CHAPTER V - Conclusions and Recommendations
Introduction
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efining prospects for non-core resources and co-financing modalities led the evaluators to address issues affecting UNDP's governance and to suggest new approaches in building development partnerships through the modalities.It is no surprise that governance aspects are considered in this report since a call for increased resources through non-core funding affects UNDP's traditional lines of accountability. This is particularly critical when these non-core resources exceed the level of core funding as is now the case. The evaluators recommend the redefinition of the overarching policy for UNDP's development mandate endorsed by UNDP's partners. Based on the resulting framework, UNDP would be in position to send the right signals to managers in charge of promoting co-financed programmes and provide them with the appropriate support.
Furthermore, assuming that a policy framework is defined and agreed upon by all partners, the evaluators propose some new approaches in building partnerships for attracting additional resources and responding to the basics of the policy framework. Roles of country offices, UNDP resident representatives/UN resident coordinators and UNDP headquarters must be redefined. Strategic niches where the UNDP comparative advantage is high-such as common areas of interest for government, donors and UNDP or multi-country development projects-need to be explored. The search for new partners and effective use of programmatic tools should also be considered.
The evaluators have organized their overall conclusions and recommendations into three areas:
1. Developing A Policy Framework for Co-financing
2. Co-financing Strategies
3. Co-financing Management and Operations
Developing a Co-financing Policy framework
F
our broad policy conclusions emerge from the evaluation of co-financing. They are basic to the definition and application of UNDP's policies, strategies and operations for co-financing arrangements for mobilizing non-core resources for UNDP. These conclusions relate to questions of an overarching policy framework, development focus, the role of UNDP in co-financing initiatives, and the criteria for assessing accomplishments.Overarching Policy
Conclusion 1: UNDP lacks an overarching policy framework that provides, for the agency as a whole, the structure, consistency, and strategic orientation for co-financing operations that will enable it to fulfil its development mandate.
The experience of Latin America and some other countries in the fifth programming cycle has demonstrated that substantial non-core funding can be mobilized in support of country and regional programmes and enhance their effectiveness and development impact where core funds may not be sufficient.
UNDP needs a policy framework for co-financing modalities that is primarily responsive to UNDP's SHD and related programme mandates and that avoids programmes that are excessively supply driven while ensuring that UNDP makes a substantive contribution. This framework needs to:
clarify the use of co-financing terminology;
ensure UNDP's substantive role while providing support services;
integrate co-financed activities into UNDP country programmes as required for IPF programmes to avoid an open-ended programming structure;
This agency-wide policy framework would help to clarify and confirm the responsibilities of UNDP senior management and the Executive Board
for co-financed programmes. These resources represent a major and growing dimension of UNDP's operations with important implications for UNDP's core programme and operational orientation.
Co-financing as part of the drive to mobilize resources needs to be viewed broadly and primarily in terms of country development. It should encompass:
Increasing UNDP's non-core resources should be a secondary consideration-not an end in itself-flowing from the achievements of resource mobilization for the recipient country.
In this context, the policy framework would establish co-financing as a development instrument for:
The policy framework would spell out the dimensions of UNDP's comparative advantage and the values it can and should add to co-financed arrangements. In addition, it would establish programming conditions for the modalities, including, for example:
Recommendation 1: Develop a consensus among UNDP's partners and staff on a policy framework for co-financing operations.
The conclusions and recommendations that follow elaborate some additional points to be considered in a policy framework for co-financing.
Development Focus
Conclusion 2: A fuller articulation is required of UNDP's development role in co-financing arrangements for SHD and the value that UNDP adds to recipient countries and donors.
The promotion of co-financing arrangements with the mobilization of resources from governments and donors requires the building of a consensus on the problem, its priority, and the means to address it. Within the broad framework of UNDP's mandate for SHD, learning about the interests and priorities of potential partners is important rather than trying to sell to them one's own preferences. Priority interests such as governance, poverty alleviation, gender equity, employment and the environment are areas of considerable competition among the donors and need further refinement to guide judgements on what is and is not acceptable for UNDP participation.
From recent experience, the evaluators have identified four programme areas where such an articulation would be desirable within the SHD framework:
The value added by UNDP participation. In addition to these programme areas, greater clarity on what UNDP sees as its contribution is desirable. Some of the main activities that have been mentioned as adding value are: managing project resources efficiently and effectively; ensuring the transparency, objectivity, integrity, and accountability of project implementation; influencing resource allocations towards SHD objectives; and mobilizing additional resources for a country's development. More specifically, the values added are reflected, for example, in the provision of distinctive services for the implementation of development projects at critical moments in a country's circumstances, the improvement of loan performance where disbursements rates are low or projects are not being implemented, and the means for bypassing cumbersome government rules and regulations that impede government operations, such as those for staffing and procurement.
Co-financing for projects outside of SHD criteria. In choosing programmes for UNDP co-financing, what should be done with projects that, while important to a country's development, may fall outside UNDP's SHD objectives (e.g., civil aviation)? Proponents for retaining such projects argue that they are a good source of earnings for UNDP that enable it to maintain staff to support its main programme interests. They also provide opportunities for UNDP to establish its acceptance by recipient governments and donors in anticipation of more upstream engagements. In these situations, UNDP is little more than a service agency since it is not involved in the substantive direction of the projects. Critics argue that such projects only divert UNDP country office attention from SHD objectives, they may result in unbounded drives for UNDP funding, and they may perpetuate the image of a highly proliferated organization. Also, the range of programmes that directly serve the SHD goal is sufficiently broad to allow for important resource mobilization in co-financing initiatives. However, it may be that a differentiation in programme dimensions between UNDP's operations in middle-income countries and those in the LDCs is desirable.
Recommendation 2: Identify the functions and programmes that are distinctive for UNDP co-financing arrangements within its mandate for sustainable human development and poverty alleviation based on experience that demonstrates UNDP's value-added and development contribution.
Following up on recommendation 2, UNDP would introduce guidance that elaborates on the broad criteria for co-financed projects under various country circumstances and development status. This guidance should give particular attention to opportunities for interrelating UNDP's work on governance and poverty alleviation. The criteria would draw on the refinements of UNDP's role in SHD that are under way. It would spell out the distinctive values added by UNDP involvement.
UNDP Role
Conclusion 3: Co-financing arrangements are accentuating two distinct roles for UNDP: one that involves UNDP in valued substantive participation and another in which UNDP serves primarily as an implementing agent. The availability of IPF funds is critical to facilitating UNDP's substantive participation.
UNDP's work over the past decade in the LAC region has been remarkably successful in mobilizing resources for co-financed programmes. In many cases, UNDP has provided important services to the recipient countries through co-financed projects. In other instances, UNDP's substantive role has been less significant e.g., in the implementation of IFI loans already committed or, in the initial years, in support services for government staffing under cost-sharing.
Co-financing, in its various modalities, can give UNDP an opportunity to participate significantly in the development processes of beneficiary countries where these processes call for resources transcending available UNDP core funds. Co-financing and related resource mobilization must, in fact, be seen as a means to an end, i.e., the substantive participation of UNDP in development activities agreed on with the participating country and donors and not as ends in themselves.
From this perspective, it is essential that UNDP play a substantive, avant garde, and innovative role corresponding to its function as a development agency in co-financed programmes. Particular importance should be given to capacity- building, i.e., helping the beneficiary country develop the human resources, organizations and enabling environment needed for effective governance. The aim should be to develop, as is UNDP's mission, country capacities to implement their own projects and establish efficient, effective, and trustworthy systems within governments and for the use of the private sector. While this may, by its nature, be a transitory function for a given project, cooperation under UNDP auspices may have a longer-term role in helping to design and manage complex programmes involving external linkages with global and regional interests which a multilateral institution such as UNDP can provide.
The availability of IPF funds is essential for UNDP country offices to be able to fulfil their substantive role. The IPF funds serve to legitimize UNDP participation and maintain its independence and integrity. They enable the country offices to play, at a minimum, a role in the pre-development and design phases of co-financed programming-a form of seed capital. For those country offices with large IPFs, these funds enable UNDP to be a significant contributor in its own right to a co-financed programme, enlarging its influence and programme impact.
In programme guidance and reviews of programmes for approval, management should ensure that UNDP is actively participating
in programme development and that it commits its own staff and financial resources. Consideration should also be given to reviewing UNDP's current portfolio of co-financed projects. This review should determine whether, in fact, co-financed projects serve UNDP's mandate, have a time frame for completing capacity-building objectives, and achieve the sustainability of project benefits. This is important to avoid the perpetuation of co-financed projects because UNDP country offices or governments prefer to continue UNDP as a "permanent" project implementation agent. Also, UNDP should draw on its expe-rience to determine those long-term development opportunities that are appropriate and attractive for UNDP co-financing.
While IPF core funds are limited in some regions and declining generally, the amounts in any country should be sufficient to permit the country offices to promote and support initiatives leading to co-financed programmes. Country offices with large IPFs should be encouraged to use these resources, for the most part, in major co-financed programmes rather than in separate activities.
Recommendation 3: UNDP should seek to have a substantive role and stake in all co-financing arrangements as an active participant and leader. Country offices should have access to a sufficient level of IPF funds to support this substantive role.
Assessing Accomplishments
Conclusion 4: Criteria for co-financing accomplishments may be perceived as overly focused on monetary targets rather than on qualitative accomplishments.
The drive to mobilize additional non-core funding for UNDP with the accompanying pressures on country offices can be counterproductive. In recent UNDP communications, much emphasis has been placed on achieving specific targets framed, for example, as five times the IPF or as a 25 per cent increase in non-core funding within a specified period. If co-financing becomes an end in itself, there will be pressures on the country offices to enter into co-financing arrangements, with less regard for UNDP's mandates and its substantive contributions. Such pressures may lead to creating durable dependencies and parallel bureaucracies. Because of the high preference for co-financed funds that flow through UNDP's accounts, they also underrate the significance and considerable potential, in some countries, of co-financing modalities such as parallel financing joined with the programme approach or other flexible arrangements employing multiple funding modalities. Guidance on co-financing needs to be balanced with an understanding of each country situation, donor preferences, and possible pace of change.
The criteria for country office achievements in co-financing should be revised to associate them with substantive accomplishments in building country consensus on the essential development issues as set forth in UNDP's SHD mandate, mobilizing co-financing resources to address these issues, and developing host-country capacities to carry forward this work. The achievement of quality programme results should take precedence over monetary targets of non-core funding increases. These criteria should include, for example, country office accomplishments within the SHD goal in:
Monetary targets should be integrated with programme accomplishments.
Recommendation 4: Develop qualitative and programmatic criteria for achievements in co-financing arrangements that emphasize UNDP's substantive participation and commitment.
Co-financing Strategies
I
n addition to the question of a policy framework for co-financing, conclusions have been reached on UNDP's strategy for promoting co-financed arrangements, particularly with regard to opportunities for co-financing worldwide, the replication of the RBLAC experience, and UNDP's comparative advantage in regional programmes.Co-financing Opportunities
Conclusion 5: The opportunities for co-financing arrangements worldwide are highly variable; it cannot be assumed that the LAC experience can be replicated although some lessons from this experience may be applicable in other countries.
Variable opportunities. Outside of the major co-financing operations of a group of countries in the LAC region, the opportunities for co-financing vary substantially from country to country. Country circumstances and government attitudes (positive and negative), donor preferences, interests and local capabilities, programme opportunities, the suitability of the various modalities, and UNDP's image are all parts of the equation for determining co-financing prospects. Also, situations are fluid, suggesting that today's circumstances may change in both favourable and unfavourable directions. In the less favourable situations, headquarters "urgings" are greeted with some resistance. In the more favourable circumstances, the pace of growth in co-financing will not be dramatic but may become significant over time. Headquarters will need to avoid a one-strategy-fits-all approach and be clear on the nature of the prospects in each country. Country strategies for resource mobilization and co-financing should be based on realistic assessments of the various factors influencing opportunities for co-financing.
Replication of the LAC experience. It cannot be assumed that the LAC experience can be replicated in scale or form in other regions or countries. The co-financing accomplishment in LAC countries is a consequence of their distinctive conditions in time and circumstance. These conditions, such as government attitudes that favour UNDP's administration of government funds to serve staffing and implementation interests, are not necessarily inherent in other regions. However, the LAC experience provides insights and lessons for considering co-financing strategies in other countries. These include:
Each country office should develop a strategic approach to co-financing, considering the full range of factors that favour or discourage co-financing opportunities. They should have access to the experience of other countries and an analytical framework that includes experience with global resource mobilization initiatives. UNDP headquarters should facilitate this access. The development of these strategies should be the responsibility of UNDP staff in the country offices in close collaboration with governments and donors.
Case studies of replicable LAC experiences should provide insights on what works, how it works, and the conditions and programme areas that are favourable for development accomplishments. Others might include the Bolivia experience, the programme in the Occupied Palestinian Territories, the pooling arrangement in Mozambique, and the co-financed capacity-building initiatives in Ethiopia.
Recommendation 5: 5a: Develop country-level strategies for co-financing.
5b: Identify and develop case studies of repli-cable features of successful LAC and other regional co-financing experience.
UNDP's Comparative Advantage
Conclusion 5: UNDP has a comparative advantage in the donor community in developing and managing regional and subregional programmes.
Regional and subregional programmes facilitate multi-country participation in addressing development problems that require cross-border cooperation to be effective. The focus here is not on regional funds that are applied bilaterally but on resources that promote collaborative multi-country action in addressing development concerns such as those related to the environment, the transmission of diseases, population movements and resettlements, and the sharing of facilities supporting human development objectives. Co-financing arrangements provide a useful and attractive means for funding such programmes.
Recommendation 6: UNDP should take the initiative in identifying and promoting regional programmes that address multi-country development interests.
The OESP evaluation of the impact of regional, interregional, and global programmes will provide useful insights responsive to this recommendation.
Management and Operations Procedures
A
number of management and operations issues need to be addressed to ensure the effective and efficient use of co-financing arrangements. These relate to headquarters/country office relationships, the role of the UNDP resident representative/UN resident coordinator, the modalities themselves, accountability, management information systems for co-financing, overhead costs, and participation of private organization.Headquarters/Country Office Relationships
Conclusion 7: Headquarters/country office relationships impede creativity and responsiveness in developing co-financed programmes.
Achievements in co-financing arrangements require headquarters/country office relationships that allow for creativity, flexibility, and substantive support in contrast with time-consuming procedural demands. Some of the main concerns that have been expressed about these relationships are the importance of providing useful substantive information and technical guidance (not just procedural demands), greater decentralized authority for project approvals that enables the country office to be responsive to co-financing opportunities, and a fund of resources available locally for programme development.
Country office staff spend a significant amount of their time mobilizing programme resources for co-financing arrangements. In addition to raising funds from external donors locally, numerous funding sources, administered at the headquarters level, can be accessed by the country offices only by complying with special approval, management, and reporting procedures. UNDP's multiplication of funding sources has boosted transaction costs for country offices, creating disincentives for co-financing initiatives. This situation may be exacerbated by the new Target for Resource Assignments from Core (TRAC) system.
With the reduction in country office staff and the importance of ensuring staff attention to the substantive aspects of programme development and implementation, country offices should be allowed the maximum flexibility possible in their efforts to mobilize non-core funds for co-financed programmes. Similarly, a review of project approval practices for co-financed projects, particularly those with large-scale funding, compared with regulations for IPF projects is also desirable to determine the suitability of the regulations for co-financed projects and, where necessary, adherence to their requirements. Generally, the achievement of co-financing arrangements emphasizes the need to:
Headquarters sensitivity to these requirements is important.
Recommendation 7: Streamline headquarters/country office requirements for co-financed projects.
By acting on recommendation 7, UNDP management would ensure that country offices have the capacities to engage in substantive programme development with flexibility in procedures, time frames, authority, and programme development resources. This should involve developing positive headquarters relationships with the country offices that facilitate and support their work. In this spirit, UNDP should review and revise its procedures for country office access to headquarters resources for co-financing country programmes. The review and approval process for co-financed projects also needs reconsideration.
The linkage of the global offices with country offices addressing major programme interests is particularly important for strengthening the field staff's substantive contributions. In this work, UNDP will need to view its role as providing leadership in developing within its SHD mandate the programme interests of governments and donors as collaborative endeavours and not simply as UNDP programmes.
UNDP Resident Representative/UN Resident Coordinator Role
Conclusion 8: The UNDP resident representative/UN resident coordinator is critical to successful co-financing arrangements.
The UNDP resident representatives/UN resident coordinators are vitally important to the task of mobilizing resources and orchestrating co-financing. Their leadership and management capabilities are decisive in creating an environment of UNDP competence and trust among the donors and governments. Where this leadership falls short or is controversial, the UNDP image suffers and co-financing opportunities are undermined. On the other hand, some UNDP resident representatives/UN resident coordinators have demonstrated exceptional skill in providing leadership in co-financing as part of UNDP assistance to governments. They have created a dimension of trust that encourages donor participation in co-financed programmes. Similarly, deputy resident representatives and assistant resident representatives have important planning and operations roles in co-financing arrangements; their expertise in this work requires further development.
There should first be an assessment of the qualities of those UNDP resident representatives/UN resident coordinators who have proven to be skilled in programming co-financing arrangements. This assessment can then serve as a guide for the selection of future UNDP resident representatives/UN resident coordinators. (The OESP evaluation of resident representative roles will be a useful resource for this assessment.) In addition, career development opportunities in training and assignments should be provided to improve leadership and managerial skills in programming and facilitating co-financing in conjunction with the programme approach. Since deputy resident representatives and assistant resident representatives play an important role in programming operations and are a pool of candidates for resident representative positions, they also should benefit from career development and training opportunities relating to co-financing arrangements.
Recommendation 8: Undertake measures that will enhance worldwide the UNDP resident representatives'/UN resident coordinators' leadership skills in programming and facilitating co-financing arrangements.
Definitions and Relationships
Conclusion 9: Definitions and relationships of co-financing modalities need clarification.
As noted above, the use of the various terms associated with non-core resources and co-financing modalities is confusing, inconsistent and sometimes euphemistic.
The term "non-core" says what it is not rather than what it is, i.e., contributor-designated programme funds. The term "cost-sharing" is often used interchangeably with co-financing and other modalities. Also, in many instances, there is no cost-sharing (such as "100 per cent cost-sharing"). Single-donor trust funds are not co-financing. Such usage complicates communications and is misleading as to the actual circumstances. However, the several modalities available for co-financing arrangements provide UNDP country offices with a useful variety of means for accommodating the preferences and interests of host governments and donors. Some observations and recommendations on the main modalities may be helpful.
Recommendation 9: Revise the guiding criteria and definitions for each of the modalities in the context of the policy framework.
In implementing recommendation 9, particular attention should be given to:
The Programme Approach and National Execution
Conclusion 10: UNDP programme instruments for the programme approach and national execution need to be integrated with the co-financing modalities.
The two main programme instruments that are important in co-financing arrangements are the programme approach and national execution.
The Programme Approach. This programming instrument is the key to opening up co-financing opportunities and generating non-core resources over the long term. It provides the means for developing a consensus among donors and governments on major development problems and mobilizing resources in sufficient magnitudes to make a difference. Where UNDP has a close rapport with governments as a partner, it can provide valuable leadership in identifying problems, building consensus, facilitating collaborative programme design, and supporting programme implementation. UNDP's role would focus on coordination, capacity-building and support services (accounting, monitoring and evaluation) within the framework of a national programme. In this framework, the flexible application of various co-financing modalities can accommodate donors and government preferences.
National Execution (NEX). Country offices are under pressure to have co-financed projects executed through NEX, especially if the funds originate directly from a government's own budgets or from governments with IFI loans. In these situations, UNDP may be used to circumvent government procedures with minimal substantive participation such as 100 per cent cost-sharing. UNDP country offices will need to assess each project and, if the conditions warrant-given the nature of the project-not hesitate to involve specialized agencies, NGOs, or the private sector in project implementation.14 Moreover, UNDP will need to be sensitive to donor concerns about weak government capacities to manage donor funds under national execution.
UNDP management should determine how these useful programming instruments can be joined with co-financing arrangements so that UNDP's objectives for capacity-building and SHD objectives can be successfully achieved. The guidance from the evaluation of national execution and reviews of the programme-approach experience should be applied.
Recommendation 10: Develop guidance on the programme approach and national execution as they apply to co-financing policies, strategies, and modalities.
Financial and Substantive Accountability
Conclusion 11: High-volume co-financing operations strain capacities for financial accountability and limited technical expertise impedes sound substantive accountability.
Two aspects of accountability should be viewed separately: financial and substantive.
Financial. The evaluators did not observe that financial accountability has been compromised in co-financed projects-a matter for the auditors, however. Yet it is clear that the substantial volume of non-core funds in co-financing arrangements places a major burden on country office staff members and their capacities to ensure accountability. The adoption of accounting and monitoring software and related systems by some country offices is proving effective in maintaining sound management. Some donors have expressed concerns about the possibility of accountability problems where national execution is promoted with governments with limited management capacities. In these situations, the country office has an important support responsibility.
Substantive. The issue of substantive accountability is more complex. Tracking performance and results requires well-designed, management- intensive monitoring systems. The country offices are overburdened with large numbers of projects, and programme officers usually carry the responsibility of both financial and substantive accountability Financial accountability tends to supersede substantive accountability. One problem is that, in co-financed projects, government monitoring and evaluation tend to be superficial and may have to be assumed or reinforced by the UNDP country office. Because of the workloads involved, the country office turns increasingly to ad hoc or intermittent external experts financed from cost-sharing or other add-on fees to undertake particular monitoring and evaluation missions. This latter point is particularly important. It is also relevant to UNDP's fiscal and substantive performance reporting. The donors expect regular and well-prepared reports on the uses of funds they have provided. Some have complained that this reporting is not handled well and this becomes a disincentive to providing additional funds for co-financing. Conversely, it was found in several instances that both IFIs and Governments appreciated and attached major importance to UNDP monitoring, evaluation and reporting.
As part of its project support services in co-financing arrangements, UNDP can play a valued role in accounting, monitoring and reporting functions. These functions are basic to attracting and maintaining non-core funds for co-financed programmes. The capacities of the country offices should be assessed periodically to ensure that staffing and systems are in place and well managed.
Recommendation 11: Ensure that in both headquarters and country offices, procedures are well established for both financial and substantive accountability for co-financing arrangements.
Management Information Systems
Conclusion 12: Central management information systems and data for co-financing operations are unsatisfactory.
UNDP's central management information systems do not provide up-to-date, complete, and consistent databases on co-financing arrangements. Duplication of systems overall and for each region and country with varying criteria and coverage makes it difficult to provide timely, accurate, and consistent accounting of co-financing. For example, the overall level of IFI partici-pation by agency is not available in current databases. The consequence is unreliable reporting at the top levels of UNDP to serve manage-ment's requirements for formulating and monitoring policies and strategies for co-financing.
At the same time, deficient and inconsistent reports provide poor guidance at the operating levels and may distort performance favourably or unfavourably.
Recommendation 12: Take steps to improve the usefulness and reliability of management information systems for UNDP's co-financing operations.
Recommendation 12 is a matter of urgency. UNDP should design a management information system for co-financing operations that is complete, consistent and up-to-date. This will involve establishing standard criteria for data and reporting requirements, providing for complete and consistent coverage of all of the components of co-financing arrangements and thematic interests, and ensuring timely reporting from the field. Bureaux and country offices should operate from the common database in their reporting to avoid inconsistent information.
Charging Fees
Conclusion 13: Charging fees for services provided by country offices has proved to be useful in ensuring local capacities to manage co-financed programmes. Practices and acceptance vary from country to country.
Charging fees for services has not proved to be a major concern in co-financing arrangements although the rates charged vary and do not necessarily follow agency guidelines. The fees are valuable supplements for UNDP administrative costs. In some instances, donors may not easily accept administration fees for cost-sharing of what in the end is perceived to be a UNDP project or programme. The situation may be different for Governments that are basically interested in maintaining a UNDP presence in the country or where UNDP country office services, despite the levies, provide a low-cost alternative to the Governments' own administration. Also, for trust funds that give donors a separate identity, a (small) fee that covers the cost of separate monitoring, accounting and reporting appears justified.
There should be an in-depth review of fees for service practices, which may bring out some anomalies in policies, regulations and practices and the linkage with the levels of supporting services provided. This review would provide an occasion for determining whether some form of fee arrangement is possible under parallel financing modalities. In any event, responsibilities for setting fees should remain with the country offices.
Recommendation 13: Further review of the rates and rate-setting procedures is desirable; however, responsibility for the negotiation and setting of rates should reside in the country offices.
Private-Sector Access
Conclusion 15: The current restrictions on UNDP access to private resources may preclude opportunities for beneficial partnerships with private organizations.
Given the general trend towards the devolution of power from the State to civil society and the privatization of former public enterprises, the current restrictions on the acceptance of contributions from private organizations may preclude promising cost-sharing partnerships in the pursuit of UNDP development objectives. From discussion with staff and country visits, the evaluators noted instances where partnerships with private organizations in co-financing arrangements would appear desirable and beneficial to country development.
The current guiding regulations appear no longer appropriate, having been adopted a number of years ago in different times and circumstances. A more systematic examination of these restrictions is desirable in conjunction with the examination and revision of co-financing modalities.
Recommendation 14: Review the restrictions with a view to opening up greater but prudent access to private resources for co-financing arrangements.
Recommended Areas of Study
Conclusion 15: Important insights into co-financing arrangements would be obtained from assessments of some additional topics.
In the course of conducting this evaluation, a number of topics relating to co-financing arrangements emerged as requiring more in-depth assessments. The evaluation process and exchanges with UNDP management and staff provided the evaluators with a richer appreciation of some of these topics and their importance in co-financing. Some of the topics are evident from the preceding discussion of conclusions and recommendations.
Additional assessments should be made in the following areas:
Selected Projects: an in-depth study of selected projects for which co-financing is the main funding mechanism to determine, for example, the impact of the projects on development and the significance of this impact for UNDP's primary development interests; the contribution to capacity-building for the achievement of self-sustaining programmes at three levels: individual professional advancement, institutional strengthening, and the orientation of the development culture; the character and significance of UNDP's upstream contributions, e.g., on policies and strategies for resource allocation and programme design; the degree of coherence of UNDP, donor, and recipient development priorities; the management issues directly experienced by the projects relating to administrative procedures, systems and services, contractual and supervisory relationships, and fiscal and substantive accountability. This assessment, if undertaken, should cover a range of programmes employing the different co-financing modalities in varied country situations.
UNDP Regulatory Impact: an examination of UNDP's rules, regulations and procedures as they relate to facilitating (or impeding) the development, approval and implementation of co-financed programmes. This examination would include, for example, delegation and decentralization of authority to country offices for pre-development work and approval of major co-financed projects, appropriateness of tied procurement, requirements for reporting to co-financiers, and local staffing policies and procedures.
Management Service Agreements: a special review of the MSAs that would consider topics such as the reasons for the apparent decline in interest in MSAs in some of the major government cost-sharing programmes, the concerns of donors employing MSAs, the desirability of closer linkages of MSAs in UNDP co-financing arrangements, the continued merits of MSA's tied procurement provisions, and the status of the MSA as a co-financing modality.
Software Development: a review of the most significant examples of software developed by the country offices for monitoring the financial and substantive performance of co-financed projects. This review should be closely associated with the development of improved management information systems and databases for UNDP generally (see recommendation 12).
Recommendation 15: Undertake additional assessments to learn about the uses and practices of co-financing arrangements.
14 The same conclusions were noted in UNDP/OESP, National Execution Modality, New York, 1995, Chapter 6.