Project Appraisal and Control

Project appraisal

Project appraisal - the process of assessing and questioning proposals before resources are committed. Project appraisal is a Systematic and comprehensive review of the economic, environmental, financial, social, technical and other such aspects of a project to determine if it will meet its objectives.

In short, project appraisal is the effort of calculating a project's viability. It often involves comparing various options, using economic appraisal or some other decision analysis technique.

Key issues in appraising projects include the following.

· Need, targeting and objectives

· Context and connections

· Consultation

· Options

· Inputs

· Outputs and outcomes

· Value for money

· Implementation

· Risk and uncertainty

· Forward strategies

· Sustainability

While appraisal will focus detailed attention on each of these above areas, none of them can be considered in isolation. Some of them must be clearly being linked – for example, a realistic assessment of outputs may be essential to a calculation of value for money. No project will score highly against all these tests and considerations. The final judgement must depend on a balanced consideration of all these important factors. While appraisal will focus detailed attention on each of these areas, none of them can be considered in isolation. Some of them must be clearly being linked – for example, a realistic assessment of outputs may be essential to a calculation of value for money. No project will score highly against all these tests and considerations. The final judgement must depend on a balanced consideration of all these important factors.

Appraisal is a systematic evaluation and overall assessment of ability of feasible project. It is done after the feasibility study. Appraisal will answer the following question:

Objective or fundamental Question - Is a proposed course of action (e.g. investing in a project) wealth creating?

Decision inputs - Cash flow and Time value of money

Decision analysis - Discounted cash flow project appraisal techniques

Yes No

Will a project designed meet the objectives?

How does the project compare with the other competing project?

Project Appraisal Process

Initial Assessment
Define problem and long-list
Consult and short-list
Develop options
Compare and select Project

Types/ Tools of appraisal

Cost-benefit analysis/ Social Cost benefit analysis ( Please refer to project planning chapter)
Capital budgeting techniques ( Please refer your second year class of accounting)

- Returned on investment

- Pay back period

- Internal Rate of Returned

- Net present vale

Financial analysis of a development project ( Please refer to project planning chapter)

- Capital requirement

- Sources of funds

- Cash flow

- Accounting and reporting system

- Profitability

Project evaluation techniques of International Agencies

Project evaluation is discovering success in achieving objectives. International agencies such as UNIDO, WORLD BANK, and OECD have prescribed their own techniques for evolution of project.

1. UNIDO /Cost benefit analysis (See in project planning chapter)

2. OECD/ Cost benefit analysis (see in Project planning chapter)

3. World Bank Techniques of project evaluation:

The project evaluation technique of World Bank is known as BTS (Bruce, Van der Tak & Sqire) approach. It is an improved version of OECD’s LM-II approach. Its silent features are:

i) This technique emphasizes distributional efficiency factor in project selection.

ii) It uses scale for measurement of saving and distribution of income. Distribution patterns that benefit poor sections are emphasized. Standard and differentiated procedures are used for project selection.

iii) Project input and output are classified into traded goods and services, non-traded goods and services and unskilled labor.

iv) Shadow price of traded goods and services is calculated in term of international price (Border price numeraire).

v) Shadow foreign rate is used to calculate the shadow price of traded good s and services.

vi) Shadow price of non-traded goods and services is based on standard consumption factors ( aggregate consumption numeraire)

vii) The shadow price of labor is what other of labor is willingly to pay.

viii) The cost and benefit are discounted to calculate net benefits

ix) All goods supply locally which could be traded internationally are subject to a price adjustment

B. Project Control;

Project monitoring and evaluation (M& E):

Monitoring and Evaluation:

Monitoring and evaluation (M&E) is increasingly recognized as an indispensable tool of both project and portfolio management. The M& E is acknowledged the need to improve performance of development assistance calls for close attention to the provision of management information, both to support the implementation of projects and programs and to feed back into the design of new initiatives. M&E also provides a basis for accountability in the use of development resources. Given the greater transparency now expected of the development community, governments and agencies assisting them need to respond to calls for more "success on the ground" with examples of development impact and with evidence that they have systems in place that support learning from experience. Used carefully at all stages of the project cycle, monitoring and evaluation can help to strengthen project design and implementation and stimulate partnership with project stakeholders. It can: Influence sector assistance strategy. Relevant analysis from project and policy evaluation can highlight the outcomes of previous interventions, and the strengths and weaknesses of their implementation. Improve project design.

Monitoring: This type of evaluation is performed while a project is being implemented, with the aim of improving the project design and functioning while in action.

Monitoring is the continuous assessment of project implementation in relation to agreed schedules, and of the use of inputs, infrastructure, and services by project beneficiaries.

Monitoring: Provides managers and other stakeholders with continuous feedback on implementation. Identifies actual or potential successes and problems as early as possible to facilitate timely adjustments to project operation is monitoring.

Evaluation: An evaluation studies the outcome of a project (changes in income, housing quality, benefits distribution, cost-effectiveness, etc.) with the aim of informing the design of future projects.

Evaluation is the periodic assessment of a project's relevance, performance, efficiency, and impact (both expected and unexpected) in relation to stated objectives: Project managers undertake interim evaluations during implementation as a first review of progress, a prognosis of a project's likely effects, and as a way to identify necessary adjustments in project design. The use of mid-term reviews of ongoing projects has spread quickly in the last decade. Terminal evaluations, conducted at the end of a project, are required for project completion reports. They include an assessment of a project's effects and their potential sustainability.

Good design of M & E has five components

Good monitoring and evaluation design during project preparation is a much broader exercise than just the development of indicators. Good design has five components:

1. Clear statements of measurable objectives for the project and its components, for which indicators can be defined.
2. A structured set of indicators, covering outputs of goods and services generated by the project and their impact on beneficiaries.
3. Provisions for collecting data and managing project records so that the data required for indicators are compatible with existing statistics, and are available at reasonable cost.
4. Institutional arrangements for gathering, analyzing, and reporting project data, and for investing in capacity building, to sustain the M&E service.
5. Proposals for the ways in which M&E findings will be fed back into decision making.

Evaluation and monitoring systems can be an effective way to:

Provide constant feedback on the extent to which the projects are achieving their goals.

Identify potential problems at an early stage and propose possible solutions.

Monitor the accessibility of the project to all sectors of the target population.

Monitor the efficiency with which the different components of the project are being implemented and suggest improvements.

Evaluate the extent to which the project is able to achieve its general objectives.

Provide guidelines for the planning of future projects (Bamberger 4).

Influence sector assistance strategy. Relevant analysis from project and policy evaluation can highlight the outcomes of previous interventions, and the strengths and weaknesses of their implementation.

Improve project design. Use of project design tools such as the logframe (logical framework) results in systematic selection of indicators for monitoring project performance. The process of selecting indicators for monitoring is a test of the soundness of project objectives and can lead to improvements in project design.

Incorporate views of stakeholders. Awareness is growing that participation by project beneficiaries in design and implementation brings greater “ownership” of project objectives and encourages the sustainability of project benefits. Ownership brings accountability. Objectives should be set and indicators selected in consultation with stakeholders, so that objectives and targets are jointly “owned”. The emergence of recorded benefits early on helps reinforce ownership, and early warning of emerging problems allows action to be taken before costs rise.

Show need for mid-course corrections. A reliable flow of information during implementation enables managers to keep track of progress and adjust operations to take account of experience (OED).

Monitoring:

Monitoring is the systematic, regular collection/ongoing collection of data, timely gathering information and occasional analysis of information to identify and possibly measure changes over a period of time.

Monitoring is the continuous assessment of project implementation in relation to agreed schedules, and of the use of inputs, infrastructure, and services by project beneficiaries. Monitoring: Provides managers and other stakeholders with continuous feedback on implementation. Monitoring identifies actual or potential successes and problems as early as possible to facilitate timely adjustments to project operation.

· Monitoring means keeping a track of implementation process.

· Monitoring involves watching the progress of a project against time, resources and performance schedules during the execution of the project and identifying lagging areas requiring timely attention and action.

· Monitoring is defined as a management function to guide in the intended direction and to check performance against pre – determined plans.

· Monitoring means periodic checking of progress of works against the targets laid down in order to ensure timely completion of the project.

Monitoring means efficiency, effectiveness and relevance

Efficiency refers to the amount of time and resources put into the project relative to the outputs and outcomes. A project evaluation may be designed to find out if there was a less expensive, more appropriate, less time-consuming approach for reaching the same objectives. (getting more output from minimum input – do less & accomplish more)

Effectiveness describes whether or not the research process was useful in reaching project goals and objectives, or resulted in positive outcomes.

Relevance or appropriateness describes the usefulness, ethics, and flexibility of a project within the particular context

Purpose of Monitoring:

Project monitoring helps to provide constructive suggestions like.
Rescheduling the project (if the project run behind the schedule)
Re budgeting the project (appropriating funds from one head to another; avoiding expenses under unnecessary heading).
Re – assigning the staff (shifting the staff from one area to other; recruiting temporary staff to meet the time schedule)

Evaluation:

Evaluation is the analysis of the effectiveness and direction of an activity and involves making a judgment about progress and impact.

Evaluation is the periodic assessment of a project's relevance, performance, efficiency, and impact (both expected and unexpected) in relation to stated objectives: Project managers undertake interim evaluations during implementation as a first review of progress, a prognosis(forecast) of a project's likely effects, and as a way to identify necessary adjustments in project design. The use of mid-term reviews of ongoing projects has spread quickly in the last decade. Terminal evaluations, conducted at the end of a project, are required for project completion reports. They include an assessment of a project's effects and their potential sustainability.

Some time project evaluation may ongoing which is conducted during the implementation phase. Some time evaluation will conducted after the some time /years of project completion that called ex post evaluation.

Type of Evaluation:

· On –going evaluation- Conducting during the implementation phase. Its purpose is to correct deficiencies as they occur to improve project performance.

· Mid –Term evaluation: It is carried out mid –way during the implementation. It purposes is to improve implementation.

· Terminal evaluation: It is conducted after the project completion. It is provide lesion for future project planning.

· Ex-post evaluation: it is conducted some years after project completion to evaluate the impact of the project.

Evaluation has its origin in the Latin word “Valupure” which means the value of a particular thing, idea or action. Evaluation, thus, helps us to understand the worth, quality, significance amount, degree or condition of any intervention desired to tackle a social, problem.

· Evaluation means finding out the value of something.

· Evaluation simply refers to the procedures of fact finding

· Evaluation consists of assessments whether or not certain activities, treatment and interventions are in conformity with generally accepted professional standards.

· Any information obtained by any means on either the conduct or the outcome of interventions, treatment or of social change projects is considered to be evaluation.

· Evaluation is designated to provide systematic, reliable and valid information on the conduct, impact and effectiveness of the projects.

· Evaluation is essentially the study and review of past operating experience.

Objectives of Evaluation:

· To verify whether the project implementation progress is a planned.

· To take corrective measures for deviation in performance

· To ascertain that actual cost are within the budgets

· To ensure that quality standards are being attained.

· To report project progress status to customer as needed

· To identify unexpected problem areas and manage them.

· To bring about overall improvement in project performance to achieve project objectives.

Purpose of Evaluation

From an accountability perspective:

o The purpose of evaluation is to make the best possible use of funds by the program managers who are accountable for the worth of their programs.

o Measuring accomplishment in order to avoid weaknesses and future mistakes.

o -Observing the efficiency of the techniques and skills employed

o -Scope for modification and improvement.

o -Verifying whether the benefits reached the people for whom the program was meant .

Form a knowledge perspective:

o The purpose of evaluation is to establish new knowledge about social problems and the effectiveness of policies and programs designed to alleviate them.

o Understanding people’s participation & reasons for the same.

o Evaluation helps to make plans for future work.

The main differences between monitoring and evaluation are the timing and frequency of observations and the types of questions asked. However, when monitoring and evaluation are integrated as a project management tool, the line between the two becomes rather blurred.

Participatory monitoring and evaluation (PM&E) is the joint effort or partnership of two or more stakeholders (such as researchers, farmers, government officials, extension workers) to monitor and evaluate, systematically, one or more research or development activities.

Value for Money =Outcome

Expenditure

= Input X Output X outcome

Expenditure input output

“Economics” “Efficiency” “Effectiveness”

The relation of the Inputs to their costs is commonly called the ‘Economics’ of a project and answers the question “How cheap did we shop?”. The relation of the Outputs to the Inputs of a project is called the ‘Efficiency’ of a project, and answers the question “How productively did we use our resources?” And the relation of Outcomes to Outputs defines the ‘Effectiveness’ of a project and provides information about how effective each outcome was in bringing about our objectives.

Combining all three measures results in a formula to calculate the ratio of Outcome to Expenditure, which answers our initial question: “What value did we get for our money?”

Purpose of Monitor and Evaluate:

In general, the purpose of monitoring & evaluation can be:

· To assess project results: to find out if and how objectives are being met and are resulting in desired changes.

· To improve project management and process planning: to better adapt to contextual and risk factors such as social and power dynamics that affect the research process.

· To promote learning: to identify lessons of general applicability, to learn how different approaches to participation affect outcomes, impact, and reach, to learn what works and what does not, and to identify what contextual factors enable or constrain the participatory research.

· To understand different stakeholders' perspectives: to allow, through direct participation in the monitoring and evaluation process, the various people involved in a research project to better understand each others views and values and to design ways to resolve competing or conflicting views and interests.

· To ensure accountability: to assess whether the project is effectively, appropriately, and efficiently executed to be accountable to they key agencies supporting the work (including, but not exclusively, the donors) (Estrella and Gaventa, 1998).

Participatory Monitoring and Evaluation (PME):

In the participatory M&E methodology, Project staff and key consultants have responsibilities to define indicators for targeted benchmarks and results; collect and maintain monitoring and evaluation information; utilize M&E indicators, as appropriate, to prepare project reports; and measure Project activity progress.

The participatory M&E is also intended to engage the major actors (project stakeholders such as donor, departmental managers, project personnel, and the end user beneficiaries etc) in the project arena/ground/field. In donor funded development project active participatory M&E of beneficiary is emphasized. The possible structured participation of stakeholder civil society and government sector agencies can keep key officials and citizens informed on Project progress, results, and impact. The participatory approach, through supporting transparent, accountable, and responsive democratic engagement, is intended to directly affect public sector and civil society action on program issues. Through the participation of both governmental and non-governmental actors and encouragement of program beneficiaries and ownership, democratic institutions and citizen confidence in development programming will be directly strengthened.

Key requirement of participatory M&E:

· Beneficiaries should be active not as just information provider.

· Stakeholder should participate in carrying out M&E.

· Focus on building stakeholder capacity and commitment.

· Process should lead to implementation of corrective action.

Traditional and Participatory M&E:

Traditional M&E emphasized the external expert for M&E of project, questionnaires survey will be conducted by expert for M&E, and ensure the accountability of project staff.

Participatory M&E emphasized to stakeholder for M&E of project, indicator identifies by project staff, consultant and stakeholders to measure outputs, effect and impact. Simple qualitative and quantitative method will used for M&E with the aim of empowering stakeholder for corrective action.

Key stages in Participatory M&E:

· Defining terms and reference for M&E

· Identifying the stakeholders

· Training to stakeholder for M&E

· Implementation of M&E as a cycle

· Dissemination of M&E result ( Participative Rural appraisal result) for workshop and seminar.

Project monitoring and evaluation in Developing countries:

· M&E emerged in developing counties after the foreign aid received in project in 1950.

· M&E is gaining importance as tools for effective management of project in developing countries.

· Project in developing country often experienced long delay and weak in implantation by this reasons cost and time over run with sub-standard performance

· Lack of effective M&E and implement of corrective action in project.

· These are the key factor of project failures

The main concern and appreciation of M&E is increasing in developing countries because of :

a) Keep in track of project progress during implantation

b) Implement corrective action if deviation gets from M&E.

c) Determine systematically and objectively to the relevance, effectiveness, and efficiency of project and their impact on beneficiaries.

d) Learn lesion for better formulation and implantation of project in future.

The United Nation has published Guiding Principles for Monitoring and evaluation. Many developing countries follow these guidelines with appropriate adaptations to suit their particular circumstances.

Project M&E in Nepal:

Project M&E method which is implementing in Nepal was developed by UNDP/World Bank in 1993. It is common to all sector projects. It consists of a system of weighting and indicator for financial and physical performance from line ministries, serve as the heart of monitoring system.

· Defining indicator for financial and physical performance

· System of weighting.

· Systemized the monthly and trimester performance report related to the financial and physical performance.

· Line ministry serves as the heart of monitoring system.

· Project are divided into two categorized i) Priority project ii) Other project· Priority project are monitored by central monitoring and evaluation division of National planning commission of Nepal.

· National planning commission’s staff serves as the sources of information for monitoring.

· Monthly and trimester report supplemented by ad hoc field observation

· Problem of project implementation are identified from M&E.

· Sector wise problems are discussed in National action Development committee (NADC).

· NADC is chaired by prime Minister on trimester.

· The non-priority projects are reviewed and M&E by respective line ministry in Ministry Action development committee (MADC).

Most of the project performance report data are unreliable. Effective corrective action are lacking in Nepalese project so M&E is highly emphasize in Nepalese project that will be donor funded or internal funded project.

Project M&E approaches of International Agency:

1. Project monitoring and evaluation System of Asian Development Bank (ADB):

a) Monitoring of progress of project financed by ADB is based on project management information system (PMIS) of the project. The PMIS produces regular periodic reports, accounting statement and statistical analysis. The appraisal report and Loan Agreement specify arrangements for the provision of such reports and statements to ADB for monitoring project progress. They are generally provided on quarterly or trimester basis.

"Informal monitoring is also done by ADB through telephone contact, correspondence and other methods as and when needed."

b) Evaluation: The appraisal report and loan agreement specify arrangements for evaluation of project. The ADB uses filed mission to evaluate the progress of the project. The various types of evaluation can be:

- Appraisal: The mission evaluates the project ability to succeed. An appraisal report is prepared which guide the project activities for implementation.

- On- going evaluation: The mission evaluates progress of the project during implementation phase. Corrective actions are recommended in the aide memoir prepared after evaluation. The timing of evaluation is as specified in the Loan Agreement or Appraisal report. Generally, it is annual or half yearly.

- Project completion evaluation: The mission evaluates the project after completion and prepares the project completion report. Lessons learned are presented which serve as guidelines for improvement of future projects.

- Benefit monitoring and evaluation: ADB Loan agreement also provides for benefit monitoring and evaluation.

- Benefit monitoring provides information needed to ensure that services are delivered to and result in benefits to those whom the project is intended to benefit. The delivery, use and immediate effects of services provided are monitored.

- Evaluation of benefits of completed projects provides information to improve the design and implementation arrangement for future projects.

- Independent consultants are generally hired to monitor and evaluates benefits.

The Logical Framework for M& E Approach

What is it?

The logical framework (LogFrame) helps to clarify objectives of any project, program, or policy through the monitoring and evaluation. It evaluates the causes and effects relationship as well as assumptions and risk of the project. It aids in the identification of the expected causal links—the “program logic”—in the following results chain: inputs, processes, outputs (including coverage or “reach” across beneficiary groups), outcomes, and impact. It leads to the identification of performance indicators at each stage in this chain, as well as risks which might impede the attainment of the objectives. The LogFrame is also a vehicle for engaging partners in clarifying objectives and designing activities. During implementation the LogFrame serves as a useful tool to review progress and take corrective action.

What can we use it for?

■ Improving quality of project and program designs—by requiring the specification of

Clear objectives, the use of performance indicators, and assessment of risks.

■ Summarizing design of complex activities.

■ assisting the preparation of detailed operational plans.

■ Providing objective basis for activity review, monitoring, and evaluation.

ADVANTAGES:

■ Ensures that decision-makers ask fundamental questions and analyze assumptions and risks.

■ Engages stakeholders in the planning and monitoring process.

■ When used dynamically, it is an effective management tool to guide implementation, monitoring and evaluation.

DISADVANTAGES:

■ If managed rigidly stifles creativity and innovation.

■ If not updated during implementation, it can be a static tool that does not reflect changing conditions.

■ Training and follow-up are often required.

Project Monitoring and Evaluation system of the World Bank:

The project monitoring and evaluation system of the World Bank consist of policy Action Matrix modality. The M & E system involves:

· Performance benchmarks for the project are specified in the appraisal report and loan document. They are stated in the form of policy action Matrix or logical framework.

· Monitoring of the project progress is based on the trimester progress report and financial statement provided by the project management information system. The local office of the World Bank also monitors the project as and when needed. Informal monitoring is done by telephone conversation and correspondence through mail, fax, and email.

· Evaluation of project is done by external consultants in collaboration with World Bank staff. Mission is fielded for ongoing evaluation every six months or annually. Project completion evolution is also done.

· The evaluation mission leaves behind an aide memoir which serves as the blueprint for corrective action and further activities of the project.

A policy Action Matrix

Development objectives

Project performance Indicator

Project inputs components

Project output achieved

Project outcome

impact

Important

assumption/risk

Agencies	PMIS	Network analysis	Logical frame work	Participative Rural appraisal
UN/UNIDO	v	v	v	v
OECD	v	v	v	v
World Bank	v	v	v	v
ADB	v	v	v	v
INGOs	v	-	-	v

Input

Output

Process

(LOB) process is employed when a repetitive process exists within the contract's work scope. The manufacturing of parts and the assembly of units in the factory are two candidates for the use of LOB.
2. Examining only the deviations from established plans, and gauging their degree of severity with respect to the remainder of the project.
3. Receiving timely information concerning trouble areas and indicating areas where appropriate corrective action is required.
4. Forecasting future performance.

S.N.

Activities Or

WBS

July 2011

August 2011

Pre-filed work activities

Initial phase-

Select your study area

Area of your Interest

Your Capability

Select your study scheme

- Survey

- Case studies

- Feasibility studies

Select your organization and location

Consult library

Consult your professor

Prepare data Plan

Filed work Activities

Planning phase-

Initial phase

– Meet chief executives

- Meet officer in charge of unit

- Collect materials

Study /Observation Phase

Overview of the Organization-

- Objectives

- Policies

- Structure

- Market

- Product/Services

- Consumers

- Performance

Detailed Observation of the unit selected for the study-

- Collection of relevant data,

- Observation of Work System

- Questionnaire administration

- Learn Through Observation

The concluding phase

Make sure that you have collected enough materials for your report.

Is there organization wants to share your observation

Make a Courtesy- call on chief executive before leave

Post- Filed work activities

Organized your data- present in logical order, design, tables, chart, graph

Record yours Observations

Write the fieldwork Report

Get your fieldwork report typed

Check your report with your supervisor

Incorporate the suggestion of supervisor on report

Again check your report with supervisor and change if any

Signed by supervisor on report

Submit the field report

New M& E system of World Bank:

LACI (Loan Administration Change Initiative):

- It is beginning from July 1, 1998 in World Bank funded project for loan administration.

- LACI integrates project accounting, procurement, contract management, disbursement, and audit with physical progress through the Project Management Report (PMR).

- Quarterly disbursements are made to the project.

- Special account is based on PMR.

- This replaces voucher by voucher disbursement method.

- LACI applies to new projects.

- The implementation of LACI is project by project basis.

- LACI is based on sound financial management a premise that is critical ingredient of project success.

M&E under LACI:

- Project task team conducts periodic progress review of the action plan through the country mission.

- The task team leader is responsible for monitoring issues and needed actions.

- Project Management report (PMR) serves as the key documents for monitoring purpose.

Project Monitoring and Evaluation System of INGOs:

INGOs (International Non-governmental Organizations) are voluntary organizations. They have head office in developed country such as US, UK, Japan, Germany. But their operations and activities extend to many developing countries. The activities of INGOs consist mainly of:

· Community Development activities: They aim at social well being of target groups. The sectors consist of – Health and drinking water, education ( including literacy and child care), agriculture, forestry, irrigation, infrastructure development such bridge, trails, school building, skill development and etc.

· Income generating activities: They aim to enhance the economic well being of the target groups. For example, goat rearing.

· Advocacy Activities: They aim to advocate issues like democracy, transparency, environment protection, right of women, children and consumer right and etc.

· Nepal has 158 INGOs are working in F/Y 2066/067 (2010/2011) with total budget NRs. 7,041,117,923.00(e.g. Save the Children Fund-USA, Save the children Fund –UK, Action Aid, Care International, Plan International and etc.) engaged in various activities at grassroots level. They operate directly or Local NGOs at grass root level. The social welfare council serves as the focal point for INGO activities.

· INGOs carry out their activities through out the small project

· Monitoring and evaluation is an important aspect of project management by INGOs.

Monitoring:

Formal monitoring by INGOS consists of periodic report and accounting statement from project, usually on a monthly or quarterly basis. The actual performance is compared against performance benchmarks in term of time, budget and quality. Corrective actions are taken for deviation by the INGOs.

Informal monitoring of project is also done through telephone contacts, email, correspondence and personal visit, etc.

Evaluation:

Filed level evaluation:

It is an on going process of project evaluation. The project progress is evaluated weekly or monthly by INGO staff through the field visit.

Impact evaluation: This is done for the country programme of the INGOs. It is carried out generally in three to five years.

Summary of Project M & E techniques by various Agencies:

Control:

Concept of Control:

Control is an essential function of management. It ensures that right things are done in right method, right time, right man and use of right resources. Control is measuring, evaluating and correcting actual performance to achieve planned targets.

Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain then are accomplished.

Control is a managerial process. It is interrelated with planning. Planning provides standards for control. Control measure actual performance and compares it with standards to identify deviations. Deviations are analyzed to corrective actions.

Control is a continuous process.

Project control variables

Project Management tries to gain control over variables such as risk.

Potential points of failure: Most negative risks (or potential failures) can be overcome or resolved, given enough planning capabilities, time, and resources. According to some definitions risk can also be categorized as "positive--" meaning that there is a potential opportunity, e.g., complete the project faster than expected.

Customers (either internal or external project sponsors) and external organizations (such as government agencies and regulators) can dictate the extent of three variables: time, cost, and quality performance or scope. The remaining variable (risk) is managed by the project team, ideally based on solid estimation and response planning techniques. Through a negotiation process among project stakeholders, an agreement defines the final objectives, in terms of time, cost, scope, and risk, usually in the form of a charter or contract. To properly control these variables a good project manager has a depth of knowledge and experience in these four areas (time, cost, scope, and risk), and in six other areas as well: integration, communication, human resources, quality assurance, schedule development, and procurement.

Pre-requisites of Control/Project Control System:

Project is a unique group of activities designed to attain specific objectives within constraint of time cost and quality performance through planning, information system, organization structure, team participation, timelines and flexibility.

Planning: Control is not possible without planning. Planning provides targets, and standards. Project plan can be set the standards and target of time, cost, quality, objectives, and performance.

Information System: Control is based on information. An effective information system is an essential requirement of control. Information system is based on internal reposting system of organization and other sources. Project should have project management information system.

Organization Structure:

Control requires a suitable organization structure with clearly defined authority-responsibilities relationship. It may help to collect performance information, compare actual result with standards, identify deviation, and suggest corrective action.

Participation: All members of project should take participation in control of project activities.

Timelines: The report and feed back for control should be on time. If information is not received at right time, the control action will be ineffective.

Flexibility: The control system should be flexible.

Types of Control and Project Control:

Project control can be classified into three types.

Pre-control:

It is feed forward control. It is input base. It is initiated before start of project activities. It anticipates problems advance and takes preventive corrective actions. E.g. Specification of quality of project work, material, quality of work, capital budgeting, method and other resources.

Concurrent Control:

This is yes no control. It is transformation based control. It is initiated during implementation of project activities. It consist of actions to ensure that operations being conducted according to plans. Problems are corrected as they arise. Example- quality control from process to process.

Post Control:

It is feed back control. It is out put based. It is initiated after completion of project activity. It is based on feed back of performance result. E.g. financial analysis. The actual performance of each activity is compared with targets to identify and evaluate deviation. It is taken improve future.

Pre-control concurrent control post control

Control Cycle/ Project Control Process:

Control is cyclical process. It involves the following four steps.

Setting Standards:

Planning set standards for project performance. Standard are the starting point of control. They are targets of performance, quality, time and cost. Targets are set for each project activity. They serve as standard for control.

Measuring Performance:

The second step in control is measurement of actual project performance within a given period. It is a continuous and on-going process to get feed back from every activities of project. Internal report relating to quantity, quality, costs, income, time, etc., provide information about actual performance.

Finding and analysis deviation:

The third step in control is comparison of actual performance with standards. Performance can be equal to be higher or be lower than standards. The causes and incidence of deviation are analyzed.

Corrective Action:

The project performance is evaluated in term of deviations. Corrective actions are taken. The action can be

Do nothing in allowable tolerance performance. It maintained status quo.

Corrective actions are taken in performance deviation. They will be training, better raw materials, and greater designed and greater motivation.

Change or revised standard with appropriate and realistic designed.

Control should focus on critical point it take the corrective action in greater damage.

Areas of Project Control:

Project control is conducted in cost, time, and quality performance.

Cost

Time Quality

Cost Control: It involves the following steps.

· Setting standard of cost, budgetary control and account of project.

· Allocating responsibilities for cost control

· Ensure proper allocation of cost in project activities and code.

· Measure actual cost and compare them with standards. Prepare cost reports.

· Identify deviation to take corrective action to control cost, overrun of cost, and maintain financial discipline.

Time Control: Time control can be two types.

Normal time Control: It is the estimated time for completion of activity in normal situation.

Crash time Control: It is the estimated times of completion of an activity which can not be reduce further irrespective cost consideration.

Every project have optimal time schedule which is effectively controlled to check time overrun.

Quality control: Quality control is checking error in an input, process and output during project implementation. Statistical quality control techniques are used in control quality. Adjustments are made for deviation.

Total Quality Management (TQM):

TQM is a management philosophy of continuously improving project quality through everyone’s commitment, involvement to satisfy customer’s needs. It puts quality first. Quality becomes the guiding factor for everything the project organization does.

TQM creates project culture, commitment, continuous improvement in all aspect. It seeks the incremental improvement.

Component of TQM:

i) Strategic Commitment: Top level management should have strategic commitment to TQM in project.

ii) Continuous quality improvement: Quality is never ending concern. It becomes a way of life.

iii) Customers focus: TQM focus on customer’s needs, satisfaction, and priority. Customers are outsiders who purchases goods. Quality establishes relationship with customers.

iv) Employee involvement: Quality is every one’s responsibility for their own work. Employee empowerment and involvement in all level is improving quality through the solve problems and team work.

v) Accurate measurement: TQM uses statistical tools for accurate measurement of critical options. Performance is compared against standards. Causes and deviation are corrected from the help of flow chart (sequence of activities), control chart(visual aid of showing variation) , histogram, scatter diagram( plots relationship between two variables) , trend chart, fish bone diagram( causes and effect analysis), and etc.

Vi) Improve materials, technology and quality of working methods.

Tools and Techniques for total quality management:

Project manager rely on several tools and techniques for TQM. They are

a) Employees do right things at first.

b) Develop benchmark learning

c) Outsourcing through contracting and subcontracting

d) Set the quality standard created by international organization for Standardization (ISO 9000) eg. Product, employee training, record keeping, supplier relation and repair policies.

e) Statistical quality control through sampling inspection.

f) JIT inventory management.

g) Speed of work and speed of activities.

h) Continuously training to quality improvement

Project Management Information System (PMIS):

Project operates in dynamic, complex, and fast changing environment. The project manager needs timely and accurate information to respond to environment changes. Information is the blood of project like human body.

PMIS is data base, and collect, analyses, store, retrieve, and disseminates for project decision. It consists of people, equipment, procedures and other working activities. It based on various forms like- written reports, project forms filled up, and forms entered in PMIS, and corrective action.

Elements of PMIS:

The project management information system consists of input, transformation (processing), output and feedback.

Feedback

Inputs: It consists of data generated internally (from project forms, reports,) and externally (functional department, and other sources).

Processing: It consists of analysis, storage, retrievals, and dissemination of data.

Output: It consists of regular and special reports about project performance.

Feedback: It provides information to redesign PMIS, for input and transformation activities.

Computerized PMIS are most commonly used to consolidate data in projects. Decision support system database are used to analyze data. Software is carefully selected.

Project Control techniques:

Project control is measuring, evaluating, and correcting performance in time, costs, and quality to achieve project objectives.

Project control techniques are-

A) Schedule control (Technical control of performance) which estimates the project duration and succeeding activities.

i) Work Breakdown Structure

ii) Network analysis (PERT/CPM)

iii) Line of Balance(LOB)

iv) Gantt chart (Bar chart)

B) Financial control:

i) Budgetary control

a) Operating budget( raw material, and goods and services budget)

b) Financial budget- Cash budget, capital expenditure budget, master budget)

c) Program budget (PPBS-Planning Programming Budgeting System)

ii) Other financial control techniques

a) Cash flow statement

b) Ratio analysis- (liquidity ratio=CA/CL, debt ratio=TD/TA, operating ratio)

c) Auditing- internal audit, external audit

Work Breakdown Structure (WBS):

A Work Breakdown Structure (WBS) is a methodical way of decomposing the project work into meaningful and logical smaller pieces or family tree of activities and their relationship for the purpose of planning and control. When completed the WBS is techniques of break down a whole work in smaller and smaller piece of work and establish hierarchical relationship among them with include all activities associated with the project scope.

It becomes the data dictionary for communicating on the project. Work Breakdown Structures have a child / parent relationship which means that you can roll up and summarize any information from the lower levels and upwards. This is true for activity cost, resource effort and schedule information.

WBS is project grouping activities in hierarchical order for each stage of project. Project work is broken down into smaller elements which are manageable, measurable, and integratable or interrelationship into total package. Hierarchical WBS is prepared. It is traditional but use in engineering work technique for planning, and control. It is present in single diagram to the whole project. It list all of the activities need to complete in project.

It can also be used to assign responsibility for groups of activities to different functional managers for planning and or accountability purposes.

It should also be used as the format for capturing and outlining changes to the project. One way of representing the WBS is to outline the format similar to a “Table of Contents” in a book. Another way is to outline the format like a tree structure similar to a Company’s Organizational Chart.

A complex project is made manageable by first breaking it down into individual components in a hierarchical structure, known as the work breakdown structure

When creating a WBS, the project manager defines the key objectives first and then identifies the tasks required to reach those goals.

A work breakdown structure (WBS) is a chart in which the critical work elements, called tasks, of a project are illustrated to portray their relationships to each other and to the project as a whole.

The work breakdown structure is the foundation of project planning. It is developed before dependencies are identified and activity durations are estimated. The WBS can be used to identify the tasks in the CPM and PERT project planning models.

Line of balance (LOB):

Line of Balance (LOB) is a method of showing the repetitive work that may exist in a project as a single line on a graph. Unlike a Bar Chart, which shows the duration of a particular activity, a LOB Chart shows the rate at which the work that makes up all of the activities has to be undertaken to stay on schedule, the relationship of one trade or process to the subsequent trade or process is defined by the space between the lines.

If one group is running behind schedule, it will impact on the following group and this is shown by the lines intersecting. A production planning system should have schedules key events leading to completion of an assembly on the basis of the delivery date for the completed system.

The LOB is based on the underlying assumption that the rate of production for an activity is uniform. In other words, the production rate of an activity is linear.

Line of Balance (LOB) is a management control process for collecting, measuring and presenting facts relating to time, cost and accomplishment - all measured against a specific plan. It shows the process, status, background, timing and phasing of the project activities, thus providing management with measuring tools that help:

1. Comparing actual progress with a formal objective plan.

LOB technique developed for monitoring and control of production-oriented projects. Its use has been increasing in R&D projects and design and construction of defense system.

It is graphic technique used for project planning and control to depict time, quantity relationship shows-

States of project given date

Condition of various activities

Activities that are not in balance

State of objective achievement by project

It is based on concept of management by exception.

It compares the actual performance with planned performance with the plan targets; pinpoint deviations assess their effect on overall project status and determine corrective actions. It provides early warning on the trouble activities.

It is useful-

Multiple unit production system where repetitive operation and units are done

Manage one time operation activities- through objective chart (cumulative project performance function), unit plan diagram (plan for each unit), lead time chart (show lead time starting for operation), progress chart (shows actual status of project).

Gantt chart (Bar Chart):

A Gantt chart is a type of bar chart that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project. Terminal elements and summary elements comprise the work breakdown structure of the project. Some Gantt charts also show the dependency (i.e., precedence network) relationships between activities. Gantt charts can be used to show current schedule status using percent-complete shadings and a vertical "TODAY" line as shown here.

A Gantt chart is a horizontal bar chart developed as a production control tool in 1917 by Henry L. Gantt, an American engineer and social scientist.

It is popular project control techniques fro simple project. It is the graphically presented chart of actual performance of progress Vs planned progress within time frame. It is a bar diagram.

Steps for preparation of Gantt chart.

- Project is broken down into small components

- Determined sequence of activities

- Estimate time/duration for each activities

- Activities are listed as sequence of time that can be carried out sequentially and simultaneously.

- It is single sheet of paper record planning and scheduling

- Checkpoint for progress measurement

Figure 5-22 A Gantt Chart of Sample Project

Showing Critical Path, Path Connections, Slack, EST, LST, EFT, and LFT

Advantage and Disadvantages:

Gantt charts have become a common technique for representing the phases and activities of a project work breakdown structure (WBS), so they can be understood by a wide audience all over the world.

A common error made by those who equate Gantt chart design with project design is that they attempt to define the project work breakdown structure at the same time that they define schedule activities. This practice makes it very difficult to follow the 100% Rule. Instead the WBS should be fully defined to follow the 100% Rule, then the project schedule can be designed.

But one problem with them is that they don't indicate task dependencies - you cannot tell how one task falling behind schedule

Time schedule for filed work and report writing (Gantt Chart):

Program -Plan budgeting system:

PPBS are planning oriented approach to developing a program budget. A program budget is a budget in which expenditures are based primarily on programs of work and secondarily on character and object. It is a transitional type of budget between the traditional character and object budget, on the one hand, and the performance budget on the other. The major contribution of PPBS lies in the planning process, i.e., the process of making program policy decisions that lead to a specific budget and specific multi-year plans.

A description of the Planning-Programming-Budgeting System (PPBS), a management tool to provide a better analytical basis for decision making and for putting such decisions into operation. A PPBS is constituted, basically, of five elements: (1) a program structure — a classification of the courses of action open to an organization for attaining its objectives; (2) an approved program document that includes precise, quantitative data on needs, resource inputs, and program outputs extending a number of years into the future; (3) a decision making process that establishes the functions, rules, and timetables for the actions required by the PPBS; (4) an analysis process for measuring effectiveness and for weighing alternatives; and (5) an information system that supplies the data required to implement the system.

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Project Appraisal and Control

· To assess project results: to find out if and how objectives are being met and are resulting in desired changes.

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