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USAID Cost Reporting Guidance

February 3


There is widespread agreement that we cannot make fully informed decisions about the best way to invest limited resources without information about how much it costs to achieve desired impacts. Comprehensive cost data are also critical for making responsible decisions about scaling and sustaining programs within host country systems. To address the current lack of information about costs of specific components of education programming across different contexts, the USAID Office of Education developed a Cost Reporting Guidance that aims to transform how we collect cost data across our education portfolio and support integration of robust cost-effectiveness analyses into our evaluation practice. The Guidance allows USAID to standardize the capture and reporting of cost data across the entire education portfolio and accomplish the following objectives:

  1. Estimate levels of investment needed to produce desired outputs;
  2. Understand differences in costs of producing the same outputs across different contexts;
  3. Map out program cost structure (cost of development, implementation, scale up; cost of management, M&E and reporting, etc.) and levels of host government and private sector support needed;
  4. Calculate cost per outcome and cost-effectiveness of comparable interventions.

Here are the main elements of the Guidance:

  1. The Guidance structures how implementers of USAID awards with cost requirements report their expenditure. The Guidance contains a list of common expenditure categories from which implementing partners will be able to select ones that are relevant for their work. This list includes the following general categories:
    1. General management and operations (mandatory for all projects),
    2. M&E and reporting (mandatory for all projects),
    3. Teacher training,
    4. Teaching and learning materials,
    5. Policy/capacity development,
    6. Private sector assessment/engagement,
    7. Parents/community involvement,
    8. Safe schools and infrastructure,
    9. Scholarships and cash transfers,
    10. Block grants, and
    11. Other (if applicable)

    Projects are also required to create sub-codes for development and implementation activities for categories with a substantial development component.

  2. The Guidance structures how implementers of awards with cost reporting requirements document and report activity-critical inputs from other sources, including donated resources such as volunteer time, in-kind equipment/ infrastructure and services, and any beneficiary/stakeholder inputs and other unpaid inputs that are often not accounted for in traditional budgets. Implementers are not required to monetize these inputs, unless this information is readily available.
  3. The Guidance requires that implementers of awards with cost reporting requirements document and report details of the intervention, both as outputs and the dosage at the beneficiary level.

Download the full text of the Guidance and the Annexes, Frequently Asked Questions, and USAID’s presentation on this reporting requirement.

Please visit the Discussion Board for questions and answers relating to the implementation of the guidance, and to post your own questions.

Join The Conversation

Questions and Answers

Purpose/data analysis/data use

As the purpose is to standardize reporting of expenditures, including management costs, how will USAID standardize costing given the different cost structures of each implementing partner?
What are USAID's thoughts on the comparability of the data that will be reported?
Since implementing partners have unique costing structures and NICRA, how will USAID review those effects and ensure standardized reporting of expenditures?
'Region' - is this defined as global regions or regions within the scope of a particular project?
What are the research questions this information is supposed to answer? What is the analysis plan? How does this justify funding?
Do you intend to make cross-country comparisons? To what purpose? How will you ensure the comparability of factors, such as context, economy, security, and so forth?
What is the bar/score for 'value for money'?
How are fees categorized?
Case-by-case project selection for cost studies: which projects? Timeline for notification?

Setting up cost reporting

Are you aware that each category and/or sub-category entails allocating 5 to 7 line items?
Given that there will be judgment calls in categorizing costs, how will USAID standardize cost reporting?
Given that the selection of sub-categories is subjective and will vary by organization, how will the process become standardized for all contractors? Or are you only trying to standardize the major categories and not sub-categories?
What is the rationale for quarterly reporting?
When it comes to making final decisions on categories and specific items to include in each for a specific project, who has final decision-making authority? What is the process and timing for finalizing the specific cost categories for each project?

Cost reporting categories and sub-categories

What has been your overall experience in the Nepal project with cost reporting? In our experience, it could get cumbersome to split up 'all charges' in relevant sub-categories and could become inefficient, if the guidance is not clear. We would appreciate more clarification in the guidance.
Please elaborate on scale-up capture.
The definitions of the 9 cost categories are not mutually exclusive. How will you ensure the comparability of data as cost allocation is open to interpretation?
The current cost categories do not have a category for direct training or services to youth or children, only teacher training. Where does something like training youth in leadership skills or work-readiness skills fit?
Are sub-categories required? Or can we simply report all costs by categories only?

Reporting on third-party contributions

Just for neatness, how do we record support from other USG entities, e.g., McGovern-Dole? This does not seem to be covered in 'Capturing inputs from other sources'
Can further guidance be provided on the definition of activity-critical contributions from other sources?
Guidance in the Cost Reporting Guidance FAQ appears contradictory: see page 2, column 1, paragraphs 2 and 3.
The guidance is not consistent in its treatment of cost accounting for government.
USAID is 'increasingly' increasing the data collection burden by requiring multiple evaluations (EGRA, LEMA, FoI, constant feedback). Collecting cost data, especially for third parties over whom we have little control or access to information adds to this burden. It is unrealistic to expect IPs to collect third-party data.
In the Annexes, on the government contribution worksheet, it specifically says the IP should report value in local currency or USD of venue, materials, and so forth. This contradicts what was said in the presentation and guidance document. Please clarify.
A quarterly frequency for non-direct project expenditures would seem excessive and pose an unnecessary burden. What is the rationale behind such frequency?
How will government and NGO contribution estimates provide the information needed? Wouldn’t USAID be better positioned to get exact costs from governments?
How do you expect implementing partners to be able to deconstruct MOE staff jobs to account for the proportion of time/LOE is spent on tasks that are part of their larger responsibilities?
The worksheets presented do not seem to account for the thousand sites or activities large-scale projects undertake. 1) What is the guidance to allow LOE to remain within reason for IPs? 2) How does USIAD expect to achieve a reasonable level of reliability and comparability of data?
Have you considered requiring IPs to include x months of a specialist to do the government cost analysis? Why don't you require governments to report on their own costs as part of the assistance agreement?
Please clarify the guidance that explains partners are not expected to monetize third-party cost, but the templates provided ask for dollar value.
How should costs from other USG contributions be reported?
Why would partners capture donor contributions? This should be a donor-to-donor activity.


Any guidance on budget flexibility (at the cost category level?)
We are conducting an Impact Evaluation. To dot i's, we know that we and the implementer and the mission need to coordinate the various ingredients/categories so that we can appropriately assess the costs and cost-effectiveness of the interventions. Are the costs of external evaluations also to be included within the categories/ingredients?
Is there any sense of whether or not these cost reporting requirements will also be applied to the other E3 program areas or throughout USAID more broadly in addition to education?
Please provide guidance on budget flexibility and how this will impact cost reporting.
What is the frequency of reporting?
Do you foresee asking IPs to roll up cost reporting within the implementer?
Has USAID considered STTA engaged in cost analysis and economic analysis to answer questions that USAID seeks to answer as a more efficient and effective approach to acquiring the needed information?
Will the additional LOE and training of local partners in this reporting be estimated and added to the price of the contract? Has USAID estimated costs of this tracking?
Do you expect budgets to be realigned to the cost reporting categories? Will proposal also require such alignment?