Omega Tool - Cash and Voucher Food Security Cluster Kinshasa - DRC 29 January, 2014

C&V Standard Model Needs Assessment & Response Analysis Intervention Sectoral capacity analysis Transfer modality selection 10. Reconciliation and services payment Contributions & Pipeline Beneficiary identification & Distribution arrangements Cyclical distribution planning Distribution monitoring Delivery mechanism selection Partners’ selection, Fee determination & Contracting Needs Assessment & Response Analysis Intervention Set-up Implementation Reconciliation Processes

The WFP C&V Standard Model Needs Assessment & Response Analysis Intervention Set-up Process 2: Activities: Output: Implementation Reconciliation Sectoral Capacity Assessment Cooperating Partners Capacity Retail Sector Capacity Financial Services Capacity IT & Communication Capacity Field Security Assessment Needs assessment Sectoral capacity analysis Transfer modality selection Delivery mechanism selection Partners’ selection, Fee determination & Contracting Contributions & Pipeline Beneficiary identification & Distribution arrangements Cyclical distribution planning Distribution monitoring 10. Reconciliation and services payment Processes Multi sectoral capacity assessment to inform the operational capacity of the programme Supports the selection of the most adequate transfer modality Takes place at any given time (possibly after market assessment) and re-assessed prior to the design of a new intervention Intervention Scope

Transfer Modality Selection via OMEGA Tool 10. Reconciliation and services payment Contributions & Pipeline Beneficiary identification & Distribution arrangements Cyclical distribution planning Distribution monitoring Delivery mechanism selection Partners’ selection, Fee determination & Contracting Intervention Set-up Implementation Reconciliation Activities: Output: Economy Cost-efficiency Cost-effectiveness External Factors Risk analysis Modality Selection Consultations Needs assessment Sectoral capacity analysis Transfer modality selection 10. Reconciliation and services payment Contributions & Pipeline Beneficiary identification & Distribution arrangements Cyclical distribution planning Distribution monitoring Delivery mechanism selection Partners’ selection, Fee determination & Contracting Needs Assessment & Response Analysis Intervention Set-up Implementation Reconciliation Transfer Modality Selection via OMEGA Tool

Main Concept 1 - Inputs 2 - Outputs 3 - Outcomes

Three Important Concepts Value for Money – cost efficiency 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: 𝑭𝒐𝒐𝒅 𝒄𝒐𝒔𝒕 # 𝒐𝒇 𝒓𝒂𝒕𝒊𝒐𝒏𝒔 =𝒄𝒐𝒔𝒕 𝒑𝒆𝒓 𝒓𝒂𝒕𝒊𝒐𝒏 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 The scale issue!!!! Will you also consider scenarios according to the scale of the operation?

Cost Elements to calculate Efficiency In-kind Commodities External transport LTSH by EDP ODOC Cash Transfer Value Delivery by EDP Voucher Transfer value / Commodities

Transaction Costs Transport to/from distribution Milling Waiting time In-kind Transport to/from market Cash Voucher

Cost-Effectiveness Cost effectiveness Value for Money – cost efficiency 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 Nutritional Value score Model In-kind, Cash, Voucher Related Costs Food+Extrans+ltsh+ODOC Transfer value+Delivery+ODOC Sum Full Costs

Delivery of In-Kind Food Omega Value Scenario 1: Delivery of In-Kind Food 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 Full Costs

Thank you!