BestPracticesinWorkingwithLocalNGOs

GrantNo.621G00100001300 PreparedforUSAID/Tanzania By MichaelF.Walsh InsideNGO March,2010 ThisstudyismadepossiblebythegeneroussupportoftheAmericanpeople throughtheUnitedStatesAgencyforInternationalDevelopment(USAID).The contentsaretheresponsibilityofInsideNGOanddonotnecessarilyreflectthe viewsofUSAIDortheUnitedStatesGovernment. UtafitihuuimefanikiwakwamsaadawawatuwaMarekanikupitiashirikala misaadalaMarekani(USAID).InsideNGOatawajibikanamatokeoyakazihii. TaarifahiinimaoniyamtayarishajinasilazimayawakilishemaoniyaUSAIDau SerikaliyaMarekani.

Introduction OnJanuary5,2010,USAID/TanzaniaawardedGrantNo.621G00100001300 toInsideNGOtocontributetotheMissionsprogramentitledBestPracticesin WorkingwithLocalNGOs.CarriedoutbetweenJanuary6,2010andFebruary 5,2010,thegrantcalledfortheexaminationoftheapproachofthreeofthe MissionsprimerecipientsAfricanMedicalandResearchFoundation (AMREF),ElizabethGlaserPediatricAIDSFoundation(EGPAF),andPact TanzaniathatmakesubawardsintheareaofHIV/AIDS.Mr.MichaelWalsh, DirectorofProgramsforFinance,GrantsandContractsatInsideNGO,carried outgrantrequirementsthroughacombinationofmaterialsreview;discussions withtheheadquartersstaffofthethreerecipients;incountrydiscussionswith USAID/Tanzania;andindepthinterviews,discussionsandRoundtableswith thethreepartnersfieldofficestaff(inTanzania)andarangeofstakeholders;and exitbriefingswiththemaswellaswithUSAID.Mr.Walshsfieldworkwas conductedJanuary25toFebruary5,2010. Mr.WalshextendssincerethankstoUSAID,theirthreepartnerorganizations, andallthoseinvolvedwithandinterviewedforthiseffortfortheircommitment oftimeandtheirsupportandsharingofexperiencesthatleadtothisreportand thefollowingkeyfindingsandrecommendations: I.Programming/DesignIssues 1. 2. 3. 4. DevelopbenchmarksleadingtomorecapableDistricts&Councils Managecashflowinterruptionswithmoreinformation Extendcommitmentbeyondannualprogramcycles DefinebenchmarksleadingtomorecapablelocalNGOs

II.Negotiation/Award 1. Investinoperationalsupporttoeffectivelymanagerisk 2. Includecapacitybuildingconsiderationsinbestvalueaward determinations 3. Settoneofcollaborationwithbroaderpartnercommunity III.Implementation 1. Streamlineanddelegateadministrativeapprovals 2. Harmonizereportingrequirements

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Conductauditsorreviewsregularlyratherthanattheendoftheactivity Mentoringbyprimesofsubrecipientsisessential Supportcoordination/collaborationamongprimesandlocalNGOs Trainingisacontinuousneed,butitrequiresatrainingstrategyand alternativemodels 7. Planforcloseoutandgraduationfromthebeginningandhighlightinthe subawardsandMOUswithLGAs. Purpose ThepurposeofthisstudywastoidentifyapproachesinwhichUSAID,prime recipientsandtheirsubrecipientrelationships,strategiesandtacticscansupport thegrowthandstrengtheningoflocalinstitutions.Thelessonslearnedandbest practicesidentifiedwillsupportUSAID/TanzaniasHumanandInstitutional CapacityDevelopment(HICD)activityundertheUSPresidentsEmergency PlanforAIDSRelief(PEPFAR)program.Inadditiontorecommendationson howUSAID/Tanzaniacanrefineitscurrentandfutureawardstofacilitate capacitybuildingoflocalnongovernmentalorganizations(NGOs),thestudy alsoconsidershowLocalGovernmentAuthorities(LGAs)canbemoreinvolved insustainingtheselocalentities. Background Launchedin2003,theinitialemergencyphaseofPEPFARconcentratedon meetingtheurgenttreatmentandcareneedsofpeoplelivingwithHIV/AIDS. AsPEPFARbeginstofocusmoreonsustainability,USAID/Tanzaniawouldlike tostrengthenitssupportoflocalNGOsandLGAs. Approach Thestudyfocusedontheworkofthreeprimerecipientsunder USAID/TanzaniasHIV/AIDSprogram: AMREF(AfricanMedicalResearchFoundation):The$2.1million ANGAZAZAIDIcounselingandtesting(CT)projecttoexpandthese servicesthroughvoluntaryandmobileCT,especiallyremoteandhigh riskgroupsandintegrateCTactivitiesmorecloselywithProvider InitiatedTestingandCounseling. ElizabethGlazerPediatricAIDSFoundation(EGPAF):The$4.6million awardwith4NGO/FBOsand33DistrictsandMunicipalCouncilsto
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3. 4. 5. 6.

expandpreventingmothertochildtransmission(PMTCT)servicesthrough trainingandsupportofthesestaffatprenatalclinicsandlaborwards. PactTanzania:The$4.5millionJaliWatotoprogramtosupport orphansandvulnerablechildrenthroughlocalNGOsandMost VulnerableChildrens(MVC)Committees.

AfterpreliminarymeetingswiththeseorganizationsinDaresSalaam,Mr.Walsh traveledtofieldofficestomeetmoredirectlywiththestaffoflocalNGOs,FBOs, CBOsandDistrictofficials: AMREFsMoshiZonalOfficeandMaranguHospitalinKilimanjaro Region EGPAFsMoshiRegionalOfficeandtheMoshiMunicipalCouncil,aswell astheShinyangaRegionalOfficeandKahamaDistrictHealthOfficeand DistrictHospital PactTanzaniaparticipantsworkinginTabora Mr.WalshalsoconductedthreeRoundtablediscussionstogatherinput: AMREFparticipants(15)inMoshi,includingparticipantsfromArusha RegionandKilimanjaroRegion EGPAFComplianceOfficers(17) PactTanzaniapartners(13)anddistrictofficials(2)fromTabora,metin Shinyanga OverviewofPrograms
Subaward Program description AMREF ANGAZAZAIDI(toshed morelight)isanextensionof the7yearANGAZA(toshed light)counseling&testing program.AMREFhasbasic supportpartnerswhoare experienced,tiedtothe MinistryofHealthandhave diversifiedfunding.AMREF IntensivePartnersrequire morecapacitybuildingand closerM&E.Subawardeesare supportedbydecentralized zonalofficesstaffedbyateam leader,aprogramofficeranda EGPAF EGPAFsPMTCTprogram focusesonDistricts, MunicipalCouncilsandafew NGO/FBOhospitals. ProgramandCompliance staffregularlymonitorfrom theirregionaloffices, supplementedwithMonthly financialreportsand quarterlyprogramreports. Regionalstaffare supplementedwith Monitoring&Evaluation personneltoassureproper dataqualityaswellastimely PactTanzania Pact/TanzaniasJaliWatoto programmobilizeslocal NGOs,volunteersandMost VulnerableChildrens Committeesatthevillage level.LocalNGOswere selectedthroughaninitial twostage,opencompetition withsupportfromPact personnel.Awardsare monitoredbyprogramand compliancestafffromDares Salaamandthesubmissionof quarterlynarrativeanddata reports.

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Howdoes the mechanism build capacity?

Trainingsaresupplemented withregularmeetingsby programandfinancestaff. Theyhaveconductedservice deliverytrainingsprimarily, buthavesupplementedthese withproposalwritingand planningworkshopsand otherfinance/compliance relatedtraining.TheDistricts proposetraining,whichis oftendrivenbychanges, turnoverandexpansions. Theworkshopsare supplementedwithfaceto facemeetingsrangingfrom1 3days. Capacity Fundinginterruptionsentailed Reportingdemandsand outcomes delaysandscalingbackof fundinginterruptionsare and activities.Somesubgrantees distractions,whileleadership precipitating havelearnedskillsinproposal isacriticaldeterminantof factors writingandhavesuccessfully success. wonothergrants. TheDistrictspropose RoleofGoT AMREFassuresthatlocal training,whichisoften andits partnerscoordinatetheir drivenbychanges,turnover perceived activitiescloselywiththe andexpansions.Workshops Districtoffices.A valueof aresupplementedwithface capacity decentralizedzonalapproach tofacemeetingsof13days. building reinforcesthisrelationship. Supportivesupervisionis carriedoutincollaboration withtheDistricts.Annual MOUsarenegotiatedamong AMREF,thesubgranteeand thelocalgovernment, representingathreeway partnershipfromthe beginningandavoidingthe creationofatwoway dependency.

financeofficerwhoprovide readilyaccessiblesupportand guidance. Trainingisprovidedbasedon theexpressedneedsofthe localpartners.Thetrainingis supplementedwithclose monitoringandmentoring. Zonalstaffarereadily available.

andaccuratereports.

Trainingandregularmeetings supporttheworkandbuild thecapacityofthelocal partners.Monthlyfinancial reportsbuildgreatercapacity whilemitigating disallowances.Districtcouncil focalpersonsformost vulnerablechildrenandMVC Committeesatvillagelevel haveallbeenincludedin trainingreceivedbyNGO partnersandvolunteers.

Mostsubawardeesare improvingtheirabilityto operatewithlesssupervision. Fundinginterruptionsaffect activities. PactassuresthatDistrictlevel officialsareinvolvedwiththe program.Theydliketosee moreinvolvementofthe districtsinassessmentsand ongoingmonitoring.The lackoffundsfordistrict councilfollowupofMVC programposesaparticular challenge.Capacitybuilding ofLGAsisunderfunded.

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OverviewofFindings ThereisbroadappreciationforthePEPFARfundingamongtheDistrictofficials andlocalNGOsinvolvedwithandinterviewedforthisstudy.Thisisoneofthe firstpointstheyalwaysemphasizedinthediscussions.Theyrecognizethat withoutthegenerosityofthedonors,theywouldnotbeabletodotheir importantworkwithpeoplelivingwithHIV/AIDS. Theprogramsarewellstructuredtoaccomplishtheintendedobjectives.The linkageswiththegovernmentattheDistrictandCouncillevelsareemphasized byallpartners.Theyclearlyunderstandandactivelyworktostrengthenthe engagementofthedistrictlevelgovernment. Whilethefundinglevelsandengagementoflocalgovernmentauthorities supportthesuccessoftheprograms,thereareanumberofchallengesthat impedethesustainabilityofthelocalpartners: 1. Disruptionsinfundingaresignificantsetbacksfororganizationstryingto sustainconstructiverelationshipswithcommunities. 2. Demandsofthedonorsforregularreportsimposeasignificantburdenon alreadystrappedhumanandtimeresources. 3. Expectationstoachieveimpactwithlimitedprogramfunds. 4. Notoleranceoffinancialorcompliancefailures,whichwouldentail significantdisallowancesorpenalties. Nonetheless,thelocalNGOsandDistrictsareallstrivingtoservetheir beneficiariesbetterwhilemeetingthedemandsofthedonors.Oneofthe underlyingstrengthsoftheseorganizationsisthepartnershiptheydemonstrate inworkingwithothers.Thereareconstructiveworkingrelationshipsextending fromthedonors,downthroughUSAID,itsprimesandsubawardees.Anumber oftheprogramstaffinDaresSalaamobservedthatthereisgoodcollaboration amongthedonorsatthenationallevelthatisimportanttothesuccessoftheir sector.Further,allimplementingpartnersdescribedagoodworking relationshipwiththeirAgreementOfficersTechnicalRepresentative(AOTR) andAgreementOfficer,whichisconsideredanessentialingredienttotheir success.Further,verysupportiverelationshipswereobservedbetweenthefield programandfinance/compliancestaffandthelocalentitiestheysupport. DistrictofficialsandNGOstafffelttheycouldrelyontheprimesstaffto respondtotheirinquiriesandconcerns.
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ThefollowingarerecommendationsforUSAIDtoconsiderinsupportingthe capacitybuildingoflocalNGOsthroughprimecooperativeagreement recipients.Asrequested,therecommendationsarecategorizedintermsofshort, mediumandlongtermactionssothattheycanbemorereadilytranslatedinto workandactionplans.ThediscussionisframedintermsofUSAIDs programmingandgrantmakingprocess,startingwithprogramdefinitionand designthenextendingtonegotiation/award,implementationandconcluding withcloseout.

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 I.Programming/DesignIssues 1.DevelopBenchmarksLeadingtoMoreCapableDistricts&Councils TheDistrictsandMunicipalCouncilsarecentraltotheseprograms.Thelatest OVCRFAhasacoherentandcomprehensivestrategicperspectiveonworking withthelocalGovernment.TheengagementofthedonorsandtheDistrictand Municipalentitiesiscritical.AspointedoutbyaMunicipalCouncilDirectorof Health,theyvaluetheinvolvementofdonorsandinternationalNGOswhich bringfocusedfundingandexpertise.Whilemanagementofthesestandalone verticalprograms,isdemanding,theyaccepttheresponsibilitiesandthe assistance,butworryaboutsustainingthemwithlimitedbudgetsandstaff. OthershaveobservedthelimitedcapacityoftheLGAs.Forexample,onlytwo officialsfocusonHIV/AIDSattheDistrictlevelandtheyareoftenbusy attendingtrainings,meetingsandpreparingadministrativedocumentsand reports.Inshort,theDistrictshaveinsufficientlytrainedstaff,inadequate financial,procurementandreportingsystemsandashortageofcriticallogistical supporttocoverawidegeographicarea.TheGlobalFundauditofGrantsto TanzaniadatedJune,2009capturesthechallengesfacedandtheriskofrelying tooheavilyonLGAsatthistime. TheDistrictsandCouncilswillneedtotakeonaddedresponsibilitiestosupport theHIV/AIDSprogramsinthefuture.Butwhatformandfunctionswillthese LGAshavetomanagetheseprogramsandhowwilltheysupporteachotheras donorfundingreachesitslimits?WillfundingmovethroughtheDistricts?Will awardsbemadetolocalNGOsthroughthePrimeMinistersOfficeofRegional andLocalGovernments(PMORALG)?OrwilltheDistrictsleadandcoordinate thefundsmanagedbyothers?Canthedonorbasketfund,whichtheLGAsare familiarwith,beenhancedtosupporttheseefforts?Theseandotherquestions mustbeansweredsoontoprovidesufficienttimetodevelopthecapacityof theseentities. EachDistrictandCouncilisatadifferentstageofcapability.Oftenleadershipis acriticalfactor,butallarestrugglingwithhighturnoverratesandtheabilityto manageacumbersomebureaucracy.RushingallLGAstodevelopbyacutoff dateisunreasonable,sograduationshouldbebothstagedandstaggered.
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Recommendations ShortTerm o Encouragethebestpracticeofannualnegotiationof(nonmonetary) MemorandumsofUnderstandingamongtheprimepartner,sub granteesandthelocalgovernment.Thisthreewaypartnershipdetails oversight,routinesupervision,suppliestobeprovidedbytheLGA, jointdevelopmentof12monthactionplanwithspecifictasks,joint outreachactivities(andlogistics)aswellascapacitybuilding milestonesandrelatedtrainingandassistance. MediumTerm o ReachagreementbetweenGoTandthedonorsonthecapabilitiestobe demonstratedbyDistrictsandMunicipalCouncilstopermitthemto managedonorfundsmoreindependently. o Determineandappropriatelybenchmarkthestagesleadinguptothis levelwithtechnicalassistanceandtrainingplannedandprovidedto assureDistrictsprogress. o Provideonthejobcompetencybasedtrainingprogramsthatleadto actualqualificationsforstaffinvolved. o IncludecriticalsystemsandorganizationaldevelopmentintheCCHP foreachDistrictandMunicipalCouncil. o Encouragepartnerstoofferprogrammaticandbudgetinformationfor inputintoCCHPs. 2.ManageCashFlowInterruptionswithMoreInformation Cashisthelifelineofthelocalpartners.Theyhavenobufferagainstfunding interruptionsorreductions,whichareinevitable,butshouldbeminimizedover thecourseofayear.USAIDandotherdonorsreceivetheirfundinglateintheir budgetcycles,whichdelaysonwarddisbursementstotheprimerecipientsand ultimatelythelocalNGOs.USAIDsreputationfortimelypaymentisbetterthan otherdonors,butitsuffersfromoccasionaldelaysinobligationoffunds. FewNGOshavesufficientunrestrictedfunds(i.e.nonFederal)tofinancegapsin funding,especiallyiftheycannotbecertainthatUSAIDorotherdonorswill comethroughwiththefunding,orwillcovercostsincurredbeforefundsare available.ThePrimeNGOsarepursuingpublicprivatepartnershipsandother

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donorfunds,buttheagreementswillnotbesufficientorbroadenoughtocover possiblefederalshortfallsorinterruptions. DelaysalsooccuronthepartoftheprimeNGOsintheirprocessingofpayments. OftenthelocalNGOhavedifficultycompletingalltherequiredreportsand documentationinatimelyandaccuratemannertoassureregularpayments.The primeNGOsprocesspaymentsthroughtheirheadquarterswhichmayentail additionaldelaysifthereareanyquestionsraisedorglitchesintheirhandlingof transactions.Thesedelayscanbeminimizediftherearesufficientfieldstaffto supportlocalNGOsinaccuratelydocumentingtheirsubmission. Whenfundingisinterrupted,localNGOssalariesgounpaid(describedbyNGO staffasinvoluntaryvolunteering),fieldactivitiesgrindtoahaltasstaffdont havefundsforfareorpetrol,andthevillagersareworryingiftheycanrelyon theservicesandsupportoftheNGOs.Districtsexperiencesimilardelays,often 3months,duetothemanylayersbetweentheLGAsandthecentral authorities.Continuityisessentialforthecare&treatmentofHIV/AIDSandthe supportoforphansandvulnerablechildren.Theimplementingpartnersat everylevelareaffectedbyfundingcutsanddelays.Forexample,theAMREF subgranteestaffexpressedconcerninthatinterruptionsanduncertaintyof fundinghindersplannedandexpectedactivitieswhichdemoralizesand discouragesmembersofthecommunityinconfrontingtheHIV/AIDSpandemic. Providingmoreinformationpermitsthemtomanagemoreeffectivelytomitigate theimpactonthebeneficiaries. Recommendations Shortterm o Provideasmuchinformationassoonaspossibletotheprimesand subrecipientsonthestatusoffundingsothatplansmaybeadjusted andmitigatingactionscanbetaken.Timelynotificationmaypermit thelocalpartnerstoextendimplementation,delayexpendituresand manageexpectationsuntilfundingarrives. o Encourageadequatestaffingoffinancialoversightinthefieldto anticipateandmitigateproblemswiththelocalNGOs,ratherthan overrelyonheadquarterstafftomonitorcomplianceaspartofthe paymentprocess.
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3.ExtendCommitmentBeyondAnnualProgramCycles EachdonorandtheGoThavetheirownannualprogrammingcyclesthatfocus onquantifiableresults,butcapacitybuildingtakes57yearsanddoesnotlend itselftoreadymeasurements.Theseannualcyclesarealsonotsynchronizedand areoftenthrownoffwhenfundingisntprovidedasplanned. Localentitiesmustwaitmonthsforfunding,whichcompressesa12month implementationplanto10to8months,whichisverydisruptive.Notlongafter theyreceivetheirannualfunding,theNGOmustthenbeginpreparingfora proposaltorenew,withtheinherentuncertaintyofcontinuation.Oneyear tranchesandtheefforttorenewaretransactioncoststhatdistractfromservice deliveryandcapacitybuilding.Further,workingwithchildrenandpeople livingwithHIV/AIDSentailsalongertermcommitment,wellbeyondthe35 yearawardsoftheprimes.Alocalpartnernotedthatiftheirprimecouldmake formal,multiyearcommitments,theywouldreachfurtheranddevelop complementaryservicesinthoseareas.Withoutalongertermcommitment,they arehesitanttocommittheseservicesandthenriskdisappointmentbythe beneficiaries. Recommendations Shortterm o Encouragetheprimestoenterintolongertermagreementswiththeir subrecipients,contingentuponavailabilityoffunds,(justasUSAID doeswithitspartners)sothattheextensionprocesscanbefacilitated. Longterm o Whileannualprogramcyclescannotbechanged,USAIDshould supportconsistentfundinglevelsandlongertermagreementswiththe primes. 4.DefineBenchmarksLeadingtoMoreCapableLocalNGOs CapacityBuildinghasbeenfocusedonservicedeliveryunderPEPFARI.To sustainHIV/AIDSprograms,capacitybuildingmustbesupportedmorebroadly toincludesupportoforganizationsandnetworks,enhancingmorethan technicalskillstoincludeoperationalsupportandtheabilitytomanage,adapt andevenadvocateasanorganization.
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 LocalNGOshavelimitedresourcesorexpertisetoinvestintheirowncapacity building.Subawardbudgetsareusuallyconfinedtoprogramimplementation, withlimitedsupportformanagementoversight.Thereisalsonobroad assessmentofthesector.Atbest,eachprimehasconductedreviewsofsub recipientsinthecontextoftheirprogramactivity,leadingtoastovepipe perspective.Annualormidtermassessmentsarealsoconfinedtosubrecipients andtheirabilitytoperformthescopeofwork,ratherthandeterminetheir progresstowardsasustainableentity. Further,thedevelopmentstagesandendstatearenotcurrentlydefinedforthe subrecipients.ThecurrentOVCRFAdefinesastandardthatthelocalNGO shouldbeeligibletoreceiveUSAIDfundingdirectly.Thisstandardcanbe definedintermsofUSAIDsresponsibilitydetermination,whichaccordingto ADS303.3.9meanstheorganization: o possesses,orhastheabilitytoobtain,thenecessarymanagement competencetoplanandcarryouttheassistanceprogram, o canappropriatelyaccountforfundsandotherassetsprovidedby USAID, o hasasatisfactoryrecordofbusinessintegrity,and o isotherwiseeligibleforaward(e.g.notonadebarredorOFAClist). Theresponsibilitydeterminationstandardisspecifictotheworktobe performedintermsofmagnitude,complexityandduration.Itdoesnottakeinto considerationthesustainabilityofthebroaderactivityortheneedfortheNGO tocompeteforlimiteddonororGoTfunding. Theprocessofincreasingthecapacityoflocalentitiesmustreinforceasenseof ownershipoftheissuestoassureultimatesuccess.Preawardassessments conductedbyprimescanbemanipulatedormisleading,notingexamplesof temporaryofficesandstafftogivetheimpressionthatanNGOismorecapable. SelfassessmentsbasedongoodexamplesfromtheTanzaniancontextaremore effectiveiffacilitatedandverifiedbytheprime.Theprocessofdeveloping capacityiscriticaltosustainingthecapacityofthelocalNGO.
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Recommendations Shortterm o HarnessfacilitatedselfassessmentsbylocalNGOstosupporttheir senseofownershipoftheissuesandeffortstostrengthentheir capacity.(See:RecentPracticesinMonitoringandEvaluationTIPS MeasuringInstitutionalCapacity,2000No.15)Obtaininputfrom Districtsandcommunitybeneficiaries.Verifyassessmentfindings selectively,especiallyincompetitivecontexts. Mediumterm o Establishbenchmarksleadingtoagraduationstandardforlocal NGOs.Stagesmayincludebasicskillbuildingandorganizational development,followedbymoreworkwiththeDistricts,expansionof activities,culminatinginaregistrationstandardorabroaderUSAID responsibilitydetermination.Atgraduation,thelocalNGO shouldhave: Governancestructures(board,organizationalgoals,leadership structure,legalstatusandconstituency) EffectiveManagementPractices(planning&program development,reporting,administrativeprocedures,information management,organizationalstructure) EstablishedHumanResources(qualifiedstaff,clearroles, adherencetolaborlaws,salary&benefitstructureandpolicies, supervisorypractices) AdequateFinancialResourcesandSystemsforManaging (steadyfunding,accounting,budgeting,financial/inventory controls,reporting) PerformanceAbility(appropriateexpertise,recordofsuccess, abilitytoassessimpactandreportaccurately) EffectiveExternalRelations(sustainingrelationshipswith beneficiaries,constituencies,governmententities,otherNGOs anddonors) Programssustainedbyotherdonorsorsourcesofrevenueand broaderengagementwithotherentitiestosustainsupport. o ConductsectorwideassessmentsoftheNGO/FBO/CBOswithfollow upmidtermassessmentstodemonstrateimpact.
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Longterm o ThefeasibilityofagraduationpathmustbesupportedbyUSAIDs willingnesstocommittolongertermplanningandfunding. o Programdesignandproposalsshouldbeinformedbycircumstances anticipatedbeyondtheestimatedcompletiondateoftheawardto supportsustainableactivities.

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II.Negotiation/Award 1.InvestinOperationalSupporttoEffectivelyManageRisk Federalregulatorystandardshavenotoleranceforfinancialorcompliance failures.Undocumentedcosts,absenceofpriorapprovalsandotherviolations leadtodisallowancesandfineswhichareseriousdeterrentsforNGOswith limitedfinancialreserves.TheprimeNGOsmanagethisbyconducting thoroughriskassessmentsandmanagingtheorganizationsandissuesthatare mostcritical.USAIDandotherdonors,however,routinelyconstrainandcastan especiallycriticaleyeoncostsforheadquarters,finance,complianceandother supportfunctions,evenasprogramshavegrown.Finance,compliance,and contractingstaffandtheirfunctionsareessentialtomanagingriskandassuring thelongtermviabilityandgrowthoftheirorganization. Despitetheimportanceofthefinanceandcompliancefunctions,thereispressure tominimizethesecostsateverypointintheawardprocess.Program descriptionsaredevelopedwithanemphasisonmeasurableresultswhichare oftentiedtodollaramounts;thereforetherelativereturnoninvestmentis emphasizedattheexpenseoffinancialandregulatorycompliance.WhenNGOs developtheirapproachtoasolicitation,theyoftensqueezethesupportcoststo demonstrategreaterefficiency.Duringthecourseofnegotiations,USAIDand donorsingeneralpushonsupportcostsbecausetheresnoagreeduponruleof thumbtoassesstheirreasonableness.Ratherthanjeopardizetheaward,NGOs oftenacquiesce,resultinginstaffingandsalarylevelsthatareinadequateto appropriatelymanagetherisks. ThisdynamicextendstothelocalNGOsaswellinwhichtheyrarelyresistthe negotiatingpositionsoftheprimes.Theydontwanttorisklosingthe subaward.ItisdifficultforNGOsandDistrictstoattractandretainqualified staffgiventheseconstraints.Forexample,thereisashortageofqualified bookkeepersinTanzania,withmostseekingbetterremuneration,ofteninthe largercities.AlocalNGOmightbudgetforfinancialstaffrangingfromTsh.200 600,000/month.Incontrast,aUSAIDfinanceassistant/cashierearnsbetween Tsh.1,200,0001,500,000/month.
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Recommendations Shortterm o Supportoperationalfunctions(finance,compliance,HR,etc.) adequately,ifnotgenerously,inbudgets.Permittheprimesto proposecosteffectivesupportstructuresgiventhenatureofthe programandanticipatedrisks. o Supportdifferenttypesoftrainingandprofessionaldevelopmentfor thesestafftohelpmitigateturnoverandtoenhancethecapacityofthe organization. 2.BestValueAwardDeterminationsShouldIncludeCapacityBuilding Considerations Thecompetitiveprocessdoesnotadequatelysupportsustainability.Thedonors placeapremiumoncosteffectivenessthatdoesnotmatchwithriskmanagement ortheneedtobuildlocalpartnercapacity.Pressuresonsupportcosts(e.g. accountants)andlogisticsaredetrimentaltolongtermsuccessoflocalpartners. ThereisnoreserveincludedinUSAIDawardsthatcansupportinvestmentin capacitybuilding.Thecostsarededicatedtoimplementationoftheprogram, notinvestmentinthefuture,unlikeaforprofitfirmearningfixedfee. Recommendations Shortterm o IncludecapacitybuildingintheprogramdescriptionofRFAssothat costscanbeallocatedtothisobjective. o Considertheprospectsforaccomplishingcapacitybuildingand sustainabilityobjectivesintheoverallbestvaluedeterminationofthe solicitation. 3.SetToneofCollaborationwithBroaderPartnerCommunity Thecollaborativetoneamongthedonors,USAIDinparticular,andtheGoT shouldechothroughtheimplementingpartnersdowntothelocallevels.There appeartobegoodworkingrelationshipsbetweenUSAIDandtheprimeNGOs. Partnerintervieweeseachnotedtheconstructiveengagementtheyhavewiththe AgreementOfficer(AO)andtheAgreementOfficersTechnicalRepresentative (AOTRs),creditingthemwithleadershipinthesectorandcommitmenttothe work.Similarpositiverelationshipswereobservedbetweenthefieldofficesand
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thelocalNGOsandDistrictsthattheysupport.Theyfeltsufficientlycomfortable tospeakcandidlyaboutthestrengthsandweaknessesoftheprogram. Collaborativeworkingrelationshipsareessentialtoeffectiveandefficient programmanagement. Opencommunicationonaregularbasissupportstimelyresolutionofissuesand mitigationofrisk.Ifacriticalissuelooms,afieldpersonismorelikelytoquickly elevateitforguidanceifagoodworkingrelationshipalreadyexists.USAIDcan reinforcethiscollaborationwithregularconferenceswiththebroaderpartner community,andsupportforsimilararrangementsbetweentheprimesandtheir subrecipients. Recommendations Shortterm o SupportthebestpracticeofconductingPreproposalconferencesto assurethatallpartiesfullyunderstandtheactivitytopreparemore realisticproposalsormakebetterinformedgo/nogodecisions. o EncourageandfundPostAwardconferencesthatgobeyondthe reviewoftheawarddocumentandincludeestablishmentofa frameworkforworkingtogether.Allpartiesshouldparticipateand establishstandardsofcommunications(e.g.nosurprises),howissues willbeelevated,howoftenthepartieswillmeet,whowillmaintain minutesandactionitems,etc. Mediumterm o ConductregularPartnersDaymeetings,hostedbytheMission Director,SOTeamLeadersorAgreementOfficer,todiscusscommon issuesoftheimplementingpartnersinTanzania.Representativesof thecontractorsandgranteesworkinginTanzaniawillappreciatethe opportunitytolearnfromtheseofficialsaboutrecentguidancefrom USAIDandtoprovideinputonpressingissues.Modeledafterthe M/OAAsponsoredPartnersDay,thegroupcanalsoestablishadhoc workinggroupstoaddresscommonimplementationissues.The criticalelementisthatthePartnersDayprovidesanopportunityfor thecontractorsandgranteestoraiseanddiscussissuesofmutual concern,rangingfromoperationalproblemstostrategic considerations.
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III.Implementation 1.StreamlineandDelegateAdministrativeApprovals PriorApprovalsareworkingwellforsubawardsbasedongoodworking relationshipsandastrongconsensusontheprogram.TheAOTRsrecognizethe needfortimelinessandknowtheprocessforreviewandapproval.However, theprimeshavealsoadjustedtheirprogramstoavoidtheneedtoobtainmore onerousadministrativeapprovals,suchasrenovationcosts, international/regionaltravel,livestockforincomegenerating,seedsforbackyard gardensandmotorcyclesforworkers.Someapprovalshavetakenaslongas8 months.NGOsandtheDistrictsrepeatedlyexpressedpuzzlementaboutthe needforadditionalapprovalsifthecostisalreadyincludedinthebudget.They observedthatsuchmicromanagedapprovalsdidnotgivethemasenseof ownership. OnlybudgetincreasesandprogramrevisionsmustbeapprovedbyAgreement Officers.Allotherapprovalscanbedelegated,streamlinedorblanketed.Under 22CFR226.25(e),theAOcandelegateapprovaltoAOTRsforawardeechanges inkeypersonnelortheirreducedworkontheproject,budgetlineitemrevisions, subawardsandsubcontracts.Onetime,nocostextensionscanalsobe authorizedforupto12months. TheMissionDirectorcanalsoauthorizeblanketwaiversfor source/origin/nationalityrequirementsunder22CFR228,aswellasapprovalof restrictedgoodswithincertainparameters.PEPFARalreadyprovidessuch authoritywhichshouldserveasabasisforblanketwaivers.TheNGOpartners preferblanketwaiverssothattheydontneedtoexpendtheadditionaltimeand efforttoseekadditionalapprovalsinthefuture. Approvalscanalsobestreamlinedtoavoidbottlenecksthatdelay implementation.OftenUSAIDandtheimplementingpartnerarenotclearon thecriteriaortheprocessforapproval,resultinginprotractedexchanges requestingadditionalinformationandclarifications. USAIDawardsarenotoriouslyadministrativelyburdensome.Otherfederal agencieshaveeliminatedorstreamlinedapprovalstominimizenonvalueadded requirementsonprofessionalstaff.Theapprovalofinternationaltravel,for example,wasarequirementestablisheddecadesagofordomesticorganizations havinglittlereasontotravelabroad.Thestandardusedbyotherfederal
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agenciesinconsideringtheneedforpriorapprovalsisifthereviewand approvalisagooduseofaGS14stime.Inotherwords,doesthepriorapproval addvaluetotheprogram? Recommendations PrimepartnersshouldconsultwithUSAIDaboutanticipatedapproval requirementsundertheirawardsandidentifymeansofexpeditingtheprocess. USAIDshouldminimizepriorapprovalrequirementstoalleviateadministrative burdensonlimitedstaffandAgreementOfficersthroughthese recommendations: Shortterm AmendAOTRLettertodelegatetotheAOTRorthegranteeapprovalof certaintransactions,suchassubawards,budgetlineitemadjustments, international/regionaltravelandrenovations(ifbudgeted). Mediumterm Prepareblanketapprovalsatthestartoftheactivityorcooperative agreementawardforthepurchaseofmotorcycles,livestockandseedsin supportofprogramobjectives. Streamlineapprovalsofpropertydisposition,requestsforexemptionsand deferralsforenvironmentalassessments,etc. 2.HarmonizeReportingRequirements Someprogramsrequireover25%ofprogramstafftimetopreparereports.The Districtsspendevenmoretimeinmanagingdifferentformsanddeadlines drivenbythedonors.Theemphasisondataqualityandthedifferentdemands ofthedonors,beyondthoseoftheGoT,driveagreatdealofthisburden.The programstaffmustcollectinformationfromdistantDistricts,verifythedataand thenconsolidatetheresultstoforwardtotheirheadquarters.Englishisalsoa challenge,soitisdifficultforNGOstafftoprepareandsubmitsuccessstories thatareoftenrequested.ElectronicsubmissionofdataandtheHealth ManagementInformationSystem(HMIS)oftheGoTmayhelpwiththe Quarterlyreports,especiallyifthedonorrequirementsareharmonized. USAIDsearlysupportoftheuseofGoTsM&Eforms,enteringdataatthe Districtlevelanditswillingtosupportovertimeforreportinghavehelped alleviatethisburdenontheprogram.AMREFsubgranteeshadfewerconcerns abouttheburdenofreporting.Theypraisedtheharmonizationofdatareporting
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throughtheZonalofficeswiththeguidanceoftheMinistryofHealthandSocial Welfare.Thenewreportingproceduresminimizethetimeandreducedouble reportingofdatatoAMREFandtheresponsibleDistrict. Whilethereportingrequirementisaburden,itisalsoabarometerofthe partnersabilitytoaccuratelyandtimelyprepareandsubmitreports.The learningcurveforreportpreparationissteepanditimposesadisciplinethat preparestheNGOforfutureawards.Programofficersnotedthatreport preparationisabasicbusinessprocessthatmustbestrengthenedfortheNGOto beresponsibletothedonors. Recommendations Shortterm o USAIDshouldcontinuetosupportthePrimeseffortstostrengthen thereportingcapacityofthelocalpartners. Longterm o USAIDshouldsupporteffortstoharmonizedatacollectionand reportingwithGoTanddonors.GreaterrelianceonGoTreporting standardswillstrengthentheircapacity. 3.AuditsorReviewsConductedRegularlyRatherThanattheEndofthe Activity PrimeNGOsadheretotheprinciplethatratherthanauditingtothepenny,you managetothedollar.Unfortunately,theauditorsdontalwayssharethis perspective.Theideaistomanageriskratherthanavoidit.Regularreviews andriskreassessmentswillhelpidentifyandaddressproblemsbeforethey groworbecomeentrenched.ThelocalNGOsalsorecommendedthatthe financialreviewersdonotcomeinasinspectors,whichputstheNGOsina defensivemode,butratherasassessors.AMREFssubgrantmanagers,for example,visiteachsiteandchecktheboxfilestoassuretransactionsare properlydocumentedandcomplete,whichisverypracticalandeasilyverified whileimposingadisciplineontheNGO.EGPAFcompliancestaffregularly meetwiththeirdistrictstoreviewdocumentationandaddressanyissuesor concerns.Eachofthethreeprimesconductregularvisitstodevelopa mentoringrelationship,asdescribedinmoredetailbelow.
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Recommendations . Shortterm o AssurethatPrimeNGOsconductregularreviewsinaconstructive mannerwithtimelyfeedbackandfollowup. Mediumterm o USAIDshouldcontinuethepracticeofconductingannual managementreviewsoftheprime.ThereviewconductedofEGPAF wasdescribedasabestpracticeinthatithelpedthemmakenecessary adjustmentsoutsidethecontextofaformalaudit. 4.MentoringbyPrimesofSubrecipientsisEssential Thedifferencebetweenmonitoringandmentoringinprogrammanagementis thequalityoftherelationship.Monitoringisamanagementtoolwhile mentoringaddsvaluetoperformanceofobjectives.Thequalityofthe relationshipbetweentheprimeandthesubrecipientsisanessentialingredient forsuccessfulprograms.ThethreeinternationalNGOsvisitedhaveaclose workingrelationshipwiththelocalpartnersthathelpsmanageissuesand changeincircumstances.Decentralizationandthecreationofzonalteams furtherfacilitatecoachingandmentoring. Decentralizationisabestpractice.Whenprogramandfinancestaffarelocated intheregionsorzonaloffices,theydescribegreateraccess,commitmentand engagementwiththelocalpartnersaswellasbettertrainingandmore productiverelationshipswiththeDistrictoffices.Thestaffarealsomorereadily availabletotroubleshootatanytime.(Forexample,theAMREFFinanceOfficer answeredcellphoneinquirieswellintothenightasNGOleadersfinallyhada chancetositdownandreviewtheirbooks.)AMREFsubgranteesreportedthat theyareverypleasedwiththedecentralizationprocesswhichtheybelieve encouragesmoreeffectivecommunicationandcoordination.AMREFs experiencealsosuggeststhatdecentralizingthesubgrantingprocessismore effectivecomparedtotheirformercentraloperationsapproachwhichoften prolongedthesubgrantingtasks. Whiletherelationshipsaresupportive,theNGOsmustbetrainedtomore effectivelynegotiatetheirawards.Toooftenlocalpartnersagreetoanyassertion oftheprimesbecausetheydonotwanttojeopardizetheaward.Whilepartof

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thisdeferenceiscultural,anotheraspectissimplythenatureofthecompetitive processinwhichitiseasiertonegotiateafterawardthanbeforehand. Giventheimportanceoftherelationshipbetweentheprimeandthesub recipients,itsqualityshouldbebenchmarkedandmonitored.Afeedback mechanismshouldalsobeestablishedtoassureactionontheinformationto makenecessaryadjustments. Recommendations Mediumterm o Decentralizationisabestpractice.Supportcosteffectivemeansof establishingafieldpresencefortheprograms. o Supportworkshops,aspartofthecapacitybuildingprocess,thattrain NGOstaffoneffectivenegotiating,especiallyinthecompetitive process. o Benchmarkthequalityoftherelationshipbetweenprimesandsub recipientstoassureproperattention. 5.SupportCoordination/CollaborationamongPrimesandLocalNGOs TheDistrictcurrentlyservesasafocalpointforcoordinationoflocalNGOs.The developmentoftheCCHPhelpssupporttheengagementofthelocalpartners,as sustainedbycoordinatedactivitiesoverthecourseoftheyear.InKahama District,forexample,theDistrictMedicalDirectormeetswiththeNGOsto discusstheGoTprioritiesandtosolicittheirinputandcontributionstothe activities.ThelocalNGOswillthencoordinatetheiroutreachandother activitieswiththeDistrict. Therearefewerexamplesofcollaborationamongtheimplementingpartners. TheImplementingPartnersGroup(IPG)underPact/TanzaniasOVCprogramis abestpracticewithregularandcomprehensiveparticipationatthenational level.PactactsasSecretariatoftheNationallevelIPGwhichhasover90 organizationsasmembers,ischairedbyDSWanditsregularmonthlymeetings arehostedbyUNICEF.AsexpectedbyUSAID,thismodelshouldbereplicated ineachdistrict.Forexample,groupsareestablishingasimilarIPGintwo DistrictsinTabora.AnotherexampleisEGPAFsuseofaDistrictmapofNGO activities.EGPAFidentifiedMildmayasacollaboratingpartnertocontinuecare ofpatientswhentheyreturntotheirvillages.Afewforumsandother coordinatingattemptswerementioned,buthavenotbeensustaineddueto
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limitedresources.Forexample,thePLHIVNetworkmodelisausefuloneandis hostedbytheRegionalMedicalOfficersinsomecases. Recommendations Longterm o Districtsshouldremainthefocalpoint,butsupporttheestablishment ofregularRoundtablesorimplementingpartnersmeetingsatthe DistrictlevelforlocalNGOstonetworkandcollaborateoncommon issues. o DistrictmappingofNGOactivitiescanfeedintotheCCHPand coordinationofactivitieswithcomplimentaryprograms,suchas nutrition. 6.TrainingisaContinuousNeed,butItRequiresaTrainingStrategyand AlternativeModels ThelimitedcapacityoflocalNGOsandDistricts,coupledwithhighturnover ratesofprofessionalstaff,driveaneedforalmostconstanttraining.Allthelocal partnershaddifficultyhiringandretainingqualifiedfinancialstaff.Invariably, theprimeshadtotrainnewstaffondonorreportsandprogramrequirementsa fewtimesayear.Frequenttrainingsareexpensiveanddonotaddressthe underlyingchallengeofretention. Thereisalsoasensethatinsomeactivities,thetrainingreceivedbytheLGAsis oftenadhocandunplanned,withdecisionsastowhoattendswhattraining oftenbasedonwhoisperceivedtobenextinlineforbenefitingfromexternally fundedtrainings,includingthetravelallowancesandperdiems.Thetrainingof LGAsingeneralwouldbenefitfrombetterplanningandaconsensusonhowit willdirectlybenefitcapacitybuilding. Recommendations Mediumterm o Conducttraininginresponsetoabusinessorprogramissuewhichis alsotiedintoabroaderorganizationalobjective.Forexample, employeeretentionisamajorchallengeforsustainability;therefore trainingshouldaddressboththetopicalneedsoftheparticipantsand thebroaderneedtokeepthemonboard.Trainingofindividuals

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shouldbeconductedwithinabroaderorganizationaldevelopment strategy. o EncourageNGOstoexplorealternativestoclassroomtraining,suchas twinning,coaching,certifying,webbasedorcomputerbasedtraining, etc. 7.CloseoutShouldBePlannedFromtheBeginningandIncludedin SubawardsandMOUswithLGAs Theadministrativeprocessofcloseoutisalwaysneglected,untiltheend,when itstoolatestaffmoveontootheractivities,documentsaremisplaced,timeis limitedandattentioniselsewhere.USAIDhaslittletimetoreviewcloseout paperwork,approvedispositionrequests,etc.Ultimatelytheresabottleneck thatpreventsasmoothandefficientcloseoutoftheproject. Astheawardconcludes,subrecipientsshouldattainthestandardthatwill permitthemtoworkmoredirectlywiththeDistrictsanddonorstocontinue theirwork.AllthelocalNGOsarenervousaboutwhathappenswhenthedonor fundsexpire.Afewareactivelyseekingmeansofdevelopingtheircapacity,but nonehastheexpertise,leadershiporresourcestoenhancethemselvesalone. USAID,otherdonorsandtheGoTmustalsoconsiderthesegraduationstandards inthecontextofastrategyforthesectorthatextendsbeyond2013.Otherwise, thelocalpartnerswillbetakingagreaterleapthantheyarepreparedfor. Recommendations Shortterm o USAIDshouldrequirecloseoutplansaspartoftheinitialproposal andthenverifytheplansatthebeginningofthefinalyear. o USAIDshouldsupporttheincorporationofcloseoutplansand graduationbenchmarksinsubawardsandMemorandumsof Understanding(MOUs)withLGAstointegrateitsplanningand resourcing. Longterm o USAIDshouldprepareitselfinternallytoexpeditecloseout processing,especiallythedispositionofequipment. o USAIDshouldrequireprimestomonitorprogresstowardsa graduationbenchmark(includinginternalchecklists,reassessments).

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Districtsshouldbeinvolvedfromthebeginninginverifyingprogress oftheNGOs. o USAID,otherdonorsandGoTshoulddefinearealisticscenariofor post2013supportforthesectorinwhichthelocalNGOswillbe sustainingthemselves.Carefullyconsidertheimpactandunintended consequencesofconsolidationofthelocalNGOsectoriflargerawards aremadetomoreefficientlymanagemorelimitedfunding. Summary Thethreeprogramsvisitedareworkingwell,despitechallengesinherentin HIV/AIDSactivitiesanddonordrivensystems.Anunderlyingstrengththathas facilitatedcoordinationamongdifferententitiesisPamojana,orworking togetherwithoneanother.USAIDsinitiativetoexaminehowitcansupport theworkofthePrimeRecipientsinworkingwiththeLGAsandNGOsreinforces thischaracteristicoftheprograms.TheMissionswillingnesstomakethe adjustmentssuggestedintheShorttermrecommendationswillbeasignaltothe localentitiesofitscommitmenttochangeandalleviatingsomeoftheirmore immediateconcerns.TheMediumandLongtermrecommendationswillbe essentialforsustainingtheinvestmentsinthelocalentitiesbeyondPEPFARII.

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