A. Introduction 3 A1. What is the purpose of this note? 3 A2. Who is this note intended for? 3 A3. How is this note organized? 3

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1 CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC Better Data, Better Aid? Practical Guidance Note on Aid Information Management Systems Draft Review Version 2f : 26 January 2009 Prepared by Aasmund Andersen Contents A. Introduction 3 A1. What is the purpose of this note? 3 A2. Who is this note intended for? 3 A3. How is this note organized? 3 B. Core Information on AIMS 4 B1. What is an Aid Information Management System? 4 B2. Why is an AIMS needed, and how do I know it will help the government and stakeholders? 4 B3. What are the top-ten things that determine whether AIMS succeed or fail? 4 B4. Who are the users of an AIMS and how could they benefit from it? 5 B5. What are the key steps in designing and implementing an AIMS? 5 B6. What are the main policy, capacity and technical requirements for an AIMS? 6 B7. We have a Public Financial Management Information System. Do I still need an AIMS? 6 B8. How can an AIMS help me in implementing the Paris Declaration and Accra Agenda for Action? 6 B9. What choices of AIMS systems do I have, and how much does it cost? What sort of capacity development support do I need? 6 B10. How will the International Aid Transparency Initiative (IATI) help? 7 C. Designing an AIMS 8 C1. Needs Assessment for AIMS 8 C1.2 Why do I need to conduct a needs assessment before designing and implementing an AIMS? _ 8 C1.3 How do I conduct a needs assessment? 8 C1.4 Agreeing on AIMS objectives and criteria for success 10 C1.5 Avoiding early mistakes: How do I know I am on the right track? 11 C2. Policy Requirements 12 C2.1 What sort of political support is needed for an AIMS to be successful? 13 C2.2 What policies or legislation is needed to underpin an AIMS? 13 C3. Capacity Requirements 13 C3.1 What kinds of capacities are needed for an AIMS to be successful? 13 C3.2 How do I conduct a Capacity Assessment and prepare a Capacity Development Strategy? 14 * Quarterly reporting is recommended and also allows alignment with various fiscal calendars. The reporting schedule must however, be determined based on country needs and in conjunction with the national budget process. 14 C3.3 AIMS Management Functions 14 C3.4 What kind of internet connectivity, network, or computers do I need? 15 C4. What Can I Do While Waiting For AIMS? 16 C4.1 What data should AIMS manage? 16 C4.2 What Data Standards and classifications should I use? 17 C5. Choosing an AIMS 17 C5.1 Can we make our own system? 18 C5.2 What should we do if we already have an AIMS system? 18 C5.3 What sort of problems have occurred with AIMS systems? 18 C5.4 Table showing the different functionalities of each of the main providers, and providing links to all known providers. 19 C5.5 How do I procure an AIMS? What are the pros and cons of government vs. development partner procurement? 19 1 P age

2 C6. How can IATI Help? 19 C6.1 What is the International Aid Transparency Initiative (IATI)? 19 C6.2 Can IATI standards and the code of conduct support me in designing and implementing an AIMS? 20 C6.3 How can I get involved in IATI? 20 D. Implementing an AIMS 20 D1. Roll-out and Implementation Strategy for AIMS 21 D1.1 Who are my stakeholders? How and when do I involve them? 21 D1.2 How can I ensure comprehensive data is reported on time? 22 D2. The AIMS data management process 22 D2.1 What is the best process for data validation and quality control? 23 D2.2 How do I prepare a Data Management Plan? 24 D2.3 Government request for AIMS reporting and reporting guidelines 25 D2.4 Data on NGO and contractor activities 25 D3. Creating reports and Analysis that make a difference 25 D3.1 How can we ensure better data = better and more accountable aid? 25 D3.2 Aid Effectiveness and Paris Indicator Reports 26 D3.3 Development Cooperation Reports 26 D3.2 MTEF and the national budget process 26 D3.2 Monitoring of National Plans 26 D3.4 Information supporting Better Coordination 27 D4. Using AIMS to promote Accountability and Transparency 27 D4.1 What promotes transparency? 27 D4.2 What promotes Accountability? 28 D5. Linking to other Government Systems and Processes 28 D5.1 Why is it important to link AIMS to other government systems and processes? 28 D5.2 How can linkages between AIMS and Public Financial Management Systems strengthen aid effectiveness and accountability? 29 D5.3 How can AIMS support the aid coordination mechanisms? 29 D5.4 How can AIMS support Managing for Development Results? 29 D6. Using AIMS to support implementation of Paris Declaration and Accra Agenda for Action 30 D7. Ensuring Benefits for all Stakeholders 30 D7.1 How can parliamentarians use AIMS to strengthen oversight, accountability and aid/development effectiveness? 30 D7.2 How can civil society use AIMS to enhance their service delivery, watchdog and advocacy roles? 30 D7.3 How can development partners be kept engaged? 30 D8. Implementing an AIMS as part of a humanitarian or post-conflict response 31 D9. Ensuring the Sustainability of AIMS 31 D9.1 Operational Sustainability 32 D9.2 System Technical Sustainability 32 E. Evaluating AIMS Impact 32 E1. User Surveys and Structured Feedback Mechanisms 33 E1.1 Templates for user surveys and analysis 33 E2. When is AIMS successful? 33 E2.1 Criteria for a government-embedded AIMS 33 E2.2 How do I turn around a failing AIMS? 34 F. Where can I Go for Help? 34 F1. IATI 34 F2. Capacity Development for Development Effectiveness (CDDE) Facility 34 F3. Development Partners 34 F5. Opportunities to learn from peers 34 F4. System providers 34 G. Appendices 35 2 P age

3 H. Additional Online Resources 35 Annex 1: References 36 Annex 2: Technical Feature Comparison of Common AIMS 36 Annex 3: Impact Evaluation Survey Forms 38 Annex 3: Minimum Technical Specifications 43 A. Introduction A1. What is the purpose of this note? To provide practical guidance to policy-makers and practitioners who are involved in developing an Aid Information Management System (AIMS), implementing it, or using it. To support countries in institutionalizing these systems and building their capacities so that AIMS can provide long-term sustainable benefits. This note was prepared at the request of partner countries and with financial support from the Capacity Development for Development Effectiveness (CDDE) Facility ( It has benefitted from a peer review process in which many policy makers and practitioners from around the globe have provided ideas, suggestions, and examples. It is a living note, and your continued suggestions for updates, improvements or additional examples will be invaluable. Please send your suggestions to cdde@aideffectiveness.org. A2. Who is this note intended for? This note is intended for development practitioners and government officials, with interests and responsibilities related to the implementation of AIMS. This may include: Ministries of Finance, Planning, aid coordination agencies or any other agency responsible for developing, managing and promoting an AIMS. Line Ministries who use AIMS data for sector planning, budgeting, monitoring, accountability. Parliamentarians who rely on AIMS data and related analyses to fulfill their oversight and accountability role. Development partners: who are required to report to AIMS; rely on its information to better plan, implement and monitor impact of their assistance; can use it to make the case for aid back home. Other stakeholders of aid effectiveness and accountability may also benefit; Civil society organizations: service delivery NGOs who need AIMS data to plan their programmes to complement others; watchdogs that seek to reduce waste, reduce corruption and promote results; advocacy NGOs who seek to hold governments and donors to account. Local Government who can use AIMS data for planning and AIMS for monitoring results Academics, researchers, journalists, citizens: who seek good access to AIMS data to contribute to policy and promote accountable and effective aid. A3. How is this note organized? This text forms the core guidance note which can be printed out and used as a reference document. However, the online version will contain links to additional examples and reference materials and can be accessed at 3 P age

4 B. Core Information on AIMS This section contains brief summary points of all the major aspects of AIMS. B1. What is an Aid Information Management System? Aid Information Management Systems (AIMS) are software applications that record and processes information about development activities and related aid flows in a given country. AIMS are designed to assist developing countries in managing their aid flows. AIMS bring together project-level information on commitments and disbursements, and may also include information on aid-financed expenditures, activities and results. This information can be aggregated to generate overall figures on aid flows, or broken down by sector or geographic area. AIMS help developing countries to incorporate aid flows onto their national budgets and improve the overall alignment of assistance with country priorities. They are usually web-based systems that rely on development partners to enter data on their assistance. The systems are therefore dependent upon institutional mechanisms to encourage regular and accurate data entry. B2. Why is an AIMS needed, and how do I know it will help the government and stakeholders? Most governments receiving aid experience difficulties maintaining detailed consolidated information of what has been received and what is planned for future allocations. The most common way of report and manage consolidated financial information of aid is by using Excel Spreadsheets. This is in fact, the most commonly used AIMS throughout recipient governments, and with a well managed reporting process and good spreadsheet skills it may in some cases still be the best and most practical solution. Spreadsheets is the starting point for all AIMS reporting, and those governments who master aid reporting in Excel are also those who most effectively will master AIMS. On the other hand, those governments who never mastered using excel for aid reporting also find it very challenging to take on AIMS. The best approach to implement AIMS is to prove the workflow and reporting process in Excel first, then migrate to AIMS. Most often an excel spreadsheet file is circulated among government and development partners, being updated with commitments and disbursements for the previous, current and next government fiscal years. This may be sufficient and works well for specific purposes, and is always the starting point for aid management. Over time, whoever, the excel spreadsheet grows more and more complex as it captures historical data. Handling of currency exchange rates also makes it a tedious task to keep updated. It is not impossible, but there are a range of limitations that usually inhibit the efficiency and accuracy of recipient governments to account for aid. Producing reports are also a challenging manual job, and the limitations of line-by-line data minimize the reporting and data storing possibilities. An Excel-based process may over time become a hindrance for planning better allocations of aid, and to allow broader sharing of information. AIMS support should be considered when a government has some capacity for aid management and shows interest and initiative in improving the way they account and plan development assistance. AIMS is an investment in accountability, and is usually planned as a capacity development project in the medium-long term. B3. What are the top-ten things that determine whether AIMS succeed or fail? The AIMS system should not be considered a purpose in itself; it is the process around it that is the most important. The countries that have a good process around aid reporting and planning implement AIMS 4 P age

5 fast and generate positive impact with it. A government without any previous work processes on aid reporting, needs to establish these first. Solving a Capacity Challenge; AIMS support should be (1) process-focused. It is crucial to clearly define some (2) measurable objectives describing the purpose of AIMS. Merely improving coordination is not a sufficient AIMS objective. AIMS must (3) solve a technical challenge for a government administration; such as improving forecasting for the national budget or producing an annual ODA report to parliament. The technical focus will also support a government institution to better realize its mandate, which generates (4) institutional ownership. Ownership should primarily be built on solving an institutional challenge, not from international pressure. Improving Organizational Workflow; For development partners to use AIMS, it is important that data reporting is based on a (5) consolidated government data request Other government institutions in need of data should use AIMS, and development partners should not receive multiple data requests. Donor agencies not complying with the request should be monitored and their (6) non-compliance published to create the right incentives. All data should be (7) validated by government in order to ensure government ownership, accuracy and alignment with government planning process. Nonvalidated data should not be used, as it may conflict with official government data reports. Making Sustainable Impact; AIMS must (8) generate outputs in the form of validated official reports on development assistance. AIMS usage and (9) impact should be continuously evaluated through user feedback. In order to have a sustainable long-term capacity development effect, AIMS should be (10) managed by government civil servants. B4. Who are the users of an AIMS and how could they benefit from it? The primary users of AIMS are key government staff in central ministries, who are responsible for coordinating and reporting of aid, and planning aid in relation to the national budget or national plans. The secondary users are those responsible for reporting the data required; this includes development partners and sometimes line ministries. These agencies will appoint a focal point, who will be the user responsible for reporting for that agency. In cases where connection to the AIMS is not possible, secondary users can also report data on excel templates following the AIMS data request structure. Development partners also find AIMS useful for information sharing and coordination purposes. They can see all activities undertaken by other agencies, and get a detailed overview of aid within their sector. Finally, other government agencies, parliament, civil society and the public will benefit from AIMS outputs, and may have access to the system to research and analyze the aid information. B5. What are the key steps in designing and implementing an AIMS? AIMS implementation starts with an independent needs assessment. The needs assessment considers the strategic, institutional and capacity aspects of AIMS implementation, and makes important recommendations for how the AIMS support is designed. This is often conducted by one or two consultants during two weeks in-country, and delivers a stakeholder consultation presentation meeting and an assessment report. When the AIMS support project is initiated, the technical requirements and specifications will be used to identify and procure an AIMS system. It is important to distinguish between system costs (software, software training, infrastructure) and capacity development support (consultancy support, advisory services). While the system costs could be planned as a one-time investment, capacity development support must be planned in the medium-term (2-3 years). 5 P age

6 Even before the AIMS system is available, the data management and reporting process between development partners and the government can be improved. The reporting format can be circulated to development partners in Excel. When the AIMS system is in place, the respective government desk officers can enter the reported data, then gradually development partners can start reporting electronically through AIMS. Most AIMS suppliers will conduct their own technical assessment, once they are contracted to deliver the system. B6. What are the main policy, capacity and technical requirements for an AIMS? The key requirement for embarking on an AIMS project is that the government receives significant amounts of aid from various sources and has some capacity for managing aid. The government needs to have identified aid management as a challenge and shown interest in expanding this capacity to better manage aid. Often this capacity exists in relation to national planning or the national budget process. When building new units, for example aid coordination units, it is important to remember that shortterm consultants may not generate long-term capacity development results. It is preferable to build on departments in permanent central ministries with a mandate responsible for national plans or the national budget. AIMS should be related to national plans and the process of resource allocation, including the national budget. This is better achieved with an aid policy in place. AIMS may then become an effective instrument to implement and monitor the policy. An Aid Policy may generate the commitments and interests of all parties to partake and adhere to the introduction of a new reporting process. Most government institutions have, by now, an internal computer network and some sort of server room or network which an IT unit is responsible for. For AIMS implementation it is important that the capacity to manage the internal network is sound. Otherwise AIMS may also be hosted out-of-country. B7. We have a Public Financial Management Information System. Do I still need an AIMS? AIMS are not complete public financial management systems (PFMS). Rather AIMS provide an interface between the recipients PFMS and information stored in donor systems. They allow for harmonised reporting of aid provided or planned and for reporting back to donors on how the funds have been used. They are thus a tool of mutual accountability with the potential to increase the predictability of aid and to reduce administrative burdens for recipients and donors alike. B8. How can an AIMS help me in implementing the Paris Declaration and Accra Agenda for Action? Some countries have made aid policies and country-based Aid Effectiveness declarations similar to the Paris Declaration. These are very helpful instruments that can be further supported by AIMS. Paris declaration monitoring indicators can for example be reported through AIMS, and the reports required automatically produced. This may also allow Paris monitoring on a more continuous basis, rather than as a bi-annual exercise. This enables governments to include Paris indicator analysis in Annual ODA reports, and give attention to progress made in accordance with the Paris Declaration. B9. What choices of AIMS systems do I have, and how much does it cost? What sort of capacity development support do I need? There are currently three widely known AIMS systems; the Aid Management Platform, The Development Assistance Database (DAD) and the Cambodia ODA Database. There are other relevant 6 P age

7 home-grown systems used in the Philippines, Sri Lanka and Mongolia. Several additional consultancies and IT companies have made bids to supply AIMS, but have yet to implement one. The limitations for other suppliers to enter this market has been that AIMS evolved from an experimental phase to the current stage where technical specifications can be made based on proven technology and results. It is therefore expected that new actors may enter the supply market, generating further innovations and results. To encourage the development and evolution of better products, it is important that AIMS is acquired through a competitive procurement process. The costs of implementing AIMS systems are sometimes difficult to compare, since they are provided under different terms and for different country environments and needs. In general, it is the capacity development efforts that are most expensive, not the systems as such. For AIMS to be successful, medium-long term capacity development support must be planned for. The Cambodian ODA Database system is available for free. However, there is no organization or company providing technical support for this system (other than some initial guidance from the Government of Cambodia and their UNDP counterparts). To utilize the system therefore requires both technical expertise and capacity development support. The Development Assistance Database (DAD) system is provided by a private company (Synergy Ltd) on a commercial basis, with technical support on an annual basis. Additional capacity development support is required. The AMP system is provided by a non-profit organization (Development Gateway), with both 2-3 years technical support and capacity development support. These contracts may not require much additional capacity development support. Most AIMS contracts are part of donor-funded projects seeking to improve aid effectiveness and public financial management. The AMP contracts tend to be the most expensive, depending on the environment the contracts range from USD 0.5 mill up to USD 1 mill over three years. The DAD systems are usually procured through a 1 year contract at around USD , but with limited in-country consultancy days and follow-on support (extra days are billed at USD 1,000/day). The Cambodian system is offered for free from the Cambodian government, but costs of adaptation and deployment must be met locally. Note that these are estimates based on recent experience only, and needs to be confirmed with suppliers based on the country context. Whatever system is chosen, a rule of thumb should be that around USD 200,000 per annum is made available for 2-3 years, combining system costs and capacity development costs. Larger government institutions and ODA volume may require more effort and a higher budget. B10. How will the International Aid Transparency Initiative (IATI) help? Many of the limitations of AIMS stem from limitations in the internal information management systems of development partner agencies. Embassy and country office staff experience great difficulties getting reports out of their internal systems which provide the data government is asking for. The IATI initiative has started a process of ensuring commitment to a standard for how aid data and information are published to the public. Such a standard will contribute to make it easier for DPs to comply with government requests, and improve the quality and timeliness of data reported to AIMS. There will always be country-specific data that a government will need which is not part of the standard, and require the judgment of donor focal points to provide. Therefore it is important to note that having a standard does not excuse the DPs from providing the information governments need. 7 P age

8 C. Designing an AIMS When a government has expressed interest in implementing AIMS, it is advised to conduct a needs assessment, in order to understand how AIMS would be helpful in the country environment. The assessment will also define what project support is needed to make AIMS successful, and help with procuring the system and services required. C1. Needs Assessment for AIMS A needs assessment is required to identify the right environment for AIMS. It is often done by independent consultants, or a team of specialists from stakeholder organizations. Country offices often face a dilemma when recruiting consultants for an AIMS needs assessment. There are relatively few available consultants for this work, and sometimes the assessment is undertaken by companies or organizations that are suppliers of AIMS solutions. This may jeopardize the neutrality of the assessment and the subsequent procurement process, where the same consultants may bid for the contract. An alternative is to compose a team, which suppliers specialists are invited to join on a non-pay basis. Suppliers may also be invited to present their proposed solution to the stakeholders during the assessment. It is also recommended that the government team travels to other countries in the region using the systems. Exchange visits and discussions between fellow government staff in the region has been proven hugely beneficial, strengthening knowledge networks of learning and sharing experiences and practices. C1.2 Why do I need to conduct a needs assessment before designing and implementing an AIMS? The AIMS implementation will be based on the findings of the assessment, and its success is determined by how well the assessment managed to interpret and analyse the most sustainable and efficient way of implementing AIMS. The quality of the assessment will therefore only appear clearly when implementation begins. By that time it may already be too late to make major strategic changes. It is therefore important that the assessment recommendations are scrutinized by as much critical discussion as possible, to ascertain that the best solutions are being sought within the possibilities available. The objective of a needs assessment is: An AIMS implementation that is based on a sound understanding of the institutional structures and key political, bureaucratic, and strategic processes evolving around utilization of ODA in country. Recommendations for how to institutionally position the AIMS for successful and sustainable implementation. Develop the technical specifications for procurement, required in order to facilitate RFP and identify the most suitable system. C1.3 How do I conduct a needs assessment? A needs assessment usually takes place over 1-2 weeks. Usually 1-3 consultants are recruited to undertake the assessment. Before this is done, a working group responsible for AIMS should be in place, and mandated to guide the consultants. Many countries already have relevant working groups that can be used for this purpose. 8 P age

9 The assessment should start with a focus on government capacities and ODA work processes, then consult key development partners to incorporate their perspectives. Towards the end of the assessment, the assessment team should present their tentative recommendation and discussion points to a broad stakeholder meeting including both government and development partners. It is preferable if this meeting also includes a representative of parliament and civil society. The assessment can be divided into two parts. A policy-related part can focus on strategic and institutional considerations, including other government systems in use. The second part can focus on AIMS objectives, capacity development needs, ICT infrastructure and considerations of risks and success indicators. An outline of the relevant aspects of AIMS that the needs assessment should include: 1. Strategic Considerations (what are the broad objectives of government, international community and the ODA flow) a. National strategies (strategic plans that is / should be enforced by government) b. Sub-national strategies (sub-national / decentralisation plans that is / should be enforced by government) c. International strategic interests (position of international actors and their influence on government policies through alignment or pressure) d. Aid effectiveness considerations towards government accountability and donor alignment and harmonization (where we are on the Paris Declaration agenda, predictions of trends that need to be supported) 2. Institutional considerations (broad setup of government institutions and donor / implementing agencies) e. Identifying the AIMS Managing Institution (where is AIMS suggested to be located / managed by and for what reasons, considering options) f. Engaging user government institutions (which gov institutions will use AIMS, for what and considering their ownership, buy-in and interests / mandate) g. Identifying and engaging the coordination mechanism and sector / area lead agencies (considering the role of agencies in-country and in particular leading agencies within sectors / cluster areas) h. Assess and describe current practices and aid reporting work flow, for which AIMS can improve and build on. Identify discrepancies between justified process on paper and actual realities. 3. Other systems (existing systems and data flow, migration of data, linkages of AIMS with other systems) i. Identify existing aid management systems, and flow of information associated. Understand limits and problems associated. Assess needs for data migration from these systems. Propose improvements to information flow. j. Identify existing financial/budgetary/debt management systems. Study possible linkages of AIMS with these systems. 4. AIMS Objectives (what strategic interests are AIMS supporting) k. National strategic objectives (which national plans are AIMS monitoring and supporting the implementation of) l. Objectives for managing institution (what mandate and administrative regulations is AIMS supporting to enforce more efficiently) m. Objectives for user agencies (what interests are AIMS supporting and facilitating for user agencies) 9 P age

10 5. ICT Infrastructure Readiness (technical capacity required for successful implementation) n. Computer infrastructure at AIMS managing institution o. ICT Infrastructure for user institutions i. Government institutions ii. Donor / Implementing Agencies 6. Capacity Development Needs (overall capacity development requirements and how the AIMS support fits into related efforts of other agencies) p. Training and support (capacity development support within scope and commitments) q. Other capacity development support (other capacity development needs and how does needs are met by other agencies, projects or other arrangements) 7. Technical / Customization Requirements (overall process and functionality requirements) r. Technical Specifications (describe key workflow components required) s. Future needs 8. External factors and Risks (list specific risks and what should be done to minimize risks, and factors external to government and stakeholder s control that may lead to unsuccessful implementation) 9. Measurable Indicators of Success and impact evaluation 10. Concept Note and management approval (including suggested implementation schedule, cost estimates, management arrangements and maintenance responsibilities) C1.4 Agreeing on AIMS objectives and criteria for success One of the lessons learned from AIMS implementations is that they have often been implemented without clear objectives. AIMS needs specific objectives and an institutional purpose in order to generate sustainable impact. Broad and un-measurable objectives, such as providing transparency of project funds, are not enough. The following are some key elements; a) The AIMS must be implemented in an environment in which it supports both national strategic objectives as well as objectives in relation to the mandates of the government institutions it involves. This must be spelt out and agreed upon by the parties concerned during the assessment phase. The purpose of AIMS should be included in policies and directives. It is important to have acceptance for AIMS as an instrument to achieve certain strategic objectives and enforce related policies and regulations. It is essential that the assessment identifies such objectives, and gets commitments and clarity from government on which broader objectives AIMS is supposed to support. Customization of AIMS will then prioritize these objectives. Ideally there is a National Development Plan or PRSP with clear indicators to be monitored, and a donor conference to request funding to its implementation. The assessment will gauge and seek acceptance for AIMS as a tool for monitoring the incoming funding in relation to the national plan, and monitor its concerted outputs. Predictability of on-budget support is crucial for the national budget process, and AIMS should support the government in ascertaining the future external resource envelope. c) Complimenting the national plan objectives, AIMS should always have objectives for its managing institution, and/or the key user institutions. It is essential that AIMS supports its managing institution to enforce its own mandate and strengthen its work processes. If AIMS is implemented outside the mainstream of an institution, it may not be sustainable and may eventually be sidetracked. 10 P age

11 The more government institutions that have starting using AIMS as a data collection, information lookup and reporting tool, the more internal pressure exists within government to expand its usage and to put resources into its maintenance and development. As a minimum, the needs assessment should address: The role of AIMS in the national strategic framework, and gauge the acceptance and commitments from government to utilize AIMS for this purpose. How AIMS can support the resource allocation process of the national budget. How AIMS can support the mandate-enforcement and practices of its managing institutions, and assess commitments towards using AIMS for these internal purposes. The readiness of key development partners in using AIMS to report their project portfolio to government. Risks and measurable indicators of success, specifying clear outputs. Based on the objectives formulated, the assessment should describe the required technical workflow requirements for AIMS, and this should be included as specifications in the procurement and contracting process. C1.5 Avoiding early mistakes: How do I know I am on the right track? Some of the most crucial decisions for AIMS implementation are considered, discussed and decided at the time of the needs assessment. A key decision is which institution should be the custodian, or manager, of the AIMS system and process. This particular decision tends to remain permanent and very difficult to change, even if the project is failing. a) The lessons learnt in this respect are: Institutions are not as permanent as often assumed. A year or two in a turbulent political process may lead to ministries splitting up or merging, authority structures to be established or discontinued, and in particular presidential / prime minister commissions or temporary offices to be shut down or paralyzed by an un-favorable political environment. Dependence on one or two charismatic persons for longer than the initial period is a risk; institutionalize the system at a technical level quickly. Even though change is often initiated by a few highly motivated and dynamic persons, and a high-level champion is necessary in the induction phase, the project runs a risk depending on them for longer than months: high level individuals may step down or be removed from office, and donor agencies rotate their staff often. Be wary of personal and institutional ambitions that are questionable and perhaps going further than their respective institutional mandates. Power-play between institutions often leads some to take on responsibilities outside their mandate for a temporary time period. It is essential that the assessments look at the legal mandates and regulations of institutions. The assessment should be based on information and consultations with staff from all relevant institutions, not only from the one institution that has been recommended for the assessment team. Consider the institutional setup in the medium-term future, not the current one. Governments are often in a process of change, with major capacity development projects ongoing, building and reforming capacity in new places. Take account of the changing institutional landscape and support other capacity development efforts, and ensure other efforts are not undermined. b) As development partners will be prime users of AIMS, the assessment should investigate how it supports their interests, and how it will be accepted as a reporting tool for them. Often different government institutions issue multiple and overlapping requests for project portfolio data, and thus development partners are reluctant to have yet another set of reporting obligations. Government requests for data are most successful if government commits to centralize the data request, so that the AIMS data reporting is the only consolidated mechanism for development partner reports. It is essential that AIMS facilitates a one-stop-shop type of reporting policy, and shares all agency reported data 11 P age

12 with the relevant government institutions. Development agencies will see the value in this, although they may still need directives and incentives.. It is the responsibility of the managing institution to make clear to the agencies that AIMS is now the place, and that non-compliance hampers national planning and execution, and therefore reflects badly on the respective agency. It is helpful if the required process is described in national policies and strategies, which will increase commitment and peer pressure. A critical decision is what definitions and data classifications to use. For government institutions to sustainably adopt AIMS for serving their own purpose, AIMS must be based on government classifications and definitions. AIMS reporting processes that are based on donor agency classification and project definitions may be easier to implement, but it makes it hard for government to make use of its data. An AIMS project will most probably fail if the data reported and, managed in the system is unusable for the government. The two critical decisions described above can lead to project failure. Imagine the following hypothetical example; Scenario Example; AIMS is implemented following an emergency, under a recently established coordination office under the Prime Minister s office. As donors pledge funds for reconstruction, government unveils a reporting mechanism with AIMS that will allow them to show their funds to the public. Two years later, and after the attention on the emergency is gone, the Prime Minister decides to close the office and merge its activities with the Ministry of Finance. Only a very few officers are moved over to the ministry, together with the AIMS system. However, there are no longer any reconstruction funds pledged, only regular development funds. The ministry has all along had their own way of reporting for aid received on-budget and in relation to the national development plan. The idea of using the AIMS is dismissed because the dataset is reported based on how donors define their projects and with financial figures from donors internal accounting systems. It simply does not adhere to the ministry s requirements and work processes, and is therefore eventually abandoned. The above example is based on experience with some AIMS implementations, in particular in a humanitarian context. The managing institution identified for AIMS may not be permanent and the process of reporting aid may not be based on what the government really needs in the long-term. It should be noted however that some inter-ministerial bodies may be a practical solution, and in particular it may work if made up of permanent civil servants and not temporary project staff. If the setup is temporary or medium-term, there should preferably be a clear long-term solution which does not create ambiguity or conflict when transitioning. C2. Policy Requirements The assessment should consider the overall strategic documents that give guidance to where and how aid is spent. Strategies always entail a responsibility of reporting how resources are allocated to the strategic objectives. Various government institutions or development partners can have different reporting responsibilities on one or many national strategies, and AIMS should seek to support their mandates and reporting obligations. The assessment should consider the pillars and/or strategic objectives of relevant national plans, and consider how AIMS can help monitor resource allocation and results for those objectives. AIMS should also help align to international development processes such as the Paris Declaration Monitoring Indicators. A weakness in many strategic documents is that their indicators are not measurable and difficult to monitor in a quantitative manner. Indicator progress data may not be available or of poor quality. Sometimes strategies have not defined explicit indicators, but indicators may be read out of the strategy. In addition to defining how AIMS may monitor resource allocation, the assessment should also consider the quality of the progress indicators and how AIMS can support results monitoring. 12 P age

13 C2.1 What sort of political support is needed for an AIMS to be successful? The introduction of AIMS imposes changes to how an institution operates. It therefore requires highlevel support in order for this change process to be successful. Middle-managers in a government institution may be eager to take on AIMS for their own purposes, but the moment collaboration with other departments, ministries and development partners is required, they may grow uncomfortable with the task. Much of this political willingness is built during the needs assessment. It is important that government s senior management is at least informed and in principle supportive at an early stage. The assessment should include a stakeholders meeting chaired by a senior manager of government, and inviting the heads of development partner agencies. It is important that AIMS projects are agreed on and signed off at the level of the minister. C2.2 What policies or legislation is needed to underpin an AIMS? There are no generic minimum requirements for what legislation and policies need to be in place for AIMS to be introduced. It is however, required that the process around AIMS reporting is clearly defined and agreed between government and development partners. The preferred policy umbrella for this process is an aid policy, or country localized Paris Declaration. This could also be components of a national plan. If possible, it will be helpful to have these policies in place before AIMS is introduced. C3. Capacity Requirements The most important requirement for AIMS to be successful is that there is government capacity and willingness to coordinate and manage the reporting of aid through the AIMS process. When planning for an AIMS implementation, there needs to be a clear understanding of current capacity of the managing institution, and what level of capacity development is required for successfully implementing AIMS. The needs assessment report should describe what capacity the AIMS project is committed to develop. It should also describe any relevant complimentary capacity development efforts from other projects. This is particularly relevant for support to IFMIS, MTEF and budget process. C3.1 What kinds of capacities are needed for an AIMS to be successful? Governments receiving significant ODA often have a separate department or unit that is responsible for aid management and coordination, and this is a good place for AIMS to start. It should be noted however, that a separate aid management unit is not necessarily a requirement for AIMS to be well managed by government. In some situations aid management units are established because the regular units are not functioning well. There are often stronger incentives to create new units and departments, rather than improve existing ones. In some cases adding another unit creates another dysfunctional layer and confusion at least in the inception period. Governments that manage aid best, do so within their regular departmental structure, and perhaps a small supporting aid liaison unit. In such environments, development partners do best in adding capacity to existing and working functions, rather than creating new ones. To develop and expand institutional capacity takes years, and is not just a matter of adding extra human resources. Great care should be taken when creating new units, and only in special cases where responsibilities are fragmented and it is unclear if existing units could be designated for aid management. Experience from AIMS implementations suggests that the capacity development efforts should focus more on the structured work processes that AIMS, the managing institution and development partners are part of. AIMS projects needs to support and ensure the quality of institutionalizing the reporting process. AIMS managing staff needs to design good and detailed guidelines for AIMS reporting, in particular based on what data is required to make a difference for government planning purposes. Such 13 P age

14 guidelines should be based on consultations with government units to benefit from the data and the development partners who report it. As a minimum the needs assessment should: Describe the current staffing capacities of each relevant government unit, and their part in AIMS reporting process. Capacity development efforts required for AIMS implementation. Describe capacity development efforts to be provided by other development partners C3.2 How do I conduct a Capacity Assessment and prepare a Capacity Development Strategy? The complexity of aid management depends on the volume of the aid portfolio and modalities used. General budget support is the least complex to coordinate and manage for a recipient government, since it is considered as external revenues and spent together with domestic funds in the national budget. A large portfolio of off-budget project support may not require much involvement from government ministries, but perhaps extensive support from a coordination office. A large portfolio of on-budget project support however, relies on government aid management capacity in both the central (resource allocating) ministry and the executing line ministry. Such a portfolio may involve a range of government institutions; a) the budget department must project and monitor its progress as part of the budget process, b) the planning department must monitor it as part of the national plan, c) the respective line ministries are executing the project, d) the central bank and Treasury may manage the accounts. The composition and volume of the aid portfolio may give clear indications of the capacity challenges of the government. Assessing capacity must be done on the basis of what outputs are expected, and what process is required to make it happen. It could be useful to map the relevant units. The aid management task grows exponentially more complex with the number of active development partners and the number of projects implemented. Figure X; Capacity Assessment Human Resources AIMS Process AIMS outputs AIMS Managing Staffing in Aid AIMS quarterly* reporting ODA Annual Report Institution Management unit guidelines, actual disbursements Budget Department Staffing in Budget and Macro-economic unit MTEF and AIMS quarterly planned disbursements Quarterly projections Planning Staffing in Planning National Plan alignment, Paris Mid-year National Plan Department unit Indicators alignment and commitments Development DP Focal Point AIMS quarterly reporting guidelines, On-budget clarity and Partners appointed and trained Consultative Group / DP information for coordination meetings Coordination purposes * Quarterly reporting is recommended and also allows alignment with various fiscal calendars. The reporting schedule must however, be determined based on country needs and in conjunction with the national budget process. C3.3 AIMS Management Functions All functions explicitly required for AIMS may be taken on by existing staff. Where there are no suitable staff available for the roles required, new positions may be considered. We distinguish between two roles; AIMS Administrator / Manager, who manage the data management process, users and how they use the system; and the AIMS Technical Administrator, who ensures that the IT system is running and available for the users. AIMS require an administrator, and this is the key manager for the AIMS process. The administrator should be a person with knowledge of the aid management process, and a detailed understanding of how the government plans, allocates and accounts for aid. The Administrator is preferably an aid management officer or manager who takes on the role as AIMS administrator. This function should not be taken on by an IT 14 P age

15 officer. An IT unit with at least one capable officer is also required, unless AIMS is hosted out-of-country. The IT function can be referred to as the Technical Administrator. Some key TOR elements for AIMS Manager / Administrator may include: Facilitate, design and implement the AIMS data management plan. Coordinating government liaison with development partners for AIMS reporting. Design and enforce the AIMS Reporting Guidelines. Validate data reported by development partners and line ministries on behalf of government. Ensure timely reports are produced, in particular for the government planning and budget process. Quality control AIMS data used for official reports. Train users in data management and system features. Some key TOR elements for Aid Management Officer may include: Support selected sector clusters, as part of the coordination mechanism, and enable such meetings to make informed decisions based on all available relevant policies, strategies, data and coordination tools. Be focal point for selected development partners as directed, and support these with policy regulations, guidelines and national strategies. Support and ensure that selected development partners are reporting to AIMS and following the Reporting Guidelines. Quality control data reporting and ensure consistency with government classification and usage. Support development partner and relevant government institution on overcoming coordination challenges. In a larger Aid Management Unit, it would make sense to appoint one officer with a particular responsibility for reporting; to produce and update reports for publication and distribution. Some key TOR elements for an Aid Management Officer with Reporting Responsibility may include: Prepare and distribute progress reports to implementing agencies, state officials at all levels to facilitate coordination, planning and monitoring Ensure coherence between strategies and policies, and AIMS analytical reporting outputs. Some key TOR elements for Technical Administrator / IT Officer may include: Ensure security and integrity of data by using appropriate firewall, virus detection software and regular backups (at least once a month). Ensure that server(s) are operating 24/7 and user connectivity is reliable. Liaise with AIMS provider on technical support. C3.4 What kind of internet connectivity, network, or computers do I need? For the managing and user government institutions, the assessment must investigate in more detail the computing, network and connectivity for key staff functions. A local network also requires well managed network security, which may otherwise slow down the access to AIMS. Power supply and backups should also be assessed. For good operation it is advised that the server has a minimum of 512kbps dedicated connection to the internet backbone. The minimum connection depends on number of users and the load it receives. Consider peak usage around reporting deadlines. It is also important to check the quality of service by the ISP service providers. Even if the AIMS is well connected over one service provider, users accessing through other ISPs may experience problems because of poor connections between the competing ISP companies. AIMS can also be hosted by an internet service provider, ensuring good internet connectivity and security. It is then important that the administrative users have a strong dedicated connection with the internet service provider. If no such capacity exist in-country, an alternative is out-of-country hosting. 15 P age