are the mitigation plans/measures for the likely negative impacts?
4. Are these plans in line with overall national environmental policies?

During project implementation

5. Are mitigation plans being implemented?

6. Are there any unforeseen impacts on the environment?
7. What measures are being put in pace to address the un-forecasted impacts on
the environment?

During project handover

8. Has the ‘environmental audit’ been performed?

9. What is the impact of the project on the environment i.e

• Are there any aversive social, cultural, economic, ecological, and

political effects on the environment?
• Does the project foster sustainable use of resources (Land, water,
solids, ozone layer, etc)?
•

Projects and Gender

Owing to the inequalities between men and women regarding access to power and resources, it has
become imperative that any project should ascertain the implication of the project on women and
men.

A distinction is always made between sex and gender. Sex refers to biological differences such as
chromosomes, hormones, and reproductive organs. Thus, the categories of sex are ‘female’ and
male’.

Gender refers to a set of culturally expected personality, behaviour, roles and attitude- attribute
associated differences between men and women. Gender is perpetrated through institutionalized
gender symbolism and gender structures.

At project starting

• What are the gender implications of the project designed?

• Are there measures planned to ensure that both men and women, participate equally in the
project and have equal access to project proceeds.
• Is the design of the project in consonance with national gender laws and policies?

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During implementation

• Are the practical and strategic gender needs of women put into consideration at the work
place for example, is there provision for adequate maternity leave, paternal leave, is the
work duration too long e.g over nine hours such that mothers are unable to meet child care
demands?
• Are the human resource policies and practices, such as recruitment, capacity building,
promotion and remuneration gender balanced.

During project closure;

• Have implemented activities taken account of the situations and circumstances of both
women and men, or they deter or exclude women?
• Have project benefits been equitably distributed between men and women according to
need?

Projects and Labour Welfare

Always ensure that the occupational health and safety issues are in place and in line with the
national labour laws, consider using the following questions for your checklist.

During Project Start

• Are there project policies (Occupational Health and Safety) in place?

• Are these policies in line with the national labour laws?
• Is there a proper structure and strategy for human resource management and development
(Recruitment/ staffing, motivation, salaries, benefits and training)?.

During project implementation

• Are these policies comprehensive and adequate?

• To what extent are the policies being implemented?

During project handover

• What is the impact of the policies implemented on the output of the project?

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 MODULE SEVEN

PROJECT MONITORING AND EVALUATION

Meaning of Evaluation

Project evaluation is the assessment at one point in time that concentrates specifically on
whether the objectives of the project have been achieved and what impact has been made. It
is about judging the merit or worth of interventions or outputs, generally focusing on the
quality, quantity and/or performance of the outputs of a piece of work. It’s an on-going activity,
which is essential at every stage of the project.

There are many ways in which the term “Evaluation” is defined some of these include:

• Reflection process to look back and forward;

• Assessment of achievement/impact over a long period.
• Learning from experience
• Valuating
• Performance review
• A process which attempts to critically, systematically and objectively determine the
worth of a project, whether it proposed on going or completed.
• A process of assessment of performance at a particular point in time or after the
completion of the project.

Evaluation is usually undertaken as an independent examination of the background, objectives

results, activities and means deployed in order to draw lessons to guide future decision-making.

Project evaluation involves assessment of whether the project management is found the right things
in the right way. As such, project evaluation is not only concerned with project outcomes but also
with the project implementation process.

Why Monitoring and Evaluation normally go together

Monitoring and evaluation go together because while monitoring as an internal process, assesses
progress on regular basis for the sake of improved management and decision making; evaluation
reflects what has happened and is happening in order to improve the future. As such monitoring
and evaluation are complimentary project management functions which together ensure that the
project is running on the right track.

Importance of Monitoring and Evaluation

• To establish whether the project is progressing as planned, i.e M & E establishes whether
or not the project is on schedule and within the resources, and if not what can be done to
faster improvement;
• To find out whether project output are useful and relevant to the development needs of
beneficiaries;

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 • To compare actual change caused by the project against set objectives.
• Assess whether effects are worth continuing with or if there is need to adjust procedures
accordingly’
• To document lessons of both good and bad practices and to enable sharing of useful
information.
• Specifically, monitoring and evaluation contributes to project effectiveness by;

- enabling project participants to assess how far the activities have been carried
out.
- Assisting project participants to determine how the resources are being utilized.
- Identifying problems or shortcomings in time for some remedy;
- Documenting accurate information about the project.
- Providing regular feedback on the progress of project implementation.

Key project areas that are monitored

Project performance areas that are monitored vary from project to project. They depend on the
nature of the project; and on specific monitoring issues identified by the stakeholders according to
each stake holder’s needs. Listed below are some of the areas that are normally monitored in a
project.

a) Time /schedule performance

Time is monitored in relation to technical and financial performance. Time in the context of a
project is planned to inform activity schedules. Time is monitored to find out whether the project
is on schedule or not.

Time schedule is crucial in project management because: -

• Projects have got to comply with the national budget frame work and time line-up.
• Delays in project implementation violate statutory financial and accounting regulations i.e,
it some part of the project budget funds cannot be spent by the close of the financial year.
• Delayed implementation often makes the project budgets and inputs more susceptible to
rising price inflation.

b). Cost/Budget/Cost performance/Financial monitoring

These monitor budgeted costs compared to actual costs incurred during implementation of a
project it is important to monitor budget performance in order to detect cost deviations earlier in
the process. It is also to monitor any unusual situations or events.

It is extremely crucial that a project operates within the approved budget. Overspending on some
project activities normally implies frustration in implementation of other activities especially those
that are designed to come later on in the project schedule.

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c) Work quality (input – output performance)

Most projects have a clearly defined set of inputs that are needed to produce a given set of out puts
within a given time. A periodic report comparing the actual and planned progress towards each of
these implementation targets is required, its important to monitor both the quality and quantity of
inputs and outputs.

d) Work quality (technical performance)

This monitors how far the planned project technical specifications have been carried out.
Technical specifications here refer to aspects like;

- Is it the right standards?

- Is it the right dimension?
- Is it the right mix of cement?

e). Activity monitoring.

Activity monitoring determines whether the planned activities are being implemented or not. Also
determines if they are timely and within the projected resource limits

f). Process monitoring

Process monitoring looks at other process related performance. In this case it is vital to monitor
compliance to the laws and regulations.

Characteristics of a good monitoring procedure

A good monitoring procedure should be both effective and efficient that is it;

• Should provide all the information required to make the correct decision
• Should not take up too much time
• Should not take up too many resources

Types of Evaluation

There are various types of evaluation depending on the basis of categorization. The basis may
include coverage, timing who does the evaluation and a comparison input –output relationship.

Coverage:

• Partial evaluation. Covers some aspects of the project not the entire one.
• Comprehensive evaluation, mid way through the project to determine which course the
project should take.

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 • On-going evaluation (formative); takes place at intervals during the implementation in
order to ascertain the continuing validity of the project.
• Terminal evaluation: done at the end of the project life to determine its relevance.

Timing

• Ex-ante evaluation: carried out before activities are undertaken to gauge viability and
needs assessment to justify activities.
• Ex-post evaluation: carried out when the activities have been completed.

Who does the evaluation?

• Built in self-evaluation: conducted by those directly involved in the implementation

• Participatory evaluation staff and external evaluators consult with the beneficiaries.
• External evaluation: carried out by individuals outside the implementing team.

Input-output relationships

• Performance appraisal: focuses on the three elements of the project (technical, time and
cost).
• Audits: focus on financial performance.
• Results evaluation: taken at or towards the end of the project to determine whether the
project output have been used to achieve the planned objectives.
• Cost/benefits assessment: to ascertain whether benefits realize from the project actually
justify the resources expended to achieve them.
• Impact studies: inform whether the project actually made the desired impact.

Mid-term evaluation: This is done mid-way through implementation of the project to determine
which trend the project should take partial evaluation: This way covers some aspects of the project
and therefore not the entire project.

• Formative on-going evaluation; Takes place at different stage of project implementation in

order to ascertain the continuing validity of the project.
• Technical evaluation in order to ascertain the continuing validity of the project.
• Terminal evaluation: it is carried out at the end of the project life to determine its impact
and relevance.

Key Questions in Evaluation

Evaluation is normally based on the following questions:

• Who wants the information?

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 • What do they want to know?
• What will the information be used for?
• When will it be needed?

Attributes of Good Evaluation Questions

• They should be attributes –vague questions lead to vogue answers.

• Limit the number- too many questions can result in on unfocused effort.
• Frame the questions so they are answerable based on empirical evidence not subjective
opinion.

Importance and Need for Evaluation

There are 4 major uses of evaluation money, performance i) implement ii) enhancing
accountability iii) promoting communication and iv) promoting learning and empowerment.

i) Improving performance

• Findings and recommendations from on evaluation should be used to improve

implementation.
• An evaluation should also be used to derive lessons from completed projects so that
these lessons may be used to guide future strategies.
• It is a management tool used to improve activities still in progress and for aiding
management in future and decision –making.
• To find out reasons for delay and to seek remedial actions.
• Enhancing Accountability

ii) Enhancing Accountability

• An evaluation can be used to improve the ways in which projects communicate the
objective, strategies, achievements and short coming with various stakeholders;
• Evaluation justifies the allocation of scarce funds, time and efforts by all the projects
participants.
• Greater openness about the achievement and failure can help to enhance trust and
reduce criticism.

iii) Promoting communication

Evaluation should promote effective communication between the various stakeholders in the
project, staff and donors.

iv) Promoting Learning and Empowerment

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 • An evaluation should be a part of the learning process through which the project
participants develop new skills in planning and social and technical change.
• Involvement in an evaluation can result in increased motivation to participate in planning
and implementing of the future activities.
• By assessing achievements and problems, participants in an evaluation enhance their
analytical capacity and critical awareness.
• Project staff can develop their planning and implementation in the evaluation process.
• In evaluation we learn about the good and bad practices so that we are able to discard bad
practices and employ good ones.

Focus of Evaluation in a project

Projects are usually evaluated for the following purposes:

• To assess whether or not a project has met its objectives.

• For operational tool to improve project design
• For policy analysis purposes

Evaluation focuses on the following

Relevance: the appropriateness and importance of goals and objectives in relation to assessed
needs.

Effectiveness: Performance in relation to the targets set by the original plans, is the project
achieving its objectives?

Efficiency: The cost effectiveness of the activities

Impact: the broader economic, technical, political, social consequences/ effects of the project.

Sustainability: the potential continuation of the project activities following the original
withdrawal of external support.

Need for Data in project Evaluation

Date is as crucial evaluation as it is to monitoring. An important requirement for collecting good

quality and adequate data is to choose appropriate methods and instruments. Methods of data
collection commonly used in project evaluation include interviews, observations, focus group
discussions, semi-structure interviews, and questionnaires and records review.

As such any evaluation exercise should design data collection and processing very properly. This
will involve

• The need to collect data, which will show the project’s progress;

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 • Record what is taking place
• Know the type of data to collect when and how
• Data collection techniques and tools to use.

Evaluation Report

Importance of evaluation reports.

• It documents the important process, which needs to be assassinated to a wide audience

• It provides a comprehensive analysis of the outcomes of the project, conclusions and
recommendations on which decision –makers base their decisions.
• It provides an important record for future reference by the different stakeholders.

Need for disseminating evaluation results

• Results of an evaluation can be used in decision-making;

• In particular an evaluation can form part of local level planning processes to meet the needs
of project participants.
• Evaluation results contribute to transparency and accountability in a project.
• Leads to information sharing among primary and secondary project stakeholders..

EVALUATION REPORT FORMAT

Typical formal for an evaluation report is outline here below. It would however be noted that there
is no blueprint format for presenting an evaluating report.

Executive summary

This presents on overall synopsis of the main aspects of the evaluation reports, which may cover
general information on the following;

• Objectives/purpose of the evaluation exercise

• Scope of the evaluation exercise
• Main findings
• General recommendations.

Background

The background usually covers the following

• Description of the project

• Purpose of the evaluation
• Evaluation problems and questions to be answered

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 • Justification

Methodology

The methodology specifies in a summarized form the following aspects of the evaluation process.

• Specific information gathered

• Sources of information
• Data collection methods/instruments
• Data analysis tools employed
• Report writing process

Presentation of results

This covers findings in accordance with each evaluation question considered

Conclusion and Recommendations

Conclusions: which are the implications of the results of the evaluations to the project

Recommendations: which are the suggested steps to be taken in light of the conclusions and
findings

MONITORING INDICATORS AND THE ROLE OF DATA IN PROJECT MONITORING

AND EVALUATION

Meaning of Performance indicators

Indicators are variables used to measure change in phenomena or an achievement in a process. In

M&E indicators are used to trace the answers to questions e.g what is the functionality of water
user’s committees?

Categories of indicators: there are two categories of indicators commonly used in M&E. These
are direct and proxy indicators

Direct indicators measure the variables directly e.g numbers of boreholes, or classrooms etc
constructed.

Formulation of performance indicators

Indicators should be formulated on the basis of the key project variables targeted in the project
matrix or work –plans. These variables may relate to project activities/inputs/outputs or methods
of implementation etc.

For each variable

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 • Define the aspects to be measured e.g classroom or training sessions, etc.
• Determine the unity carried of measure e.g numbers or sizes frequency, etc.
• State the time element e.g per week month etc.
• Determine the spatial /location aspects, e.g per sub country, or district etc (as applicable).

In formulating the indicator, it is crucial to specify the unit of measurer or at the ever least estimated
or observable terms. A simple four-step approach may be used as follows:

Step Indicator/Parameter Specification

1 Basic/Elementary indicator Agricultural production value rose.
2 Add quantity how many/how Agricultural production value rose to $ 4500
much?
3 Add quality (what /how) Agricultural export value (excluding
subsidy) rose to $ 4500
4 Add time (when and how long? Agricultural export value (excluding subsidy
rose to $4500 by the end of 2003.
Factors considered when selecting indicators for monitoring and evaluating projects

In selecting which indicators to adopt, management decision are usually based on the following
considerations.

• Information that show whether or not project objectives are being achieved.
• Information required for effective management of a project (finance, staffing and logistics)
• Information that responds to the priority interest of the different groups involved in the
monitoring process.
• The data that is valuable and can be collected accurately in order to ensure that the
monitoring information is up to date, accurate timely, relevant and reliable.
• Ability to use the collected information (feed back to the user for decision making).

Types of Indicators

-Input indicators

In put indicators assess the extent to which resources are being utilized in the project to active the
objectives. Input indicators also measure utilization of capital and recurrent expenditure on
equipment and any schedule of activities that need to be completed before the project can begin

-Out put indicators

These show whether the outputs that were targeted are being achieved as planned and in the right
quantity and quality

-Process indicators

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These show whether the activities that were planned are being carried out as effectively as planned.
They are used to show the volume, efficiency and quality of work. They reflect what is being done
and how it is carried out.

-Impact indicators

These are used to assess what progress is being made towards reaching the project objectives and
what impact the project has had on the different target communities. The project can create either
a positive or negative change.

It is hence extremely crucial that organizations develop impact indicators for all their activities.
Developing impact indicators helps organizations objectively evaluate themselves and to know
which activity has been most effective and which ones have not.

Objectively verifiable indicators (OVI)

Indicators must be objectively verifiable. A non verifiable indictor produces subjective results,
which may not be very useful to management. The verifiability of indicators is normally stated in
terms of the following:

• Quality - How well?

• Time - By when?
• Quantity- How much?
• Location Where?
• Cost What amount?

Means of Verification (MOV)

There must always be ways of measuring or collecting information about each of the indicators.
This is what is called “Means of certification” it is important to state the sources from which
information to verify indicators can be gathered.

MOV informs us where to get evidence that an objective verifiable indicator has been met and
where to find the necessary data to verify the indicator.

Issues to consider when establishing MOV

• Are the MOVs available from normal sources (Statistics, observation and records)?
• How reliable are the sources?
• Are special data gathering techniques required? If so at what cost?

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ROLE OF DATA IN MONITORING AND EVALUATION

Introduction

This session focuses on the statistical process of collecting processing and managing data both for
continuous monitoring and timely evaluation of projects. It also explains the importance of good
quality data in monitoring and evaluation of processes.

Definition of Data

Data refers to basic facts from which one may easily draw meaningful conclusions. For instance,
a set of observations recorded about a particular organization is called organization data.

Forms of data for monitoring and evaluation

Data for monitoring and evaluation takes two forms namely; quantitative and qualitative data.

Quantitative data: Quantitative data some times called numerical data will either be discrete or
continuous. Discrete data will take the form of whole numbers e.g number of classrooms
constructed, number of health units constructed. Continuous data will take on any given range of
values. For example, distance in (Kms) could take the form of 2.5 km, or 3.6km etc.

Qualitative data: this is used to measure social variables like poverty level education level etc.

Baseline Data

In project language baseline data normally refers to a collection of data/facts about the
characteristics of a community before a project or program is set –up. Baseline data is so crucial
in project monitoring and evaluation because it offers the basis for measurement. Without baseline
data one cannot be able to order to determine situational performance or trends in performance of
a project. In order to make sense. Both project monitoring and evaluation normally compares
project performance data with the original situational data in order to establish what has changed
during project implementation. Baseline data can take the form of quantitative or qualitative data.

Methods/Tools of collecting monitoring and evaluation data

Methods of data collection commonly used in evaluation include interviews, observations, focus
group discussions, semi-structure interviews and questionnaires. These are called primary sources
of data. In duration there are secondary sources, which include review of project resources baseline
data and any other documentation about the place, people or problems involved in the project.

In addition, there are secondary sources, which include review of project records baseline data and
any other documentation about the place, people or problems involved in the project.

Primary sources of data

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The most common primary sources of monitoring data include the following; Direct observation,
this means observing objects, events, processes and relationships or projects performance and
recording these conservations.

Holding semi-structured interviews.

Researchers should avoid being too restricted by the pre-set questions on the list

Key informant interviews: This involves interviews, which engage selected informants. The key
informants should be able to answer questions about project performance and give a good
overview of the impact of the project to the community.

Focus group discussions: A small group of people (6-12) with specialist knowledge or interest in
a particular project is invited to discuss specific topics related to project performance in detail. A
facilitator is chosen to keep the discussion on or around the original topic and to stop an individual
dominating.

Importance of data in Monitoring and Evaluation.

It’s Important to use correct data in monitoring and evaluation exercises. This is due to the need
to:

• Measure performance
• Assess trends
• Have precision in conclusion
• Enhance reporting and feedback

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SUPERVISION OF TIME, CONTROL AND REMEDIAL ACTION

Introduction

The time taken to implement project activities is an important measure of successfulness of

supervision of project implantation amongst others. Supervisor of project implementation has to
pay particulate attention time control measure. Time scheduling and its supervision time extension
and postponement. Damages for non completion partial competition and handover practical
completion detect/warranty liability period.

Time is a major supervision function within projects implementation. When a project

implementation runs cut of time, if develops strain and puts an additional stress on resources from
the various parties to sustain the extension. On almost every party involved there is additional
operation expenditure into the extension period.

Time element and Value

Project implementation time deals with setting and implementing start, duration and end that are
useful to supervisor. There are events and activities.

The delay of a ‘start’ or ‘end’ of some part of project activities or prolongation of specific activities
duration, propagate distortion in the entire project time frame and brings about consequences. The
time element value of project implementation may make the project fully or partially succeed or
fall in terms of delivery, usefulness and development effect. It may worth the whole viability of
the project or loss or even life of people. For example, a delay in completing health facilities can
make people who would otherwise have been save by the health services from the facilities to die.

Detailed project implementation time supervision must both anticipate and overcome possible
problems in advance and help provide satisfactory solutions to delays. The inevitable problems,
even in the best supervised projects implementations needs to be controlled by;

• Planning and setting targets

• Choosing method to achieve such plans and targets
• Monitoring and evaluation progress
• Taking corrective action immediately when problems have been identified and as they are
necessary.

The supervisor should ensure continual and optimal setting monitoring evaluation and revision as
the ultimate ways to cope with time supervision.

Time scheduling

Time scheduling is the assigning of starting dates and completion dates to the various activities
that go in the project implementation. The important things for supervisor of project
implementation to note is the.

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 • The earliest time that an activity can start.
• The latest time that an activity may be completed without delaying the project completion.
• The leeway or float or degree of freedom available in scheduling an activity.
• And the critical path.

Most often supervisor of project does not develop the time schedule directly but cause it to be done
by the project implementer. The supervisor checks whether it is realistic and achievable within
the available means and meeting the expectation.

Supervision of implementation of time schedule

This involves a set of checks and balances to ensure that the schedule is being gathered to it is
continual through campaign the actual on –the job daily progress with that which was anticipated
and previously scheduled. This covers the process of making decision based on this comparison.
It covers keeping current the information that is required is required in rescheduling.

The supervisor.

List all the activities that are to get under way on any given to look ahead and to ensure that all
activities are started on scheduled activities. The supervisor to note that an activity is not
completed as at their later finish time. They become critical to the completion of the entire project
implementation. The late finish of any activity is the latest that it can be completed without
interfering with the planned completion of the overall project implementation.

Project activity time listing supervision table.

Activity Activity Activity Activity Activity latest time Progress

Code Description Duration Earliest time Remarks
Start Finish Start Finish

In supervision of project implementation time, the most troublesome aspects are matters of claims
for time-related extra costs and extensions by the implementer and the disputes that result there
from.

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 MODULE EIGHT

PROJECT DOCUMENTATION, REPORTING AND REVIEW

Introduction

This section contains details of different types of project management documentation, which may
be used as guidelines in producing your own project/ programme documentation.

The section is split into two categories.

Core documentation and

Supporting documentation.

Core Documentation

There are 5 major documents which should be in place for each project/programme. They are as
follows.

1. The Project Brief

This is the document which describes your project. It defines amongst other things.

- The scope of what you are trying to achieve,

- The timescales you are working in, and
- The resources you require.

It should also define the business justification for the work of your project (which may be expanded
upon in a separate business case, see below).

2. The project plan

The project plan should break down your project into achievable pieces of work, known as
‘Deliverables’ or ‘Products’. The project plan allows you to monitor progress, and to identify those
areas you will need to keep a keen eye on during the project (known as the ‘Critical Path’).

3. The Risk Register

The risk register contains the risks you have identified as result of your risk analysis, and your
proposals/ strategies for managing them.

4. The Issues Register

The Issues Register is a log of all issues that arise during your project and of the decisions made
on how to manage them.

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5. Lesson Learnt Report

The ‘Lesson Learnt’ report is one of the most important documents your project will produce, as
it records both the things that went well, and the things that you would recommend be done
differently in future projects of a similar nature.

The Lessons Learnt report ensures that;

• Best practice is developed and implemented and

• Future projects of a similar nature avoid any ‘pitfalls’ that may have been experienced.

Stakeholders’ analysis Records/Matrix

A stakeholder is best defined as an individual or organization that needs to be involved with, or

who will be directly affected by the programme or project. The following groups of people will
all, to a greater or lesser extent, play a part in the success of the programme or project.

• Delivery partner (e.g public and voluntary sector bodies and agencies, commercial
suppliers and others contributing to the work or delivery of the programme or project);
• Target audience or customers (e.g children, young people, adult learners, families etc).
• Other stakeholders (e.g lobby/interest groups);
• The core and wider programme or project management teams. (ie Senior Responsible
Owners (SRO), Programme or project managers, programme or project support managers
and staff);
• The programme or project Board (and Steering or User Groups).

With the above in mind you should, before you plan the programme or project, ensure that you
identify those key stakeholders and other interested parties – i.e those who can seriously aid or
hinder the successful delivery of your programme or project. These include;

• Those who must be consulted or involved in design and delivery

• Those who will contribute to the work –again they need to be involved at appropriate
design and planning stages (ie key delivery partners.
• Those who will be directly affected by the outcomes – ie customer beneficiaries.
• Anyone who has expectations of, or an interest in, the work – for example in lobby groups.

Take time to talk to and involve your key stakeholders, to make sure they fully understand and
“buy in” to the work.

Take time to talk to contributors to the work to make sure you have their full commitment and that
they will be available when you need their contribution.

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Stakeholders and the Project Board.

The principle is that key stakeholders should be represented on the Project Board. Where this is
not possible a separate consultation mechanism may be necessary.

Stakeholder can be managed in a number of ways. A stakeholder consultation group. May be set
up, or a number of stakeholders may be included within the Project Board.

Steering group

Programmes and Projects should also consider involving key stakeholders in steering groups to
get their perspective on direction. Steering groups also provide a mechanism for helping to
understand the environment.

A steering group does not usually involve itself in monitoring progress, except to the extent
required to fulfill its function this is left to the Project Board.

If you have a large number of stakeholders it may be more appropriate to establish a separate
Stakeholder Group.

Risk Register

The Assessment and management of risk are (respectively) recorded and monitored using a risk
register. Registers will be held and maintained at programme, sub-programme and project level.

The Risk Register record identified risks according to probability of risk, likely impact and
Programme severity. Counter-measures will be identified to show the measures in place, or being
considered, to minimize the risk being realized

The register will also identify timescales and the effect on the risk of activating the
countermeasure. Suitable owners will be identified to manage each risk. Risks at the level of the
sub-Programmes or Projects will be a matter for the manager of each sub-Programme or Projects,
however, all risks identified should be recorded, even if they are closed swiftly;

The Risk Register should contain the following information as a minimum

• Risk reference – this should be a unique reference code for the risk. This will be essential
to ensure that no risks are missed and will act as a key where risks are escalated;
• Description –should describe the nature of the risk and how the risk will impact on the
Project or Programme when identifying and describing risk you should think in terms of
the following, or similar phrases to express the risk in terms of threat and impact (or cause
and effect) –i.e

-There is a risk of/that ….which may result in ……

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-There is a threat of ……..which may result in……….

-When (Date) identified;

Owner –this is the person who carries the responsibility for ensuring that the risk is monitored
and, where appropriate, effectively managed. This may not be the person who has to do the
necessary task, but they must be continuously aware of the risk status;

Assessment ratings

Note: Inherent risk should be re-assessed in light of counter-measures to assess whether it has
been reduced as a result of action taken. If it has been reduced, then the assessment of residual
risk should be done.

Proximity – timing of the threat of the risk. Is the threat strongest at a particular point in time?
(i.e certain period, date etc?). Does the threat disappear sometime in the future? Or does the
probability or impact change over time?

Counter measures Counter measurers should be represented on the relevant programme (or
Project) plan as they require activity and consume resource –as above risk should be re-
assessed to see if either probability or impact has been reduced by the identified/deployed
counter-measure and assessed residual risk should be recorded/shown on the risk register;

Target date / Trigger –timing by which counter measure action needs to be started (or
completed) based on what it is and how it will address the risk – e.g contingency actions will
identify the trigger that would warrant the plan being invoked. Other actions may need to be
undertaken at a specific point in time.

Contingencies

Status – description of the current position for the risk. Include whether the counter –
measures are in place and if they are being effective. The status should be reviewed regularly,
and it is often helpful to set review dates against risks to prompt the review. Statement of
status may include information about whether the risk is decreasing or increasing in relation to
the likelihood of occurring (what is the trend?); closed; relegated (when, to whom and why?);
or escalated (if latter then to whom and when (detailed reasons should be recorded as to why
it was escalated).

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 MODULE NINE

PROJECT PROPOSAL WRITING

Introduction:

Having a good project idea is one thing; presenting it to financiers for funding is another. Funding
a project depends on the proposal’s ability to adhere to requirements and standard stipulations/
guidelines of the prospective funder.

Project proposals are documents designed to present a plan of action, outline the reasons why the
action is necessary, and convince the reader to agree with and approve the implementation of the
actions recommended in the body of the document.

It is a written description of the project to be undertaken

A proposal is a request for financial assistance to implement a project. For a community project,
it may be used to seek approval from the community members (the community itself being the
most important donor). You may use these guidelines to seek project funding from any donor. We
recommend that you aim for multiple sources of funding. If you have only one source of funding,
you may become dependent upon that one source.

A proposal is not just a "shopping list" of things you want. It must justify each item in the list of
things you want, so that a donor agency can decide if it wants to provide some or all of those
things. You must know (and be able to communicate) exactly what you want to do with these
things and that is why you should design a project to carry out what you want to achieve.

It is important to carefully formulate and design your project. It is equally important to write a
proposal which will attract the necessary funding. Proposal writing is a skill which requires some
knowledge and practice.

Your project proposal should be an honest "sales" document. Its job is to inform and to convince.
It is not a place to preach, boast or to deceive. If you are convinced it is a good idea and should be
supported, your project proposal should honestly report it to decision makers who weigh its merits
against other donation commitments. It should clearly indicate how and when the project will end,
or become self supporting. Proposals should be neat and tidy, preferably typewritten, and without
any extraneous or unnecessary information.

How elaborate your proposal is should depend upon the number of resources being requested and
how big the total project is. Modify these guidelines to fit the project and proposed donor.

The project proposal must reflect the background work you have already done and should be
logically set out. It is not enough to write a letter stating your request. You have to demonstrate
the need and prove that the project is worthy of funding. Remember that there will be many other
organizations and individuals competing for the funds.

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Use clear concise and simple language which says exactly what is meant. If necessary, use
diagrams or charts to illustrate key points. Use appendices to avoid crowding the body of the
proposal and the flow of the narrative. Tailor your presentation to the agency approached. Express
a willingness to be interviewed personally by the funding agency once they receive and read your
proposal request.
Do not be discouraged if your proposal is not accepted. Find out why, and try another agency.

Plan Your Project (Practical Vision):

Perhaps you and your associates have many ideas of things you want to do; you see a need to
reduce illiteracy, to reduce poverty, to provide safe drinking water, to improve the level of health,
to provide training for disabled persons, and many other things. You must, however, choose a
project that is very specific; limit your goal to a single desired solution to the highest priority
problem.

Involve the whole community. In choosing your project, call a meeting and do not neglect to
include the people who have been often neglected in the past, women, disabled, the very poor,
those who have no voice in the way things are decided in the community. Make sure that the people
who are supposed to benefiting your project feel that this is their project, for their benefit, and that
they may contribute to it because it is theirs.

It is not enough, however, to choose your goal. Good planning is needed, identifying your available
or potential resources, generating several strategies and choosing the most viable one, deciding
how you are going to monitor (watch) the project to ensure that it stays on track (ie it continues to
be consistent with your original desires), ensuring that the accounting is both transparent and
accurate, and deciding what is to be done when (a schedule) . A bit of research about the location,
the population characteristics, the situation, the existing facilities, is needed in order to objectively
describe the background to the project. Involving the community and the beneficiaries in this
research is the best way to ensure that it is valid.

With the community or target group, use Brainstorming Principles and Procedures to outline a
Plan or Project Design. Without allowing criticism, ask group members to contribute to each step
of a brainstorming group process: what is the priority problem (list all, even the foolish statements;
then rank them in order of priority), facilitate the group to understand, therefore, that the goal is
the solution to that identified problem. Help them to generate objectives (finite, verifiable, specific)
from that general goal. Identify resources and constraints, then generate several alternative
solutions, choosing the most viable. Other documents are available to explain the brainstorming
process in more detail but this was a brief sketch.

With your background work behind you, you will want to start drafting your proposal. We highly
recommend that you obtain resources (funds) from several sources. Do not let your organization
or group become dependent upon a single donor.

Before you begin to write your proposal, keep in mind the following points:

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 • It is necessary to find out in advance what sources of funding are available, through
governments, United Nations agencies, some international NGOs or private foundations.
• Most donors look for the degree of local initiative in the project proposal, the utilization of
the available resources within the country itself and the plans for the project to be self-
supporting once the initial funding has been spent.
• Your project should be practical, not too costly, and have the potential for being repeated
in other situations.
• Increasingly, funding agencies are looking for integrated approaches to development
projects. This means that you will want to see to what extent your project supports and
supplements existing activities, and is designed to overcome identified problems.
• Almost all UN and government agencies, foundations and private voluntary agencies have
their own proposal format that they will want you to follow. If you are not in contact with
a local or regional representative, write a letter requesting information as to proper
procedures, application format and funding requirements. While format varies, the same
information is asked for by all agencies and foundations.
• Find out the budgeting cycle of the agency, whether annual, quarterly or ongoing. Check
to see if there is a closing date for application.

Project Structure (Outline of Proposal)

These (structure) guidelines are not intended to tell you what to write, but rather how to write the
proposal. If you are responsible for writing the proposal, then it is because you are the "expert" (in
the best sense of the word). If you are responsible, then you know what you want to achieve and
the best way to achieve it. In any event, don't panic at the prospect and don't be put off by the
technical jargon that unfortunately is frequently used.

Do not try to write the proposal by yourself. Ask for help from your friends and colleagues,
programmer, manager, staff and those who can assist in either concepts or in style. Think of
preparing a proposal as a written form of "dialogue" in which each successive draft is a
continuation of the process.

The chapters of your proposal do not necessarily have to be written in the order presented here,
but what is written in each chapter must relate in specific ways to what is written in the other
chapters. Make sure that you put the right content in the right chapter. Make sure that each topic
relates to the others and to the proposal as a whole.

A project proposal aimed at soliciting funds must follow a specific format of the prospective donor,
since preferences differ from one to another. Nonetheless, there are common elements in all, hence
the possibility for a general guideline.

a) Title Page (Cover):

This is a single page; the front cover of the proposal. It should include:

• Date;
• Project title;

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 • Locations of the project;
• Name of the organization; and
• Any other necessary single line information.

b) Abstract (Executive Summary):

Write this part last. It is a collection of critical elements in the proposal. This is the section on
which a potential donor will read and make that vital preliminary decision: whether or not to
seriously consider assisting.

This should not be written, or even contemplated, until all above sections are written. Avoid
writing it as an introduction. Think of it as a concise summary and conclusion.

The optimum size is half a page; the absolute maximum size is one page. Any longer and it is in
danger of not being read or considered. It should summarize only the key recommendations and
be written for busy board members or executives who may read up to fifty of them and may not
initially read anything more than the executive summary for each proposed project.

Ironically, while you write the abstract last, you then put it directly after the front or title page of
your proposal.

A good summary should consider the following questions.

• What project is being proposed?

• Where is it located?
• What problem is it meant to address?
• What is its likely duration?
• Who are the beneficiaries?
• Who are the implementers?
• What is the total implementation cost?
• What are the proposed sources of findings?
• What plan is in place for the project institutionally?

Background (Causes of the Problem):

This section is expected to answer why your project is needed. Here you will want to give a
description of the situation and focus on factors which prompted the formulation of your proposed
project. Tell how the need for this project was identified and who was involved in developing the
project. Explain your project's origin or context.

It is most advisable to involve the whole community in identifying priority problems; that is called
"participatory research."

The first thing the background does is to identify the problem. That means it must name the
problem and locate the problem. It indicates the target group (beneficiaries), the sector, the
magnitude, and other actors who are working to solve that problem. It also indicates the extent to

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which the problem has been solved by the other actors, and what has been so far accomplished by
your group.

While examining the problem(s) to be addressed, several questions should arise here. What is the
condition of the target group to justify the donor donating money and perhaps seconded staff? A
history of the community, your group, or the project is not essential, but a brief outline can be
useful. More importantly, what conditions, or what changes in conditions, are envisaged that would
lead to any donor agreeing to fund your project?

You may wish to include:

• Project area (Issues and problems, not descriptions);

• Reasons for making this proposal;
• Circumstances leading up to the project; and
• Broader plans or strategies of which it is a part.

If yours is a project that is not starting fresh, the background will also indicate any changes in your
project since it began.

Remember that the background chapter describes the factors leading to the problem that your
project intends to solve. Everything in this section should be justification to approve the project
and the requested funding assistance. Long histories and analyses would be detrimental here.

The Project / Organization (Profile):

This section describes the (perhaps changing) organization and management structure needed to
carry out the activities described above.

Describe briefly your organization's goals and activities. Be specific about its experience in
working with problems of a similar nature, what its capabilities and resources are in undertaking
a project of this nature.

The abilities and experience of your organization's members, your human resources, may well be
your greatest asset. Indicate the kind of assistance your organization expects to receive from
possible collaborating agencies. Attach additional organizational information, such as an annual
report, if available.

Explain:

• How will it be done?

• Who is responsible for the project?
• Who will implement (who will do it)? and
• Who will direct the implementation of the project?

Who runs the project? Who is in charge of the overall organization? Who is responsible for its
overall implementation (in contrast with responsibility for its design and its monitoring, and in

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contrast with the separate actors, separate agencies, and separate locations) ? Will that change?
These can be spelled out in the proposal. See Organizing by Training for participatory methods of
developing the organization.

Do not overlook the activities (labour) of volunteers who contribute to the project. Although they
might not be paid staff, they are resources, and contribute resources to the project.

Goals & Objectives (Solution - Output):

The goal of your project should be to solve the problem or problems described in the background.
Goals and objectives must relate to the previous chapter, by stating what is the solution to those
above problems. You need a set of (general) goals, and sets of (specific) objectives.

Start with "goals" which are general, long term, broad desires. From those goals generate specific
"objectives" which are verifiable, measurable, finite, and have specific dates of achievement. For
example: "To reduce illiteracy," is a goal; while "To teach basic literacy skills to 20 clients by
March 2," is an objective.

You will want to be as specific as possible in stating the objectives of your project. They should
be written in terms of the end results you expect in the project, not how you will achieve these
results. Those results must be verifiable (ie. you can clearly show that they have been achieved,
and they can be confirmed by outside observers) .

When selecting the goals and objectives for the project, remember the nature of the donor you ask;
what kinds of solutions are sought? The donor does not want to contribute to dependency, so is
not interested in funding charitable services which may take the pressure of obligation off those
authorities who should look after the rights of the local people. Most donors are not simply a source
of funds for carrying out routine "operations." They are interested in supporting activities which
highlight the needs of the most vulnerable and distressed, and promote self reliance, ethnic
harmony and development.

Beneficiaries (Target Group):

In this chapter you describe the beneficiaries or target groups in some detail. You may also add
indirect or secondary beneficiaries (eg people trained to help the primary beneficiaries). This can
be an expansion of the topic mentioned in your background section; indicate their number,
characteristics, reasons for vulnerability, locations, and so on.

Most donor agencies will be more predisposed towards your project if you can demonstrate that
the beneficiaries have participated in the choice and design of the project. (An appendix can list
meetings of beneficiaries, listing details such as dates, locations, times, topics discussed, speakers,
and lists of beneficiary group members who attended. Refer to the appendix in this chapter; do not
include it here; put it at the end of your proposal).

Activities and Targets (Inputs)*

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This chapter identifies the inputs in your project, ie what resources (cash, personnel and actions)
will be put into your project.

First, start with examining possible strategies to reach the objectives mentioned above. In each
case you have to link with the previous chapter. The best project proposal lists two, three or four
different strategies and discards or rejects all but one of these, and says why. Then it goes on to
say, "Given the objectives and strategies, what activities must be implemented or started to use
that strategy and reach the objectives?"

Target means, "How much, to whom, where and by whom?" – In other words, "Who does what?"
For example, what kind of training will you provide, for how long, and how many people will be
involved? What specific skills will be taught and what kind of follow up activities are planned?

Indicate what kinds of jobs are being done in the project. Refer to your appendix for key job
descriptions. Always refer those activities to how they will achieve the objectives mentioned
above. Even the activities of the support staff must be justified in that they must be employed so
as to allow the operational staff to reach their targets.

The Schedule (Each Action When) *

In this section you describe in sequence the activities you plan in order to achieve your objectives.

If you can be so specific as to give dates, even if approximate, all the better. You may wish to use
a diagram or bar chart to mark out the calendar events.

Include in the work plan the phasing of the project; how one stage of the project leads to the next.

How long will support be needed? (When will the project end, or when will the project be locally
self-supporting?)

Costs & Benefits (Analysis)*

In a proposal, the chapter called costs and benefits is not the same thing as a line-by-line budget
with numbers indicating amounts of money. (The line-by-line budget should be put as an appendix
at the end of the document, not in the text).

Here in the text of your project proposal, the chapter on costs and benefits should be analytical and
narrative, and relate to the previous chapters. It should discuss those budget lines that may need
explanation (eg purchases, expenses or needs which are not immediately apparent or self
explanatory).

You should try to make a cost benefit analysis, ie relate the quantity of the objectives reached, to
the total costs, and calculate a per unit cost (eg the total cost divided by the number of children
taught literacy will be the per unit cost of teaching literacy) .

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Summaries or totals of the following information may help some donors to decide:

• local costs;
• external costs;
• methods of financing;
• local versus foreign exchange needed;
• all non-financial contributions by the local community (each costed with money
equivalent);
• methods to obtain supplies (where and how purchased); and
• Proportion of total costs requested in this proposal.

As well as the costs (including the amounts asked for in the proposal), you should make some
comparison between the costs (inputs) and the value of benefits (outputs). The following could be
answered:

• Who benefits?
• How do they benefit?
• Justifications for the project?
• What are the specific outputs of the project?
• What is the average total cost per beneficiary?
• Will value of benefits exceed costs of inputs (or vice versa)? By how much?

When the objectives are qualitatively different from each other (eg number of new parent
committees formed and the number of children taught literacy) , then some arbitrary but reasonable
division of "per unit" cost must be calculated.

The budget totals should be indicated in this section, then refer to appendix for the detailed budget.
Other sources (donors and the amounts) must be mentioned. The total amount requested should
appear here in narrative text.

The above (*) can be summarized in the ‘Implementation Strategy’ section. A typical example of
a plan is indicated below

Strategy /Implementation plan.

This section of the project proposal, the goal is to outline all procedures that are necessary to make
the project successful. Often, the strategy helps to define short term and long-term goals for the
project, explains how to systematically accomplish each step and what type of return can be
expected from the effort. Here, the intending funder is given an idea of how important the project
is and the potential it has to help the community make better use of available resources/ change
the situation at hand.

Strategy may consist of a single intention or many intentions, carried out at the same time.

- Come must be taken that strategy relates to problem objectives, assumption and
its out put will address the problem; it must also be feasible

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 - Strategy involves statement of

• What is to be done.
• Who is to do it.
• When it is to be started and completed.
• How it will be done, all which have to summarized in a work plan.

NB.1: The Work Plan illustrates how the specific project activities are to be implemented

Showing what comes first, second, etc. For our case of the Gravity Flow scheme project,

No. Activity Objective Time Period

A Sensitization of To create
beneficiaries awareness
of the
importance
of using
safe water
B
C
D
E

NB: Monitoring and Evaluation

• Mechanisms for assessing project progress must be set out in the implementation plan.
This helps to evaluate whether we are working in line with the plan. The logical frame
work matrix if used has to be revealed.

Monitoring (Observing):

Monitoring should be done by:

• the affected community, represented by the local committee;

• Your agency or organization (specify who in it) ; and
• Your donors.

How will achievements be measured?

How will they be verified?

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Monitoring and follow-up should be built into the project activities. Part should be continuous self
evaluation by you (the implementing agency).

The monitoring and receiving of reports from the project to the donor must be worked out and put
into your project proposal. The monthly reports should be designed and reviewed as to usefulness
to the donor for its ongoing planning and programming for the whole country.

Reporting (Communicating the Observations):

In any agency-funded project, accounting and accountability are very important. This applies to
most donor agencies, UN, governmental or NGO.

In your proposal, your reporting procedures should describe: "how often, to whom, including
what?" You may want to discuss this with the prospective funding agency since reporting and
evaluation requirements vary among agencies, and are dependent upon type of project.

Your proposal should indicate what reports will be submitted. These include regular ongoing
reports, and a final report. Short, frequent reports may include only events and activities. Longer
reports should indicate the results of the project activities (not just activities) , an evaluation or
assessment of how far the objectives were reached, reasons why they were not, and the impact or
effect on the beneficiaries (target group) .

Reports should be prepared and submitted optimally every month. The proposal should indicate
what reports are to be submitted and with what frequency and content. Each project (if your group
is proposing more than one project) requires a separate report (two or three pages of text plus
needed appendices).

A detailed monthly narrative report should include how far each of the intended objectives has
been reached, what were the reasons they were not fully reached, and suggestions and reasons
about changing the objectives if they were found to need changing. The narrative report can include
information about events and inputs (what actions were undertaken, see below) , but should
emphasize outputs (the results of those actions in so much as they lead to achieving the stated
objectives) . Attention should be paid to the number and location of beneficiaries. The monthly
report would best be organized into sections corresponding to the sections of your proposal.

The final report should include the same topics as the monthly reports, plus a section called
"Lessons Learned," and a section indicating the impact of the project on the target community and
surrounding areas. The report should be concise (brief but complete).

Appendices (Attachments):

The text of your proposal should be a single, brief yet complete argument from beginning to end
–– easy to read. Because many important details will make the text too convoluted and difficult to
read, they should be put into appendixes at the end.

Typical of documents to put in appendices are:

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 • lists;
• diagrams;
• detailed budget;
• job descriptions; and
• any other necessary detailed documents.

When you have written your first draft of the project proposal, go through it and look for any
descriptions of details in your text that may draw the reader away from the smooth flow of the
argument. Move them to an appendix, and in their place put a brief note about them and ask the
reader to look in the appendix for the details.

Appendices can include any other material that will allow officers of donor agencies to decide
whether or not to approve funds. The purpose of the appendices is to be able to include all the
necessary and important details (which the meticulous reader will examine) , but not in the text of
your document where you want a smooth flowing, brief argument. It tucks those details away for
use when wanted

Detailed Budget:

The line-by-line budget should be put in an appendix. Each line on your detailed budget should
have the total costs for one budget category. The lines should be grouped into similar kinds of
costs (eg salaries, vehicles, communications, fuels, transport).

Budgets may be of 2 types:

- The capital budget – for one your and beyond.

-The operating budget covering the day-to-day operating expenses.

You can, distinguish between non expendable items (ie equipment that can be used again later)
and expendable (ie supplies that get used up).

The budget should be a realistic estimate of all costs involved in implementing and operating the
project. If possible, demonstrate the potential for eventual self support, or support from other
resources other than the one to which you are applying. Costs estimates should be broken down in
to logical categories (line items) such as: salaries; supplies and materials; equipment; travel and
per diem; rent; telephone.

Often, funding agencies prefer to match grants, or assist with part of the total budget rather than
give the entire sum. Therefore, it is suggested that you show the total budget when applying, and
indicate when you expect or hope to get other funding assistance.

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 MODULE TEN

PROJECT COST AND FINANCIAL MANAGEMENT

Projects face different types of costs stemming from the use of the 3 types of resources- human,
material, financial (and time) in attempting to achieve the set objectives.

This module will help you to

• Identify each of the costs within your project

• Ensure that expenses are approved before purchasing
• Keep a central record of all costs incurred
• Control the overall costs

The module will also enable you to:

• Determine whether your expenses were adequately budgeted

• Monitor and control instances of over-spending
• Gain special approvals for extra –ordinary expenses
• Schedule expense payments and invoice approvals
• Keep your project and financial plans up-to-data.

Project Cost Management

This module covers key concepts and areas related to project cost management

1.The knowledge area of Project Cost Management consists of the following processes.

Project Cost Processes

Process Project Phase Key Deliverables
Cost Estimating Planning Activity Cost
Estimate

Cost Management
Plan
Cost Budgeting Planning Cost Baseline
Cost Control Control Cost Estimate
(Updates),

Cost baseline
(Updates).

2. Alternative identification process identifies other solutions to any identified problem.

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3. Value Analysis approach is used to find more affordable, less costly methods for accomplishing
the same task.

4. The cost Estimate process takes the following inputs-

• Enterprise environmental factors assessment.

• Identification of organizational processes and assets
• Project scope statement
• Work Breakdown Structures’
• Project Management plan. This may include:

-Schedule Management plan

-Schedules Management plan

-Staffing Management plan,

-Risk register.

Selecting the appropriate method to depreciate project’s assets.

Depreciation is a technique used to compute the estimated value lost by an asset during its life
time. There are 3 techniques used to do this which include:

- Straight line method: reduces the asset by the same amount each.
- Declining balance method: reduces value by bigger figure in the first year and
by a lesser amount in the proceeding years.
- Sum of the year’s method: Reduces asset value basing on the life of the asset.
Lets say the life of the asset is five years, The total of one to five is fifteen. In
the first year, we reduce 5/15, 4/15 for year two and so on.

Project Cost Estimation

This is a programme manager’s Problem. It mainly involves

• Establishing the project requirements and drawing the Plan for the Project
• Estimating the Cost and establishing the Budget
• Identifying and acquiring necessary resources (People, Equipment, etc).
• Managing it (to the schedule, within budget).

NOTE: Cost is usually the boundary that cannot be crossed and is a determined by how much
(labour, materials, etc). and how long (Schedule)

The challenge is to figure out what it will take before you have done it?

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Fundamentals of Costing

Cost accounting is the set of techniques; methods and principles whereby transactions are
appropriately recorded, costs are ascertained, classified and allocated to products and activities
within the organization/ project.

Cost Accounting is concerned with the allocation of costs to individual jobs, products or services
for purpose of pricing, profit measurement and inventory evaluation.

Cost Accounting is a system for recording data and producing information about costs for the
products produced by an organization and all the services it provides. It is used to establish costs
for particular activities of responsibility centers. The terms cost accounting and management
accounting are often used to mean the same thing, but are different in that management accounting
uses cost accounting information.

Classification of Costs

Cost can be classified in different ways according to the purpose for which they are to be used.

Functional Analysis of costs.

a) The functional costs include;

i) Manufacturing costs

ii) Administration Cost

iii) Selling and Distribution Costs

iv) Research and Development (R&D) costs.

b) Classification by nature

i) Material costs,

ii) Labor costs and

iii) Other expenses

c) Classification according to ease to trace (Traceability)

Direct Cost

i) Direct material costs

ii) Direct labor costs

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iii) Direct expenses.

Indirect Costs

i) Indirect material costs

ii) Indirect labor costs

iii) Indirect expenses

d) Avoidable and Unavoidable costs

Avoidable costs are costs that can be eliminated by changing the operation or taking one course of
action rather than the other.

Unavoidable costs are costs that will not be changed regardless of the decision that is made. A
distinction between avoidable and unavoidable costs is relevant in the provision of information to
management to assist in decision –making.

e) Controllable and Non-Controllable costs

These are vital for purposes of providing management with control reports and control
information. It is useful to make a distinction if possible between controllable costs and costs that
cannot be controlled by a manager either because they are unavoidable or because they are under
the control of someone else.

f) According to Cost Behaviour

Understanding cost behaviour helps in:

- Forecasting (budgeting)
- Controlling of costs
- Monitoring of performance

Cost behaviour is about making analysis of the responsiveness of costs to changes in the level of
activity i.e variability of costs.

It refers to the way in which total costs or costs per unit are affected by fluctuations in the level of
activity. A common assumption in cost and management accounting is that costs belong to one of
the following categories.

i) Entirely fixed costs (fixed costs). Costs such as periodic rental charges and senior
management salaries.

ii) Entirely variable costs such as direct materials and labour costs.

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iii) Semi-variable costs/semi fixed costs)

Elements of Costing

Direct Costs – Attributable to the Project and include:

- Salaries and associated benefits, material costs payments to subcontractors or

consultants, project related travel, etc.

Indirect (Overhead) Costs – Necessary Business Expenses:

General Administrative costs, facility (space, utilities, insurance) marketing, ongoing

research and development

The Basic Cost Equation:

Cost = labor x Time + Other Direct costs + Indirect Costs

Note: Indirect Costs are usually allocated on some proportional basis of the activity each project
a Business is executing.

The Project Costing Process-Steps

– Break the Project down into a set of definable tasks (Iterative, top-down process)

- Identify major activities (Design. development, integration, production test).

- Break down further into “self Contained” tasks.

Keeping projects under Cost control and Financial management

Cost and financial management is an important factor in controlling projects.

Important issues to consider include:-

• Examining the various approaches to estimating and costing inputs/outputs.

• Analyzing data and budget information.
• Uses and limitations of traditional project costing and evaluation methods.
• Determining cost estimates for work packages.
• Determining what cost data to collect.

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 • Forecasting project schedule cost for completion.
• Defining and controlling financial tolerances.
• Defining and prioritizing project resources (labor, materials etc).

Financial Reporting and Reviews

The financial reporting and review process will mitigate the risk of the project overspending and
ensure that the project is kept focused and on target. Such financial and budgetary information
may include:

1. Monthly reporting that includes:

• Time allocation (direct and indirect)
• Value of work done
• Value of rework
• Lost hours (or non productive work); extraordinary purchases.
2. Establishing the cost rate.
3. Building up project costs that include;

• Estimating staff time;

• Applying indirect costs

4. Recording and validating both direct and indirect

FUNDRAISING AND RESOURCE MOBILIZATION

Fundraising is not just about writing proposals or collecting money. It is about winning hearts and
minds.

It is about building a constituency of supporters for your cause. It is about learning to communicate
effectively with the public and developing a network of enthusiastic and committed supporters for
your cause.

Fundraising is divided into two parts:

Public fundraising and Institutional fundraising

Public fundraising looks at how to build a constituency in your community and raise funds from
people.

Institutional fundraising looks at managing relationships with donor organizations and how to
manage your own fundraising activities efficiently.

In public fundraising, we will look at how to:

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 • Mobilizes support as well as funds for your cause;
• Get local people involved
• Organize local fundraising events
• Get support from local companies
• Get support in kind
• Raise money from diaspora communities
• Generate income
• Develop a fundraising strategy
• Communication effectively
• Manage your donors.

In institutional fundraising, we will look at how to;

• Describe your organization effectively to funders.

• Manage your approaches to a limited range of funders more successfully.
• Produce project proposals that follow a logical structure
• Produce a well –structured description of your project which links input of resources to
outputs and outcomes.
• Devise and implement a ‘core funding strategy’
• Make the best use of your colleagues to help you with your fundraising.
• Make the best use of beneficiaries, volunteers and supporters in your fundraising.
• Know when to adapt projects for funders without compromising your organization’s core
objectives.
• Build and maintain relationships with your funders.
• Establish and maintain an effective paper-based record keeping system.
• Identify potential funders.
• Develop a fundraising plan

Project cost management

Project cost management includes the processes required to ensure that projects are completed
with in the approved /authorized budgets/ boundaries.

It provides an overview of the following major processes

-Resource planning- determining what resources (people, equipment, materials, etc) and what
quantities of each should be used to perform project activities.

- Cost estimation-developing an approximation (estimates) of the resources needed to complete

project activities.

-Cost budgeting- allocating the overall cost estimate to individual work items.

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-Cost control-controlling changes to the project budget. Done by closely monitoring and
evaluating the way resources are used.

a) Resource Planning

1. Inputs- under here ,we use;

- Work breakdown structures
- Historical information
- Scope statement
- Resource pool description
- Organizational policies.
2. Tools and techniques
- Expert judgment
- Alternative identification
3. Output
- Resource requirements

b) Cost estimating

-Projects are implemented as activities (points which consume resources). Estimating

costs therefore needs to base on inputs:-

-Work breakdown structures

- Resource requirement estimations based on each activity

- Activity duration estimates

- Resource rates estimations (tools and techniques; and required out puts)

c) Cost Budgeting

1) In puts

- Cost estimates

- Work breakdown structures

- Project schedule

2) Tools and Techniques

- Cost estimate tools and techniques

3) Out put:-cost base line budget

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d) Cost control:-

This is concerned with

a) influencing factors which cause/ create change to the cost baseline to ensure that changes are
beneficial;
b) determining that the cost baseline has changed
c) managing the actual changes when and as they occur.
Cost control includes
i) Monitoring cost performance to detect variation from plan
ii) Ensuring that all appropriate changes are recorded accurately in the cost base line
iii) Preventing incorrect, inappropriate, or unauthorized changes from being included in
the cost baseline
iv) Informing appropriate stakeholders of authorized changes.
Cost control therefore involves monitoring performance and operations of projects and
establishing ‘why’ there may be some deviations from the cost baselines. Cost control
must be integrated with other control processes ( scope, quality, schedule, change, etc)

Project Expenditure Monitoring and Control

WBS WBS APPROVED INCURR ESTIMATE ESTIMAT

COD DESCRIPTI EXPENDITU ED COST D COST TO ED
E ON RE COMPLETI TOTAL
ON COST
(@ Activity)

Financial Cost Monitoring

Information to be Source of Use of
collected Information Information
Project Budget - Expenditure by -Invoices and -Estimate activity
and project activity Voucher costs
Expenditure -Compare cost of
different projects
Identify areas of
excessive
expenditure, etc
Staff salaries -Salaries -Staff records -Establish amount
-Tax, insurance paid on staff
-Other payments - Pay slips -Ensure are paid
(health allowances, according to
travel ,etc) -Salary records performance

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 -Ensure staff know
al their entitled
benefits.

BUDGETING

Definition

A plan translated in financial terms for the resource and operations of a business, organization or
project for a stated future period.

It may also be looked at as a statement of income and expenditures.

Development project managers have several major tasks to perform in respect of managing project
funds. These can be summarized as follows:-

1. Determining the require3ments for funds to service the needs of scheduled activities during
a defined period.

2. Controlling the project through the allocation of funds to different activities

3. Making the required adjustments in the allocation of funds among activities

during the planned period of time.

Types of Budgets

1. Operational budget- day to activity budget

2. Capital/ development budgets eg for acquisition of equipment/ fixed assets.
3. Financial budgets- (cash budgets, projected income and expenditure statements, etc.)

Approaches to Budgeting

a) Zero based budgeting (ZBB)

b) Incremental budgeting.

Advantages of Budgeting.

1. Budgets are always directly linked to the implementation planning

exercise, and therefore directly reflect the objectives of the project.
2. The organizational/project structure is defined in terms of zones of financial
responsibility under the budget.
3. Each project subsection is involved in determining its own objectives and
work programme through the exercise.

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 4. Budgeting is a means of communicating to different stakeholders within and
out side the project, and therefore helps to resolve conflict
5. It provides the basis for allocating priorities and assists with resource
allocation throughout the project structure
6. It provides a basis for monitoring and evaluating and controlling project
operations which allows corrective action.
7. Budgeting allows/enables management to take responsibility for planning
their work, setting targets and measuring their performance which can all
add up to a stimulus to achieving higher levels of performance.

Financial management and Accounting for projects

While the project budget represents the implementation plan in financial terms, the actual
operational aspects of handling the finance requires the development of appropriate organizational
structures and systems. Most managers of development projects are not accountants, nor need they
be!

A basic understanding of accounting may, however, be helpful to managers. All projects of

whatever size need accounts section which supports three major tasks.

i) Planning, controlling and recording of transactions Accounts section tasks

ii) Presentation of information
iii) Financial management - Management task

Cash flow statement/ budgets

A cash budget is detailed statement of of the expected cash receipts (in flows) and
payments (out flows). It is a reflection of the expected cash /financial position of each of
the periods ahead. This serves to enable the project determine whether to continue as
planned or not; whether expenditure needs to reduced; whether there is need to approach
the a bank out source funds/ for a loan, etc.

Budgetary expenditure control process

This involves the following steps:-

1. Preparation of a budget
2. Identification of responsibility centre
3. Adoption of mutually agreed targets
4. Periodic monitoring and recording/tracking of actual performance
5. Careful comparison of actual and planned performance.
6. Assessment of reasons / causes for deviation/ variances in performance
7. Initiation of corrective action. Corrective action is anything done to bring expected
future project performance into line with the project plan.
8. Preventing incorrect, inappropriate action from being included in in the baseline/
budget.
9. Informing appropriate stakeholders of the authorized changes

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 10. Completing an Estimate at Completion (EAC).This is a fore cast of total project
costs based on the project performance to date.

Reasons for time and cost over runs

a) Designs/ determining work scope
- Delay in appointment / selection of consultants
- Delay in receipt of drawings
- Change in scope due to un expected situations/ inadequate studies. This may be
scope of the whole project/ work/ activity scope.
NB: Successfulness of project implementation depends on the extent to which
it is properly planned. Scope determination and project requirements
determination is done during planning.

b) Shortage of inputs
i) Personnel
- Technical personnel
- Skilled labour
ii) Material inputs/ equipment
- Delay in the erection of major equipment
- Delay in placing orders for critical machinery
- Delay in delivery of imported and /or indigenous equipment
- Shortage of critical items in the advanced stages
- Transport bottlenecks and other transmission lines development

c) Finance
- Delay in receiving/ releasing funds
- Fluctuations in prices of major material inputs/ foreign exchange
- Delay in approval of revised cost estimates
- Delay in finalizing of contracts and delay in placing of orders for major items.

Internal Control systems

These refer to financial and non-financial checks instituted in the organization / project to ensure
that the operations run in an orderly manner. Controls are meant to establish safeguards on
operations and assets of projects to promote efficient use of resources.

Financial/ Accounting controls:-

- Controls over payments

- Controls over receipts
- Controls over financing operations
- Controls over accounts receivables and payables

Non-financial / Administrative controls

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 - Controls over the personnel section
- Controls over fixed assets
- Control over laid down policies
- Control over laid down procedures.

There are a number of cross-cutting ways which can be used for the above controls (financial and
non- financial).

- Organizational plan reviews

- Arithmetic and accounting controls
- Supervision
- Budgeting
- Review Meetings
- Filling systems
- Periodic report reviews
- Audit functions (internal), etc.

EFFECTIVENESS AND EFFICIENCY OF MONITORING & EVALUATION SYSTEMS.

Overview and Concepts.

Effectiveness is about “doing the right thing” to address a situation. Hence an effective monitoring
and evaluation system is one that portrays the following characteristics:-

• Done at the right time (Not too late);

• Targets the right indicators;
• Involves a wide range of stakeholders (participatory);
• Produces the right results (results-based);
• Based on experiences gathered from the field;
• Informs decision making;
• Results in follow-up action.

Monitoring and Evaluation Systems must also be efficiently managed. Efficiency is about “doing
things in the right way”. An efficient M&E system should portray the following characteristics.

• Employs the right methodology and tools;

• Utilizes the right number of resources (Not too much);
• Takes a reasonable amount of time (duration);

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 • Makes a clear distinction of the roles of the different players.

Efficiency is about resources. i.e. financial, human and time resources.

Cost effectiveness is a term that is always used to refer to a combination of both efficiency and
effectiveness qualities. As such, cost effectiveness of a monitoring and evaluation process calls for
“getting the best results at the most reasonable cost”.

Cost effectiveness therefore asks three fundamental questions namely: -

• What is the cost of the Monitoring and Evaluation process?

• What is the output of the process?
• What is the outcome of the process?

Costs of Monitoring and Evaluation: This relates to the cost of various inputs that goes into
designing and conducting the M&E process. Such inputs include financial, human and other
material inputs.

Output of Monitoring and Evaluation process: This refers to the products that must come from
an M&E process. Normally the output is expressed in the form of reports, briefs etc.

Outcomes of the Monitoring and Evaluation process: This refers to management changes that
are implemented as a result of the M&E products. Outcomes are the results of the follow-up
actions that must always follow the M&E output.

Distribution of roles and responsibilities for monitoring and evaluation

Effective M&E requires a very clear distinction in roles and responsibilities of the different
stakeholders in the project management structure.

A project management pillar has got 3 levels namely:

• Leadership (governance) level;

• Strategic management level;
• Operational level.

Each of these levels is involved in M&E of projects. However, cost effectiveness calls for a clear
demarcation in the roles played by each level so as to avoid wasteful duplication.

Modern project management practices specify that each of these different levels has got distinct
interests in the project. The distinctions in interest are summarized below:-

Level of management Key interest

Operational level Inputs, practices, time frames, quality specifications etc.

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 Strategic management level Output indicators

- Quantity, quality etc.

Leadership level Outcome/impact, policy, vision implication.

Effective monitoring and evaluation requires that each level of management put maximum
emphasis on its key interest areas. This therefore means that, for example:

• The leadership level should look for information/indicators that relate to the overall
outcome of a project. However this does not imply that this level should never get
interested in project operational matters. It should be, though its interests should primarily
be for the purpose of getting pointers to its mission / vision-related interests (and not for
operational/implementation purposes).

Designing an Effective Project Monitoring and Evaluation System

An effective monitoring and evaluation system should be able to generate adequate information
which is useful for three project management purposes namely:-

i) To support the implementation of the project/program;

ii) To provide feedback into the design of a follow-up action; and
iii) To provide a basis for accountability in the use of development resources:
o The rationale for a systematic approach in designing and implementing a
monitoring and evaluation system;

o The steps followed in the planning of an M&E system; and discuss the project-
planning matrix (Logical Framework) as a tool for systematic approach to
designing an effective Monitoring and Evaluation system.

Rationale for Systematic approach to designing a Monitoring and Evaluation System

The need for a systematic approach to designing a monitoring and evaluation system of a project
is supported by the following objectives:

• Adequate distribution of roles and responsibilities amongst the different levels and
categories of stakeholders;
• Effective utilization of monitoring and evaluation resources;
• To ensure maximum consistency of M&E System with project objectives, activities
and targets;
• To select the most significant indicators for each level of players;
• To maximize opportunities for feedback into the rest of the project cycle.

Designing a Monitoring and Evaluation System.

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A good M & E System should have the following qualities

• Clear statement of measurable objectives for the project;

• A structured set of indicators covering outputs of the project and their impact to
beneficiaries;
• Provision for collecting the necessary data at reasonable cost;
• Institutional arrangement for analyzing and reporting results;
• Procedures for feedback into the decision making process.

Steps in designing an M&E System

The following steps describe the path for drawing up an effective monitoring plan.

• Examine project goals, objectives and activities;

• Identify which components/issues are to be monitored;
• Identify information to be collected on each component /issue;
• Decide on how the information is to be collected, analyzed and stored;
• Decide on how the processed information is to provide feedback into the decision making process.

The Project Planning Matrix – A tool for Systematic approach to Project Monitoring and
Evaluation

The Project Planning Matrix (PPM), which is sometimes called the Log-Frame, is a key instrument
for presenting and analyzing monitoring and evaluation information. It includes formats for
presenting specific information for monitoring and evaluation of all key aspects of the project,
including project goals, objectives, activities and inputs. For each of these aspects, specific
indicators for measurement are analysed as well as means of verifying on performance.

Steps in Making A Project Monitoring Plan

In the project planning and implementation process, it is always useful to make a monitoring plan,
which will serve as a guideline for the organization on what and how to inform management. In
order to make a project monitoring plan, it is assumed that the project plan itself is elaborated in
sufficient detail to be operational, and the organizational structure has been defined, including the
operational responsibilities of tasks.

Step 1: Selection of indicators.

The first question, which will have to be answered, is: what do you want to know? of course, you
will want to know almost everything related to the project, but start with the absolutely necessary
items, you can always add others later. Keep in mind that data collection and processing is a
tiresome process, which becomes even more frustrating to individuals for whom its use is unclear.
A rigorous selection must be made, and here it is important to realize what the information is
needed for. Always focus on the needs of project management. Do not gather information just for
the sake of reports.

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What is the purpose of monitoring?

• Is it monitoring of action?
• Is it monitoring of results?
• Is it monitoring of reaction?
• Is it monitoring of context?

Step 2: Select Data to be collected:

The definition of the data to be collected is an immediate consequence of the choice of the
indicator. Data specifies in precise terms what needs to be gathered in order to measure the indictor.
Specification of the data also permits us to make an estimate of the resources required to do the
job, which may, in turn, heavily influence the choice of the proper indicator.

Step 3: Specify Sources of verification. Where can we find the data we need?

The difficulty in obtaining relevant data is often felt as a major constraint for effective monitoring,
possibly related to the fact that information flow in the district is understandably low in comparison
to national government.

However, project managers at the local government level have got to devise innovative ways of
dealing with this problem. In the first place, it can be observed that for the monitoring of action
and results, all relevant data are generated by the project organization itself, and thus data
collection would in principle not constitute a major technical problem. It can be regarded as an
in-house activity, which does not need special skills or knowledge, but which requires
organizational capacity and a certain level of discipline.

For the monitoring of reaction and context, we always need to collect data outside the realm of the
project organization, which means that the source will either be statistics collected by other
entities, or data collected directly from the source, viz. the target group or the project environment.
If statistics are being used, the collection and analysis of these data require certain skills, because
they should be screened on errors and crosschecked if possible.

Step 4: Select Methods of data collection.

Methods of data collection are especially relevant for the out-house data collection activities. The
different methods of data collection already discussed in this manual should be applied here.

Step 5: Distribute Responsibilities. Who does what in the monitoring process?

Different levels of the project organization will be involved in this process. Therefore it must be
made clear who does what. In large vertically differentiated organizations information will travel

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a long way to the top management, giving rise to complicated communication schemes. Projects
normally do not have this problem, but still responsibilities in the monitoring process should be
clearly defined and people must know what they are supposed to do.

The in-house monitoring of actions and results will mostly be done by those who are involved in
the realization of the activities, i.e. the operating core of the organization. In this information
chain, responsibilities should be known and agreed upon, since after all, the information chain is
as strong as the weakest link.

Step 6. Designing the Reporting and Feedback scheme

The information, which is being generated in the organization, will have to be channeled to
management. It is therefore very important that management indicates how and when this would
be done. Some information will be passed in formal reports or formats; other information will be
analyzed in meetings or in non-routine meetings or informal events.

Step 7. Design the database. Where and how will the information be stored?

The output of any monitoring system is information that goes to project management to direct the
project implementation process. But relevant data are of course later used for evaluation as well.
Therefore, a database should be designed, creating accessibility to the results and impacts of the
project.

Needless to say, the writing of reports and proposals is enormously facilitated if the relevant
information is readily available. Apart from evaluation and report writing, the database may be
used for research as well.

Step 8. Determine Means and Costs.

Once you have an idea of the information processing needs in quantity and quality, it is possible
to assess the necessary means: specialized personnel, consultancies, cars, computers, training,
offices and equipment etc.

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