7. HowTo Guide C5-2: Costing a Multi-Year, Multi-Sectoral, and Multi-Level M&E Work Plan Step 1:
Select a costing methodology
Carefully consider which planning and costing methodology to use before embarking on this process. There are four possible methods for estimating the costs associated with implementing the M&E system: 1.
Conventional Cost Accounting (CCA): This method focuses primarily on determining financial costs based on categories of direct and indirect costs associated with a particular product, service, or process (e.g., salary costs, procurement costs, or consultancy costs) as illustrated in the example below. CCA works well in organizations with regulated or standard business processes, such as government offices. $10,000
Maintenance costs of school buildings
$4,000
Textbooks
$8,000
Operational costs
$8,000
TOTAL
Chapter 5
Salary costs of all teachers
$ 30,000
2.
Mathematical modeling: In mathematical modeling, formulas are used (derived from specific numerical inputs into a model) to calculate the anticipated costs of a program.
3.
Unit cost method: In this method, the unit costs of specific functions or processes are determined and then multiplied by the number of people intended to receive the particular service. The unit cost method works well for repetitive processes where the unit costs are known. The GOALS model by the Futures Group is an example of a unit cost method. In the GOALS model, the estimated coverage of services is determined, the unit cost of providing the services is determined, and the two numbers are then multiplied by each other, as illustrated in the following example: Service coverage
1000 children need to be in primary school
Unit cost of providing services
$60.00 per year to provide primary education to a child
Calculation to determine total cost: 1000 children x $ 60.00/child = $ 60,000 to provide primary education to 1000 children
Costed Monitoring and Evaluation Work PLans
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