WASH response costing

Estimate the overall WASH response funding requirements

The HRP is also a funds raising appeal document, where funding requirements of each cluster are presented separately and consolidated to form the total funding requirement for the response. Each sector coordinator is responsible to estimate the budget needed to implement the sectorial strategy for the coming year/phase. This is a complicated task as many parameters must be considered, and many variables are still unknown during planning phase (material cost, logistic cost...), which can change the overall budget. Nevertheless, response costing must be done quickly enough for funding to be allocated without delay. Even when costs are roughly estimated, it is important to be transparent and be able to explain how it was calculated. Cluster response budgets also represent targets against which funding allocation level will be regularly measured. Such monitoring of the funding status is used to advocate for further efforts in resource mobilization throughout the response.

Response costing method

As shown in the diagram above, there are two ways for WASH Cluster coordinators to estimate WASH response budget:

1- Indirect costing: In protracted emergencies (usually around September), partners are requested to upload a summary of their planned projects for the next year on the OPS website. Cluster coordinators can be asked to pre-validate their projects making sure they meet minimum criteria. Operational Response Plan’s costs can be calculated by adding up requested budgets from all approved partner’s planned proposals. This method can be used in sudden onset emergencies. The positives and negatives of this include:

•   Pros as quick, participatory, field oriented, partners can in theory factor in their capacity
•   Cons as can be very inaccurate because:

-Partners have tendency to overestimate their funding requirements, and do not necessarily factor in access and capacity

-Difficult to estimate geographic/program overlapping. Partners will not do it between themselves, as they are anyway in competition for funding

-Subjective, based on partner’s estimation

2- Direct costing: The WCC use caseload figures, priority activities and unit prices to estimate total response budget themselves. Activities/beneficiaries unit costs can be estimated directly, or taken from partners’ former projects’ final report (reports’ budget are indeed preferred to proposal ‘s budget, as cost are usually more accurate).

• Pros: apparent accuracy. Can provide further guidance to partners’ proposal evaluation in terms of unit cost. Help to evaluate future projects cost. Based on population figures/caseload, so access and capacity already factored in.
• Cons: time consuming for HWCP, based on population figures that are sometimes inaccurate, not participatory. Unit cost can be only approximate, and vary from one place to another.