## _040308a — Executive Summary & Selected Sections on TA Reform

## Source details

**Canonical URL:** [_040308a — Executive Summary & Selected Sections on TA Reform](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2008/_040308a.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2008/_040308a.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2008/_040308a.pdf.json)

---

### I. Purpose, scope, and context
- Paper outlines reforms to increase impact of the Fund’s Technical Assistance (TA), building on:
  - Medium-Term Strategy (MTS), Independent Evaluation Office (IEO) recommendations, Malan Committee, Fund Review of RTACs, Crockett Committee, and Managing Director’s refocusing exercise.
- Scope exclusions:
  - Reprioritization of TA resources reflecting current budgetary environment (to be reflected in RSNs for FY2009) is excluded.
  - External training by the IMF Institute (INS) and FSAPs/ROSCs are excluded per budget classification (though they constitute TA under the Articles of Agreement).

### II. Cross-cutting recommendations and prior external advice
- Selected prior recommendations (preserved wording excerpts):
  - “Implement charges graduated according to income.”
  - “Improve TA prioritization in the context of a constrained budget and make it more demand driven.”
  - “Step up fundraising.”
  - “Consider charging for direct services to members to help rationalize demand and enhance efficiency, even if donors help to defray costs for countries unable to afford the charges.”
  - “Identify the full cost of bilateral services to benchmark against other providers and enhance transparency.”
  - “Better coordinate TA delivery with the Bank.”
  - “Provide TA based on the relative expertise of the Bank and the Fund, not differences in TA costs.”
  - “Promote increased country ownership of TA.”
  - “Strengthen TA monitoring and evaluation.”
  - “Establish medium-term country policy framework for setting TA priorities, linked to more systematic assessment of factors affecting past performance.”
  - “Design a more systematic way to track progress and identify reasons for shortfalls.”
  - “Align RTAC strategies with Fund strategic priorities.”
  - “Strengthen RTAC operations by focusing more on reporting results.”

### III. Current TA delivery, focus, and relative scale
- TA as core Fund activity: “in most cases, it is currently provided without charge to any requesting member country.”
- Geographic and income focus (TA Field Delivery in Person-Years; average over FY2002-07; excludes CARTAC):
  - Low income countries: 47 percent
  - Lower middle income countries: 32 percent
  - Upper middle income countries: 11 percent
  - High income countries non OECD: 3 percent
  - OECD countries: 0.5 percent
  - “Benefiting countries with different income levels (6.6 percent)”
- Per capita income thresholds (reproduced exactly):
  - $ 11,115 < high
  - $3,595 < upper middle < $11,115
  - $905 < lower middle < $3,595
  - low < $905
- Areas of TA expertise listed: “macroeconomic policy, tax policy and revenue administration, expenditure management, monetary policy, the exchange rate system, financial sector stability, legislative frameworks, and macroeconomic and financial statistics.”
- Relative scale cited: OECD DAC aggregate technical cooperation in related areas about US$3.5 billion in 2003 versus the Fund’s allocation to TA of less than US$0.2 billion a year.
- Modes of delivery: field missions by HQ staff (short, strategic), long-term and short-term experts, resident advisors, RTACs; HQ functions include mission preparation, report finalization, desk-based TA, backstopping, expert management, TA policy development, research, evaluation, and outreach.

### IV. Prioritization and integration with surveillance and lending
- Reform objective: “enhance the integration of TA with surveillance and Fund lending operations.”
- Regional Strategy Notes (RSNs):
  - Purpose: “to enhance prioritization by better aligning TA with strategic objectives of the recipient country and the Fund.”
  - Process: area departments and TA departments, in consultation with country authorities, set out a medium-term TA agenda in RSNs and map them into the Resource Allocation Plan (RAP).
- Charging regime: “Prioritization would further be strengthened by a charging regime.”

### V. Projectization, performance measurement, and evaluation
- Project orientation and performance indicators:
  - “The Fund-wide introduction of performance indicators will make TA more transparent and accountable.”
  - TA to be primarily organized as projects, each with clear objectives, deliverables, and measurable progress indicators; distinguish Fund-controlled areas from those requiring authority action.
- Evaluation and learning:
  - “Fund evaluation of TA is expected to become more systematic in monitoring and assessing results and to better disseminate lessons learned.”
  - IEO and Directors: “TA evaluation should become more systematic in assessing results. Lessons learned from self-assessment and evaluation should be incorporated in TA work more systematically.”
- Costing:
  - “Better costing of TA projects will help ensure efficient allocation of resources, better inform management decisions and enhance accountability.”
  - Costing benefits: awareness of absolute cost of TA, relative cost vis-à-vis other TA providers, and basis for charging and billing of donors.

### VI. Financing, charging, and donor partnerships — FY2007–FY2008 figures and medium-term context
- TA Cost Allocation (Millions of US$; methodology changes limit comparability):
  - Direct cost of TA: 110.2 (FY2007 Outturn), 107.3 (FY2008 Budget)
  - Externally financed TA: 28.2 (FY2007 Outturn), 34.2 (FY2008 Budget)
  - Internally financed: 81.9 (FY2007 Outturn), 73.2 (FY2008 Budget)
  - INS: 7.2 (FY2007 Outturn), 0.0 (FY2008 Budget) — “For FY2007, misclassified under TA; excluded from FY2008 onward and included under external training.”
  - Total TA: 117.4 (FY2007 Outturn), 107.3 (FY2008 Budget)
  - Governance and support: 79.0 (FY2007 Outturn), 59.6 (FY2008 Budget)
  - Grand total: 196.4 (FY2007 Outturn), 167.0 (FY2008 Budget)
  - Note: methodology for assigning cost to output groups changed substantially between FY2007 and FY2008.
- Medium-term TA Cost Allocation (as presented):
  - FY2008 FY2009 FY2010 FY2011 (Budget, Millions of US$)
    - Direct cost of TA107.3110.7110.6-119.6112.6-125.6
    - Externally financed TA34.246.545.9-54.947.8-60.8
    - Internally financed73.264.264.764.8
  - (Millions of 2008 US$)
    - Direct cost of TA107.3106.4102.2-110.6100.1-111.6
    - Externally financed TA34.244.742.4-50.742.5-54.0
    - Internally financed73.261.759.857.6
  - Source cited: "The FY2009-FY2011 Medium-Term Administrative, Restructuring, and Capital Budgets," OBP.
- Financing considerations:
  - Internally financed TA expected to decline by about 20 percent in real terms over the medium term because of Fund restructuring.
  - For FY2009, existing donor commitments expected to largely offset these cuts.
  - Beyond FY2009, meaningful financing decisions require better information on demand for Fund TA.
- Charging as financing option:
  - Charging introduced primarily “to make TA pass a market test” and provide price signals and ownership incentives.
  - Current charging limited to resident advisors; upper middle-income and high-income countries required to provide cash contributions for resident advisors.
  - Charging policy authority with the Managing Director in consultation with the Executive Board.
  - Proposed Charging Regime for Nonprogram Countries (Percent of cost base):
    - Income Group 1
      - Low income20
      - Lower middle income40
      - Upper middle income60
      - High income100
  - Income group definitions (preserved exactly): low income: $905 or less; lower middle income: $906–3,595; upper middle income: $3,596–11,115; and high income: $11,116 or more. Adjusted annually.
- Potential net revenue estimate from charging:
  - About US$9 million per year, assuming no reduction in demand.
  - Estimate based on FY2007 detailed TA delivery data, using average personnel and travel costs.
  - Estimate assumes a reduction in TA by 20 percent compared with FY2007 and administrative cost of 10 percent of revenue.
- Timing:
  - Systems and work practice changes for costing expected to become operational in the course of FY2009.
  - Charging to be implemented with FY2010.
- Exemptions:
  - Program countries (account for about 40 percent of Fund internally financed TA) and externally financed TA (including RTACs) to be exempted.

### VII. Management, RTACs, and delivery mix
- RTACs:
  - Six RTACs expanded (Pacific; the Caribbean; East, West and Central Africa; and the Middle East); RTACs provide “technical and diagnostic studies, training, seminars, workshops, and online” assistance.
  - RTACs “found to be effective and efficient,” supporting increased use.
  - Recipient contributions in some RTACs can be substantial (example provided: contributions up to 70 percent for Central AFRITAC).
- Delivery mix and staffing:
  - Small share of TA field delivery provided by Fund staff; many activities rely on experts and RTACs; HQ undertakes desk work, backstopping, and policy/evaluation functions.
- Devolution and experimentation:
  - For FY2008 a reserve equal to 5 percent of internal financing for short-term experts and travel or US$1.2 million was set aside for unanticipated TA needs; area departments bid for reserve after mid-year RSN revisions.
  - For FY2009 staff experimenting in devolving some external funds to area departments; about one third of external funds to be allocated in early April via RSN/RAP prioritization with CCB oversight (purchaser-provider variant).

### VIII. TA quality control, standards, and RSN/RAP integration
- TA quality control:
  - HQ backstopping and peer review are hallmarks of Fund TA quality control.
  - Area departments monitor TA delivery and implementation via Article IV consultations and program missions.
  - Fund maintains a roster of experts; certification procedures emphasize performance records and familiarity with international best practice.
- RSN/RAP/MTB integration:
  - Two coordinated exercises: top-down (management/OBP sets budget ceilings) and bottom-up (area departments allocate resources via RSNs and RAPs).
  - RAP to be presented both in dollar and person-years; further standardization and methodological refinements needed.
  - Planned change: starting with FY2010, the CCB will decide annual allocations to TA areas.
  - Next steps include fine-tuning RSN mapping into RAPs, enhancing systems and work practices for bottom-up planning, and aligning RAP with MTB including incorporation of potential new external financing.

### IX. Measuring TA performance — framework and systems
- Movement to results-focused project management:
  - Projects defined as “a set of one or more related activities that within a specified period generates measurable outputs and contributes to achieving a certain objective.”
  - Project features: outputs delivered by staff and expected outcomes under recipient country control; attainment verified through objectively observable criteria; projects dynamic and amendable; authorities consulted in design to ensure ownership.
- Quantitative indicators:
  - Three-tier project ranking (introduced FY2008):
    - Tier 1—multi-event, multi-topic
    - Tier 2—multi-event, single topic
    - Tier 3—single event, single topic
  - Final quantity outputs include: number of different projects; number of countries receiving tier 1 and tier 2 TA; number of reports.
- Qualitative indicators and evaluation procedures (STA three-stage):
  - 1. End-of-Mission Assessment Report for each TA mission.
  - 2. Within a year of project completion, recipient country prepares a Project Evaluation Report (PER) using a standard template; authorities assess achievements and sustainability on a scale of 1 to 4; STA and area department comments may be added.
  - 3. Program evaluation after TA has been provided in several topical areas for three to five years; STA plans to conduct a TA program evaluation in two regions every year, staggered coverage.
- Costing gaps and intended improvements:
  - Current gaps: HQ staff time generally not attributed to specific projects (exception: CAFRITAC uses TRS to allocate staff time and quarters bills multi-donor subaccount).
  - Implementation steps: collect all project-related cost information, measure staff time by project, enhance reporting systems, and explore attributing cost to project outputs.
  - Current billing practice: Fund bills donors on a standard cost concept lumping travel and personnel costs; Fund recovered 98 percent of field delivery costs of donor-funded TA over the past three years.
  - Fund will change billing to more appropriately reflect actual costs.
- TAIMS (Technical Assistance Information Management System):
  - Introduced 2004 as central repository; had serious problems: lack of departmental agreement on conceptual model/use, usability issues, inconsistent/incomplete departmental use.
  - Example usage metrics: only 15 percent of all TA missions in FY2007 were linked to TAIMS projects; two-thirds of externally financed projects lacked an end-of-project assessment; one-fifth lacked project outputs; more than one tenth lacked project objectives.
  - Planned revisions to conform with results-focused project management and simplify user interface expected to be completed by April 2008.
  - From FY2009 onward, TA departments to report both internally and externally financed projects in TAIMS.
- Next steps for evaluation, systems, costing, reporting:
  - Develop conceptual framework for evaluating Fund TA projects; majority of projects to have self-assessment complemented by external evaluations; involve TA recipients in evaluation framework.
  - Review TAIMS entries and performance in October 2008.
  - Capture cost data by linking TAIMS to systems housing staff time (TRS) and travel cost (TIMS and FACTS); changes expected completed by mid-FY2009.
  - Refine billing procedures to include all project-related costs for new donor arrangements and progressively for current donors; TA accounting must meet external audit standards and formal closeout procedures be established.

### X. Charging regime design, revenue estimates, and administrative arrangements
- Charging principles and scope:
  - Charging to take into account country income and program status.
  - Proposed regime differentiated by per capita country income and exempts program countries and externally financed TA (including RTACs).
  - Cost base for charging: “All project-related actual costs as discussed in Section IV (that is, staff and expert salaries and benefits, and travel costs).”
  - Timing: costing systems operational in course of FY2009; charging implemented with FY2010.
- Proposed Charging Regime for Nonprogram Countries (Percent of cost base):
  - Income Group 1
    - Low income20
    - Lower middle income40
    - Upper middle income60
    - High income100
- Income group definitions (preserved exactly): low income: $905 or less; lower middle income: $906–3,595; upper middle income: $3,596–11,115; and high income: $11,116 or more. Adjusted annually.
- Revenue and administrative considerations:
  - Potential net revenue estimate: About US$9 million per year, assuming no reduction in demand.
  - Estimate assumptions: based on FY2007 detailed TA delivery data, using average personnel and travel costs; assumes a reduction in TA by 20 percent compared with FY2007 and administrative cost of 10 percent of revenue.
  - Administrative cost of charging system tentatively estimated at 10 percent of revenue (or $1 million annually with net revenue of $9 million, assuming no reduction in demand).
  - Staff exploring upfront payment options to prevent arrears or procurement delays.
- Integration with prioritization:
  - Charging must be integrated with RSN/RAP; willingness to pay signals demand and value attached to Fund TA and helps allocate implicit subsidy under differentiated charging.
- Charging practices elsewhere (summary):
  - No uniform practice among multilateral TA providers; common practice: TA related to a loan typically financed via loan, other TA generally free of charge.
  - Examples: IFC (2007) prices TA inversely related to public benefits; IBRD charges for TA beyond normal work practice and provides some full fee-for-service TA to upper middle-income countries (about US$15 million per year).
- Donor partnerships and product lines:
  - Strategy: bundle TA in product lines (topical trust funds) to highlight links to donor development strategies; expand delivery through RTACs.
  - Changes to attract donors: OTM one-stop window, donor gateway with TA information, results-focused project management, transparency of TA costing, sharing regional strategies with donors.
  - Constraints: donor interest in a general administered account limited due to earmarking; trust fund modeled for proportional burden-sharing equivalent to endowment financing.

### XI. Box 6 — Action Plan and resource implications (selected numerical items)
- RSN/RAP/MTB coordination:
  - Area departments expected to spend about one additional staff year to prepare RSNs in FY2008.
  - Fully integrating RAP with MTB estimated to cost 1.25 of an additional staff year.
- TAIMS revamp and related costs:
  - Capital costs of US$0.5 million for FY2008/09.
  - Start-up costs for TAIMS usage in FY2009, including staff training of about one staff year.
- Collecting and billing project-related costs:
  - Start-up costs of about US$0.6 million to change systems and train staff to identify project backstopping and management cost.
  - Start-up costs estimated at US$0.2 million to change systems to allow more accurate billing.
  - Compliance and ongoing data management estimated at about ¾ staff year.
- Charging regime administration:
  - Cost of administering system tentatively estimated at 10 percent of the revenue raised (or $1 million annually with net revenue of $9 million, assuming no reduction in demand).
- Fundraising and RTACs:
  - Administering funding for topical trust funds: each additional $5 million expected to cost about one staff year (recouped through trust fund management fee).
  - Opening a new RTAC: one-off start up cost of about $0.7 million; on a permanent basis, one staff as a coordinator.

### XII. Conclusions and questions for Board discussion
- Reforms aim to:
  - Integrate TA with surveillance and lending to improve prioritization.
  - Strengthen RSNs and map them to the RAP and medium-term budget (MTB).
  - Projectize TA with clear objectives, deliverables, and performance indicators.
  - Improve costing, enable a differentiated charging regime (with income-graduated charges and subsidies for LICs), and step up fundraising and donor partnerships.
  - Systematize TA evaluation and disseminate lessons learned.
- Resource implications and expectations:
  - Charging regime expected to yield net revenue of $9 million, assuming no reduction in demand.
  - Some reforms included in MTB; others expected to be resource neutral or raise revenue.
  - Opening new RTACs, while mostly externally financed, will require additional Fund resources.
- Questions posed for Executive Directors (preserved focus):
  - Is the proposed action plan appropriate and does it leverage the comparative advantages of Fund TA?
  - How much emphasis should the Fund give to expanding its evaluation framework?
  - Will charging, combined with fundraising, avoid unduly rationing TA for those that need it most and contribute to more efficient allocation?
  - Will bundling TA into topical trust funds and increasing delivery through RTACs enhance partnerships with donors?

*Source: Executive Summary and selected excerpts from IMF document _040308a (IMF).*

### Executive Summary ......................................................................................................

### Executive Summary

### I. Introduction — purpose and context
- Paper outlines reforms to increase the impact of the Fund’s Technical Assistance (TA).
- Reforms build on the Medium-Term Strategy (MTS), the Independent Evaluation Office (IEO) recommendations, the Malan Committee, the Fund Review of Regional TA Centers (RTACs), the Crockett Committee, and the Managing Director’s refocusing exercise.
- Emphasis: make TA more effective and efficient while building on its strengths.
- Scope note: the paper excludes reprioritization of TA resources in light of the current budgetary environment (to be reflected in RSNs for FY2009); external training by the IMF Institute (INS) and FSAPs/ROSCs are excluded per budget classification (though they constitute TA under the Articles of Agreement).

### II. Key cross-cutting recommendations and prior external advice (Box 1 — Selected Recommendations on TA-Related Issues)
- Refocusing: Strategic Directions in the Medium-term Budget (2008)
  - “Implement charges graduated according to income.”
  - “Improve TA prioritization in the context of a constrained budget and make it more demand driven.”
  - “Step up fundraising.”
- Crockett Committee (2007)
  - “Consider charging for direct services to members to help rationalize demand and enhance efficiency, even if donors help to defray costs for countries unable to afford the charges.”
  - “Identify the full cost of bilateral services to benchmark against other providers and enhance transparency.”
- Malan Report (2007)
  - “Better coordinate TA delivery with the Bank.”
  - “Provide TA based on the relative expertise of the Bank and the Fund, not differences in TA costs.”
- MTS (2006)
  - “Better align TA and external training with other core Fund activities.”
  - “Promote increased country ownership of TA.”
  - “Increase focus on areas of comparative advantage.”
  - “Strengthen TA monitoring and evaluation.”
  - “Explore scope for mobilizing outside resources for TA and external training, in particular scope to combine full charging for direct cost of TA with creation of a trust fund to subsidize TA to LICs.”
- IEO Evaluation of Fund TA (2005)
  - “Establish medium-term country policy framework for setting TA priorities, linked to more systematic assessment of factors affecting past performance.”
  - “Design a more systematic way to track progress and identify reasons for shortfalls.”
  - “To signal ownership, involve authorities and counterparts more in the design of TA and follow-up.”
  - “Ask experts to do more to identify options and discuss alternatives.”
  - “Widen ex post evaluation and adopt systematic procedures for disseminating lessons.”
  - “In prioritizing TA, make explicit all strategic decisions and tradeoffs.”
- Fund Review of RTACs (2005)
  - “Align RTAC strategies with Fund strategic priorities.”
  - “Strengthen RTAC operations by focusing more on reporting results.”
  - “Identify the costs of backstopping, management and mobilizing resources for RTACs and budget for them.”
  - “Foster coordination among TA providers.”

### III. Overview of current Fund TA delivery and focus
- TA is a core Fund activity; “in most cases, it is currently provided without charge to any requesting member country.”
- Geographic and income focus:
  - “About 80 percent of Fund TA goes to low- and lower-middle-income countries, particularly in sub-Saharan Africa and Asia.”
  - Distribution (TA Field Delivery in Person-Years; average over FY2002-07; excludes CARTAC):
    - Low income countries (47 percent)
    - Lower middle income countries (32 percent)
    - Upper middle income countries (11 percent)
    - High income countries non OECD (3 percent)
    - OECD countries (0.5 percent)
    - “Benefiting countries with different income levels (6.6 percent)”
  - Per capita income thresholds used in classification reproduced exactly:
    - $ 11,115 < high
    - $3,595 < upper middle < $11,115
    - $905 < lower middle < $3,595
    - low < $905
- Areas of TA expertise include: “macroeconomic policy, tax policy and revenue administration, expenditure management, monetary policy, the exchange rate system, financial sector stability, legislative frameworks, and macroeconomic and financial statistics.”
- RTACs: use of six RTACs (Pacific; the Caribbean; East, West and Central Africa; and the Middle East) has expanded; RTACs provide “technical and diagnostic studies, training, seminars, workshops, and online” assistance.
- Relative scale:
  - OECD Development Assistance Committee cited aggregate technical cooperation in related areas at about US$3.5 billion in 2003 versus the Fund’s allocation to TA of less than US$0.2 billion a year.
- Modes of delivery:
  - Field missions by HQ staff (short, strategic), long-term and short-term experts, resident advisors, RTACs; HQ provides mission preparation, report finalization, desk-based TA, backstopping, expert management, TA policy development, research, evaluation, and outreach.

### IV. Prioritization and integration with Fund core functions
- Reforms aim to “enhance the integration of TA with surveillance and Fund lending operations.”
  - Rationale: “TA contributes to good policymaking, builds institutional capacity, and reinforces other core Fund functions. In turn, surveillance and Fund lending help identify and prioritize TA to meet a country’s economic objectives.”
- Regional Strategy Notes (RSNs)
  - Purpose: “to enhance prioritization by better aligning TA with strategic objectives of the recipient country and the Fund.”
  - Process: “In RSNs, area departments and TA departments in consultation with country authorities set out a medium-term TA agenda.”
  - RSNs are mapped into the Resource Allocation Plan of TA departments, which are being aligned with the budget process.
- Charging regime
  - “Prioritization would further be strengthened by a charging regime.”

### V. Performance measurement, projectization, and evaluation
- Performance indicators and project orientation
  - “The Fund-wide introduction of performance indicators will make TA more transparent and accountable.”
  - “TA will be primarily organized as projects, with each project having clear objectives and deliverables against which progress will be measured and which will distinguish between areas within Fund control and those that require action by the authorities.”
- Evaluation and learning
  - “Fund evaluation of TA is expected to become more systematic in monitoring and assessing results and to better disseminate lessons learned.”
  - IEO and Directors emphasized: “TA evaluation should become more systematic in assessing results. Lessons learned from self-assessment and evaluation should be incorporated in TA work more systematically.”
- Costing
  - “Better costing of TA projects will help ensure efficient allocation of resources, better inform management decisions and enhance accountability.”
  - Costing benefits listed: awareness of absolute cost of TA, relative cost vis-à-vis other TA providers, basis for charging and billing of donors.

### VI. Financing, charging, and external partnerships
- Current financing patterns and FY2007–FY2008 figures (TA Cost Allocation, FY2007-FY2008; Millions of US$; methodology changes limit comparability):
  - Direct cost of TA: 110.2 (FY2007 Outturn), 107.3 (FY2008 Budget)
  - Externally financed TA: 28.2 (FY2007 Outturn), 34.2 (FY2008 Budget)
  - Internally financed: 81.9 (FY2007 Outturn), 73.2 (FY2008 Budget)
    - Direct (i.e., country-related) TA, incl. field time and HQ work: 30.1 (FY2007 Outturn) ... (ellipsis in source)
    - Backstopping and management of experts: 14.7 (FY2007 Outturn) ... (ellipsis in source)
    - Policy and evaluation: 10.2 (FY2007 Outturn) ... (ellipsis in source)
    - Long-term and short-term experts: 23.5 (FY2007 Outturn) ... (ellipsis in source)
    - Other: 3.5 (FY2007 Outturn), 5.9 (FY2008 Budget)
  - INS: 7.2 (FY2007 Outturn), 0.0 (FY2008 Budget) — “For FY2007, misclassified under TA; excluded from FY2008 onward and included under external training.”
  - Total TA: 117.4 (FY2007 Outturn), 107.3 (FY2008 Budget)
  - Governance and support: 79.0 (FY2007 Outturn), 59.6 (FY2008 Budget)
  - Grand total: 196.4 (FY2007 Outturn), 167.0 (FY2008 Budget)
  - Notes: methodology for assigning cost to output groups changed substantially between FY2007 and FY2008.
- Fund fundraising and donor partnerships
  - Strategy: strengthen partnerships through fundraising; “External financing for TA will be facilitated by bundling TA in product lines, which better highlight links to donor development strategies.”
  - Partnerships to be “developed on a broader, longer-term, and more strategic basis, focused on topical trust funds and on expanding TA delivery through Regional Technical Assistance Centers (RTACs).”
- Charging and subsidy considerations
  - Directors urged exploration of “increasing external financing and charging for TA while subsidizing low-income countries (LICs).”
  - MTS and Crockett recommendations support charging for direct services with subsidies (e.g., trust funds) for LICs.

### VII. Management, delivery, and RTACs
- Increasing role of RTACs
  - RTACs have been “found to be effective and efficient,” leading to increased use; RTACs deliver TA via “technical and diagnostic studies, training, seminars, workshops, and online.”
- Delivery mix and staffing
  - Only a small share of TA field delivery is provided by Fund staff; many activities rely on experts and RTACs; HQ undertakes desk work, backstopping, and policy/evaluation functions.

### VIII. Conclusions and issues for discussion
- Reforms seek to:
  - Integrate TA more closely with surveillance and lending to improve prioritization.
  - Strengthen RSNs and map them to the Resource Allocation Plan and medium-term budget.
  - Projectize TA with clear objectives, deliverables, and performance indicators.
  - Improve costing, enable charging regimes (with income-graduated charges and subsidies for LICs), and step up fundraising and donor partnerships.
  - Systematize TA evaluation and disseminate lessons learned to inform future TA design.

*Source: Executive Summary (IMF). URL provided in the source metadata.*

### 8.      To ensure high impact, Fund TA is being better integrated with surveillance,

### 8.      To ensure high impact, Fund TA is being better integrated with surveillance, lending, and recipient country reform agendas.

### Integration of TA with surveillance, lending, and country reform
- Coordinated surveillance-lending-TA brings synergies to the Fund’s work.
- Basic capacity-building TA:
  - Lays institutional foundations.
  - Builds human capacity for effective policymaking.
- Highly specialized TA:
  - Uses relevant cross-country experience to enhance the surveillance dialogue.
  - Strengthens country policy formulation and analysis, focusing on how to implement specific Fund policy advice.
- Surveillance and lending operations help identify and prioritize TA in line with country strategic objectives (for LICs often set out in their poverty reduction strategy) and with the Fund’s policy advice.

### Area departments as linchpin for TA strategies
- Area departments integrate country reform agendas with the Fund’s policy and surveillance perspectives, drawing on TA departments’ technical expertise.
- In coordination with country authorities, area departments:
  - Identify topics for TA and set priorities across TA departments.
  - Balance short- and medium-term considerations.
  - Rely on TA departments for prioritization, sequencing, and delivery mode.

### Embedding TA in a medium-term framework
- TA is being embedded in a medium-term framework to balance short-term policy needs with medium-term capacity-building requirements so short-term considerations do not crowd out longer-term goals.
- Longer planning horizons:
  - Help the Fund enhance cooperation with other TA providers.
  - Facilitate fundraising.
- Complements the Joint Management Action Plan (JMAP), which aims to ensure that TA work is allocated within the Fund and the World Bank respective areas of expertise.

### Aligning TA with Fund and country policies
- Country agendas must be prioritized within a Fund-wide TA strategy.
- 2006 pilot: staff developed 10 country-specific TA strategies (Technical Assistance Country Strategy Notes, TACSNs).
  - TACSNs identified TA needs for particular countries, formulated with area and TA departments and country authorities.
  - TACSNs were country-specific and not helpful for prioritizing among countries and regions, leading to the need for better prioritization by sectors and integration with the Fund’s Medium-Term Budget (MTB).

### Regional Strategy Notes (RSNs) as the basis for prioritization
- Area departments started preparing RSNs in FY2008. RSNs superseded TACSNs and:
  - Outline medium-term TA priorities for an entire area department to integrate TA with surveillance and lending operations.
  - Aim to incorporate views of country authorities and TA departments through a consultative and iterative process.
  - Use discussions in the context of the Fund’s regular surveillance or policy dialogue to identify TA needs and gauge ownership.
  - Rely on TA departments for technical underpinning of needs assessments and analyses; TA quality control helps integrate TA with Fund core mandates.

- RSNs common format:
  - A regional overview of the department’s surveillance agenda, potential program involvement, and TA priorities for countries or groups of countries.
  - Individual notes for intensive TA users linking TA priorities with broad macroeconomic objectives.
  - A consolidated note to address the TA needs of user countries not covered by individual notes.
  - May discuss TA strategies for subgroups of countries within the same region (e.g., Francophone or Anglophone African budget systems, post conflict needs).

- RSN features:
  - Designed to cover TA priorities over the medium term.
  - Updated every year and revised mid-year.
  - Should flag foreseen medium-term demand shifts in TA priorities to factor them into department business plans.
  - Facilitate coordination with other TA providers and support fundraising by setting out medium-term TA strategy for countries and regions.
  - Will be accompanied by broader Fund disclosure policies to widen dissemination of Fund TA findings, while safeguarding confidential information.

### TA Quality Control (Box 2)
- Quality control from HQ is a hallmark of Fund TA, featuring close supervision (“backstopping”) and peer review.
- Area department TA monitoring:
  - Article IV consultation and program missions monitor TA delivery and implementation against policy objectives and help authorities conceptualize TA needs.
- Close supervision and peer review:
  - TA managers plan and track progress through pre-mission terms of reference and post-mission back-to-office reports.
  - Peer review culture ensures advice from TA and area departments is considered before missions, during drafting of TA reports, and as reports are finalized.
- Selection of external experts:
  - Fund maintains a roster of experts.
  - Certification procedures include strong performance records and proven familiarity with international best practice.
  - Choice of expert for a project is reviewed by supervisors in TA departments for skills match.

### Integration into the Medium-Term Budget (MTB)
- Two coordinated exercises to integrate TA into the Fund’s MTB:
  - Top-down exercise:
    - Conducted by management and the Office of Budget and Planning (OBP) as part of the MTB framework.
    - Sets a ceiling for department budgets; for TA departments one element is the resources (internal and external) available for TA.
  - Bottom-up exercise:
    - Departments allocate resources to TA through RSNs; allocation by country and topic is area department–led.
    - TA and area departments decide on allocation by activity (e.g., number of missions) based on availability of experts and appropriate delivery mode.
    - Activities are specified in the Resource Allocation Plan (RAP), which includes RTAC and other externally financed TA delivery.
    - RAPs aggregated to show distribution of TA across area and TA departments.
    - TA departments add pro-rated backstopping and management costs and costs of TA policy development, evaluation and research.

- Final reconciliation requires an iterative process to synchronize bottom-up assessments with top-down constraints.

### Shifts in TA resource allocations and experimentation
- Until FY2008: difficult to shift RAP resources mid-year; allocations for TA departments were fixed and shifting between TA departments required management decisions.
- Area departments are becoming more involved in shifting resources:
  - For FY2008, a moderate reserve of internal funds was set aside: 5 percent of internal financing for short-term experts and travel or US$1.2 million. This reserve was used to meet unanticipated TA needs and shifts in short-term priorities. After mid-year revisions to the RSNs, area departments bid for the reserve and management, in consultation with the Committee on Capacity Building (CCB), decided allocations.
  - For FY2009, staff started experimenting in devolving some external funds to area departments. About one third of external funds will be allocated in early April through a prioritization process via the RSN/RAP exercise that, based on area departments’ preferences, may shift funds between TA departments with the CCB maintaining oversight (variant of the purchaser-provider approach). Based on this experiment, staff will consider whether this model could be extended.

### Next steps to operationalize RSNs and RAPs
- RSNs are not yet fully operational; area and TA departments are exploring enhancements to their dialogue, including prioritization across countries with different development levels and strengthening coordination with country authorities and regional institutions.
- Planned change: starting with FY2010, the CCB will decide the annual allocations to TA areas.
- Work to fully integrate the RAP with the MTB includes:
  - Fine-tune mapping of RSNs into RAPs to better link priorities and resources; further standardization needed to make RSNs and RAPs fully consistent and allow meaningful aggregation.
  - Present the RAP both in dollar and person-years; refinements to the methodology and more standardized RAP management by TA departments are needed.
  - Enhance systems and work practices to manage the bottom-up planning process.
  - Better align the RAP with MTB formulation, including better incorporation of the potential for new external financing into RAPs and the MTB. Regional medium-term priorities will inform fundraising to reduce planning uncertainties related to external financing.

### Measuring TA performance
- Fund TA evaluation instruments:
  - Fund-wide evaluations:
    - Staff regularly review Fund TA.
    - In July 2002 the Executive Board established the TA Evaluation Program, presenting three to four evaluations a year to the Board.
    - In 2005 the IEO evaluated TA focusing on relevance, effectiveness, and ownership.
  - Evaluations by TA departments:
    - TA departments generally self-assess completed externally financed projects for donors; independent evaluations of TA delivery vary by department.
    - STA and LEG have regular evaluations.
    - MCM conducts regular assessment visits to countries with intensive TA programs and uses external consultants for significant multiyear programs.
    - FAD undertakes regular inspection missions to intense TA users and distills policy lessons from topical evaluations; some are conducted with external participation.
  - Evaluation of RTACs:
    - Conducted by external evaluators usually midway through each Center’s three-year cycle.

- IEO observations (summary):
  - At the outset of major TA activities, the Fund and country authorities should agree how progress and success will be measured.
  - The Fund should unbundle different stages through which TA may achieve results, and then monitor them.
  - Ex post evaluations should be broadened and more systematic procedures adopted for disseminating lessons.

- Challenges:
  - TA is not sufficiently standardized to facilitate effective monitoring and evaluation.
  - No common understanding of parameters for performance measurement; TA organized at task/mission level by some, as a continuum by others.
  - No common benchmarks for success (e.g., mission level, yearly, or in relation to surveillance/lending programs).
  - Differences inhibit systematic measurement of TA.

### A framework for TA performance measurement
- Reinforcement of TA performance measurement as part of Fund-wide introduction of performance indicators and output-based budgeting, including dollar budgeting over the medium term and three-year rolling departmental business plans.
- Since FY2008 the Fund measures performance in delivery of TA and other Fund outputs within an integrated framework; OBP monitors these outputs for budget decisions and Board reporting.

- TA organized primarily as projects:
  - Interdepartmental working group harmonized terminology and set minimum information requirements in a guidance note completed in September 2007.
  - Project defined as a set of one or more related activities that within a specified period generates measurable outputs and contributes to achieving a certain objective.
  - Features:
    - Every project has outputs to be delivered by staff and expected outcomes under the control of the recipient country.
    - TA managers will specify how attainment would be verified through objectively observable criteria for each project element.
    - Projects are dynamic and can be amended based on mission findings, authorities’ responses, and Fund prioritization of follow-up assistance.
    - Authorities are consulted in design of main project deliverables to ensure country ownership.

- Results-focused project management (Box 3 example):
  - Objective example: Increase in tax revenue, to be verified through an increase in the revenue-to-GDP ratio or a real growth in tax revenue.
  - Assumptions example: Amendments to the tax code enacted.
  - Project example: FAD sends a tax policy mission, then a diagnostic tax administration mission, and finally a long-term resident advisor on tax administration.
  - Output example: TA report outlining reforms; a workshop on large taxpayer unit operation.
  - Outcome example: Large taxpayer unit established.

- Advantages of results-focused project design:
  - Captures information relevant for all levels of Fund management; detailed project information informs departmental operations and aggregated information informs Board and management.
  - Provides standardization for comparability while allowing TA departments to tailor indicators to specific projects.
  - Helps distinguish which areas are within Fund control and which require action by authorities where political sensitivity or partial coverage of reform agendas may affect implementation.

*Source: _040308a - 8.      To ensure high impact, Fund TA is being better integrated with surveillance, lending, and recipient country reform agendas.*

### 29.      Measuring performance in a meaningful way will take time. Moving to results-

### 29.      Measuring performance in a meaningful way will take time. Moving to results-focused management of projects requires a shift from assessing the quality of project inputs to assessing tangible results

### Measurement overview and institutional outputs
- Moving to results-focused management shifts assessment from inputs (e.g., “were the experts appropriately skilled?”) to tangible results (e.g., “did a project deliver what it was supposed to? are results sustainable?”). Identifying good indicators is an evolutionary process and the first indicators chosen may not be entirely satisfactory.
- The Fund’s TA activities produce two distinct institutional final outputs:
  - TA activities that can be directly attributed to specific projects (field or HQ-delivered, backstopping, management, and direct administrative support) — final outputs 1-4 in Appendix II.
  - TA activities that cannot be attributed to specific projects and are classified under research and outreach — final outputs 5 and 6 in Appendix II.
- Performance measurement dimensions discussed:
  - Quantitative: volume or amount of TA delivered
  - Qualitative: extent to which TA achieved intended objectives
  - Cost: achieving the most efficient resource allocation
  - Implementation: information systems requirements

### B. The Quantitative Aspect — intensity and quantity indicators
- Quantitative indicators measure the intensity of engagement with a country; policy advice is abstract and does not lend itself to quantitative measurement.
- Projects are ranked under a three-tier scheme introduced for FY2008:
  - Tier 1—multi-event, multi-topic
  - Tier 2—multi-event, single topic
  - Tier 3—single event, single topic
- Final quantity outputs for the Fund include:
  - number of different projects
  - number of countries receiving tier 1 and tier 2 TA
  - number of reports
- TA-related research and outreach quantitative indicators:
  - number of working papers published
  - number of fundraising events
  - intermediate outputs monitored: TA support processes, resource mobilization, monitoring and planning, TA coordination, policy development and evaluation, and comments from non originating departments (intermediate indicators 1-5 in Appendix II)

### C. The Qualitative Aspect — evaluating quality and outcomes
- Results-focused management enables judging project quality by measuring success against verifiable indicators and promotes accountability and systematic self-assessments.
- Results-focused project management allows comparative evaluation across projects and delivery modes (e.g., effectiveness of workshops complementing missions; sequencing effects).
- STA three-stage TA evaluation procedure (Box 4):
  - 1. End-of-Mission Assessment Report for each TA mission comparing results against objectives.
  - 2. Within a year of project completion, recipient country prepares a project evaluation report (PER) using a standard template; authorities assess achievements and sustainability on a scale of 1 to 4; STA and area department comments may be added. Interim PERs for long projects may be done.
  - 3. Program evaluation after TA has been provided in several topical areas for three to five years; reviews constituent PERs, surveys country authorities, involves country visits by STA evaluator and staff; STA plans to conduct a TA program evaluation in two regions every year, staggered coverage.
- No quality indicators have been defined for final institutional outputs for research and outreach; quality indicators exist for intermediate outputs only.

### D. The Cost Aspect — current gaps and intended improvements
- Currently costs are not fully allocated at the project level.
  - Field delivery costs for externally financed projects (travel expenses and salaries of experts) and costs related to seminars and workshops are available.
  - HQ staff time spent on TA delivery, backstopping, management, and administrative support is recorded but generally not attributed to specific projects (exception: CAFRITAC uses TRS to allocate staff time and quarters bills multi-donor subaccount).
  - The Fund has data on field costs of internally financed projects but does not consistently manage them by project.
- Benefits of more accurate project costing:
  - Strengthen cost control to inform TA planning and resource prioritization.
  - Raise awareness of absolute and relative costs of different Fund TA projects and of Fund TA relative to other providers.
  - Support fundraising and charges for TA and assure donors and charged countries of “value-for-money.”
- Implementation steps for costing:
  - Staff will start collecting all cost information directly related to a project, including measuring staff time by project and enhancing reporting systems.
  - In the longer term, explore attributing cost to project outputs to anchor costing in results-focused management.
- Current billing practice:
  - Fund bills donors on a standard cost concept that lumps travel and personnel costs, regardless of expert location or qualifications.
  - Over the past three years the Fund recovered 98 percent of the field delivery costs of donor-funded TA.
  - No built-in incentive for project managers to minimize costs or use local experts for externally financed experts; for internally financed experts, TA department budgets are billed at actual costs for salaries with a mark-up for benefits.
- The Fund will change billing to more appropriately reflect actual costs.

### E. The Implementation Aspect — TAIMS and information systems
- TAIMS (Technical Assistance Information Management System) introduced in 2004 as central repository for TA project information to provide a consistent, accessible, integrated view across departments.
- TAIMS has had serious problems:
  - Lack of departmental agreement on the conceptual model and use.
  - Usability issues created barriers to effective usage.
  - Departmental use remains inconsistent and incomplete.
  - Example usage metrics: only 15 percent of all TA missions in FY2007 were linked to TAIMS projects; two-thirds of externally financed projects lacked an end-of-project assessment; one-fifth lacked project outputs; more than one tenth lacked project objectives.
- Planned TAIMS revisions:
  - Revisions to conform with results-focused project management and to simplify the user interface expected to be completed by April 2008.
  - From FY2009 onward, TA departments will report both internally and externally financed projects in TAIMS.

### F. Next Steps — evaluation, systems, costing, and reporting
- Evaluation policy and practices:
  - Unified TA management approach expected to enable broader lessons and a more systematic evaluation framework; all evaluations will routinely be published.
  - Evaluations for donor-financed TA will continue to be done externally. A review of the RTACs is scheduled for FY2010 and will report on external evaluations for individual RTACs undertaken since FY2005.
  - Develop a conceptual framework for evaluating Fund TA projects drawing on international best practice; majority of projects to have self-assessment complemented by external evaluations; framework should involve TA recipients and could include evaluation ratings with evaluator flexibility.
  - Explore ex post evaluations of internally financed TA by units not providing TA directly and define the roles of area departments and authorities; CCB may supervise such ex-post evaluations.
  - Recognize evaluation costs (example: STA spends 5 percent of its budget on evaluation); stronger evaluation framework may require resource shift from input assessment to results assessment.
- TAIMS and staff practices:
  - Staff training on TAIMS and quality control of TAIMS entries are critical.
  - Staff will undertake a review of TAIMS entries and performance in October 2008.
  - Explore standardizing project outputs across TA departments to permit aggregation and broader views (example: IFC experience).
- Collecting project-related cost information:
  - Ongoing changes to Fund information systems will capture cost data if TAIMS projects are linked to systems housing staff time (e.g., TRS) and travel cost (e.g., TIMS and FACTS). Changes should be completed by mid-FY2009.
  - Staff will start reporting time spent by project, including backstopping and management; reporting systems should define data needs for target groups and assign responsibilities for reporting standards and analysis; staff training required.
- Billing and accounting changes:
  - Staff will refine billing procedures to include all project-related costs (including staff time) for new donor arrangements and progressively for current donors.
  - Changes will require substantial adjustments in FIN, OTM, and TA department practices; TA accounting and financial record-keeping must meet external audit standards and formal closeout procedures be established.

### V. Financing of TA — medium-term context and options
- Internally financed TA is expected to decline by about 20 percent in real terms over the medium term because of Fund restructuring.
- For FY2009, existing donor commitments are expected to largely offset these cuts; beyond FY2009, meaningful financing decisions require better information on demand for Fund TA.
- TA Cost Allocation, FY2008-FY2011 (as presented in the source)
  - FY2008 FY2009 FY2010 FY2011
    - Budget (Millions of US$)
      - Direct cost of TA107.3110.7110.6-119.6112.6-125.6
      - Externally financed TA34.246.545.9-54.947.8-60.8
      - Internally financed73.264.264.764.8
    - (Millions of 2008 US$)
      - Direct cost of TA107.3106.4102.2-110.6100.1-111.6
      - Externally financed TA34.244.742.4-50.742.5-54.0
      - Internally financed73.261.759.857.6
  - Source: "The FY2009-FY2011 Medium-Term Administrative, Restructuring, and Capital Budgets," OBP.
- Considerations on the nature of Fund TA:
  - TA contains elements of a public good: Fund TA is partly an international public good; TA-related research falls into this category; TA tailored to a specific country may provide spillover benefits to other countries, potentially large for program countries.
  - The Fund’s comparative advantage lies in integrating TA with its other core activities; the Fund will provide TA only if requests align with priorities established in the RSN/RAP process and not to raise revenue.
- Charging as a financing option:
  - The Fund will introduce charging for TA primarily to make TA pass a market test; charging complements reforms to promote efficiency and cost-effectiveness and provides price signals and ownership incentives.
  - Current charging regime is limited to resident advisors (office space and supplies, telecoms, administrative support; upper middle-income and high-income countries required to provide cash contributions).
  - Charging policy authority resides with the Managing Director in consultation with the Executive Board.
  - Proposed Charging Regime for Nonprogram Countries (Percent of cost base):
    - Income Group 1
      - Low income20
      - Lower middle income40
      - Upper middle income60
      - High income100
    - The groups are based on GNI per capita and defined as follows: low income: $905 or less; lower middle income: $906–3,595; upper middle income: $3,596–11,115; and high income: $11,116 or more. Adjusted annually.
  - Recipient contributions in some RTACs can be substantial (example: contributions up to 70 percent for Central AFRITAC). Reimbursement arrangements exist where countries pay the Fund for long-term advisors.

*Italic source attribution:* _Source: Excerpt from IMF PDF chapter/section titled “Measuring performance in a meaningful way will take time. Moving to results-focused management of projects,” file _040308a - 29._

### 49.      Charging will take into

### _040308a - 49.      Charging will take into

### Charging regime: principles and scope
- Charging will take into account country income and program status.
- Charging regime proposed to be:
  - Differentiated by per capita country income (text table).
  - Exempting program countries, which account for about 40 percent of Fund internally financed TA.
  - Exempting externally financed TA, including that provided through RTACs, for which the market test would come through third-party payment.
- Rationale for exemptions:
  - Undesirable to fully charge lower income countries because it would unduly ration TA for those that need it most.
  - Lower income countries would find it difficult to justify paying expert salaries that may be substantially outside the public pay scale.
  - Charging undesirable for program countries where stepped-up TA is critical to program success and may help implement conditionality and safeguard the Fund’s financial resources.
- Cost base for charging:
  - All project-related actual costs as discussed in Section IV (that is, staff and expert salaries and benefits, and travel costs).
  - Aligned with billing model for donor-financed TA.
- Timing:
  - Systems and work practice changes for costing expected to become operational in the course of FY2009.
  - Charging will be implemented with FY2010.

### Expected revenue and administrative considerations
- Potential net revenue estimate:
  - About US$9 million per year, assuming no reduction in demand.
  - Estimate based on FY2007 detailed TA delivery data, using average personnel and travel costs.
  - Estimate assumes a reduction in TA by 20 percent compared with FY2007 and administrative cost of 10 percent of revenue.
- Staff exploring options for upfront payment to prevent arrears or procurement delays.
- Administrative procedures will be designed to limit cost to members and the Fund.
- Historical note:
  - Charging policy before 2001 required a contribution of $5,000 from all TA recipients for long-term experts; it was discontinued when countries went into arrears.

### Integration with prioritization and allocation
- Charging must be integrated with the Fund’s prioritization process (RSN/RAP process).
- Authorities’ indication of willingness to pay will signal demand and value attached to Fund TA; this signal will be an important input to RSN/RAP and lead to more cost-effective allocation.
- RSN/RAP will allocate the implicit subsidy provided through the differentiated charging regime.
- Charging could reduce perceptions of distortions in choice of TA providers where other suppliers charge for similar services.

### Charging practices elsewhere (Box 5: Charging Policies of Other TA Providers)
- No uniform practice among multilateral TA providers.
- Common practice:
  - For TA related to a loan, multilaterals typically require in-kind contributions and incorporate cost of TA in their loan.
  - Other TA generally provided free of charge.
- Exceptions cited:
  - IFC (2007): policy that prices TA inversely related to its benefits to the public; applies to public and private clients; subsidies justified where TA yields broad public benefits.
  - IBRD: charges for TA when it goes beyond normal work practice; charges levied at discretion of regional managers; provides some TA on a full fee-for-service basis to upper middle-income countries (about US$15 million per year).
- Bilateral providers:
  - Few impose cash charges; of 10 donor countries reviewed, only two imposed charges and then only occasionally.

### External financing: donor partnerships and product lines
- External financing has grown steadily since the late 1990s and has increasingly financed TA field delivery.
- Donors value Fund TA strengths:
  - Integration with surveillance and lending operations.
  - RTACs: governance structure (recipient countries, donors, and Fund staff) builds stakeholder ownership; RTACs respond promptly and are less costly.
  - Supervision and quality control: backstopping by specialists at HQ and dissemination of international best practices.
  - Complementarity to donor policies.
- Changes to make Fund TA more attractive to donors:
  - OTM’s one-stop window for donors and a donor gateway with TA-related information.
  - Results-focused project management to make TA results more tangible.
  - Strengthening transparency of TA costing and sharing regional strategies with donors.
- Medium-term approach to external financing and product lines:
  - Bundling TA through a menu of topical trust funds (modeled after multidonor subaccounts; e.g., trust funds on TA in fragile states and AML/CFT under consideration).
  - Expanding delivery through RTACs to ensure better traction and lower cost; discussions underway on new RTACs in Central America and Southern Africa.
  - Existing subaccounts remain important for donors delegating budgets to field offices.
- Constraints and alternatives:
  - Donor interest in a general administered account for TA seems limited due to earmarking of overseas development assistance.
  - A trust fund modeled to provide proportional burden-sharing among Fund members would be equivalent to financing through endowment.

### Internal financing and limits
- Internal financing will continue to be crucial:
  - Charging will offset some cuts in internally funded TA, but internal funding needed to pay the subsidized charging regime and for TA policy development and research.
  - Not desirable to fully replace internal financing with external financing to maintain flexibility in reallocating resources as priorities change.

### Next steps and management changes
- A note will lay out details of the charging regime, including payment modalities, role of in-kind contributions, distribution of charging revenue, administration of charging, and outreach program; the note will be circulated to the Board.
- A fundraising drive will make the case for more external financing.
  - If strong demand exists for new product lines, TA output could increase in real terms from the pre-downsizing baseline; this would require additional backstopping capacity in the long run.
  - Priorities set by the Fund through an internal process endorsed by the Board; availability of external financing will not drive TA output.
  - The Board, by deciding annually the budget’s gross financing limit, will place a cap on external financing.
- Further changes to TA management:
  - Offer more visibility to donors by linking contributions to tangible outcomes or recipients.
  - Use RSNs to convey priorities and indicate matches with donor interests, cooperating with donors as the Paris Declaration recommends.
  - As soon as feasible, reduce the Fund’s administrative fee, which is considered expensive because it is not related to specific project expenses.
    - Current administrative fee: 13 percent (introduced in early 1990s).
    - Other organizations charge 5–7 percent for trust fund management and bill separately for backstopping and project management; the Fund intends to move toward that model.
  - When all costs related to a specific TA project can be identified, bill donors separately for project field delivery, backstopping, and management costs.
  - A mechanism along lines of current CAFRITAC modalities would reimburse TA departments for backstopping and management costs incurred for specific projects; administrative fee would be for trust fund management only.

### Conclusion, resource implications, and discussion questions
- Reforms underway and proposed aim to make Fund TA more effective in prioritizing, monitoring, evaluating, and costing TA, and to better integrate TA with Fund core functions and country reform agendas.
- Reforms highlighted:
  - Strategic alignment of Fund and recipient priorities; charging regime to signal demand.
  - Integration of country priorities into regional strategies and alignment with budget cycles (MTB).
  - Results-focused management and more systematic evaluation policies and practices.
  - Refining costing and billing by project to ensure efficient allocation.
- Resource implications:
  - Charging regime expected to yield net revenue of $9 million, assuming no reduction in demand.
  - Some reforms included in MTB; others expected to be resource neutral or raise revenue.
  - Opening new RTACs, while based mostly on external financing, will require additional Fund resources.
- Questions for Executive Directors:
  - Do Directors agree that the proposed action plan (Box 6) is appropriate and leverages the comparative advantages of Fund TA? How much emphasis should the Fund give to expanding its evaluation framework?
  - Do Directors agree that, combined with a fundraising drive, charging will not unduly ration TA for those that need it most and could contribute to a more efficient allocation of resources?
  - Do Directors believe that bundling TA into topical trust funds and increasing delivery through RTACs will enhance partnerships with donors?

*Source: Excerpt from IMF document _040308a - 49.      Charging will take into (PDF chapter/section).*

### Box 6. Action Plan and Resource Implications

### Box 6. Action Plan and Resource Implications

### Strengthen RSN/RAP/MTB coordination
- Area departments are expected to spend about one additional staff year to prepare the RSNs in FY2008.
- Fully integrating the RAP with the MTB is estimated to cost 1.25 of an additional staff year.

### Implement results-focused project management
- Revamping TAIMS:
  - Capital costs of US$0.5 million for FY2008/09.
  - Start-up costs for TAIMS usage in FY2009, including staff training of about one staff year.
  - In the medium term, these costs are expected to be offset by savings from the improved interface and TAIMS replacing other systems to manage TA delivery.
- New Fund-wide evaluation framework:
  - Depending on how comprehensive the framework will be, it might require a shift of resources from TA delivery to assessing results.

### Collecting and billing for all project-related costs
- To identify project backstopping and management cost:
  - Start-up costs of about US$0.6 million to change the systems and train staff.
- To allow for more accurate billing:
  - Start-up costs to change systems are estimated at US$0.2 million.
- Compliance and ongoing data management:
  - Estimated at about ¾ staff year for maintaining the various systems and with opening and closing projects, vetting data, and maintaining information systems.

### Implement charging regime
- Cost of administering the system are tentatively estimated at 10 percent of the revenue raised (or $1 million annually with net revenue of $9 million, assuming no reduction in demand (see paragraph 50)).

### Take a more proactive approach to fund-raising
- Administering funding for topical trust funds:
  - Each additional $5 million is expected to cost about one staff year, depending on the nature and volume of funds, but this would be recouped through a trust fund management fee.
- Opening a new RTAC:
  - One-off start up cost of about $0.7 million.
  - On a permanent basis, one staff as a coordinator.

*Source: Box 6. Action Plan and Resource Implications (from the provided IMF content).*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2008/_040308a.pdf_