Omega Tool - Cash and Voucher Food Security Cluster Kinshasa - DRC 29 January, 2014 C&V Standard Model Needs Assessment & Response Analysis Processes 1. Needs assessment 2. Sectoral capacity analysis 3. Transfer modality selection Intervention Set-up 4. Delivery mechanism selection 5. Partners’ selection, Fee determination & Contracting Implementation 6. Contributions & Pipeline 7. Beneficiary identification & Distribution arrangements 8. Cyclical distribution planning 9. Distribution monitoring Reconciliation 10. Reconciliation and services payment The WFP C&V Standard Model Needs Assessment & Response Analysis 1. Needs assessment Processes 2. Sectoral capacity analysis 3. Transfer modality selection Intervention Process Set-up 2: 4. Delivery mechanism selection Activities: 5. Partners’ selection, Fee determination & Contracting Output: Sectoral Capacity Assessment Implementation Reconciliation 6. Cooperating Partners Capacity Contributions & Pipeline 10. Reconciliation Retail Sector Capacity and services 7. Beneficiary payment identification Financial Services Capacity & Distribution arrangements IT & Communication Capacity 8. Cyclical distribution Field Security Assessment planning 9. Distribution monitoring Intervention Scope Needs Assessment & Response Analysis 1. Needs assessment 2. Sectoral capacity analysis 3. Transfer modality selection Intervention Intervention Set-up Set-up Activities: Reconciliation • Implementation Economy Implementation Reconciliation • Cost-efficiency • Cost-effectiveness 6.External Contributions • Factors 6. Contributions 4. Delivery 4. Delivery mechanism mechanism selection selection 7. 5. Partners’ 5. Partners’ selection, selection, Fee Fee determination determination & Contracting & Contracting 8. Output: & Pipeline 10. Reconciliation 10. Reconciliation & Pipeline services andand services 7. Beneficiary payment Beneficiary payment identification Risk analysis identification & Distribution & Distribution arrangements arrangements Cyclical 8.Consultations Cyclical distribution distribution planning planning 9. Distribution 9. Distribution Modality Selection monitoring monitoring Transfer Modality Selection via OMEGA Tool Main Concept 1 - Inputs 2 - Outputs 3 - Outcomes Value for Money – cost efficiency Three Important Concepts Economy – cost per unit of inputs . Cost-efficiency - cost per unit of programme outputs. Cost-effectiveness - cost of achieving desirable programme outcome. Guidance from DFID on measuring and maximising value for money - 2011 - Economy The key input for WFP operations is food. The cost of the food is the metric for understanding the “economy” of our programmes. • For in-kind food assistance the “economy” is: = # • For cash and voucher based programmes, the “economy” is: transfer value Cost efficiency The key output for WFP operations is the number of beneficiaries reached In Kind Food ZD/HH/month Commodities 6,300 External transport Transfer Value Cash Voucher 6,800 7,300 850 LTSH by EDP 1,150 Delivery by EDP 400 600 ODOC 2,000 ODOC 700 800 sum cost efficiency Cost transfer ratio C&V ZD/HH/month ZD per p/mo 10,300 1,717 81% sum 7,900 1,317 86% 8,700 1,450 84% Cost Elements to calculate Efficiency In-kind Cash Voucher Commodities Transfer Value Transfer value / Commodities LTSH by EDP Delivery by EDP Delivery by EDP ODOC ODOC ODOC External transport Transaction Costs In-kind Transport to/from distribution Milling Waiting time Cash Transport to/from market Transport to/from distribution Voucher Transport to/from distribution Waiting time Transport to/from market Value for Money – cost efficiency Cost effectiveness Cost-Effectiveness Cost-effectiveness is calculated where benefits can be quantified, although not necessarily expressed in money terms, making it possible to choose between variants in programme design on the basis of the relative cost of achieving desired outcomes Guidance from DFID on measuring and maximising value for money - 2011 - From Alpha to Omega Value In-kind, Cash, Voucher Related Costs Model Food+Extrans+ltsh+ODOC Sum Transfer value+Delivery+ODOC Nutritional Value score Full Costs Omega Value Scenario 1: Nutritional Nutrients Value score In Kind Delivery will potentially be Delivery of In-Kind Full Delivery Food Costs Costs Scenario 2: Nutritional Nutrients Value score Delivery of Voucher Omega Value > 1 : Full Delivery Costs Costs Nutritionally more Cost-Effective Omega Value < 1 : Voucher Delivery will potentially be Nutritionally more Cost-Effective Thank you!