Omega Tool - Cash and Voucher

Food Security Cluster Kinshasa - DRC

29 January, 2014

C&V Standard Model

Pro

cesses

1. Needs assessment

2. Sectoralcapacityanalysis

3. Transfermodalityselection

10. Reconciliation and services payment

6. Contributions & Pipeline

7. Beneficiaryidentification& Distributionarrangements

8. Cyclicaldistributionplanning

9. Distributionmonitoring

4. Deliverymechanismselection

5. Partners’selection, Fee determination& Contracting

NeedsAssessment& ResponseAnalysis

InterventionSet-up Implementation Reconciliation

1. Needs assessment

2. Sectoralcapacityanalysis

3. Transfermodalityselection

10. Reconciliation and services payment

6. Contributions & Pipeline

7. Beneficiaryidentification& Distributionarrangements

8. Cyclicaldistributionplanning

9. Distributionmonitoring

4. Deliverymechanismselection

5. Partners’selection, Fee determination& Contracting

The WFP C&V Standard Model

NeedsAssessment& ResponseAnalysis

InterventionSet-up Implementation

Pro

cesses

ReconciliationProcess 2:

Activities:

Output:

Sectoral Capacity Assessment

Cooperating Partners Capacity

Retail Sector Capacity

Financial Services Capacity

IT & Communication Capacity

Field Security Assessment

Intervention Scope

Transfer Modality Selection via OMEGA Tool

1. Needs assessment

2. Sectoralcapacityanalysis

3. Transfermodalityselection

10. Reconciliation and services payment

6. Contributions & Pipeline

7. Beneficiaryidentification& Distributionarrangements

8. Cyclicaldistributionplanning

9. Distributionmonitoring

4. Deliverymechanismselection

5. Partners’selection, Fee determination& Contracting

NeedsAssessment& ResponseAnalysis

InterventionSet-up Implementation Reconciliation

10. Reconciliation and services payment

6. Contributions & Pipeline

7. Beneficiaryidentification& Distributionarrangements

8. Cyclicaldistributionplanning

9. Distributionmonitoring

4. Deliverymechanismselection

5. Partners’selection, Fee determination& Contracting

InterventionSet-up ImplementationReconciliation

Activities:

Output:

• Economy• Cost-efficiency• Cost-effectiveness• External Factors

Risk analysis

Modality Selection

Consultations

Main Concept

1 - Inputs 2 - Outputs 3 - Outcomes

- 6 -

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

C&V ZD/HH/month Cash Voucher

Commodities 6,300 Transfer Value 6,800 7,300

External transport 850

LTSH by EDP 1,150 Delivery by EDP 400 600

ODOC 2,000 ODOC 700 800

sum 10,300 sum 7,900 8,700

In Kind Food ZD/HH/month

cost effi ciency ZD per p/mo 1,717 1,317 1,450 Cost transfer ratio 81% 86% 84%

Cost Elements to calculate Efficiency

In-kind

Commodities

External transport

LTSH by EDP

ODOC

Cash

Transfer Value

Delivery by EDP

ODOC

Voucher

Transfer value / Commodities

Delivery by EDP

ODOC

Transaction Costs

Transport to/from distribution

Milling

Waiting time

In-kindTransport to/from market

Transport to/from distribution

Cash Transport to/from distribution

Waiting time

Transport to/from market

Voucher

- 11 -

Value for Money – cost efficiency

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

Cost-Effectiveness

From Alpha to Omega Value

Nutritional

Value score

Model

In-kind,

Cash,

Voucher

Related Costs

Food+Extrans+ltsh+ODOC

Transfer value+Delivery+ODOC

SumFull

Costs

Omega Value

Scenario

1:

Delivery of

In-Kind

Food

Nutritional

Value

Delivery

Costs

Nutritional

Value

Delivery

Costs

Scenario

2:

Delivery of

Voucher

Omega Value < 1 :

Voucher Delivery will potentially

be Nutritionally more Cost-

Effective

Omega Value > 1 :

In Kind Delivery will potentially

be Nutritionally more Cost-

Effective

Nutrients score

Nutrients score

Full

Costs

Full

Costs

Thank you!