Managing the total cost of projects over their life requires an accounting system that captures and reports all project costs, rather than accounting by separate contracts or stages and tracking against annual appropriations. Multi-year budgeting facilitates allocation of funds for project implementation over a project’s life cycle. Project proposals, especially for a large infrastructure project, should also present organizational arrangements for running the project once the construction is finished. Problems in implementation can at times be related to poor project selection and budgeting.

# **6. Project Adjustment**

23. The funding review process should have some flexibility to allow changes in the disbursement profile to take account of changes in project circumstances. For instance, if events transpire to make a project no longer incrementally beneficial, there should be a device via the funding approval process or the monitoring process to request project sponsors to recast the project, or even to halt disbursements. This suggests that funding should be carried out in tranches, with the tranches relating to the discrete phases of the project. Each funding request should be accompanied by an updated cost-benefit analysis and a reminder to project sponsors of their accountability for the delivery of the benefits.

24. These funding mechanisms can reinforce the nature of the monitoring process, making it an active rather than passive form of monitoring. Governments need to create the capacity to monitor implementation in a timely way and to address problems pro-actively as they are identified. Monitoring project implementation would minimally involve comparison of project progress relative to the implementation plan. Implementing agencies should be required to submit progress reports to identified monitoring agencies that may then need to audit both financial and physical implementation.

# **7. Facility Operation**

25. Once a project is completed, there should be a process to ensure that the facility is ready for operation and services can be delivered. This requires an effective mechanism for handover of management responsibility for future operation and maintenance of the created assets and adequate budget funding of service delivery agencies to operate and maintain these assets. But the completed assets may still lie idle if they are not suitable for service delivery. Thus it is also important to verify the extent to which the newly completed facility requires post-completion adaptation or ancillary investment before the assets can be utilized.

26. In addition, asset registers need to be maintained and asset values recorded. Ideally, countries should require their operating agencies to compile balance sheets, on which the value of assets created through new fixed capital expenditure would be maintained. Whether there is accrual accounting or not, agencies should maintain asset registers which are exhaustive in their records keeping, and where necessary, legal title to property is affixed.

27. Active monitoring of service delivery is a desirable element of ensuring that the new assets serve the purpose over their useful life. This suggests that the quantity and quality of 9