Final Report of Social Audit Working Group on “Audit of the Community Investment Projects Implemented

by IRC along the SCP pipeline route”

The authors of report, the members of Social AWG:

Ehtiram Soltan -coordinator, “The Scientific-Technical Progress and Education Center”

Azad Aliyev - group member, “Social Economic Research Union”

Gulaye Guliyeva - group member, “Merhemet” Foundation

Temkin Eminli - group member, Azerbaijan Diabetes League

Rashad Hasanov – student, Azerbaijan State Economic University

Baku- 2006

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DISCLAIMER The contents of this report should be treated as the opinions and conclusions of the report’s authors. In no way does this report reflect the policies or view of the project sponsor or any other organization concerned. The authors are solely responsible for any mistakes in this report. The project participants note that they have fully understood their duties and tried to do their work professionally. Such principles as professional approach to the audit performance, competency, comprehension of the duties put forward have been observed in writing the report and an effort was made to fully guarantee the maximum effectiveness of the audit procedures. An attempt was made to observe the principles of mutual respect and understanding with associates of parties going through the audit during the audit process. The members of the audit group approve the report with their signatures below.

Ehtiram Soltan oglu /coordinator/ _______________

Azad Aliyev /group member/ _______________

Gulaye Guliyeva /group member/ _______________ Temkin Eminli /group member/ _______________ Rashad Hasanov /student/ _______________

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Contents

Executive summary 4 I. Introduction 1.1. The objectives of the project 7 1.2. The scope and feasibility of the project 7 1.3. The criteria of the project 7 1.4. IRC and local partner NGOs 7 1.5. An Introduction of SCP and Audit Project 8 2. Methodology 2.1. The members of Audit group and their roles 9 2.2. The methods of conducting audit 9 2.3. Selection of Communities to be audited 10 2.4. Audit Plan 10 2.5. Initial requested documents 10 2.6. Document review and checklist preparation 11 3. The analysis of findings achieved during audit and observations 3.1 The procedures regulating Community Participatory Assessment (CPA) and activities reflected in Guidelines

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3.1.1. Activities reflected in CPA Guidelines 12 3.1.2. Observations, findings and recommendations on CPA attained during the observations in Communities

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3.1.3. Conclusions 18 3.2. Procedures regulating Micro-projects Implementation in

Communities and activities reflected in Guidelines 19

3.2.1. Activities on “Micro-projects Implementation Guide” 19 3.2.2. Observations, findings and recommendations on Micro-project

Implementation attained during observations 22

3.2.3. Conclusions 23 4. Acknowledgements

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Appendixes Appendix 1. Audit group members and information on their

organizations. 25

Appendix 2. Audit timeline 26 Appendix 3. Checklist 29 Appendix 4. Photos 31

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Executive summary This document reflects the activities conducted within the framework of “Audit of Community Investment Programs implemented by IRC along the South Caucasus Pipeline” project which was realized by financial aid of Open Society Institute Assistance Foundation (OSI-AF Azerbaijan). The aim of Audit group was to conduct an audit of projects implemented by IRC and its partner organizations. Three communities out of 24 where IRC and its partner National NGOs implemented micro-projects have been objects of the audit process. Three projects were implemented in three communities by 2 NGOs. Communities were determined by random selection. The objectives of the project were:

• Audit of SCP, IRC and its local NGO partners in meeting commitments to achieve community participation in micro-projects.

• Audit of the implementation of micro-projects by IRC, its local NGO partners and communities

• Audit of IRC commitment to build sustainable capacity in communities Achievements

• The Action Plan Committee (APC) was created in Meshedi Huseinly and Gilinjbeyli

communities, and a democratic election to this Committee was held by the Community members

• The representatives of Executive Structure and Municipality had played an active role in Micro-project Implementation and in APC and all mutual expected results were achieved.

• Finding the balance principle was fulfilled in Meshedi Huseinly, Gilinjbeyli and Jirdakhan communities. Participation of women in APC and in all activities was provided during the project implementation in all three communities.

• The budgets of all three micro-projects were developed on the basis of realistic calculations and no financial issues were identified during audit.

• Selection and planning procedures of the projects in Meshedi Huseinly and Gilinjbeyli communities were implemented correctly.

Non-conformances and other Shortcomings

• The introducing process of CPA team and implementing organization was not carried

out in accordance with CPA-1, Activity 1, Step 1. • Documentation process was implemented weakly in all three communities and no

measures were taken in this direction. • The time allowed by the Implementation Guidelines for completing the eight CPA

activities is considered insufficient. Implementation of 8 activities in 3 days negatively influenced quality of the project. Most of community members could not attend these processes till the end, because of time limit. Along with this, even the processes that were intended to be implemented within this framework were not successfully implemented.

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• There is no document proving Community Monitoring and Assessment though it was intened in Section D of CPA Introductory part.

• In CPA-8.5 document of Jirdakhan community the artesian project is reflected. Replacement of priorities was not reflected in the documents.

• According to Section 1, item B of Micro-project implementation guide “The micro-projects are one component of IRC’s Integrated Community Based Development (ICBD) approach.”

This one component of the project- micro-project implementation has been sustainable just in some cases, but after the project implementation community capacity building was not ensured (documentation, fundraising, proposal writing ability and etc.).

• There is no application of training provided to NGOs on Sustainability on October 13, 2005 at IRC’s Kurdamir office in communities.

• Though the objectives of the project was intended to provide all the community members to benefit from artesian veil, but unfortunately this objective was not fully accomplished (refer to “Artesian well drilling” project).

• Location Map (refer to A 1.2) and Micro-project Technical Drawing (refer to A 1.3 and A 2.2) are not in line with technical standard in all three communities.

• No relevant sector specific sub-groups were created in all three communities. • Technical standards were not observed during road rehabilitation (refer to “Road

rehabilitation” project, A 1.3 and a 2.2).

Recommendations

• During micro-project implementation considering the specific characters of communities, information measures must be executed in such manner, that, all community members could have precise information about the process, its essence, and benefits. - Preparation of visual aids in order to inform community members, holding informal

meetings (for example, around of tea-table), and explanation of essence of further activities would be advisable during these meetings.

- The staff implementing above mentioned tasks must be involved in appropriate training in advance.

• The control mechanism over documentation process must be strengthened in communities. Special trainings must be delivered to APC to improve documentation abilities.

• Implementation of 8 activities reflected in CPA must be extended to 5 days. The implementation guidelines time should be 4 hours per day, as break between stages plays a great role for community members for thinking.

• More attention must be paid to management of the project. • Documentation should be properly carried out and during trainings the members of

APC should be educated that, “Community interests” are always priority. • Micro-project is a way to achieve sustainable development of communities. Therefore,

along with micro-project implementation, the special attention must be paid to formulation of communities and their sustainable development during the process. Dedication of more time for improving management and fundraising capabilities in communities, and practice of practical problems is desirable. To ensure sustainable development in communities, not only western methods, but also traditions and mentality must be used.

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• It is necessary to strengthen management of the project, to freshen control mechanism over performance of the project, to provide regular monitoring of execution of trainings.

• New micro-projects must be implemented in communities. Identification and Prioritization of Community projects must be improved and the projects from which the majority of population will benefit must be preferred.

• Technical standards must be met in designing process of future micro-projects. • It is necessary for IRC to improve linkage mechanism with Communities and control

mechanism over micro-project implementation. • It would be advisable to present quality certificate proving appropriateness of micro-

project implementation to quality standards. Preparation, assessment, approval and implementation of Micro-projects must be simplified and these processes must be implemented rapidly.

Conclusions

• It was first time that, local NGOs were directly involved in CPA (Community Participatory Assessment) implementation and gained great capacity in this field.

• CPA process does not adequately address the need for implementing NGO partners to become fully aware of community issues. This enhanced awareness is necessary to assure that the building of community capacity is optimized. These issues emphasize the need for more time to be allocated for initial training. Such training may give communities the greater confidence they need to implement projects for themselves.

• Micro-projects were implemented in accordance with Micro-project implementation guideline. But not all the members of community could benefit from it.

• During the implementation of the project in order to guarantee qualitative work IRC had the control over processes.

• Micro-project implementation positively affected and played significant role in development of communities and solution of social problems.

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1. Introduction 1.1 The objectives of the project

The main objectives of the audit of Community Investment Program (CIP) implemented by IRC along the SCP pipeline were:

• Audit of SCP, IRC and its local NGO partners in meeting commitments to achieve community participation in micro-projects.

• Audit of the implementation of micro-project by IRC, its local NGO partners and Communities.

• Audit of IRC commitment to build sustainable capacity in communities The purpose of the Audit was to verify whether the commitment to SCP had been effectively fulfilled, and the long-term sustainable development of communities had been achieved on the basis of real facts. 1.2 The scope and feasibility of the project

Group members have spent 6 months on audit activities. In the first stage group members group members obtained the documents that were subject to audit and prepared checklist. Group members got acquainted with the best international audit experience. They received trainings on preparation and implementation of audit program, and each of them have got appropriate certificate. Responsible persons were identified for the audit directions and the essence of their responsibilities. Group members defined responsible persons on each audit directions and each member clearly understood the essence of their responsibilities. At the beginning of audit process Social AWG found out that, IRC has finished its activity on CPA in Communities. But as a result of IRC’s assistance Social AWG could have audit meetings with local partner NGOs and Communities. Though group members had faced some obstacles (the timetable was extended as documents and answers to given questions were delayed by NGOs and IRC, and etc.) they could still achieve objectives reflected in the project. 1.3 The criteria of the project The successful and qualitative implementation of the project strongly depends on agreed criteria by authors of this Report and auditee. The following criteria were determined:

• The commitments of SCP • IRC’s Community Participatory Assessment Guidelines • IRC’s Micro-project Implementation Guide

1.4 IRC and its local partner NGOs

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• IRC has been implementing micro-projects in Azerbaijan since 1994 and since 1998 it has been implementing long-term projects with the purpose of improving community development in the Communities along SCP pipeline route. IRC’s purpose is to help communities to assess their resources, and by this way to assist them to find out solutions of problems in the field of infrastructure, health, agriculture, education and economy on the basis of Integrated- Community based Development model. IRC and its local partner NGOs have implemented micro-projects in 34 Communities in order to ensure Community Sustainability.

• Ganja Regional Organization of “Bilik” Educational Society was established in 1999, in Ganja city. The main purpose of this organization is to educate the population. From November 30, 2004 till 2005, “Bilik” has acted as a partner organization in “Capacity Building of National NGOs” project implemented by IRC Azerbaijan and tried to achieve objectives and purposes of the project. The project had 2 main strategic directions and the organization has mobilized all its potential in these directions. “Bilik” NGO has successfully implemented some educational projects in Ganja and also took an active role in implementation of some governmental projects.

• “Azerbaijan Educational Youth Organization” (AEYO) was established on December 10, 1994, and passed State Registration on April 11, 1997. The major objective of AEYO is to contribute to solution of problems of our country in the field of education and to help youth to present themselves to society. AEYO operate in the field of education, youth, poverty reduction and development of civil society.

1.5 An introduction of SCP and Audit project The excavation field of gas that is planned to be transported by SCP, Shahdeniz natural gas field, is situated in Azerbaijani area of Caspian Sea, 100 km to the south-east from Baku. This is one of the biggest natural gas fields with its great reserves. The estimated amount of gas that will be extracted from this field is approximately 1 trillion cubic meters. The construction and exploitation of Shahdeniz gas field and SCP is implemented by 7 national and international consortium including BP, Azerbaijan State Oil Company, Statoil, LukAgip, NICO, TotalFinaElf, and TPAO. BP is acting as an operator of this consortium. The building of the pipeline is almost complete. The length of the pipeline will be 690 km, and will be able to transport 7.3 billion cubic meters natural gas per year from Sanghachal terminal of Azerbaijan, passing through the territory of Georgia, to Turkey. In future the capacity will be increased to 16 billion cube meters. SCP is being constructed parallel to BTC. The gas that will be excavated from Shahdeniz gas field, will positively affect gas-supply of Azerbaijan, Georgia and Turkey. Azerbaijan reserves the right to get 1.5 billion cube meters gas per year. Georgia is expected to get 5% of transported gas as compensation for transit tariff. Turkey has signed contract with Azerbaijan to get more than 6 billion cube meters of gas per year. The capital expenses for the first stage of exploitation and construction of SCP is approximately 3.2 billion USD, 2.3 billion USD is planned to be spent for construction of sea and terminal equipment of Shahdeniz field, 0.9 billion USD is planned to be spent for the pipeline construction. The length of the pipeline in the territory of Azerbaijan is 442 km. The pipeline passes through 137 Communities of 13 regions. Micro-projects appropriate to Community Investment Program have been implemented in order to achieve Sustainable Capacity of Communities along the SCP pipeline. The implementation of

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audit project on the basis of Memorandum of Understanding signed between BP and OSI-AF on August 5, 2005 and realized with the financial aid of BP and OSI-AF is very important to find out whether commitments to CIP were appropriately fulfilled, to find out weaknesses and to give some recommendations to elaborate them.

2. Methodology

2.1 Audit group members and their responsibilities

The group members performed following duties as a result of task division among them:

1. Ehtiram Soltanoglu (Coordinator)- responsible person for co-ordination of team activity connected with audit of the CIP implemented by IRC, audit of the Micro-projects Implementation , processing and verifying audit outcomes, developing final report and recommendations

2. Azad Aliyev (member) - responsible person for conducting audit by Micro-projects Implementation Guide, preparing report of appropriate sphere, collecting initial data, and investigating initial audit results.

3. Gulaye Guliyeva (member) - responsible person for conducting audit of Community Participatory Assessment, preparing report of appropriate sphere, exploring results obtained from community meetings and interviews.

4. Tamkin Eminli (member)- responsible person for conducting audit of Community Participatory Assessment, preparing report of appropriate sphere, taking photos organizing meetings with communities and community leaders.

5. Rashad Hasanov (student)- responsible person for translation, administrative support, document management and record keeping.

The detailed information about group members and their NGOs is given in Appendix 1. During audit procedure: • 6 organizations (IRC, its local partners and Communities) were audited. • The sight visits have been organized to 3 communities located in 2 regions. • 3 organizations have been visited. • The number of interviewed persons- 50 • The number of audited documents- 110 • The number of photos taken- 63 2.2 The methods of conducting audit

• Determination of audited communities by random selection. • Identifying national NGOs implementing projects in selected Communities. • Introductory meeting and discussions with responsible persons of BP/SCP and IRC. • Getting acquainted with CPA documents at IRC’s premises. • Preparation and sending of checklist to auditee. • Site visits to audited communities:

� Determination of number of community members participating at training;

� Selection of constructed and renovated facilities; � Obtaining documents

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� Checking information with community members to achieve maximum objectivity

� Determination of local executive authority members. � Interviews and discussions � Questionnaire � Photos � Acquaintance with the documents;

• Audit meetings with the organizations implementing this project- “Bilik” and “Educational Youth Organization of Azerbaijan”

� Acquaintance with documents � Comparison of documents � Interviews and discussions � Questionnaire � Photos

2.3 Selection of audited Communities

Audit group randomly identified 5 communities among communities where IRC is implementing projects. 3 communities out of 5 were selected as subject to audit due to time limit and volume of the work. Within a timeline for implementation of the project, following randomly-selected micro-projects in three communities were subject to audit:

• “Repairing school roof and building sewage system” project in Meshedi Huseinly community of Shamkir.

• “Artesian veil drilling” project in Gilinjbeyli community of Shamkir • “Road rehabilitation” project in Jirdakhan community of Yevlakh

Following local NGO partners of IRC operated in above mentioned communities: • Ganja Regional Organization of “Bilik” Educational Society • Azerbaijan Educational Youth Organization

2.4 Audit Plan

The plan of audit project of communities along the SCP pipeline route was developed according to mutual agreement between IRC and SCP representatives during preparation of audit project (refer to Appendix 2). Social AWG could successfully cope with its tasks in time:

• Signing contract with OSI-AF • Holding trainings on safety and health. • Obtaining requested documents. • Primary acquintance and initial investigation. • Acquintance meeting of group members with BP/SCP and IRC officials. • Site visits to Meshedi Huseynli, Gilinjbeyli and Jirdakhan communities • Meeting with IRC representatives • Collecting data.Initial analysys. Exploratation of initial results • Introductory meeting on Audit findings • Preparing audit report

2.5 Initial requested documents

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• IRC’s Community Participatory Assessment Guidelines • IRC’s Micro-projects Implementation Guide (I would like to emphasize that both

documents were presented to audit group prior to audit activities) • Commitments of SCP

2.6 Document review and checklist preparation

• List of 24 communities, where micro-projects on CPA are implemented • Grant Agreements signed between SCP project and Partner NGOs • List of all NGOs participating in CPA • List of all projects implemented by NGOs on CPA • Selection criteria of local partner NGOs • List of all tender participants on CPA • External and internal audit reports • Grant Agreement signed between BP and IRC (excluding financial part)

Audit group members review above mentioned documents and prepared appropriate checklist (refer to Appendix 3). Following documents were reviewed at IRC’s premises during initial audit meeting:

• Community Participatory Assessment Report and Micro-project documents (With attached micro-project proposal and payment documents):

� Gilinjbeyli community (Shamkir) � Meshedi Huseinly community (Shamkir) � Jirdakhan Community (Yevlakh)

• Training attendance list

� CPA training � Leadership, project design and implementation training � Micro-project summary � Environment training � Monitoring and Assessment training � Sustainability training

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3. The analysis of findings achieved during audit and observations 3.1 The procedures regulating Community Participatory Assessment (CPA) and activities reflected in Guidelines

CPA Guideline (this document is available at ĐRC’s premises) The CPA Guideline is a proprietary document developed by IRC on the basis of its experience of running similar programmes elsewhere and made available in its current form for the first time in Azerbaijan for this programme. It has been written to allow NGO partners to take communities through a stepped process that should allow them to build their capacity in a way that is sustainable. 3.1.1 Activities reflected in Community Participatory Guidelines 8 activities are reflected in CPA document on Community Mobilization. These are described below where references in brackets refer to relevant clauses in the CPA Guideline document. Activity 1: Introductory Meeting The objective of introductory meeting is to brief community members on the implementing organizations, donors, and program goals and objectives. Introductory meeting consists of following stages:

• Introduce the CPA team and Implementing Organization (refer to 1.1, 1.2) • Outline program goals and objectives (refer to 1.3) • Outline CPA objectives and goals • Highlight the importance of Community participation and review meeting rules.

(refer to 1.9, 1.4, 1.5) • Present and explain the CPA schedule (refer to 1.7) • Nominate and select “Community Election Team” (refer to 1.10) • Conclude Introductory meeting

Activity 2: Community mapping The community mapping exercise helps everyone understand the location and importance of community features, recourses, and potential opportunities. The features include the boundaries of the communities, roads, paths, schools, houses, mosques, health centers, water sources, gardens, small pasturelands, forests, and livelihood opportunities. The community defines the important opportunities that are available and constraints that impact their community and vicinity. These activities are represented in the following steps:

• Organize participants into groups (refer to 2.1) • Explain activity and essential map components • Gather information and guide activity through targeted questions (refer to 2.2, 2.3) • Presentation and discussion of group maps • Reproduce community map and record summary of discussions (refer to 2.3, 2.4).

Activity 3: VENN/Village Institutional Diagram

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The VENN/Village Institutional Diagram is a simple way of recording all the key organizations and economic influences past and present in the community and vicinity. This tool helps the community identify and measure their roles and importance to the community. This activity is carried out in 4 steps:

• Explain activity and initiate discussion of actors in the community • Explain and create an institutional diagram (refer to 3.1) • Presentation and discussion of diagram (refer to 3.2) • Reproduce diagram and record summary of records (refer to 3.3, 3.4)

Activity 4: Finding the balance The purpose of this activity is to share experiences of women and men’s role in various kinds of work and decision making, identifying obstacles women face to full participation in decision-making, particularly in development programs, and to think about strategies for creating an equal gender balance in decision-making and workloads. The activity is represented in the following steps:

• Divide the plenary group into small working groups and provide activity materials (refer to 4.1).

• Explain the activity and initiate discussion on gender roles and responsibilities • Discuss and record levels of gender involvement in community activities • Discuss, rank and record obstructions to women’s participation (refer to 4.2) • Group presentation of findings to plenary session • Record summary of discussions and group findings (refer to 4.3).

Activity 5: Community brainstorming and problem analysis In this activity community prioritizes and ranks problems identified during the CPA. The activity includes 5 steps:

• Explain the activity to the plenary group as a whole (refer to 5.1) • Plenary session discussion to identify the primary community problems • Conduct Problem Tree Activity (refer to 5.2, 5.3) • Divide participants into groups and facilitate completion of problem/solution worksheet

(refer to 5.4, 5.5) • Presentation of group findings and summary in a Problem Analysis Chart

Activity 6: Community Problem Ranking Prior to ranking the problems, the CPA team asks the community members to list the major problems identified by the community and again conduct brief discussions in the plenary. Based on the discussions during the plenary, the community prepares the problem-ranking chart by listing the major problems twice- once in the left-hand column and once in the top row. Next, the community members compare the two problems and decide which is more serious. The rank column shows the community’s most serious problem. This activity includes 5 steps:

• Generate final list problems identified by the community (refer to 6.1) • Preparation of Problem Ranking Chart (refer to 6.2, 6.3) • Presentation of Problem Ranking Chart • Complete Problem Ranking Chart based on community input • Record Problem Ranking Chart Information

Activity 7: Action Plan Committee (APC) Formation The community members learn the process of APC member election. Seven steps are carried out in this activity:

• Outline the process of APC formation

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• Discussion of APC member eligibility, roles and responsibilities and characteristics (refer to 7.1)

• Nominations of APC candidates • Notify CPA participants and other community members about the time/date of APC

member elections • Preparations for APC member elections (refer to 7.2) • Conduct APC member elections • Document APC election results and complete APC Membership Agreement

Activity 8: Community Action Plan After the community elects its APC members, IRC and new APC prepare a strategic plan to address the community-defined needs. Community Action Plan consists of 4 steps:

• Review the purpose of creating a CAP (refer to 8.2, 8.4) • Review problems identified in the previous experiences • Draft Community Action Plan (CAP) • Finalize the CAP (refer to 8.1)

3.1.2 Observations, findings and recommendations on CPA attained during the observations in Communities

3.1.2.1 Commitment CPA- Activity 1: Introductory Meeting The objective of the introductory meeting is to brief community members on the implementing organizations, donors, and program goals and objectives, Observation It was intended to give brief information about implementing organization, its mission, the projects implemented by this organization in our region/country, about essence and importance of the project. But this was done only in introductory meeting. No information was provided during project implementation. Insufficiency of information about organization and implemented project even lead some members of Jirdakhan community of Yevlakh to think that the micro-project was implemented by local municipality. In Meshedi Huseinly and Gilinjbeyli communities most of community members told that (refer to Appendix 4, photo 1,4), they had not had any information about implementing organization. Analysis Activities reflected in CPA-1 Activity 1 Step 1 were implemented only in introductory meeting, the evidence of the implementation of this activity in further stages was not presented to audit team. Recommendations During implementation of such projects, taking into account the characteristics of local communities, the informational measures must be taken in such manner that each member of community could have correct information about process, its essence and benefits.

• Preparation of visual aids to inform community members, holding informal meetings (for example, around of tea-table), and explanation of essence of further activities would be advisable during these meetings.

• The staff implementing above mentioned tasks must be involved in appropriate trainings in advance.

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3.1.2.2 Commitment Activity 1, step 4: Highlight the importance of community participation and review meeting rules. Item 3*. Ask one participant to volunteer that is familiar with all the community participants who would be willing to be responsible to ensure the participant list is completed during the various activities of the CPA process. Note: Documentation during CPA process, including identification of responsible person for completing participant list, CPA Guidelines, Program Summary, training sector- community capacity building is implied.

Observations

• We observed that the documentation process had been carried out very weakly in all three communities (Meshedi Huseinly, Gilinjbeyli, and Jirdakhan). The number and percentage of training participants is not indicated in al three communities in some places.

• There was not any document proving community activity after implementation of micro-project in any of the three communities.

• There is no document showing replacement of Road project with Artesian veil project in Jirdakhan community.

Analysis Documentation process was implemented weakly in all three communities and no measures were taken in this direction. Recommendations The control mechanism over documentation process must be strengthened in communities. Special trainings must be delivered to APC to improve documentation abilities. 3.1.2.3 Commitment CPA Guidelines, Implementation guidelines of Activities1-2-3-4-5-6-7-8 Observation The time allowed by the Implementation Guidelines for completing the eight CPA activities is considered insufficient. Implementation of 8 activities in 3 days negatively influenced quality of the project. Most of community members could not attend these processes till the end, because of time limit. Along with this, even the processes that were intended to be implemented within this framework were not successfully implemented. Analysis The timeline for each of three communities (Meshedi Huseinly, Gilinjbeyli, Jirdakhan) for implementation of 8 activities showed that these activities can not be implemented in 3 days. Because, time for implementing Activity 1 is 30 min-1 hour, Activity 2 is 2-2.5 hours, Activity 3 is 1-1.5 hours, Activity 4is2-2.5 hours, Activity 5 is 4 hours, Activity 6 is 1-1.5 hours, Activity 7is 3-4 hours, Activity 8 is 3-4 hours . If we sum all required time for implementing each of these activities total required time will be 21 hours. And if we add breaks between these activities we will have 27 hours (2 hours for each day, 2x3=6+21=27). Let’s divide this time into 3 days. We will have 9 hours of training per day. It shows that the implementation time is too short. Executive guideline time for implementation of 8 activities reflected in CPA document failed. Recommendation Implementation of 8 activities reflected in CPA must be extended to 5 days. The implementation guidelines time should be 4 hours per day, as break between stages plays a great role for community members for thinking.

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3.1.2.4 Commitment Activity 2: Community mapping (Detailed comment on commitment is given in 3.1.1) Observation This process is very specific and peculiar. Therefore, group members observed this process in video cassettes, photos and flipcharts. They could carry out this process in Meshedi Huseinly and in Gilinjbeyli. But group members were not able to do this in Jirdakhan community. Analysis Commitment was fulfilled in all three communities. 3.1.2.5 Commitment Activity 3: Venn/village institutional diagram The VENN/Village Institutional Diagram is a simple way of recording all the key organizations and economic influences past and present in the community and vicinity. This tool helps the community identify and measure their roles and importance to the community. Observation After discussing Venn/village institutional diagram group members came to the conclusion that the representatives of executive power and municipality had taken an active part in Micro-project implementation and in APC. They have done all their best in solution of the problems. Analysis: Commitments to Activity 3 was fulfilled in all three communities. 3.1.2.6 Commitment Activity 4: Finding the balance The purpose of this activity is to share experiences of women and men’s role in various kinds of work and decision making, identifying obstacles women face to full participation in decision-making, particularly in development programs, and to think about strategies for creating an equal gender balance in decision-making and workloads. Observation Finding the balance principle was fulfilled in Meshedi Huseinly, Gilinjbeyli and Jirdakhan communities. Participation of women in APC and in all activities was provided during the project implementation in all three communities. Analysis: Activity 4 was implemented in Meshedi Huseinly and Gilinjbeyli communities. 3.1.2.7 Commitments Activity 5: Community brainstorming and problem analysis Community prioritizes and ranks problems identified during the CPA in this activity. Activity 6: Community Problem Ranking Community prioritizes its problems in this activity. Observation Activity 5 was implemented accordingly in communities Meshedi Huseinly and Gilinjbeyli. But unfortunately, this process was not implemented accordingly in Jirdakhan (refer to Appendix 4, Photo 5,6). Because, community members selected road project, and this was reflected in CPA document. But at the end artesian well drilling project was implemented. Group members came to this conclusion after analyzing video cassette and CPA documents. Analysis: These commitments (Activity 5 and 6) were carried out in 2 communities. This process was weakly implemented in Jirdakhan.

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3.1.2.8 Commitment CPA- Activity 7: Action Plan Committee (APC) Formation Observation The Action Plan Committee (APC) was created in Meshedi Huseinly and Gilinjbeyli communities, and a democratic election to this Committee was held by the Community members. This process was not implemented in Jirdakhan community. Prior to IRC’s activity in this community, “Save the Children” had formulated this Committee and this committee began to be managed by IRC. Analysis: This process was implemented in Meshedi Huseinly and Gilinjbeyli communities. 3.1.2.9 Commitment Activity 8: Community Action Plan After the community elects its APC members, IRC and new APC prepare a strategic plan to address the community-defined needs. Observation Though priority was given to implementation of artesian veil drilling project in CPA document of Jirdakhan community, the group members observed that road project had been implemented instead of artesian well drilling and community members which were interviewed said that they were unsatisfied with this fact. No document proving project replacement was presented to group members (Photo 5-6). Analysis In CPA-8.5 document of Jirdakhan community the artesian project is reflected. Non-conformance Replacement of priorities was not reflected in the documents. Recommendations Documentation should be properly carried out and during trainings the members of APC should be educated that, “Community interests” are always priority. 3.1.2.10 Commitment CPA 1.7 Community Participatory Assessment, Schedule/Agenda:

• To develop a long term community vision • To initiate developing a long term plan for integrated community based development

(ICBD). BTC’s tender announcement (sustainability section, timeline) Observation One of the main commitments taken by IRC in all of the three communities (Meshedi Huseinly, Gilinjbeyli and Jirdakhan) – to build sustainable capacity in communities was not completely fulfilled. It was observed that community stopped its activity as soon as the project was implemented. No documents proving their further activities were found in these three communities. We did not witness their initiative to solve any problem independently. It proves one more time that the responsible organization approached to CPA process perfunctorily. Non-conformance According to Section 1, item B of Micro-project implementation guide “The micro-projects are one component of IRC’s Integrated Community Based Development (ICBD) approach.” This one component of the project- micro-project implementation has been sustainable just in some cases, but after the project implementation community capacity building was not ensured (documentation, fundraising, proposal writing ability and etc.).

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Recommendations Micro-project is a way to achieve sustainable development of communities. Therefore, along with micro-project implementation, the special attention must be paid to formulation of communities and their sustainable development during the process. Dedication of more time for improving management and fundraising capabilities in communities, and practice of practical problems is desirable. To ensure sustainable development in communities, not only western methods, but also traditions and mentality must be used. 3.1.2.11 Commitment Introductory part of CPA, Section D, Program Planning and Implementation To conduct participatory monitoring and evaluation Observation The most of APC representatives were not aware of participatory monitoring and evaluation in all of the three communities (Meshedi Huseinly, Gilinjbeyli and Jirdakhan). They had not been delivered any training on monitoring and evaluation and they had not taken part in any related training. Analysis: Though it is intended in item D of CPA introduction part to conduct participatory monitoring and evaluation, there is no document proving this procedure. Analysis There is no document proving Community Monitoring and Assessment though it was intened in Section D of CPA Introductory part. Recommendations One of the main components of CPA process is to conduct participatory monitoring and evaluation. But this process was not applied as mechanism during the project implementation. More attention must be paid to management of the project. 3.1.2.12 Commitment Capacity Building project of National NGOs Program summary Commitment corresponding to CPA document Training During program national NGOs and community partners will work with IRC to increase their self-confidence, to help them to get involved in local initiatives in future, to improve their project capabilities through training. These activities include strategic planning, writing proposal, budget development, organizational progress, dispute settlement, and monitoring and evaluation. Prior to each component of the project IRC will provide training for NGOs and NGOs will be responsible for providing these training in each object community. Observation Though the national NGOs were delivered training on Sustainability of communities, no documents proving that national NGOs applied this training in communities could be found during the observations of group members. As a result of this, the Community sustainability principle was corrupted and activity of community (APC) was stopped as soon as the micro-project was implemented. Non-conformance There is no application of training provided to NGOs on Sustainability on October 13, 2005 at IRC’s Kurdamir office in communities. Recommendations It is necessary to strengthen management of the project, to freshen control mechanism over performance of the project, to provide regular monitoring of execution of trainings.

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3.1.3 Conclusions

• It was first time that, local NGOs were directly involved in CPA (Community Participatory Assessment) implementation and gained great capacity in this field.

• CPA process generally was implemented well. However, issues of documentation were weakly implemented. Along with this, participants from communities were not fully aware of mission and roles of CPA participants. The trainings intended in CPA process were delivered in a short period of time. As a result of this community members were not able to participate these trainings completely which was resulted with lower abilities of sustainable capacity.

3.2 The procedure regulating Micro-projects Implementation in Communities and activity reflected in Guidelines

The Micro-projects Implementation Guide (this document is available at ĐRC’s premises) is a proprietary document developed by IRC on the basis of its experience of facilitating the implementation of similar programmes elsewhere. It is made available in its current form for the first time in Azerbaijan for this programme. It has been written to allow NGO partners to take communities through a stepped process that should allow them to develop and deliver a project that is of community benefit The following activities are presented in this document which is reflecting stages of Micro-project implementation, in accordance with CIP. 3.2.1. Activities in “Micro-projects Implementation Guide” Section 1: Introduction to micro-projects The first section deals with the role of micro-projects in IRC’s Integrated Community Based Development. This section also includes the information about people who is involved in implementation of micro-projects. It involves them in taking part in Community Participatory Assessment, in identifying community problems and needs, in ranking crucial needs, in establishing an Action Plan Committee (APC) and in preparing community development plan. Micro-project implementation helps the community in writing proposals, managing resources and developing their capabilities during the process. During micro-project implementation it is intended to present used documents and Micro-project Forms Index. Introduction section is divided into 2 parts:

• Definition of micro-project • Why IRC supports micro-projects

Section 2: Micro-project proposal Section 2 deals with preparation of micro-project proposal and planning process. Micro-project selection and proposal writing are also presented. (Refer to A 1.1). This activity consists of 2 stages:

• Micro-project selection and planning • Proposal writing

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Section 3: Cost estimates and project budget summary Section 3 gives detailed information about micro-project implementation in stages. It describes identifying materials and equipment, preparation of labor cost estimate, community’s contribution of 25% of total costs, and all other activities for preparation of budget. Budget is prepared by APC, and is reviewed by IRC for better use of resources and for better project design. Micro-project budget (refer to A 1.1) and Budget vs. Actuals report (refer to PS 0.5a) is a means to prevent potential financial difficulties, to help IRC and APC have control over implementation. This activity is presented in following stages:

• Break down of micro-project inputs • Material and equipment cost estimates (refer to A 1.1) • Labor cost estimate (refer to PS 01, PS 01a) • Administrative cost (refer to A 1.1) • Community contribution (refer to A 1.1) • Budget summary (refer to A 1.1)

Section 4: Micro-project proposal submission Section 4 deals with submission of project, which was prepared and signed by the APC, through an IRC staff member. The IRC staff member is responsible to notify and submit a completed set of proposal to the Evaluation Committee. The following attachments are to be included:

• Micro-Project Budget (refer to A 1.1) • Location Map (refer to A 1.2- sample) • Technical Drawing (refer to A 1.3) • Micro-project Timetable(refer to A 1.4) • CPA Problem Ranking Matrix (refer to A 1.5- sample) • Letters of Support (refer to A 1.6)

Section 5: Micro-project proposal review process The process of proposal review and review of project’s design are described in this section. IRC is responsible to its donor for the funds it spends on the micro-project. Therefore, each micro-project is reviewed to ensure the funds are spent efficiently. Evaluation Committee is responsible to manage the proposal review process to ensure a complete and timely assessment of the proposed community micro-project. If project budget is realistic, then the review process of the project is done in following steps:

• Notification and Evaluation Committee Regarding Proposal submission • Initial proposal review • Translation of Proposal Documents • Sector Specific Review (Including Gender and Environment), (refer to A 1.1, item 6; A

2.5) • Review by Staff Engineer (A 2.2, A 2.3, A 2.4) • Final Review and Approval by Evaluation Committee and Project Manager. • Tender process (refer to Section 7, Micro-project implementation- Contracting steps) • Preparation of Contract (refer to Section 6, Micro-project implementation- Micro-project

contract- sample ) • Proposal, Tender Documents and Contract to Headquarters Office for Final Approval and

Signature.

Section 6: Micro-project Contract This section describes how the community will spend a few days organizing their documentation and contribution commitments after the proposal is approved. In general, the project is divided

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into several parts: preparation and first payment; implementation monitoring, second and third payments, completion and final payment and evaluation. Contract includes six articles:

• Financial and material contribution • Start and duration of the project • Assistance in procurement • Financial obligations • Settlement of disputes • General Implementing partner obligation

Section 7: Micro-project implementation- contracting steps Contracting procedures and providing APC/Communities some basic instructions to assist in their selection of the most appropriate contractor for micro-project implementation is described in Also includes contracting guidelines, information on liabilities to the donor or supervisor. It is intended that IRC staff should provide all necessary technical support to the APC in facilitating the processes outlined below:

• Contracting procedures- Pre-qualification • Open invitation for contractors to register with APC (refer to CS-13, CS-14) • Development and maintenance of APC contractor register

Contracting procedures-Selection of Contractors and collection of tenders include following steps:

• Establishment of Tender Evaluation Commission (TEC) (refer to CS-01) • Contractor Eligibility and Tender announcement (refer to CS-02, CS-04, CS-05, CS-06,

CS-07) • Tender Submission(refer to CS-03) • Tender opening procedure(refer to CS-08) • Bid analysis and contractor recommendation(refer to CS-09, CS-10) • Tender document archive • Contractor notification of tender results (refer to CS-11, CS-12)

Section 8: Micro-project implementation- Payment steps This section describes that IRC is responsible to conduct frequent community site visits to monitor progress of the project, ensure the quality of work, provide information to project management as to when payments are due, and submit payment request forms. Project is managed by the APC and relevant sector specific sub-groups. Prior to the distribution of each payment the following monitoring activities and documentation is required (refer to PS 01-PS-06) :

• First payment • Second payment • Third payment • Final payment

Prior to Final payment IRC staff are required to check all expenses and ensure that the micro-project is completed (refer to PS-07, PS-08) Section 9: Micro-project completion and evaluation This section deals with IRC’s obligation to return to communities to evaluate the operation and maintenance of the micro-project, and the impact of the project on the community beneficiaries in accordance with pre-determined schedule, between two weeks and a month after payment. It is also emphasized that, an Evaluation Workshop will be organized in each community and workshop results and information will be amalgamated into the Final Evaluation Report.

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3.2.2 Observations, finding and recommendations on Micro-project Implementation attained during observations

3.2.2.1 Commitment Section 4: Micro-project proposal submission After the APC and community are satisfied with the micro-project proposal and it is ready for submission, five members of the APC sign the document. The community submit their proposal documents through an IRC staff member. The IRC staff member submits complete set of proposal documents to the Evaluation Committee. Observation The budgets of the project (refer to A 1.1) were designed satisfactorily, Budget vs. Actuals report (refer to PS 0.5a) was prepared accordingly and has helped ensure control over project performance. The audit team observed that Material and Equipment Cost (refer to A 1.1), Labor Cost Estimate (refer to PS 01 and PS 01a), administrative costs, community contribution and budget summary (refer to A 1.1) were prepared adequately. The proposal was submitted to Evaluation Committee of IRC along with attached documents. Audit group also observed that Location Map (refer to A 1.2) and technical drawing (refer to A 1.3) does not meet technical standards. Analysis

• The budgets of all three micro-projects were developed on the basis of realistic calculations and no financial issues were identified during audit.

• In Section 4 table A 1.3 is called “Technical drawing”, in documents and additional materials part the same table is called the “Technical diagram of the micro-project”.

Non-conformance Location Map (refer to A 1.2) and Micro-project Technical Drawing (refer to A 1.3 and A 2.2) are not in line with technical standard in all three communities. Recommendations Technical standards must be met in designing process of future micro-projects. 3.2.2.2 Commitment Section 8: Micro-project implementation-payment steps Project is managed by APC and by specialist in the field of relevant sector specific sub-group. Observation Though it is intended that relevant sector specific sub-group must manage the project, no proof was presented to audit group about formulation of these sub-groups. Non-conformance No relevant sector specific sub-groups were created in all three communities. Recommendations It is necessary for IRC to improve linkage mechanism with Communities and control mechanism over micro-project implementation. 3.2.2.3 Commitment According to “Artesian well drilling” project implemented by Ganja regional center of “Bilik” Educational Society, the community members of Gilinjbeyli should be provided with water. Implementation of “Repairing school roof and building sewage system” project was chosen in Meshedi Huseinly community of Shamkir.

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Observation Objectives and proposal of “Repairing school roof and building sewage system” (refer to Appendix 4, photo 2) project meets community needs of Meshedi Huseinly community of Shamkir. The objective of the project is to improve quality of the education in community. “Artesian well drilling” project (refer to Appendix 4, photo 3) was implemented in Gilinjbeyli community. Project design was not in line with corresponding procedures, but the place for drilling artesian well was not successful. The objective of the project was to supply community members with water. But the artesian well was drilled in such a place that not all community members could benefit from this project. Both projects were implemented by Ganja regional center of “Bilik” Educational Society. Analysis

• Selection and planning procedures of the projects in Meshedi Huseinly and Gilinjbeyli communities were implemented correctly.

• Though the objectives of the project was intended to provide all the community members to benefit from artesian veil, but unfortunately this objective was not fully accomplished (refer to “Artesian well drilling” project).

Recommendations New micro-projects must be implemented in communities. Identification and Prioritization of Community projects must be improved and the projects from which the majority of population will benefit must be preferred. 3.2.2.4 Commitment Section 8: Micro-project Implementation-payment steps- “Road rehabilitation” project. IRC is responsible for implementation of project and ensuring quality work. Azerbaijan Educational Youth Organization is implementing “Road rehabilitation” project. Observation “Road rehabilitation” project (refer to Appendix 4, photo 6) is not compliant with existing road building standards. Road rehabilitation was implemented in a low quality, soft soil was graved. Rain and snow mixed gravel with soil, as a result of this some part of the road was destroyed. The width of the road intended to be 4 meters, but in some places it is 3 and 3.5 meters. Non-conformance Technical standards were not observed during road rehabilitation (refer to “Road rehabilitation” project, A 1.3 and a 2.2) Recommendations It would be advisable to present quality certificate proving appropriateness of micro-project implementation to quality standards. Preparation, assessment, approval and implementation of Micro-projects must be simplified and these processes must be implemented rapidly.

3.2.3 Conclusions

• Micro-projects were implemented in accordance with Micro-project implementation guideline. But not all the members of community could benefit from it.

• During the implementation of the project in order to guarantee qualitative work IRC had the control over processes.

• Micro-project implementation positively affected the development of communities and played a significant role in the solution of social problems.

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4. Acknowledgments The working group would like to thank the following groups and persons for the assistance that they rendered us during the audit activities:

1. Dr. Farda Asadov, Managing Director of OSI-AF 2. BP Azerbaijan, and personally Matin Akhundlu 3. Dan Bliss, BTC Social Performance and Community Relation Manager 4. IRC and personally Mr. Amir Omanovic 5. Transparence Oil Revenue and Public Finance Program Director, Mr. Galib

Efendiyev 6. NGO Audit Program Coordinator, Mrs. Esmira Asadullayeva 7. Dr. Clive Morgan, International mentor 8. Sahib Mammadov, The member of mentor group 9. NGO Audit Support Officer, Mrs. Elmira Gasimova 10. BP Azerbaijan Enterprise Center Staff 11. Mr. Andrew Buchman, External Engagement Strategy Coordinator

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Appendix 1: Audit group members and information on their organizations

Scientific-Technical Progress and Educational Center was established in September, 2001. One of the fields of activity of the organization is to provide community groups with scientific-practical and juridical assistance for implementation of local agrarian, industrial, small business, educational and other development programs.

Volunteer professionals in the fields of industry, science, community institutions and etc. are involved in activity of organization. The manager of the organization is Ehtiram Ali. Ali Ehtiram has graduated from Baku Technical University. He also has Postgraduate degree from Moscow University. He is the author of several scientific articles.

Ehtiram Soltanoglu (Coordinator)

Social and Economic Research Union was established in May, 2001 and passed registration at Ministry of Justice of Azerbaijan Republic in September, 2003. It has status of legal entity. The organization is a member of Ecoforum coalition, EITI, European Mountain Forum, Azerbaijan NGO Alliance for Children’s Rights. It has implemented 7 projects from 2003 to 2005. The associates of the organization have participated in trainings on research and investigation, development of entrepreneurship and small business, management of financial and human resources, transparency, establishment of linkages with donors, development of reports and etc. The Managing Director and organizer of the organization is Azad Aliyev.

Azad Aliyev

Marhamat foundation was established in March, 2001. The objective of the

foundation is to assist in solution of social problems, to help to organize material and juridical defense of refugees, living without a roof over their heads, to organize patronage of homeless children and etc. Gulaye Guliyeva is one of the founders and co-chairman of the foundation.

Gulaye Guliyeva

The main goal of the Azerbaijan Diabetics League Public Union organization is to provide diabetic persons with juridical and social-economic assistance.

It began its activity in Ganja, Goranboy, Barda, Agdash, Ujar, Gabala, Yevlakh, and Mingachevir. The League has approximately 10000 members. The official number of people suffering from diabetics in Azerbaijan is 86000, non-official number is 300000.

ADL has implemented 20 projects to solve problems of diabetic persons. Its hot line successfully continues its activity. Eminli Temkin is the Chief of Mingechevir Regional Center of Diabetics

Lague.

Tamkin Eminli

Rashad Hasanov- The second year student of Azerbaijan State Economic University, the faculty of International Economic Relations.

Rashad Hasanov

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Appendix 2.

VII. Calendar-plan of the audit of micro-projects implemented by IRC along the SCP pipeline route

Number

Date

Activities 30.10.05

06.11.05

13.11.05

20.11.05

27.11.05

04.12.05

11.12.05

18.12.05

25.12.05

01.01.06

08.01.06

15.01.06

22.01.06

29.01.06

05.02.06

12.02.06

19.02.06

26.02.06

05.03.06

12.03.06

19.03.06

1.

Signing contract with

OSI-AF.

2.

Holding trainings on

safety and health. .

3.

Obtaining requested

documents.

4.

Primary acquintance

and initial investigation.

5.

Acquintance meeting

of group members with

BP/SCP and IRC

officials.

6. Group members’ visit

to community A.

7. Group members’ visit to

community B.

8. Group members’ visit

to community C.

9. Group members’ visit to

community D.

10. Group members’ visit to

community E.

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11. Meeting with IRC

representatives.

12.

Collecting data.Initial

analysys.

Exploratation of

initial results.

13. Preparing audit

report.

14.

OSI-AF reviews

report and provides its

comments

15. OSI-AF translates

report

16.

Presentation of report

to BP/SCP.

17.

Presentation of final

report to BP/SCP.

18. Review of report by

BP/SCP.

19.

Meeting with the

group member to

agree the final report

with them

20.

Signing of final

report.

21. Communicate the

audit report to the

public

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Notes: 1. Contract with OSI-AF reflects salary of group members, scope of other expenditures connected with activity, payment rules, and regulation of disputed issues according to Azerbaijan laws. 2. Holding trainings on safety and health is very important for safety of group members during audit procedure. 3.Obtaining documents of BP/SCP and IRC connected with micro-projects and communities in attendance of representatives of OSI-AF. 4. Primary acquaintance with documents and initial investigation. 5. Means acquaintance with responsible person for CIP of BP/SCP and IRC. 6.7.8.9.10 To organize visits to A, B, C, D, E communities agreed with IRC and audit the implementation of micro projects and communities participation. 11. The main objective of the meeting with IRC representatives is to analyze and evaluate initial findings obtained during audit. 12. The main objective of collecting and analyzing the information is to summarize, analyse, verify and assess the outcome of group members’ observations. 13. Developing final report on the basis of investigation and analysis of reports prepared by subgroups. 14. Review and analysis of the report by the representatives of OSI-AF. 15. OSI-AF translates final report. 16. 17. 18. 19. 20. Agreeing and signing of audit outcomes with BP/SCP and IRC. 21. Means disposing audit outputs implemented by group members to public with mutual agreement of OSI-AF, BP/SCP and IRC.

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Appendix 3: Checklist

1. Questions to NGO on Community Participatory Assessment 1.1 Please confirm your name, status and role with respect to the Community

Participatory Assessment (CPA) by your NGO in relation to the implementation of a micro-project in the community to which you were assigned. Please provide documentary evidence for your roles and responsibilities with regards to CPA (and micro-project) implementation.

1.2 What was the process to select NGOs to join the Community Mobilization Team for the Community Participatory Assessment? Are you aware of any selection criteria? Why do you think that your NGO was invited to participate?

1.3 What was the process to select communities to participate in Community Participatory Assessment and, subsequently, in micro-project implementation? Was your NGO involved in this process, if so, how?

1.4 What was the process to advise communities, and individuals within them, that they were to be the focus of a Community Participatory Assessment and possible micro-project? Please provide documentary evidence, including records, to support your answer.

1.5 What training did you and other members of your NGO receive in order to undertake Community Participatory Assessment? Please provide evidence of any training received including detail on training course or workshop content.

1.6 Please provide evidence for facilitating the stages of the Community Participatory Assessment (CPA) by your NGO in the community to which you were assigned

1.7 Please provide a list of members of the elected Community Action Plan Committee and sight of records of their attendance in the activities for Community Participatory Assessment.

2. Questions to Community Action Plan Committee members on Community Participatory Assessment 2.1 Please confirm your name, status and role with respect to the Community Action

Plan Committee and its implementation of a micro-project in the community to which you were assigned

2.2 How were you, your community and other individuals within it made aware of the Community Participatory Assessment with the opportunity to become involved in a micro-project process?

2.3 How many Community Participatory Assessment meetings did you attend and what activities did they cover?

2.4 Please describe the process of your selection as a member of the Action Plan Committee.

3. Questions to NGO on Micro-projects Implementation 3.1 Please confirm your name, status and role with respect to the facilitation of

micro-project implementation in the community to which your NGO was assigned.

3.2 What training did you and other members of your NGO receive in order to facilitate micro-project implementation? Please provide evidence of any training received including detail on training course or workshop content.

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3.3 Please provide evidence for facilitating the Micro-project Implementation process by your NGO in the community to which you were assigned.

3.4 What evidence can you provide for monitoring the implementation of the micro-project in this community? What issues have arisen from this monitoring and how have you responded to them?

3.5 Is there a mechanism for receiving and responding to concerns and complaints from communities engaged in this micro-project? Can you provide evidence for its application including response to findings?

3.6 Has IRC audited this micro-project? If so, please provide evidence, including for any response to findings.

3.7 Have any external agencies audited this micro-project? If so, please provide evidence, including for any response to findings.

3.8 Has a final evaluation been done for this community micro-project as per Section 9, page 27 of the Micro-project Implementation Guide? If so, please provide sight of a copy for review.

4. Questions to Community Action Plan Committee members on Micro-projects Implementation

3.3 Please confirm your name, status and role with respect to the implementation of this micro-project in your community.

3.4 What training did you receive on the development and implementation of a micro-project following your election as a member of the Community Action Plan Committee? Do you have a record of this training, for example, a certificate and can you provide the Audit team with a sight of the training materials?

3.5 Please describe your involvement in the micro-project implementation process and provide any evidence you retain to demonstrate this involvement, for example, agendas and minutes of meetings, draft proposals and plans for review, photographs, press cuttings etc.

3.6 How many Micro-project Implementation Meetings did you attend as a member of Community Action Plan Committee and what activities did they cover?

3.7 Have you been asked for your views on the performance of the project? If so, how was this done and recorded?

3.8 Have you had any feed back from IRC or the NGO Community Mobilizer on their view of the performance of the project?

3.9 Have you made or are you aware of any complaints about any aspect of the project? If so how were they handled and what feed back was there?

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Appendix 4. Photos Photo 1 Meshedi Huseinly community

Photo 2. Repairing school roof project in Meshedi Huseinly community

Photo 3 Artezian well project in Gilinjbeyli community

Photo 4. Gilinjbeyli community

Photo 5. Meeting in Jirdakhan community Photo 6. Road project in Jirdakhan community

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SUMMARY TABLE

NGO WORKING GROUP TITLE: Social AWG NGO WORKING GROUP MEMBERS: Ehtiram Soltan, Azad Aliyev, Gulaye Guliyeva, Tamkin Eminli, Rashad Hasanov (student) AUDIT OBJECTIVES: 1. The audit of commitments taken by SCP, IRC and partner NGOs to achieve participation of

Communities in implementation of Micro-projects. 2. The audit of Micro-project implementation by IRC, local partner NGOs and Communities. 3. The audit of commitments taken by IRC to provide Sustainable Development of Communities.

BP/BTC/SCP responses may be characterized as below: Accept (A): We accept the reported non-conformance, finding, observation, recommendation. We will take appropriate steps, or provide evidence on how BP/BTC/SCP has already addressed this issue. Accept with Qualification (AwQ): We understand and appreciate the audit result in question, but we disagree with some aspect of non-conformance, finding, observation or related recommendation, as presented. We therefore “qualify” our agreement by providing details of our policies and/or actions that address the issue(s) raised. Reject (R): We disagree with the Audit result; in the BP/BTC/SCP Summary provide our views.

Reject with Qualification (RwQ): Company doesn't agree with the finding and the recommendation of Audit Working Group in general, however recognizes existence of some of the challenges.

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No. Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Community Participatory Assessment (CPA) part

Findings F1 The Action Plan Committee

(APC) was created in Meshedi Huseinly and Gilinjbeyli communities, and a democratic election to this Committee was held by the Community members (positive).

A: As the APC is a crucial feature in allowing a mobilized community to undertake social development projects, IRC and BP/BTC/SCP are pleased that Audit Group commends the means in which members were selected.

F2 The representatives of Executive Structure and Municipality had played an active role in Micro-project Implementation and in APC and all mutual expected results were achieved (positive).

A: Ensuring involving from local authorities greatly enhances the likelihood of community success in undertaking development projects. IRC and BP/BTC/SCP are pleased that the Audit Group commends the involvement of the executive structure and local authorities.

F3 Finding the balance principle was fulfilled in Meshedi Huseinly, Gilinjbeyli and Jirdakhan communities. Participation of women in APC and in all activities was provided during the project implementation in all three communities (positive).

A: IRC and BP/BTC/SCP believe that that the extent to which all members of a community participate in development activities greatly determines scale of success. Achieving appropriate gender balance is a primary consideration in development projects we support in Azerbaijan.

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No.

Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Community Participatory Assessment (CPA) part

Findings F4 The introducing process of CPA team

and implementing organization was not carried out in accordance with CPA-1, Activity 1, Step 1.

R1: Preparation of visual aids to in-form community members, holding informal meetings (for example, around of tea-table), & explanation of essence of further activities would be advisable during these meetings. The staff implementing above mentioned tasks must be involved in appropriate trainings in advance.

RwQ: As the Audit Group itself recognizes, introductory meetings were held in all communities, as project activities commenced. However, it is indeed possible that introductory information was not repeated beyond the intro sessions and furthermore that not all community members absorbed the entirety of preliminary information during the first meeting. IRC and BP/BTC/SCP believe that the introductory process was followed, but that in future projects, more subsequent efforts might be required to reinforce retention of introductory information.

F5 Documentation process was Implemented weakly in all three communities and no measures were taken in this direction.

R2: The control mechanism over documentation process must be strengthened in communities. Special trainings must be delivered to APC to improve documentation abilities.

R: This finding ignores several key points: first, the CPA step in question calls for community volunteers to document meetings and participants. The absence of community volunteers (and hence some documentation) does not imply a control issue, or a need for special trainings). Second, The training delivered to NGOs and communities concerned mobilizing communities to identify their own problems and the means to solve them; rather than instructions on listing people, or recording minutes of discussions. Nonetheless, like the Audit Group we do see value in encouraging the growth of capacity amongst national NGOs and communities to professionally document meetings and outcomes.

F6 The time allowed by the Implementation Guidelines for completing the eight CPA activities is considered insufficient. Implementation of 8 activities in 3 days negatively influenced quality of the project. Most of community members could not attend these processes till the end, because of time limit. Along with this, even the processes that were intended to be implemented within this framework were not successfully implemented.

R3: Implementation of 8 activities reflected in CPA must be extended to 5 days. The implementation guidelines time should be 4 hours per day, as break between stages plays a great role for community members for thinking.

AwQ: Creating an ‘ideal’ schedule for training and CPA activities, one that suits all participants, is impossible. Some participants would prefer to receive as much training in a short period, so as to minimize time away from other activities (and maximize retention). Others may prefer shorter days spread over a longer period. The timeframe developed by IRC attempts to reach a balance; we do not believe 4 hours per day is a appropriate amount of time for effective training. While IRC and BP/BTC/SCP recognize that schedule adjustment might be warranted, it is not clear whether this conclusion is based on community (participant) opinion.

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No. Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Community Participatory Assessment (CPA) part

Findings F7 There is no document proving Community

Monitoring and Assessment though it was intended in Section D of CPA Introductory part.

R4: More attention must be paid to management of the project.

AwQ: IRC and BP/BTC/SCP accept that Audit Group has not been provided sight of an assessment document. Ho-wever, this does not demonstrate that community partici-pants did not engage in evaluation and discussion following project implementation, nor does it lead us to believe that more attention must be paid to project management.”

NC1 Commitment: Activity 8 Community Action Plan of CPA document Non-conformance: In CPA-8.5 document of Jirdakhan community the artesian project is reflected. Replacement of priorities was not reflected in the documents.

R5: Documentation should be properly carried out and during trainings the members of APC should be educated that, “Community interests” are always priority.

RwQ: IRC and BP/BTC/SCP would note first of all that Audit Group’s investigation, while incomplete, demonstrates that Activity 8 did take place in Jirdakhan, resulting in production of appropriate document. It is an interesting finding that the identified priority in the document was not, ultimately, the project that was pursued, and that up-to-date documents should have been produced. We disagree, however, with the inference that APC members have not been appropria-tely trained regarding importance of “community interests.”

NC2 Commitment CPA 1.7 Community Participatory Assessment, Schedule/Agenda: - To develop a long term community vision - To initiate developing a long term plan for integ-rated community based development (ICBD). BTC’s tender announcement (sustainability sec-tion, timeline) Non-conformance According to Section 1, item B of Micro-project implementation guide “The micro-projects are one component of IRC’s Integrated Community Based Development (ICBD) approach.” This one component of the project- micro-project imple-mentation has been sustainable just in some ca-ses, but after the project implementation commu-nity capacity building was not ensured (documen-tation, fundraising, proposal writing ability & etc.)

R6: Micro-project is a way to achieve sustainable development of communities. Therefore, along with micro-project implementation, the special attention must be paid to formulation of communities and their sustainable development during the process. Dedication of more time for improving management and fundraising capabilities in communities, and practice of practical problems is desirable. To ensure sustainable development in communities, not only western methods, but also traditions and mentality must be used.

RwQ: BP/BTC/SCP and IRC believe that sustainability is encouraged and supported by systematically encouraging community participation in their own development, from needs assessment thru implementation of micro-projects to post-implementation evaluation. However BP/BTC/SCP and IRC can no more ensure capacity building than we can guarantee sustainability. The only party that can ensure a community’s sustainable development is the community itself. For the purposes of this audit, and in general, BP/BTC/SCP and IRC are responsible to follow their own principles in support of enabling community development. We believe our performance in support of sustainability is exemplary.

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No. Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Community Participatory Assessment (CPA) part

Findings NC3 Commitment

Capacity Building project of National NGOs Program summary Commitment corresponding to CPA document

Training During program national NGOs and community partners will work with IRC to increase their self-confidence, to help them to get involved in local initiatives in future, to improve their project capabilities through training. These activities include strategic planning, writing proposal, budget development, organizational progress, dispute settlement, and monitoring and evaluation. Prior to each component of the project IRC will provide training for NGOs and NGOs will be responsible for providing these training in each object community. Non-conformance There is no application of training provided to NGOs on Sustainability on October 13, 2005 at IRC’s Kurdamir office in communities.

R7: It is necessary to strengthen management of the project, to freshen control mechanism over performance of the project, to provide regular monitoring of execution of trainings.

R: As above, BP/BTC/SCP and IRC stand behind our efforts to build capacity for sustainable development among national NGOs and in communities. This has included, in the context of the activities under audit, both trainings and examples of “learning by doing.” We are unaware of any commitment to provide training on October 13, 2005 in Kurdamir.

Micro-project implementation

Findings

F8 The budgets of all three micro-projects were developed on the basis of realistic calculations and no financial issues were identified during audit (positive).

A: Like the Audit Group, BP/BTC/SCP and IRC recognize that financial issues and poor budgeting can severely undermine the success of development projects.

F9 Selection and planning procedures of the projects in Meshedi Huseinly and Gilinjbeyli communities were implemented correctly (positive).

A: We value this recognition of positive planning and selection procedures.

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No. Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Micro-project implementation

Findings

F10 Though the objectives of the project was intended to provide all the community members to benefit from artesian well, but unfortunately this objective was not fully accomplished (refer to “Artesian well drilling” project).

R8: New micro-projects must be implemented in communities. Identification and Prioritization of Community projects must be improved and the projects from which the majority of population will benefit must be preferred

RwQ: BP/BTC/SCP will continue to work with local communities to assist in their development. We do not accept that the Audit Groups negative assessment of the artesian well project obligates BP/BTC/SCP and IRC to undertake new projects in its place. It should also be that it is unlikely that any single micro-project will provide benefits to all or even a majority of participants; we leave it to communities (with our training and assistance) to identify which are their highest priority needs. This is illustrated through the emphasis during the CPA process on community members’ involvement in discussing, prioritizing and ranking their priority needs, from which decisions regarding micro-project implementation are made, with appropriate follow-up related to micro-project planning and management by the community elected representatives on the Action Plan Committee.

Non-conformances

NC4 Commitment Section 4 of Micro-project Implementation Guideline: Micro-project proposal submission Non-conformance Location Map (refer to A 1.2) and Micro-project Technical Drawing (refer to A 1.3 and A 2.2) are not in line with technical standard in all three communities.

R9: Technical standards must be met in designing process of future micro-projects.

AwQ: BP/BTC/SCP and IRC agree that technical standards are important as a means of ensuring quality in micro project design and implementation. It would be of assistance to have additional information as to which technical standards the Audit Group is referring, and specific reference to issues that are deemed in non-conformance in the stated documents. Technical review of the micro-project proposal documents are completed by an engineer (community member and/or IRC staff) prior to approval of projects.

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No. Issue Related Recommendation BP/BTC/SCP response* (A, AwQ, R, RwQ) and explanation

Non-conformances

NC5 Commitment Section 8: Micro-project implementation-payment steps Non-conformance No relevant sector specific sub-groups were created in all three communities.

R10: It is necessary for IRC to improve linkage mechanism with Communities and control mechanism over micro-project implementation.

AwQ: The Audit Group correctly observes that sector specific sub-groups were not created in these three communities. In the context of the program, it was not planned to create sector specific sub-groups within each community. These sector specific sub-groups are mentioned in the ‘Micro-Project Implementation Guidelines’ as they are used in some of IRC’s community development programs, particularly where there are multiple micro-projects to be managed by the community group over a longer period of time. However, this document is a general guide for overall IRC community development programs and not a specific detailed implementation plan for the NGO Capacity Development program, and in this case the reference to sector specific sub-groups did not apply.

NC6 Commitment Section 8: Micro-project Implementation-payment steps- “Road rehabilitation” project. Non-conformance Technical standards were not observed during road rehabilitation (refer to “Road rehabilitation” project, A 1.3 and a 2.2)

R11: It would be advisable to present quality certificate proving appropriateness of micro-project implementation to quality standards. Preparation, assessment, approval and implementation of Micro-projects must be simplified and these processes must be implemented rapidly.

AwQ: In the context of future programs, it may be possible to enhance the system of certification of completed micro-projects, in addition to the current internal monitoring procedures for verification of micro-project completion by IRC staff, APC members and representatives of relevant local authorities. We do not agree with the need for the processes to be simplified and implemented more rapidly. It is acknowledged that the documentation requirements and processes for micro-project implementation are considerable, and sometimes time consuming. However, in order to allow for transparent, complete and participatory processes it is felt that this system is not overly cumbersome and serves as a valuable tool for practical learning, building trust, and a basis for further community based activities beyond the life of the program. It should also be noted that within the context of this program, both the NGO implementing partners and the community groups this was their first round of utilization of the micro-project documents, therefore the ‘learning curve’ was steep, and based on other program experience the documentation and timeframe for implementation is appropriate for community groups within Azerbaijan.