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QAT Detailed Overview of QAT Process.ppt

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  • Analysis:
  • MOŻE PODKRESLIC ZE PROCESS JEST NAJAWZNIEJSZY TZN INVOVEMEN OF STAKEHOLDERS I AUDIT PANEL
  • TRZEBA NAPISAC W JAKIEJ WERSJI
  • Transcript

    • 1. Quality Audit Tool for Managing Social Performance
    • 2. Acronyms Used
      • QAT – Quality Audit Tool
      • ECA – region of Eastern Europe and Central Asia
      • MFI – microfinance institution (MF Banks, non-banking financial institutions, non-governmental organizations)
      • SP – Social Performance
      • SPM – Social Performance Management
      • SR – social responsibility
      MFC Quality Audit Tool
    • 3. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 4. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 5. Rationale: ECA Region Context MFC Quality Audit Tool
      • Since beginning in 1997 focus and pressure on MFIs’ self-sustainability
      • Withdrawal of donors to less developed countries
      • New comers – commercial investors (i.e. Deutche Bank, Raiffaisen Bank)
      • Post – soviet negative connotation of ‘social’ = for free
      • Commercialization of MFIs
      • Mission drift observed
      • Still huge interest in impact, but no resources to measure
      • Difficulties in promoting Social Performance
      • No commitment to social goals at the level of operations
      • Interest in easy and effective tool bringing quick measurable results
      Context Market trends Social Performance reality
    • 6. QAT Purpose
      • Assessing status and effectiveness of systems in managing SP
      • Helping MFI realize its strengths and weaknesses in SPM
      • Helping MFI prioritize actions for improvement of their SPM
      • Ensuring institution-wide understanding and buy-in
      • To ensure MFI is on track: ‘ how effective are your systems in aiming at achieving your mission?’
      • To optimize resource investment: ‘ build on what you have and invest in what you really need’
      • To prevent MFI from doing everything at once and burn out shortly – ‘let’s improve step by step and look for quick wins’
      • To create enabling environment for change; to prevent SPM be one person ‘project’
      MFC Quality Audit Tool QAT aims at… … in order to:
    • 7. QAT Target Markets
      • MFIs concerned about their Social Performance and quality of their management systems for SP
      • MFIs planning social rating exercise and willing to prepare themselves
      • Donors / Investors / Partners willing to support their partnering institutions in improving their SPM
      MFC Quality Audit Tool
    • 8. SP Dimensions Assessed by QAT MFC Quality Audit Tool Management systems SP information system Intent and design Dim Sub-dimension Content 1.1. Setting SP objectives
      • Mission translation
      • Social goals and objectives (outreach, service, change)
      • SR to clients, staff, communities, environment
      • gender aware policies
      1.2. Strategy for achieving SP objectives
      • Systems for developing coherent strategy
      2.1. Systems for monitoring and understanding performance
      • Operations and marketing: mechanism for collecting clients feedback
      2.2. Information system quality and appropriateness
      • Marketing, HR, Research, MIS, internal audit: data reliability
      2.3. Information analysis and communication
      • Marketing, operations: data analysis and reporting
      3.1. Information use
      • Management practice: data use, performance monitoring
      3.2. Decision making
      • Decision making at strategic and operational level
      3.3. Organizational culture
      • Governance, leadership
      • Internal communication
      3.4. Alignment of organizational systems
      • HR: Staff Incentive System; recruitment and training
      • Change management capabilities
    • 9. SPTF Dimensions in QAT MFC Quality Audit Tool SPM-mission clarity How well is the mission understood by all staff? Is mission translated into goals and SMART objectives? How well it is implemented into practice? SPM-alignment of systems How does internal systems support achievement of mission? SPM-decision making Are decision (both strategic and operational) made based on SP info? What is the reliability of SP info used? Gender approach Does MFI have gender aware policies? How effective are they implemented? Non-financial services Covered indirectly through overall assessment of institution strategy including range of services and its ability to answer clients’ needs Responsibility to clients Does MFI have client SR policies? How effectively are they implemented? Responsibility to community Does MFI have community SR policies? How effectively are they implemented? Responsibility to staff Does MFI have SR towards staff policies? How effectively are they implemented? Responsibility to environment Does MFI have environmental SR policies? How effectively are they implemented? Social Goal--Outreach This is referred through process questions on mission clarity, strategy, objectives: Does MFI define their target clients properly? How effective it is in reaching the target clients? Social Goal--Services This is referred through process questions on mission clarity, strategy, objectives: Does MFI know what are the target clients needs? How effectively are they met?
    • 10. QAT Uses for MFI Manager
      • To check if an MFI is at right track towards their mission achievement
      • To identify strengths supporting their SPM
      • To identify weakness: gaps and areas for improving their SPM
      • To use prioritized initiatives for developing action plan for improvement, allowing step by step SPM institutionalization
      • To buy in staff at all levels; to build understanding SPM is overarching theme rather than project or tool
      • To monitor progress in SPM institutionalization (in case of repeated audit)
      • To prepare for social rating
      MFC Quality Audit Tool
    • 11. QAT Uses for MFI Manager - Examples
      • Horizonti QAT lessons learnt:
      • „ This was very important for we did the audit before implementing anything: conducting the audit we knew the gaps – where we need to pay more attention.
      • One of the outcomes – we do know what we are doing, we are targeting the right people and doing a good job, but we need to work on systems to support this.
      • We saw that the MIS cannot support performance, so we will have a new one improved.
      • We collect a lot of information which can be used for SP indicators.”
      • ED, Horizonti, Macedonia
      • Zene za Zene QAT next steps:
      • Define more specific objectives for better understanding what it means for the terms of SP?
      • To experiment with MIS reports content
      • To improve internal communication
      • To measure drop-outs
      • To use client satisfaction form across the institution
      • SPM Champion, Zene za Zene, B&H
      MFC Quality Audit Tool
    • 12. QAT Uses for Donor / Investor / Partner
      • To help MFI improve in SPM through diagnosing strengths and weaknesses and developing action plan
      • To optimize its support through financing or helping implement the initiatives from action plan
      • To better understand the institution, its mission orientation and rational behind its translation to action
      • To monitor progress in SPM institutionalization (in case of repeated audit)
      MFC Quality Audit Tool
    • 13. QAT Desired Impact: MFI Level
      • Outcome - setting the stage for change process
        • Clearer operational understanding of SPM
        • Clear understanding by staff of what needs to be done to improve SPM
        • Internal champion and sponsor identified – infrastructure for change established
        • Better communication of social orientation and required support to stakeholders
        • Quick wins implemented
      • Short term impact
        • Process of SPM improvement kick-off
        • Consistent effort of MFI to improve SPM in a manageable steps
        • There is on-going buy-in of staff, leadership of champion and support of senior management and board for implemented changes
      • Medium term impact
        • Internal systems are improved to be better aligned with double bottom line goals
      • Long term impact – expected
        • Institution gets all aligned to double bottom line and results are improved
      MFC Quality Audit Tool
    • 14. QAT Impact: Examples From MFIs MFC Quality Audit Tool Gap: description of the target group was vague and mixed with eligibility criteria for the loan Quick win: through a series of half day workshops defines what is meant by saying „we want to reach economically and socially challenged families” and comes up with the indicators based on housing materials, asset base, etc. Gap: At fast growth, new staff don’t understand and commit to mission Quick win: re-design of training program for newly hired staff to ensure mission perspective incorporation Gap: collects lot of information, which is not used later on Quick win: review the new set of MIX SP indicators to see which information they can start using immediately Micro Development Fund, Serbia CARD, the Philippines Moznosti, Macedonia More examples of MFIs’ quick wins in MFC Newsletter Issue 1/2008
    • 15. QAT Desired Impact
      • Investor / Donor / Supporter level:
        • Increased number of partners refocus from assessing SP to improving SPM  more supportive and longer term cooperation on SPM improvement
        • More informed partners make better decision in selecting more likeminded partners
        • More efficient allocation of resources to likeminded MFIs and activities that can bring greatest value in improving SPM at MFI
      • Industry level
        • More MFIs aware of their SPM status and effectiveness
        • More MFIs improve in their SPM
        • Less mission drift
        • Better public image of Microfinance
      MFC Quality Audit Tool
    • 16. QAT Benefits for Various Stakeholders
      • MFI Managers:
        • Clear current picture of SPM systems quality
        • Good basis for effective implementation plan
        • Efforts oriented on mission acknowledged
        • Staff understands better and is bought-in through discussion about SPM
        • Allows improving before future social rating
      • MFI staff
        • Better understanding of how their tasks fit into social goals and strategy
      • Donors / investors / supporters
        • Better understanding of MFI’s commitment to mission and its translation into practice
        • Assessment of MFI’s SPM quality
        • Effective identification of MFI’s needs in terms of supporting their SPM institutionalization
      MFC Quality Audit Tool
    • 17. QAT Uses – Extracts from 5th SPM Working Group Meeting Minutes
      • In March 2008, the representatives of 10 organizations – members of MFC facilitated SPM Working Group, met in Warsaw to discuss lessons learnt in SPM institutionalization. Among other subjects they discussed QAT uses:
      • „ It can be used before the process of SPM implementation – it is nice to have gaps
      • Could be used for process evaluation – a good diagnostic tool
      • Could be useful for taking on board those who were not directly involved – e.g. IT people
      • Gives an understanding where the gaps are and what actions need to be taken
      • The format is very useful – the SPM team might be biased – but through interviews one gets more objective information
      • Could be used multiple times – especially before the strategic planning
      • Provides awareness of different opinions and perceptions
      • Stimulates additional discussions at the institutions on SPM
      • Gives better understanding of HR needs – where there are gaps in assumed and actual way the processes work
      • Remind and refresh the mission and social objectives
      • Reveals information flow bottlenecks
      MFC Quality Audit Tool
    • 18. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 19. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 20. 4 Steps in QAT MFC Quality Audit Tool
      • ED
      • Senior management (Finance, Operations, HR, Marketing, )
      • Board
      • Senior management
      • Internal auditor
      • MIS staff
      • Research staff
      • Regiona l level
      • Branch level
      • LO
      • Clients
      • All
      0,5 day 2 - 3 days 1-2 days 0,5 day 1 day Preparation Gap analysis Follow up interviews Audit panel Final report Analysis & draft report 1 day Staff participating Total time: from 6 up to 8 days
    • 21. External & Internal Assessor MFC Quality Audit Tool QAT is implemented by the team of two people: external and internal assessor: Internal Assessor External Assessor Neutral job position (best from HR or Marketing, with managerial perspective understanding) Experienced in Microfinance Internal assessor can help to ensure commitment from management & staff Skilled in qualitative research skills ensures appropriate probing Valuable knowledge of the organizational systems and information Impartiality and independence ensures review of organizational systems and information to check for reliability SPM understanding is required Skilled in analysis and synthesis of complex information
    • 22. QAT Implementation Steps (1)
      • Gap analysis: presents detailed questions which are used to assess SPM; sets up a base for more in-depth follow-up
        • Source: ED and senior management
      • In-depth follow-up: gathers more detailed information to verify and better understand gap analysis; checks status and effectiveness of systems
        • Source: Interviews with senior management, staff & clients; review of documents and internal reports; and information flows.
      MFC Quality Audit Tool
    • 23. QAT Implementation Steps (2)
      • Analysis and draft report: combine information and draft report highlighting strengths and weaknesses of issues in gap analysis; it captures perspectives of different stakeholders to be discussed during audit panel.
      • Analysis include:
        • Qualitative data analysis using triangulation of different information sources (interviews with different staff, focus groups with clients, review of written documents)
        • Tally sheet is used to identify common themes and divergences around strengths and weaknesses of MFI systems, notes from the interviews are reviewed for evidence and rationale behind emerging themes
      • Draft report is written addressing strengths, weaknesses, evidence and issues to further discuss/explore that serve as basis for discussion with representatives of different stakeholders during an audit panel.
      MFC Quality Audit Tool
    • 24. QAT Implementation Steps (3)
      • Audit panel: Presentation of findings to key organizational stakeholders, including staff from all levels of organization and clients, where appropriate.
        • Audit panel allows for further verification of the audit results and finalize the report
        • The initiatives for addressing gaps are identified and prioritized in order to develop action plan for SPM improvement
      • Final report: finalized based on audit panel discussion
        • Includes prioritized activities to be undertaken by MFI in order to improve SPM by addressing the identified gaps and by building on identified strengths
      MFC Quality Audit Tool
    • 25. Source of Information and its Validation MFC Quality Audit Tool Source of information Validation: what for? In-depth interviews with senior management Set a base, learn the strategic directions In-depth interviews with middle management and functional staff Confirm status, confirm evidence, cross-check data Focus Group Discussion with Loan Officers and Clients Confirm status, confirm evidence, cross-check data Internal documents and reports: Board meeting minutes, codes of conduct, financial statements, portfolio reports, strategic plans, HR policies, MIS reports, clients satisfaction / exit surveys etc Look for evidence, cross – check data Audit panel Verifies findings, explore doubtful issues, includes more evidence
    • 26. Data Collection Methodology
      • Gap analysis questions: basic set of questions defining the framework of SPM assessment
        • i.e.: do you seek to be socially responsible organization in relation to your target clients?
      • Status questions: questions validating the status of SPM components: their presence in the institution
        • Asked to Loan Officer: How do you communicate interest rate to clients? How do you ensure they understand?
      • Effectiveness questions
        • Asked to clients: How do you learn about interest rate? How do you know what is it?
      MFC Quality Audit Tool
    • 27. QAT questions examples MFC Quality Audit Tool Source: QAT Handbook
    • 28. QAT Report Structure (1)
      • Report is divided according to dimensions and/or sub-dimensions
      • Each dimension / sub-dimension includes:
      • [to be discussed during audit panel:]
        • List of institutional strengths supported by evidence
        • List of institutional weaknesses supported by evidence
        • Points for discussion: when there are different and not coherent opinions and evidence, they can be clarified and agreed during audit panel
      • [after audit panel:]
        • key elements of the action plan
      MFC Quality Audit Tool
    • 29. QAT Report Structure (2) MFC Quality Audit Tool Dimension 1: Intent & design Sub-dimension: Setting social performance objectives
      • MFIs strengths:
      • xxxx
        • EVIDENCE: xxxxx
      • MFIs areas for improvement:
      • xxxx
        • EVIDENCE: xxxxx
      • Discussion points:
      • Something still unclear
      • various opinions
      • Action plan:
      • What are the priority actions?
      • What are quick wins?
      • What are immediate next steps?
    • 30. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 31. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 32. QAT Attributes - Time
      • Preparation (documents review)
      • Gap analysis
      • Individual interviews
      • Focus Group Discussions with Loan Officers and Clients
      • Analysis
      • Audit panel
      • Final report
      • 1 – 2 days
      • 0,5 day
      • 1,5 – 2 days
      • 1 day
      • 0,5 -1 day
      • 0,5 days
      • 1 day
      • Depends on skills and experience of assessor
      • With external facilitator the process is more intensive and shorter
      • Internal Assessor can adjust duration to the internal dynamics
      MFC Quality Audit Tool TOTAL: 6 – 8 days Process steps Duration
    • 33. QAT Attributes: Cost
      • Staff time
        • Internal Assessor
        • Staff in interviews
        • Staff in audit panel
      • Travel to branches for FGDs
      • Snacks for FGDs
      • Includes:
        • 6 – 8 days
        • 1,5 h per person
        • 3 h per person
      • Travel costs
      • Costs of drinks and snacks
      • External facilitator time
      • Lodging
      • Travel
      • 6 days * daily rate
      • 6 nights * daily allowance
      • Cost of plane ticket
      MFC Quality Audit Tool MFI costs External facilitator MFC estimated cost for external assessment: 6000 USD + staff time cost
    • 34. QAT Attributes: Breadth of Functionality MFC Quality Audit Tool For whom? Implementation usage Results usage Staff
      • understanding how their tasks fit into strategy and mission
      • securing their buy-in
      • acknowledgement of up-to-date efforts
      Management and Board
      • ensuring all staff is on the same page
      • assessment of effectiveness in SPM
      • effective identification of areas and actions to improve SPM
      Supporters / Investors
      • understanding the organization better (it’s social mission and its translation to practice)
      • managerial systems quality assessment
      • effective identification of areas and actions to support SPM institu tio nalisation
    • 35. QAT Attributes: Infrastructure and Resource Requirement
      • Resources required:
        • Staff time
        • Funding for external facilitator budget
      • Infrastructure required:
        • Computer for assessors, recorder
        • Separate room for conducting interviews (preventing noise, securing proper concentration)
        • Convenient room for 2 FGDs (with Clients and Loan Officers)
        • Transportation to branch (if needed)
        • Conference room for holding audit panel (including: LCD projector, flipcharts, markers)
      MFC Quality Audit Tool
    • 36. QAT Attributes: Ease of Use
      • In case of external assessment:
        • MFI needs only to set up logistics and select internal assessor
        • Additional benefit: MFI is trained on how to conduct the assessment to do it independently next time
        • Challenge: securing the funding
      • In case of self-assessment:
        • Pre-assessment training is required
        • Timing adjusted to the internal dynamics of MFI
        • Challenge: the selection of internal assessor must be more careful
      MFC Quality Audit Tool
    • 37. QAT Attributes: Customer Satisfaction
      • Assessing both strengths and weaknesses makes the audience appreciate the objective assessment: they are motivated to improve as their up to date efforts to achieve the mission are acknowledged
      • Involvement of many stakeholders into process and allowing them commenting during audit panel make them owe the findings in opposite to external findings (external assessor becomes perceived rather as facilitator)
      • Developed action plan reflects the real needs and does not irrationally overburden staff
      • Clear and easy to follow structure of the report makes it a handy document for further work
      MFC Quality Audit Tool
    • 38. QAT Attributes: Customer Satisfaction in Citations
      • I am pleasantly surprised how everything is now clear – the role and the goals of SPM
      • External assistance in the audit is very helpful. I wonder whether to us people would say what the external auditor found out. I have a feeling they tell us what they think we want to hear.
      • It was good that loan officers and branch staff were included in this audit. They gave a needed perspective for the understanding of the issues they face in their work. The fact that all staff was included means we will have full support for the changes
      • I am the SPM team member. During this week it became clear that we did a lot of stuff, discussed and decided on many points. I now see what will be the result of the entire SPM effort.
      • Social audit made me realize that we are already working on many aspects of SP in our organization, but have not given it the right emphasis
      • I am now better aware of the importance of the right loan for the client. I will pay more attention to how I do my work, how the loan is used and whether the client is advancing. This is giving me an encouragement for my future work
      • Partner, Bosnia and Herzegovina
      • In our case, this tool revealed many weak points in the systems and management processes and resulted in creating an institutional strategy with a holistic approach
      • AgroInvest, Montenegro, Serbia
      MFC Quality Audit Tool
    • 39. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 40. Agenda
      • QAT Overview
      • QAT Process
      • QAT Attributes
      • QAT vs. Other Tools
      • QAT Implementation
      MFC Quality Audit Tool
    • 41. QAT vs. Other Tools (1) MFC Quality Audit Tool Compliance audits: social accounting by Social Audit Network (UK) Social Performance Audit Tool (SPA) by USAID
      • Gathers perspectives of various stakeholders
      • Discussion on findings in held
      • Assesses quantitative outputs: social accounts
      • Focused on outputs, not internal systems
      • QAT allows assessing the effectiveness of systems
      Similarities with QAT Key differences
      • Assesses status and effectiveness
      • Uses a scorecard to assess SPM, which is less flexible – comparison to desirable characteristics of MFI
      • Is not aligned with SP framework
      • Allows for comparison between organizations to greater extent
      • Does not encourage immediate management reaction and commitment to improvement
    • 42. QAT vs. Other Tools (2) MFC Quality Audit Tool SOCIAL Tool by ACCION Social Performance Indicators by CERISE
      • Methodology of data collection is the same (interviews, documents)
      • The greater focus is put to outputs: outreach, client service, information transparency, customer protection,
      • Less focused on internal management systems
      Similarities with QAT Key differences
      • Goal: to determine the abilities of MFI to achieve social objectives
      • More quantitative questionnaire
      • Covers less areas: outreach to poor and excluded, adaptation of products and services to target clients, improving social and political capital, Corporate SR
    • 43. MFIs Implementing QAT Worldwide
      • ECA region
        • AgroInvest and MDF, Serbia
        • Aregak, Armenia
        • FinDev, AzerCredit and Viator, Azerbaijan
        • Horizonti and Moznosti, Macedonia
        • Partner and Zene za Zene, Bosnia and Herzegovina
      • The Philippines
        • ASHI, CARD
      • MENA Region
        • Tamweelcom and DEF, Jordan
        • Till end of 2008: ARDI and AMOS, Morocco
      MFC Quality Audit Tool
    • 44. Contact Details
      • For more information on QAT, please contact:
        • Ewa Bankowska, Project Coordinator
        • E-mail: Ewa@mfc.org.pl
        • Phone: +48 22 622 34 65
        • Skype: bankowska
      MFC Quality Audit Tool