SECT: The standardized early childhood development costing tool

There is an urgent need for accurate cost data in early childhood development (ECD) services. In particular, a standardized costing tool that can support a range of interventions, cost-benefit analysis, budgeting, and scale-up is necessary. The utility of existing cost data on early childhood programs is limited by low comparability, and the availability of data varies by type of intervention.

After completing substantial research on existing cost data and costing tools starting in 2014, the Center for Universal Education (CUE) at The Brookings Institution began an effort in 2015 to develop a costing tool for ECD interventions. This tool was intended to be made available for use by funders, governments, program implementers, and researchers to improve access to and the quality of ECD programs. CUE partnered with the World Bank’s Strategic Impact Evaluation Fund (SIEF) to develop and pilot the Standardized ECD Costing Tool (SECT) in countries where SIEF impact evaluations were being conducted. This allowed the partners to test the tool with variations by region, intervention type, and the capacity of implementing agencies and partners to gather data and conduct the costing exercise. This report reviews previous efforts to cost ECD, describes the gaps that this tool fills, explains the utility and components of the tool, summarizes the lessons and results of five pilot costing exercises in Bangladesh, Malawi, Mali, Mexico, and Mozambique, and discusses next steps to roll out the tool to users across the globe.

Challenges to Capturing Accurate Data and Earlier Efforts
To date, efforts to collect cost data for ECD range from the collection of costs at the program level, to estimates based on key program costs or on key variables in a program area, to estimates at the national level. While some of these cost estimates included specific costing models, others were simple back-of-the-envelope calculations. Despite these efforts, comparability is low and risks of inaccuracy are high for much of the existing data. Our research shows that availability of data ranges widely between types of intervention: while regional data estimates are available for unit costs of micronutrient supplementation, antenatal care, and skilled attendance at delivery, only limited or context-specific data is available for the unit costs of parent-education and child-protection services, for instance. The paucity of accurate and comparable data is likely the result of the complexity and challenges related to ECD programming. ECD programs have different structures and systems, include a variety of activities, use varied inputs, and serve different numbers of beneficiaries for varying lengths of time. Furthermore, ECD costs are often complex, since programs for the early years can include interventions across a range of sectors, from nutrition, health, and sanitation, to education and social protection. Other challenges associated with costing ECD include the fact that services are often provided by a range of actors, and may include volunteer labor.

The Standardized ECD Costing Tool (SECT)
SECT attempts to address some of the challenges described above by providing a single tool that offers methodological consistency to costing ECD programs, which can be used across the full range of interventions, balancing flexibility and rigor. The utility of SECT is twofold. On the one hand, standardized and accurate cost data can strengthen the case for investment by enabling more precise cost-benefit and cost-effectiveness analysis. On the other hand, such data can lead to more informed or better investments by improving the efficiency of administration, so that actual and expected expenditures are better aligned, investments are made in the most cost-effective interventions, and cost and quality trade-offs can be analyzed. In addition to an existing list of common ECD interventions, users can edit the tool to suit their individual needs. The tool can be used to analyze data as ECD line items across different interventions (for example, to track personnel costs), or can be broken down by activity. Unit costs can be calculated by entering beneficiary numbers, and scale-up costs can be estimated as well.
ECD costs can be broadly divided into the following three main categories: 1. overhead costs (upper level management in government, plus design, start-up, and evaluation costs); 2. direct costs (infrastructure construction, teacher salaries, training, food and supplements, uniforms, cash transfers, equipment, direct administration, and monitoring); and 3. imputed costs (volunteer time and opportunity costs of buildings used). The most important components to consider when costing are:

• Services provided
• Program frequency and duration
• Staff-to-student ratios and staff remuneration
• Staff supervision and professional development
• Geography
• Delivery setting
• Program scale

Lessons and Results from the Pilot Costings
The pilot costings, carried out in Bangladesh, Mali, Malawi, Mexico, and Mozambique, captured programs varying in complexity and providing a wide range of early childhood services. These include the relatively straightforward program in Bangladesh, which provided parenting education on child stimulation on top of an existing nutrition program, and also the complex case of building and operating preschools in Mozambique, where three providers were contracted to carry out the work in five provinces.

It is important to highlight that the five costing exercises conducted were pilot exercises with the purpose of capturing lessons learned so that the tool and the process of data collection and analysis could be improved for future utilization of the tool.

Key learnings from the pilot exercises included lessons about the design of the tool itself, as well as lessons from its use. Design lessons included the risks associated with having an open design or modifiable tool, in contrast with automation, which may be in tension with accuracy. It was also noted that, while measuring and comparing intensity and quality between different interventions is crucial to determine the cost effectiveness of programs, this is a challenging task. Finally, the piloting process made it clear that the tool would have much greater utility and quality control if it could be made available online, which would also facilitate the centralization of the cost data.

Data limitations were a challenge in some of the pilots: in some cases, costs were not available for all components. For example, in Malawi, data was only available for one activity, representing 34 percent of the overall program costs, while in Mali, data for the two components implemented by the government was unavailable. Several of the programs also experienced gaps between planning and intervention. This emphasized the importance of tracking accurate beneficiary numbers and also ensuring that actual expenditures, rather than budgets, are entered into the costing tool. Limitations were also introduced as the result of an inability to separate fixed from ongoing costs in one case.

All costs reported in Table 1 are actual costs provided from each program based on available data with the exception of Mozambique where due to timing of program delivery, the only option was to use budgets for 6 months of implementation. Table 1 is provided as a summary and not for the purpose of direct cost comparisons across programs given the heterogeneity of the programs.

Table 1: Summary of Pilot Costing for Different Programs across Five Countries

Policy Recommendations

SECT provides a long-needed concrete tool to help make a case for ECD investments, choose investments that are more informed, and improve efficiency in planning and budgeting. The following actions would help to ensure wide dissemination and use of SECT in the coming years:

1. Support Data Collection, Management, and Accountability
Donors are encouraged to support and help build the capacity of governments and non-state providers in expenditure data collection and management. Comparable and methodologically sound ECD cost analyses using SECT depend on the collection of timely and accurate expenditure data that is easily retrieved. Widening data accessibility would help hold organizations accountable for the services that they fund and provide.

2. Disseminate SECT
Broad dissemination of SECT would support the development of a rich database of ECD costs across regions, intervention type, and program funding and delivery models. Dissemination efforts would have to encompass a range of strategies, targeting governments and policymakers, multilateral institutions and private donors, service providers and program evaluators. The tool could also be disseminated through academic organizations and through courses that train ECD leaders and practitioners.

3. Create a Knowledge Hub for ECD Costing
Creating a knowledge hub for the use of SECT would involve a number of distinct actions:

• Management of the tool: The knowledge hub would manage use of the tool and support early users in the application of the tool, as well as supporting the translation of the tool and accompanying documents into other languages.
• Data centralization: The knowledge hub would establish a global database on ECD costs, and manage the collection of the results of costing exercises.
• Data analysis: The knowledge hub would work with partners engaged in costing exercises to perform analyses on the collected data, including costed implementation plans at scale, simulations of the effects of quality variation on cost, linkages between cost and evaluation data, and cost-benefit analyses.
• Creation of an online platform: The knowledge hub would provide an internet-based platform in which SECT and the resulting data could be housed. This would entail negotiating between the competing priorities of flexibility and standardization, to ensure consistency in costing methodology.

4. Develop a Training Module for SECT
The development of a standard training module for SECT would ensure broad and correct use of the tool. Capacity could be expanded across geographical regions and user types through a training-of-trainers model. The aim of such training would be to promote methodological consistency in the costing, increase understanding of the functions that have been automated, and strengthen understanding of unit costs.

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