Presented by

Conrad Barbertonconrad@cornerstonesa.net

Practical issues on implementing costing for ECDN

Presentation to the ECD-Nutrition Measurement Workshop,

World Bank, Washington

4 - 5 February 2015

Uses of costing information• Research and lobbying

– Evaluating the benefits and costs of ECDN interventions

– Evaluating the cost-effectiveness of different ECDN interventions

• centre-based ECD versus home-based visiting

• structural quality of centres versus process quality of teaching

– Comparing costs across programmes and countries

• Government policy, planning and budgeting

– Evaluating the fiscal cost of proposed ECDN policies

– Evaluating the cost of scaling up existing interventions

– Developing budgets for implementing ECDN programs

– Designing approaches to managing disbursements / subsidies

• Private funding of ECDN

– Determining funding requirements – for funding applications to donors or gov.

– Determining sustainable prices to charge caregivers

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Comparability of costing information• There is no agreed approach to measuring the benefits of

ECDN, making it difficult to compare the cost-effectiveness of

interventions

• Generally ECDN cost information is not comparable across

programs and countries because:

– different programmes deliver different ECD doses…

– differences in what is included in the costing and what not

– differences in the treatment of capital, discount rates, exchange

rates, volunteers’ time, technical assistance, etc.

• Costs of pilots are not good benchmarks for upscaling

“too little attention is paid to elements of systems building—training and

supervision, monitoring and evaluation, payment mechanism—that are crucial for

the quality, equity and sustainability of large-scale ECD programs”

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Need for a common approach

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The availability of a template or guidelines developed with input from researchers

should facilitate data collection and increase the payoff from such efforts by creating a

database of cost data that are comparable across programs

• Need to agree on the purpose for comparing costs as this will

determine the costing approach that informs the design of the

template

• Comparing the cost-effectiveness of different ECDN

interventions requires a common approach to defining and

measuring both outcomes and costs

• Comparing per capita costs and overall program costs of

different ECDN programs only requires a common approach to

defining and measuring costs

Designing a costing template

• A ECDN costing template would need to accommodate:

– a diversity of ECDN programs

– different approaches to the bundling of services

– the systems required to manage large-scale programs

– heterogeneity in the location of implementation (e.g. urban/rural)

• The focus would be to model comparable results for:

– the total cost of an intervention or program

– the cost of the management and oversight systems

– the costs for specific delivery units – centres, teams or groups

– the average cost of programs per capita

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Costing template: things to standardize• The naming and description of ECDN interventions

• The definition of beneficiaries

• The definition of ECDN outputs (dose) and outcomes

– and the period over which they are measured

– (would no try to monetize benefits – as in cost-benefit analysis)

• The inputs that are to be costed

– and how they are counted (e.g. staff time)

– and classified into categories (start-up costs and fixed vs variable costs)

• Treatment of donated items and volunteers’ time

• Discount rates used in relation to training and capital inputs

• Exchange rates

• Baseline years to ensure comparability over time

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Standardising the approach to marginal costs?

• The marginal cost of a production process is the cost of

producing one more unit of a good

– e.g. the cost of adding one more child to an ECD class

• It is often difficult to standardise marginal costs because:

– the additional ‘unit’ can be very different in different contexts,

• e.g. one extra child, an extra home visiting team, an extra ECD centre, an extra region etc.

– there are often capacity thresholds for different kinds of inputs

• e.g. if the prescribed child to teacher ratio for an ECD class is 30, the marginal cost for child

29 is very different to the marginal cost for child 31

• Marginal costs are generally less relevant from a budget

management perspective than average costs

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Standardising the approach to opportunity costs?

• The opportunity costs of a resource is the value of the next-

highest-valued alternative use of that resource

– the opportunity cost of volunteers’ time helping at an ECD centre

• Comparing the opportunity costs is very difficult because

‘alternative use’ possibilities vary widely across different

contexts

– volunteers’ may have real alternatives or not, so their opportunity

costs would differ accordingly

– the opportunity costs of ECD fees to a poor family is very

different to a rich family

• Rather than trying to calculate the opportunity costs rather

describe the private resource inputs of different role-players

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Example of a simple costing template:

Costing to support budgeting for

ECD programmesin South Africa

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Case Study 2:Costing to

support budgeting for ECD programmes

in South Africa

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Costing to support budgeting

• What does the Department of Social Development

need to budget to expand ECD services based on

the models that have been developed in partnership

with Ilifa Labantwana?

– Focus on replicating and/or scaling-up the service delivery

models that formed part of the Ilifa initiative

• Output: detailed costing model of

– the ECD centre quality improvement programme

– the Home Visiting by Family & Community Motivators (FCM)

programme

• Used for planning and budgeting

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Practical issues relating to a costing template

• Need to think about who needs to be involved in its

development, but who should have the “final say” on

certain methodological issues

• Need to think about who “owns” the template and

therefore who is responsible for keeping it current:

– Updating key variables such as exchange rates, inflation indexes

etc.

– Verifying the consistent application of the framework

– Modifying the template so as to continuously improve it

– Keeping a database of studies that use the template

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The End

QUESTIONS

AND

DISCUSSION