Summary

New Zealand Agency for International Development: Management of overseas aid programmes.

Although small by international standards, New Zealand’s Official Development Assistance (ODA) programme budget has increased significantly in recent years. For 2007/08, the ODA programme budget administered by the New Zealand Agency for International Development (NZAID) is $428.8 million, an increase of $70 million from 2006/07.

NZAID is a semi-autonomous agency of the Ministry of Foreign Affairs and Trade. It is responsible for managing New Zealand’s ODA programme. We examined the effectiveness of NZAID’s management of overseas aid programmes, given the increases in budget since it was established in 2002. We focused on how NZAID planned, implemented, monitored, and evaluated its overseas aid programmes.

We specifically looked at how NZAID managed three programmes - the Papua New Guinea bilateral programme, the Indonesia bilateral programme, and the Pacific Regional Health programme. For each of the three programmes, we examined six aid projects and initiatives.

Our findings

Planning aid programmes

We expected NZAID to have an up-to-date strategic approach to planning how to deliver its aid programmes, and to align aid programmes with its overall strategy. We expected NZAID to align its aid programmes with need by considering the views of communities and working with the governments of the recipient countries. We also expected NZAID to make sure its aid programmes complemented those of other international aid donors, where appropriate, and to have clear objectives for its programmes that reflected changing needs and circumstances in the recipient countries.

NZAID has a long-term strategic approach to planning the delivery of its aid programmes. It aligns its aid programmes with need by considering the views of, and working closely with, its development partners. NZAID also makes sure that its aid programmes complement those of other international aid donors, and that the objectives of the aid programme are consistent with broader international development goals and NZAID’s overall focus on eliminating poverty.

NZAID refers to the importance of “strategic partnerships” but has no document or guidance setting out its overall approach to strategic partnerships for all of its programmes. It has not provided staff with guidance explaining how and when strategic partnerships should be entered into. Also, the preparation of NZAID’s health strategy has been delayed due to staff vacancies.

In our view, NZAID needs to prepare generic guidance for staff on strategic partnerships with development partners, and give priority to completing its health strategy.

Implementing aid programmes

We expected NZAID to have a sound basis for the funding arrangements it puts in place. We also expected NZAID to promote sustainable outcomes through the funding arrangements it uses, and to work effectively alongside partners and contractors to implement aid programmes.

NZAID works closely with its development partners and contractors to implement its aid programmes, and promotes sustainable outcomes through its funding arrangements in various ways. However, at the time of our audit fieldwork, NZAID did not have comprehensive, clear, and easily accessible processes or procedures for putting in place its funding arrangements. In some cases, it had not completed those processes and procedures. NZAID has since addressed this issue. However, in our view, NZAID needs to regularly monitor and review compliance with its new processes and procedures to ensure that they are effectively applied, and to promote better practice in procurement and contract management. NZAID also needs to train all relevant programme staff in those processes and procedures.

Although there is guidance at a programme level, NZAID has no clear exit strategy for ending aid projects and initiatives. Also, NZAID’s staffing capacity is stretched in Head Office and in the overseas posts we visited during our audit. NZAID needs to prepare guidance for staff on exit strategy planning for aid projects and initiatives within programmes, provide training on leadership and people management for staff before they are sent to overseas posts, and provide ongoing training in financial management for local staff in overseas posts. NZAID needs to clarify the responsibilities and accountabilities of staff in Head Office and staff in overseas posts for managing and monitoring funding arrangements.

NZAID also needs to work with the Ministry of Foreign Affairs and Trade to ensure that guidelines for Head of Mission funds are followed at overseas posts. All the relevant information on sources of funding received by development partners from NZAID needs to be held centrally and be easily accessed by all relevant staff.

Monitoring aid programmes

We expected NZAID to have set up funding agreements in a way that enables effective monitoring and management of progress, outputs, and longer-term outcomes. We also expected NZAID to assess how well aid delivery is progressing and take action when aid delivery is not progressing as intended.

However, NZAID has no clear approach to setting up funding arrangements in this way. Funding arrangements set out the monitoring and accountability arrangements, but these are not always clearly specified. The extent of NZAID’s monitoring varies, but it usually involves assessing reports on agreed milestones, and communicating and working with development partners and other international aid donors. NZAID has interventions available when aid delivery is not progressing as intended, and usually addresses issues through its working relationships with development partners.

In our view, NZAID needs to set clear objectives, reporting milestones, and relevant performance standards and targets within its funding arrangements. NZAID needs to provide more structured direction and feedback to development partners on monitoring and reporting requirements, and to prioritise and customise the type, level, and frequency of monitoring activity carried out.

Evaluating aid programmes

We expected NZAID to evaluate the effectiveness of its aid programmes and have enough resources and people skilled in development evaluation to do so. We also expected NZAID to improve how effectively it plans, manages, and delivers aid programmes by sharing the evaluation results internally and externally.

NZAID reviews and evaluates the effectiveness of its aid programmes through a range of evaluative activities. It collects, monitors, and analyses data on programme reviews and evaluations carried out throughout NZAID. Although NZAID staff actively take part, most evaluations and reviews are contracted out. The lessons learnt from reviews and evaluations are fed back formally and informally into the management and delivery of aid programmes through various mechanisms.

In our view, NZAID needs to prioritise initiatives and projects within programmes for review or evaluation, and ensure that evaluations at the end of an initiative or project focus on assessing effectiveness. Relevant information on reviews and evaluations needs to be entered consistently into its Activity Management System.

In our view, it needs to be easier for staff to identify external contractors with specialist evaluation skills and experience on the Approved Contractor Scheme database, and NZAID should assess the performance of contractors after they have completed each assignment. Reviews and evaluations of aid projects and initiatives within programmes should focus on lessons learned about how the activity was planned, managed, and delivered, and how the activity contributed to wider programme objectives.

Our recommendations

We recommend that the New Zealand Agency for International Development:

Planning aid programmes

  1. prepare generic guidance for staff on strategic partnerships with development partners;
  2. give priority to completing its health strategy;

Implementing aid programmes

  1. regularly monitor and review compliance with its processes and procedures for funding arrangements;
  2. regularly train all relevant programme staff in its processes and procedures for funding arrangements;
  3. prepare guidance for staff on exit strategy planning for aid projects and initiatives within programmes;
  4. provide training focused on leadership and people management skills for staff before they are sent to overseas posts;
  5. provide ongoing training in financial management for local staff working in overseas posts;
  6. clarify the responsibilities and accountabilities of its Head Office staff and overseas staff for managing and monitoring aid programme funding arrangements;
  7. work with the Ministry of Foreign Affairs and Trade to ensure that guidelines for Head of Mission Funds are followed;
  8. hold centrally all relevant information on sources of funding received by development partners, and make that information readily available to all relevant staff;

Monitoring aid programmes

  1. set clear objectives, reporting milestones, and performance standards and targets within its funding arrangements for aid projects and initiatives;
  2. provide more structured direction and feedback to its development partners on their monitoring and reporting requirements;
  3. prioritise and customise the type, level, and frequency of monitoring activity for the development partners who need the most advice and assistance;

Evaluating aid programmes

  1. prioritise aid projects and initiatives for review or evaluation, and ensure that evaluations focus primarily on assessing effectiveness against objectives and relevant outcome measures;
  2. ensure that information about aid project or initiative reviews and evaluations is entered consistently into its Activity Management System;
  3. review the performance of contractors in the Approved Contractor Scheme after they have completed each assignment; and
  4. focus reviews and evaluations of aid projects and initiatives within programmes on lessons learned.
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