Reduce duplication and management costs with periodic functional reviews has had promising steps, especially due to NGO-led initiatives, on the harmonization of partnership agreements, joint logistics and procurement procedures and transparent and comparable cost structures. According to the annual independent report (2019), however, the progress remains uneven. On the donors’ front, there has been reluctance to move to reduce individual donor assessments. The co-conveners continued to focus primarily on instituting measures to reduce costs within the UN group, capitalising on UN reform efforts to gain traction on certain commitments.
From the (I)NGO side, signatory reports indicate that they are making progress to provide transparent and comparable cost structures. NRC is working in collaboration with nine NGO partners and Humentum to design tools to implement the recommendations of its 2017 study on harmonising cost classifications and financial reporting among NGOs. This is done through the Money Where it Counts initiative. The actions and tools developed will now go into the testing phase, namely the plan to establish a two-year long pilot project with a group of donors and agencies. Beside testing the protocol in terms of transparency, budget performance, and timeliness gains, the pilot would also function as a platform to support interested agencies in the path from the initial analysis to the endorsement and finally compliance with the protocol. A solid governance structure and monitoring and evaluation framework are planned to ensure the pilot is able to measure its effectiveness and modify the protocol as necessary based on evidence.
IRC is working with Mercy Corps and Save the Children to roll out a sector-wide pilot of its SCAN (Systematic Cost Analysis) tool in 2019. The tool, which aims to improve the transparency and comparability of cost data across INGOs, was used in 2018 by IRC, Mercy Corps, NRC, DRC and Oxfam in Iraq to assess the comparative costs of cash delivery programmes.
Having a common system in place in the humanitarian sector for cost classification and financial reporting template allows for a greater efficiency and reduce management costs for commonly required goods and services. It has the potential to reduce the time spent on meeting numerous individual financial budgeting and reporting requirements.
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