Increasingly, communities are responsible for service planning, making informed choices, providing financing and other contributions, and ultimately, service management. There is growing interest in approaches that delegate financial management and procurement responsibilities to the communities themselves, giving communities full control over investment resources and project implementation. Direct financing to communities
Direct financing to communities is a process by which a funding agency (e.g., social fund, sector line agency, or local government) provides funds directly to communities responsible for managing the implementation of subprojects. A community includes groups of individuals living in close proximity to each other able to identify a need and come together to access project funds. The community is usually represented by some form of community-based organization or local project committee therefore it is not the community per se that enters into a contract with the funding agency, but the group representing that community. Although there is a range of institutional options to provide funding to community-based organizations, the CDD/SF type interventions will focus on the partnership between the funding agency and the community. In this model, communities receive funds directly form the funding agency (central government, elected local government, or NGO), procure materials, hire contractors and consultants/technical experts, employ skilled and unskilled labor, and ultimately manage the overall implementation of the subproject. The role of the funding agency changes significantly when the communities are responsible for implementing subprojects themselves; it becomes a facilitator providing not just funds but also technical support to the community throughout the project cycle. Community Contracting
Community contracting has been defined as procurement by or on behalf of a community. While there are many different models of community contracting, they all share certain key characteristics and goals. Community members are involved in identifying needs and selecting a subproject; participation is encouraged throughout the subproject cycle; and communities provide contributions in the form of labor, cash and/or materials, so as to promote ownership and (it is hoped) sustainability. The Bank's procurement procedures were originally designed for large investment projects rather than for projects financing many community-level subprojects. They have since evolved to include rules for small-scale projects that meet Bank audit requirements while retaining the flexibility required for demand-driven interventions (Small Works and Community Participation in Procurement; Procurement Guideline 3.15 Community Participation in Procurement) . Financial Management
In some cases, communities may be unfamiliar with sound financial management and disbursement practices, with the danger that funding may be managed at best poorly, without sufficient transparency and accountability, and at worst appropriated for the wrong purposes. Hence, CDD projects usually require specific procedures for financial management and disbursement that maximize accountability and transparency, and training on accounting and financial management procedures when necessary.
Key readings: Communities Taking the Lead: A Handbook on Direct Financing of Community Subprojects
by Samantha de Silva
Community-based Contracting: A Review of Stakeholder Experiences (111KB PDF)
by Samantha de Silva
Community Contracting in the Malawi Social Action Fund: Local Stakeholder Perspectives
World Bank Africa Region Findings No. 163; July 2000
by Samantha de Silva, World Bank, and Christine Kamwendo, MASAF Zone Manager
Community Contracting in Rural Water and Sanitation: The Swajal Project, Uttar Pradesh, India Water and Sanitation Program - South Asia, World Bank; June 2001
Empowering the Community: The FONCODES Community Contracting Strategy in Peru. A Case Study. (12KB PDF), April 2000, by Oscar Castillo, TWUAN
Guide for Task Teams on Procurement Procedures Used in Social Funds (154KB PDF)
Social Protection Discussion Paper No. 0106; February 2001
by Jorge A. Cavero Uriona
Procurement and Disbursement Manual for Projects with Community Participation
Gita Gopal. World Bank, 1988, World Bank Discussion Paper No. 312. World Bank Financed Projects with Community Participation: Procurement and Disbursement Issues Gita Gopal and Alexandre Marc. World Bank, World Bank Discussion Paper No. 265. |
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