Chapter Six: Aid administration and management
AusAID is an administratively autonomous agency within the Foreign Affairs and Trade portfolio. The agency is responsible for the management of the Australian Government's overseas aid program.
The Director General reports directly to the Minister for Foreign Affairs on all aspects of aid policy and operations. The Director General is responsible to the Secretary of the Department of Foreign Affairs and Trade for the administration of AusAID and is a member of the department's Executive.
AusAID has a central office in Canberra and is represented at 23 diplomatic missions overseas. Overseas representation supports the aid program's operations in developing countries and with multilateral agencies.
Strategic plan
In 2001 AusAID undertook a major strategic planning initiative to ensure the agency is positioned to respond to the increasingly complex international development environment and to deliver an aid program that continues to advance Australia's national interests.
This initiative was based on a recognition that donors face new challenges for aid effectiveness - a need for strengthened policy engagement with partner countries, greater focus on assisting aid recipients to build their own development capacity, closer coordination among development partners and less reliance on stand-alone projects.
The AusAID Strategic Plan was issued in December 2001. Key operational changes outlined in the Plan include:
- better program strategies through, for example, increased attention to development research and analysis
- more rigorous selection of program activities to align with strategies
- greater efforts to improve quality of activities, particularly at the design stage
- broadened participation in the delivery of the aid program
- continuous improvements to contracting, including use of a wider range of contract models, streamlined tender and contract documentation, and expansion of the contractor performance system
- expanded use of specialist expertise and integration of this within program and policy areas
- a greater focus on in-country program and contract management and monitoring.
The agency is now moving to implement these changes. Dialogue with partner governments and other stakeholders is a priority in the development of detailed implementation arrangements for the initiatives outlined in the AusAID Strategic Plan.
AusAID outputs
AusAID's core business is to serve the Government by advising on development issues and delivering Australia's development cooperation program with excellence. AusAID has a single outcome: Australia's national interest advanced by assisting developing countries to reduce poverty and achieve sustainable development. Two agency outputs contribute to this outcome: policy and program management. The Government will purchase these two outputs from AusAID at an agreed price of $10.4 million and $56.7 million respectively in 2002-03. AusAID's people management and corporate systems support the delivery of these two outputs.
Policy advice
AusAID provides advice and analysis to the Minister for Foreign Affairs, the Minister for Trade, and the Parliamentary Secretary to the Minister for Foreign Affairs on aid policy, program directions and international development issues. The provision of timely, comprehensive and accurate policy advice and analysis allows the Government to make informed decisions in the national interest.
The agency also supports Government communication with the Australian community and Parliament through the provision of briefings, speeches, correspondence, press releases, replies to parliamentary questions and publications. This helps build community understanding of development issues and ensures that the aid program remains accountable to the Government, the Parliament and the Australian public.
Program management
AusAID manages Australia's overseas aid program on behalf of the Government. Actual delivery of the aid program is outsourced. AusAID's program management seeks to:
- ensure programs and projects correspond with Government priorities and are defined in partnership with the people and governments of developing countries
- ensure high quality projects and programs through effective identification and design, regular monitoring, evaluation, identification of lessons learned, and access to technical expertise and external advice
- establish and manage contracts with delivery agents including the private sector, public sector providers, international and regional development organisations and community groups including NGOs.
In 2002-03, AusAID will seek to develop a greater focus on in-country activity management. This will improve the effectiveness of activity management by enhancing field-level decision-making, responsiveness to local circumstances and dialogue with partner governments.
Improving impact and effectiveness
AusAID places a high priority on improving the quality and impact of the aid program, particularly in strengthening the effectiveness of aid delivery and the sustainability of activity benefits. During 2002-03, AusAID will continue to promote a more comprehensive and efficient approach to program management and implementation.
A key contribution to enhancing aid quality will continue to be made through the work of the Quality Assurance Group (QAG). Significant progress has been made over the past three years in developing the approach to quality assurance through regular reviews. During 2001-02, the QAG, in partnership with NGOs, assessed quality in design and implementation of NGO activities funded through the aid program. The findings of the review will form the basis for further AusAID dialogue with NGOs during 2002-03 to promote and support continuous improvement in NGO project quality.
In 2002-03 AusAID will conduct reviews that focus on key program and sector priorities. These will include examination of capacity building and institutional strengthening approaches, cofinancing programs and volunteer programs. AusAID will also assess the efficiency and impact of changes to aid management systems associated with the implementation of the AusAID Strategic Plan. A program of reviews of Australian assistance to key regional organisations will continue.
Learning from experience
To improve AusAID's performance, it is important to make good use of knowledge generated in the process of delivering aid programs - what works, what doesn't, and why. This includes drawing on AusAID's own experience and that of other donors. In 2002-03 greater emphasis will be placed on lessons learned by improving the feedback loop from our experiences on the ground. This will be tackled in a number of ways, including strengthening procedural guidance and tools, enhancing peer review processes, and providing examples of good practice.
In association with the redevelopment of AusAID's management information system, improvements to the collection, analysis and reporting of program performance information will be implemented during 2002-03. These improvements will provide management with a better basis for decisions on program design and delivery.
Contract services
AusAID contracts firms and individuals to deliver activities at all stages of the project management cycle: feasibility, design, implementation, review and evaluation. AusAID has been undertaking a range of reforms designed to improve the contracting process, and these initiatives will continue in 2002-03. They include: significant streamlining of tender and contract documents, greater emphasis in contract documents on the achievement of strategic milestones, increased use of contracting models that focus on achievement of major outputs, giving balanced corporate feedback to contractors, and tying more directly the capacity to win future contracts to the past performance of contractors.
An increased emphasis on program quality is one of the main themes of the AusAID Strategic Plan. This will affect contracting arrangements in several ways. For example, the choice of contracting models will be expanded so that the `best for project' contracting strategy can be utilised. AusAID will continue to consult formally with stakeholders, including industry, about the reforms.
People Management and Corporate Systems
People management
The AusAID Strategic Plan includes a broad agenda for aligning the agency's approach to people management with the new strategic directions for the agency. The plan also identifies the need to strengthen the capability of staff to deliver the outcomes identified in the plan.
In 2002-03, AusAID will implement its updated People Management Strategy. The new strategy will ensure that AusAID can position itself to meet its future needs as a professional government agency, with skilled staff working in an environment that helps them achieve their full potential. As part of the new strategy, AusAID will implement a practical approach to workforce planning, identify training and development needs for the agency, initiate a program of skills development and implement its updated performance management system.
Financial, statistical and information management
AusAID is developing the Information Management and Technology (IM&T) Strategic Plan 2002-2005 to bring IM&T into line with the key corporate priorities outlined in the AusAID Strategic Plan. The major focus of the IM&T strategic plan is on providing appropriate information management systems to support the effective delivery of the aid program. The aim is to achieve seamless and transparent interfaces between AusAID's various information systems to ensure better efficiency and functionality.
A number of applications are currently being redeveloped to achieve this aim, including AusAID's Activity Management System (AMS), which will be replaced by AidWorks. AusAID will also redevelop information systems used for aid statistics and scholarship student information. A redeveloped financial system will be implemented in 2002-03 and will result in improved systems integration, more flexible internal reporting and faster end of month processes. These initiatives are being undertaken in accordance with the Government's policy on outsourcing through partnerships with small to medium Australian enterprises capable of delivering leading edge technologies.
An Information and Research Services Unit was created in February 2002 to better integrate information management within the agency. In 2002-03 the Unit will consolidate changes associated with the provision of library and statistical services, with an increasing emphasis on electronic service delivery.
Enhancing corporate performance
Key business processes are being reviewed in order to improve performance and enhance the transparency and accountability of AusAID's corporate governance structures. An improved risk management framework has been adopted, which will require the preparation of risk management plans at corporate, branch and program levels.
The internal audit strategy for 2002-03 will take into account these risk management plans and the review of business processes. It will also place greater emphasis on reviewing the performance of specific programs in aid delivery. In 2002-03 AusAID will continue to conduct audits of significant contractors and NGOs.
