Evaluation of Australia's aid investment monitoring systems
Client name: Australian Department of Foreign Affairs and Trade (DFAT) Office of Development Effectiveness
Project name: Evaluation of Australia's aid investment monitoring systems
Location: Australia, Asia Pacific
Coffey was engaged by the Australian Government’s Office of Development Effectiveness (ODE) to evaluate the investment-level monitoring systems used by managing contractors to deliver the Australian aid program.
The Australian aid program has a strong emphasis on performance, results and value-for-money. It is critical that Australia's aid investment performance information is used to its full potential for effective management and learning.
Investment monitoring systems are at the foundation of DFAT's aid management system and external accountability reporting. These systems have been developed over time to support a performance culture that generates realistic and robust information on the performance of the aid program. The purpose of this evaluation was to identify ways in which DFAT can improve its investment monitoring systems, and through this, the effectiveness of the Australian aid program.
The evaluation considered the characteristics of DFAT better-practice investment monitoring systems for programs delivered by managing contractors, and what factors contribute to or inhibit better-practice.
Coffey's Research, Monitoring and Evaluation team asked key questions around two elements: 1) what are the practices of a DFAT 'better practice' investment monitoring system for programs delivered by managing contractors, and 2) what factors contribute to, or inhibit, 'better practice' investment monitoring systems delivered by managing contractors? What is the relative importance of these factors, and what are the management implications for DFAT?
This evaluation found that DFAT’s performance culture is the most important determinant of investment monitoring system quality. We also found that there are weaknesses in the monitoring systems that are currently used, and which may increase the threat to:
- aid investment quality
- risk management practices
- the ability to learn and adapt.
Our evaluation identified seven recommendations for DFAT and managing contractors to consider, including:
- DFAT to identify and promote investment-level management actions to foster DFAT's performance culture
- DFAT to strengthen its communication of the role of monitoring in serving the organisation's strategic objectives including managing risk and undertaking public diplomacy.
- DFAT to institute a routine check of investment monitoring systems during the investment monitoring phase, and this be supported by a review of relevant internal guidance and tools.
- DFAT to ensure that all investment managers have access to technical support to establish and oversee investment monitoring arrangements.
- DFAT monitoring expectations to be better standardised across managing contractor contracts to incentivise appropriate and consistent levels of attention to monitoring.
- Managing contractors build upon their culture of performance and invest in the monitoring skills and expertise of their staff.
- Managing contractors to support simple yet adaptable approaches to monitoring across the portfolio of investments that they are responsible for, while promoting learning between these investments (and from other sources).
The full report and DFAT’s response to our evaluation can be found at the DFAT website.