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close this bookCosting Guidelines for HIV/AIDS Prevention Strategies (UNAIDS, 143 p.)
close this folderChapter 5: ANALYSIS OF COST DATA
View the document(introduction...)
View the document5.1 Adding Up Costs
View the document5.2 Cost Profile
View the document5.3 Unit Costs
View the document5.4 Using the cost analysis in planning and budgeting

5.4 Using the cost analysis in planning and budgeting

Once the basic cost analysis is done, the information can be used in a variety of ways to aid planning and budgeting for the future. In general current cost data can serve as a baseline for extrapolating information for both the future and other projects. What is clearly important is to consider to what extent the project that you are obtaining cost information from is similar to the activities that you are hoping to do.

The financial cost analysis can contribute to an understanding of budgeting requirements of a specified project. The financial cost analysis will give you an idea of the total volume or resources that have been spent. The financial analyses will also serve as a basis for future budgeting. There are a range of ways that you can use existing cost data to help in budgeting (1):

· An ingredients approach would mean that you list all of the possible inputs and then consider to what degree you will be using them in the future project for the expected level of output (e.g. number of persons counselled) that you would like to achieve. Once you have determined the “quantity”, you can then about the price and the cost. For example if you think that you will need 1.25 nurses, you can think about whether to hire 1 full-time nurse and 1 part-time nurse, or you can consider whether it is feasible to hire one nurse and pay for extended hours. This approach requires a lot of detailed cost information and is appropriate if programme conditions are changing quickly.

· A less detailed approach to budgeting would be to take the current costs of a project and extrapolate to your circumstances and then do a rough adjustment depending on how similar you think your projects are. An important thing to consider is whether the project you are taking the costs from is actually running efficiently. Alternatively you could apply some mark-up to the costs (e.g. 20%) in order to give some margin of error.

Regardless of the method you use, if you are budgeting for the future you need to adjust the price or cost information for inflation. You will need to consider what level of inflation you would like to take into account and that prices will rise every year. So for instance, in a country with a relatively stable level of inflation of 8%, you may choose to 10% as the proportion by which you expect prices to increase each year. However, if you are in environment with rapid inflation, you may wish to convert your costs to a more stable currency such as the US $ and then do your budget calculations (12).

Financial cost analyses will also help to consider the affordability of projects, as it provides information on the extent of money that is required to run a project. This information can be used to consider the range of sources and amount of money that is available to finance the project.

However, as discussed in chapter 2 and 3, financial cost analyses only reflect the actual expenditure on a project. If a project had substantial donated components, then relying on financial cost analyses will give a distorted view of the actual resources being used. Thus when considering issues such as replication of projects to different settings or scaling-up projects in size, it is critical to consider what basic infrastructure may have been in place which was not accounted for in a financial cost analyses. For example, many NGO-based projects often receive assistance in the start-up phase of projects (e.g. exchange of goods in kind or subsidised printing). It is here that economic analyses are useful.

Annex 1
Case Study - Cost Analysis of Schools Education Project - ‘Teach English to Prevent Aids (TEPA)

Background

The American Peace Corps deploys American volunteers to work within communities. Almost half of the volunteers work in education teaching math/sciences or the TEFL programme (Teach English as a foreign language). The Peace Corps have adopted a content-based approach to teach English. In 1992 the Peace Corps, working in conjunction with the Ministry of Education in Cameroon, initiated the TEPA programme. TEPA uses English language teaching materials whose content matter is the knowledge, attitudes and practices as they relate to AIDS prevention. TEPA was initially designed for students of the second cycle of secondary schools (form five students) in the eight provinces of French-speaking Cameroon. These students have been learning English at secondary school level for four/five years and are supposed to have a high/intermediate level of proficiency in English.

The inception of the TEPA project occurred in June 1992, when the Peace Corps sponsored a workshop in conjunction with the National Inspector of English. Participants included Ministry of Education and Health Officials, individuals from the health and education sector and 10 Peace Corps Volunteers and their counterpart Teachers (Cameroonian colleagues working at the same school). The objective of the workshop was to develop a content-based approach to teach English to prevent Aids. Lesson plans were developed at the workshop and teachers were asked to test them out for six months.

A second workshop was then held to provide feedback on the draft materials and to finalise the materials. These materials were then sent to Washington, and the Ministries of Education and Health to see if the content was appropriate.

The materials, which consisted of a Teachers Manual called “Teach English, Prevent Aids” and a companion guide for students (“Learn English, Prevent Aids”). The books were printed, along with posters.

The implementation of the TEPA project began by training people in how to use the book. For Peace Corps volunteers who were teaching English, TEPA training was done in the course of Peace Corps Orientation. In addition, there were a number of training, held in each province. Each workshop was held for two days with about 25-35 teachers of English, including 4-5 Peace Corps volunteers. The Cameroonian teachers were identified by provincial inspectors of English and Peace Corps Volunteer advice.

The first provincial workshop was held in 1994 and the last province had a workshop in October 1996. These workshops were primarily organised by the Ministry of Education, where individual teachers and provincial inspectors found locations. Peace Corps provided the financial resources necessary for the workshop (e.g. transport, hotel). Some of these workshops took place in schools and government structures which were free of cost, other workshops took place in hotels.

The Peace Corps have now handed over the project to the Ministry of Education. Under the overall guidance of the National Inspector of English, further training workshops will be organised by local associations and provincial inspectors.

TEPA Activities

The TEPA project is implemented during school time and taught by school staff and Peace Corps volunteers. It is designed as part of the curriculum for the English class in predominantly franchophone areas. The materials are designed for 80 hours of instruction. Teachers have options about the use of TEPA. They can either teach TEPA for 80 hours or stretch it over the school year switching between TEPA and other materials. TEPA is designed to be taught in four 20-hour segments.

The TEPA Materials

The materials were developed by teachers (rather than consultants) based on techniques developed and already used in classrooms. The Manual is designed to help teachers in the context of large classes and few resources. TEPA promotes student involvement and motivation through participatory activities. The grammatical structures, language functions and vocabulary levels meet the required national standards set by the Cameroonian Ministry for fifth year students of English.

While not part of the ‘official’ national curriculum, the TEPA materials are recommended material and are supported by the Ministry of Education as supplementary material.

The TEPA Evaluation

In order to assess the impact of TEPA on students knowledge and changes in attitude and behaviour, an evaluation was carried out. The design of the TEPA evaluation was the most appropriate one to evaluate a behavioural intervention. The evaluation attempted to assess the impact of the TEPA project by comparing behaviour between a control group (a group without TEPA teaching) and a sample of students who had been taught using the TEPA materials. The baseline survey took place in October 1995, and the follow-up survey in June 1996.

Planning the Costing Exercise

3.1 Defining the question and objectives

The objective of the cost exercise was to assess the cost of starting-up and the initial implementation of the TEPA project.

3.2 Identify the alternatives

The project can be characterised as being in a transitional phase: moving from the first stage of start-up activities to a stage where it is becoming an established operation. These stages are handled by different institutions. The project development was financed by the Peace Corps. Now that the project is becoming institutionalised, the management and administration of TEPA is being devolved to the Ministry of Education and its provincial inspectors of English. However, the service delivery is done through both Cameroonian teachers and Peace Corps Volunteers. The TEPA project was designed as primarily an in-school education programme. It was based on a curriculum-based teaching approach by English as a second-language secondary school teachers. There were no peer education or condom provision activities which were specifically programmed. Because of our interest in start-up costs, we will use the Peace Corps as the main delivery organisation and including the resources and inputs contributed by the Ministry of Education as additional costs.

3.3 Describe the alternative

The primary strategy that will be costed is the schools-education project. There are no secondary strategies, identified, although the relevant activities of the Ministry of Education will be included. The project can be characterised as being in a transitional phase: moving from the first stage of start-up activities to a stage where it is becoming an established operation. These stages are handled by different institutions. The project development was financed by the Peace Corps. Now that the project is becoming institutionalised, the management and administration of TEPA is being devolved to the Ministry of Education and its provincial inspectors of English. However, the service delivery is done through both Cameroonian teachers and Peace Corps Volunteers.

As the TEPA activities were only a very small component of a much larger and more complex organisational activities of Peace Corps, we decided not to do a full costing but rather consider an incremental analysis. The incremental approach will ask what is the additional cost of implementing TEPA given existing services

In general cost data were only available by activity (e.g. for a training workshop). It was not possible to get cost information for the TEPA project broken down by the suggested input categories (e.g. supplies, personnel). The main activities were:

· development and production of curriculum and educational materials
· training
· management and administration

We would have liked to get an idea of the costs of implementation of the curriculum. However, given the nature of the programme, there was a great deal of integration with ongoing Ministry of Education activities. The extent of these resources (principally staff time) that could be allocated to the TEPA project was difficult to distinguish, and not fully costed. So the cost analysis will only reflect start-up and costs of initial implementation such as training.

3.4 Deciding on a data time-frame

The start-up activities were spread over a four-year period. Thus the costing analysis will seek to examine the incremental cost of starting-up and implementing TEPA over the 1992-1996 period.

Collection of Cost Data

Several issues arose while attempting to collect cost information on the TEPA project:

(1) The costs of implementing TEPA were not routinely monitored by Peace Corps, Cameroon. All financial expenditures for the TEPA project were only documented in faxes to Washington. The overall costs of running Peace Corps activities were easily available on a budgetary allocation basis rather than actual expenditure. Detailed item-expenditure was time-consuming to extract from the accounting software. Thus the majority of information about TEPA was gained in discussion with Peace Corps and Ministry of Education personnel.

(2) Outcome indicators were not routinely monitored. Due to the scale of the project, there was no systematic approach to keeping track of the number of teachers trained in TEPA, number of teachers using TEPA in class, and the number of students being taught TEPA. In order to obtain unit costs, this study used a variety of sources to approximate the minimum numbers of teachers using TEPA and students being taught the TEPA curriculum.

(3) There was some input from the Washington office, principally in terms of assistance in the design and production of the TEPA manuals. The amount of time and cost of this assistance was not possible to ascertain. Thus the costing of the project may underestimate these costs.

(4) Given the nature of the programme, there was a great deal of integration with ongoing Ministry of Education activities. The extent of these resources (principally staff time) which could be allocated to the TEPA project was difficult to distinguish, and not fully costed.

Cost Analysis

The time-frame for the costing was the period 1992 to 1996. This covered the inital development of TEPA and the first stage of implementation which was done by the Peace Corps and the Ministry of Education. In a table 1 we present the financial and economics costs of the intervention. Financial costs represent actual expenditure on goods and services purchased. Economic costs include the estimated value of goods or servies for which there were no financial trasactions or when the price of the good did not reflect the cost of using it productively elsewhere.

Table 1: Financial and Economic Costs of the TEPA Project, 1992-96 (US dollars)

Activity

Financial Cost

Economic Costs

Development and Production of Curricula and Educational Materials

25 837.50
(40.6%)

45 837.50
(37.6%)

Training

18 920.00
(30.0%)

18 920.00
(15.4%)

Implementation of the Curriculum

-

-

Management and Administration

18 810.00
(29.4%)

58 316.00
(47 %)

TOTAL

63 567.50

123 073.00

We see that total financial costs were $63 567.50. Although there was a four-year timeframe for the costing analysis, we did not attempt to adjust for inflation over this period. This was principally because there was not a sufficient breakdown of which year the money was spent).

Fourty percent of the cost was attributed to the development of the educational materials (consisting of workshops to initiate TEPA, a feedback workshop, use of local artist and consultant from the US who assisted in the development of materials). The training costs reflected the cost of the 10 provincial workshops used to train teachers between 1994 and 1996, but does not include TEPA training for the peace corps volunteers. The Peace Corps training takes place over 3 months of which 3-4 days of the general training are spent on TEPA for the TEFL volunteers There were no financial costs for the implementation of the activity as the intervention did not hire any additional staff to teach TEPA. The teaching was done by peace corps volunteers and teachers already in the school system. Finally, the management and administration costs reflected the costs of evaluating the intervention (workshop, training and the evaluation study).

However, these financial costs do not reflect all the inputs that have been used to design and implement TEPA. The economic costs attempt to include some of the key omissions. The two new items included in economics costs are the actual cost of printing were it to have been done in Cameroon (the printing was done in the US at almost no cost to the project) and the salary costs of two key staff whose time was significantly spent on TEPA managment and administration and diverted from other activities. Total costs have now increased to $ 123 073 which is almost double the financial costs. Management and Administration now account for 47% of the total cost and Development of IEC materials almost 38% of the cost.

The only output information that was monitored was the number of teachers being trained in TEPA. There was no information about the amount of staff time spent teaching TEPA, the number of trained teachers actually teaching TEPA or the number of students being taught TEPA. Table 2 presents a few unit costs based on conservative estimates of output from discussions with staff. Unit costs are relatively low. Although the cost per student taught will probably range from $6.51 (a very conservative number of students definitely learning TEPA) to $1.17 (which represents the maximum number of students who could be learning TEPA). Although 300 teachers were trained, it was not clear how many were actually teaching TEPA. The TEPA director knew of 54 teachers actually teaching TEPA, if this were the case then the cost per student would be $6.51, and if all TEPA-trained teachers taught then the costs per student would be $1.17. This is based on the figure of about 350 students per teacher (e.g. 7 classes a day)

For another example of the implementation of the costing guidelines, please refer to: UNAIDS 1999, “HIV Prevention Among Injecting Drug-user Populations: cost, epidemilogical and behavioural analysis. Report of the field study in Belarus,” which can be found on the UNAIDS website: www.unaids.org.

Acknowledgements: This Study was completed with the assistance of a number of people. We are grateful to the Peace Corps, Cameroon who hosted our visit. Gabriel Kwenthieu gave freely of his time and shared his experience of the TEPA project. Bob Myer provided financial information and Shelley Smith of Peace Corps, Washington facilitated our visit to the project. Thanks also go to Claude Cheta of IRESCO who contributed substantially to our understanding of AIDS prevention activities in Cameroon and assisted with the data extraction from the TEPA evaluation. Finally, we would like to thank Charlotte Watts for her encouragement and comments throughout the duration of the study. This study was supported by funds from UNAIDS.