ASSESSING EFFECTS OF GRANT MANAGEMENT SYSTEM IN PROJECT

SUCCESS: THE CASE OF SIINQEE BANK , OROMIA NATIONAL REGIONAL

STATE, ETHIOPIA

A RESEARCH PROPOSAL SUBMITTED TO HARAMBE UNIVERSITY

IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE
DEGREE OF MASTER’S IN PROJECT MANAGEMENT

By

ZELALEM KEBEDE

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 HARMBEE UNIVERSITY
POSTGRADUATE STUDIESCOLLEGE OF BUSINESS AND
ECONOMICS
MPM PROGRAM

ADAMA, ETHIOPIA

EFFECTS OF GRANT MANAGEMENT IN PROJECT SUCCESS: THE CASE OF

SIINQEE BANK ADAMA, OROMIA NATIONAL REGIONAL STATE, ETHIOPIAA

2
Research Proposal submitted to Harambe University in partial fulfilment of
the requirement for the award of the degree of master’s in project
management

By

ZELALEM KEBEDE

HARMBE UNIVERSITY
FACULTY OF BUSINESS AND ECONOMICS
MPM PROGRAM

ADAMA, ETHIOPIA

3
Table of Contents
Abstract..........................................................................................................................................4
CHAPTER ONE.................................................................................................................................5
INTRODUCTION..........................................................................................................................5
CHAPTER TWO..............................................................................................................................12
REVIEW OF LITERATURE...........................................................................................................12
2.1 Theoretical Literature Review........................................................................................12
2.2 Review of Empirical Studies............................................................................................18
2.3. conceptual framework of the study................................................................................21
CHAPTER THREE............................................................................................................................22
RESEARCH METHODOLOGY.....................................................................................................22
3.1 Description of the study Area..........................................................................................22
3.2. Research Design................................................................................................................22
3.2 Population and Sample......................................................................................................22
3.3 Data Collection...................................................................................................................23
3.4 Data Analysis......................................................................................................................23
3.5 Reliability and Validity test..............................................................................................24
3.6 Ethical Consideration.......................................................................................................24
Work Plan and Budget..................................................................................................................25
WORK PLAN..............................................................................................................................25
LOGISTICS..............................................................................................................................25
Details of Expenses..................................................................................................................25

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 Abstract
The main objective of this study is to explain the effects of grant management in project
success in micro finance service the case of siinqee Bank . It also attempts to identify
factors that affect the grant management system, to explain the contribution of grant
management system for project success and to examine the current status grant
management system in project success in the study area. To achieve the study
objectives, both primary and secondary data will be collected from both sources.
Primary data will collect by means of survey questionnaire, in-depth-interview of case.
Secondary data will be generated by reviewing the works of scholars, which will include
performance report documents. An analytical framework will be applied for better
understandings and measuring empowerment in the context of this study. The analysis
will be base d on a respondent survey data to be collected from a total of 100 randomly
selected staff member and performance report in the Ocssco (siinqee Bank). A logit
econometrics model will be used to analyze effect of grant management system in
project success in Ocsso. Moreover, descriptive statistics such as mean, t- test, and chi-
square will be computed to obtain the influence of grant management system in the
company. SPSS will be employed for data analysis. Findings from such research topic
at company as level are essential since the results may give spot of light to development
planners in order to fight poverty situations and thereby attain economic development.

CHAPTER ONE
INTRODUCTION

This chapter outlines background information on subject of research and covers statement
of the problem, objectives of the research, hypothetical research questions, and

5
significance of the study. The chapter will also other sections including limitations,
delimitations, the scope and organization of the study. The relationship between key
concepts and the relationship from one to the other will describes in the background of
the study.
1.1. Background of the Study

Organizations overall are continually involved in developing and attempting to implement new
projects. Majority of the nongovernmental organizations are project based. It is very beneficial to
understand the various factors during project implementation that determine a project success or
failure in nongovernmental organizations.

NGOs are those organizations that play an important role in bridging the gap between
government, business sector and society. The NGOs also act independently for the welfare of the
society by empowering them through training programs, financial support, skill development,
advocacy etc. (Karanth B., 2015). Their goal is to contribute to a just society, with the values
equality, liberty and freedom being well observed. The need to address a wide range of problems
adversely affecting vulnerable groups prompted the emergence and growth of non-governmental
organizations globally (Alex, 1997). Not-profit organization or non-governmental organizations
(NGOs) are amongst whose activities are rely on project-based systems.

Project success has been defined by the criteria of time, budget and deliverables (Flaman and
Gallagher, 2001). According to research (Frese and Sauter, 2003) a project is only successful
when there is good planning. This requires excellent forward planning, which includes detailed
planning of the process implementation stages, task timeliness, fall-back positions, and
replanning. The researchers noted that, initial planning is not enough. Projects often take wrong
turns, or initial solutions prove unfounded. The project manager is not prepared to re-plan or has
not considered and planned fall-back positions when initial plans fail, will often find that the
project first stalls, and then finally fails. We must remember that project management is not a
straight-line process, it requires rethinking which goes with the changing environment

Grant management system is a grant making process which is categorized as pre awarding and
post awarding. The pre awarding includes Pre awarding assessment, partner identification &
selection, risk determination and negotiation. The post awarding includes the award
disbursement, monitoring & evaluation, capacity building, and closeout (PSI 2011).

6
LNGOs getting grants from the donor through grant making process. Besides, the donor conduct
assessments before channeling funds to LNGOs that make sure the fund will be used for intended
purpose (Abenet 2016). Thus, it is vital to have effective and efficient grant management in place
because project success is mainly depending on the effective use of available resource on time
with desired quality of deliverable (Woderyelsh 2016).

The high levels of poverty in developing countries have led to a situation where by
community based projects are donor funded and according to Burnside and Dollar
(2000), donor aid has different outcomes to the countries that receive it and this study
seeks to assess the actual effects that donor aid has on community development. grant
funding provides the required resources to build infrastructure, improve production,
provide health care and education, and facilitate, economic, political, and social
processes. This poverty and the fact that the state has not fully meet its social responsibilities,
have created a situation where donor funding have been valuable in community development.
This has led to people viewing donor funding as a substitute solution to community welfare needs
(Fironze Manji et al, 2002). The role played by foreign aid in post-independence period was
relatively small since the government provided most of the social services. As many developing
countries became indebted to the West, the neo liberal policies became the political-economic
ideology by the west to the developing nations demanding minimalist role of the state in
delivering social services and rather focus on providing an enabling environment for growth
(Fironze Manji et al, 2002). These neo-liberal policies were implemented by Bretton Woods
institutions and led to an increase in unemployment and decline in real incomes of most citizens
in developing nations. Consequently, the social basis and structure was restructured and
transformed thus strengthening the forces that would be sympathetic to the situation. Internal
disparities widened due to externally imposed constraints on education, health, social programs,
and liberalization of price controls and dismantling of state owned enterprises. Also, SAPs were
seen to be linked with deteriorating health conditions in Africa and Latin America leading to
increased child malnutrition, increase in infec tious diseases and infant and mortality rates.
Thereafter, the bilateral and multilateral institutions set aside funds to mitigate the social
dimension of the adjustments in an effort to minimize these inequalities that their policies had
perpetuated. The funds set aside went to the NGOs sector to reach recipient communities as
donor aid (Fironze Manji et al, 2002).

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According to United Nations Human Development report, per capita income ratio in sub Saharan
Africa declined from ninth of that in OECD countries in 1960 to an eighteenth by 1998 (United
Nations 2001 p.16). There has been a small recovery towards the end of 1990s, while the
developed countries have increased aid, this part of the world has not shown significant
improvements if we look at poverty assessment indicators (Clegg, 2010).

Previous studies related to grant management system and project success were very rare. The few
research papers conducted on INGOs were very limited in their number and scope for which most
of them were dealt with the 70/30 proportion challenges emanating from the ACSO directives for
instance study conducted by Hiwot (2016) challenges and prospects of Charity and Society
Association 70/30 guideline implementation on the performance of NGO‟s in Ethiopia. On the
other hand, some study focuses on financial management, and others on program effectiveness
and internal control issues studied separately. Study conducted by Seble (2015) assessment of
financial management practices in selected INGOs in the health sector. Thus, this study will
focuses on effect of grant management system in project success. To this end, the study will try to
analyses the relationship between grant management system and project success in international
non-governmental organizations context, operating in Adama .

1.2. Statement of the Problem

Even though project success is a fundamental project management concept, an examination of the
project management literature demonstrates that there is no unified definition of project success
(Baccarini, 1999). Success criteria are the benchmarks used to measure or judge success or
failure, according to Collins and Baccarini (2004), Cooke-Davies (2002), Lim and Mohamed
(1999), and other researchers. Success factors are the management inputs and systems that lead to
project success, according to Collins and Baccarini (2004), Cooke-Davies (2002), Lim and
Mohamed (1999), and others. However, there is a lack of consensus on the criteria by which
success is measured.

The problem regarding to grant management is that, past studies related to this issue were very
rare. Even the few research papers undertaken on local NGOs as part of graduate studies were
limited in scope and some of them studied, for instance, regarding the 70/30 challenges emanated
from the 621/2009 ChSA directives. Very few looked at financial management and others on
program effectiveness and internal control system issues. By contrast, the present study had
considered to more comprehensive compared to the other researches due to its inclusion of four

8
different but wider and integrated in scope in assessing the grant management system and
evaluate the practices in OSCCO.

Morrissey (2001) claimed that aid works well conditional on other variables in the growth
regression. Lavagnon, (2011) found out that project fail to achieve their goals due to a number of
problems that could be termed managerial, organizational, poor stakeholders’ involvement as
well as cost overruns and delays in fund release during implementation. These studies provide
scanty information as far as effects of donor funding on community development is concerned.
However, donor funding has brought different reactions in empowering communities, in
management, implementation of projects and their sustainability in the long run. There seems to
be little or no improvement in the livelihoods of the communities that these projects purport to
empower.

Abuzeid (2009) observed that although more progress has been made in poverty eradication than
during any comparable period of time in history, poverty remains a huge global challenge since
over one billion people still live in conditions of absolute poverty, subsisting on less than one
dollar a day. Hjertholm and White (2003) notes that less developed countries (LDCs) of the world
continue to suffer from economic hardship, raising questions of whether the increasing donor
funding is an effective method to boost growth and development in the recipient nations.

In Kenya there are very many donor funded community projects countrywide. These projects
however are faced with many challenges which affect their completion and they fail to achieve
the desired objectives and thus Chicati (2009), recognized that over the past decade, both in
Africa and the world in general, most of the projects funded by donors have failed drastically.
There are many projects being undertaken in the rural areas with the aim of poverty eradication.
A key challenge to local and international community is how to ensure the effective delivery of
foreign aid in poverty reduction efforts around the world.

Oromia Credit and Saving sharing company (OCSSCo) or Siinqee Bank has been encouraging
grant fund management system for project success. However, socio-demographic factors that
determine for the effectiveness of project success in MFI are scantly studied in context Adama
City Administration . Hence, this study will aims to identifying, understanding, describing effects
of grant management system for the success in the study area.

1.3 Research question

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The main research questions of the study are:

i. What is the current status of grant management system for project success in
the study area
ii. What challenges faces in grant management system in project success
iii. What factors do affect for the effectiveness of grant management system
iv. What are the contribution of grant management system for the project success

1.4 Objective of the study

1.4.1 General objective

The main objective of the study is to evaluate effects of grant management informer
Oromia Credit Saving SC micro-finance service in Siinqee Bank .

1.4.2 Specific Objective

i. To examine current status of grant management system for project
success in the study area.
ii. To study main challenges of grant management system in the study area
.
iii. To identify factors affecting grant management system.
iv. To explore the contribution of grant management system for
project success

1.5 Significances of the study

According to PMBOK guidelines and empirical evidence, project performance increases with the
better understanding of project management areas. grant fund management is one of the
components in project management areas under project cost management.

Studies shows that one of the challenges for sustainability in NGOs in Ethiopia is grant
management system, insufficient funding and lack of funding in relation to the resource needed

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to achieve the project objectives (Dagne Negash, 2017). To overcome these challenges, it is
believed that the NGOs must have proper fund management practices. However, lots of studies
indicate insufficient funding is a challenge but not show how different international NGOs are
managing these limited resources. That is, how the funding management system must be and
what funding management systems and practices are applied currently have not been well studied
in grant fund.

The significance of this study is to demonstrate the effect of grant management system in order
to attain the goals of the project within planned time, under the given budget and at agreed or
targeted quality. From this study, grant management system in OSCCO (siinqee) can also get
information to improve their performance in project fund management. Findings and
recommendations of the study will enhance the knowledge base of current practices. Moreover,
the study will help to understand the role of practicing grant management system and applying it
for further development and this paperwork will serve as a future reference for researchers on the
subject matter.

1.6 Scope of the study

The research work will be delimited on grant management system of Oromia credit and
saving share company /OCSSCo/ Siinqee Bank and it also aims at identifying effect of
grant management system those who involved in project of Adama Tawon. On the other
hand, not all the data will be included in the survey. This delimitation is attributable to
the financial, time and other resource limitations. Therefore, the study is undertaken to
meet its objectives within the scope mentioned.

1.7 Operational Definition

Grant is a non-repayable amount of money and/or commodity that is provided for the fulfilment
of objective by the grantor, usually called, the donor, to a grantee who is the recipient of the grant
(Grant, 2019).

Grant Management System is the process of reporting the projects and financial performance to
the grant makers and/or government. Every funder has different requirements, but most private
and corporate grant makers want to see the projects progress towards meeting the objectives that

11
stipulated in its proposal as well as how the projects allocated the grant award to the program
costs (Heather et al., 2014).

Project: A unique set of coordinated activities, with definite starting and finishing points,
undertaken by an individual or organization to meet specific objectives within defined schedule,
cost and performance parameters (Harold, 2003)

NGO as “non -governmental organization (NGO) is a non-for-profit, voluntary citizens’ group,

which is organized on a local, national or international level to address issues in support of the
public good’’. While the term NGO is widely used, there are many other overlapping terms used
such as “not for profit’’, “voluntary’’ and “civil society’’ (World bank 2001)

Funds management involves estimating resources requirements and meeting those needs in a
cost-effective manner (Amalraj, 2007).

Project funding is how the money required to undertake a project, programme or portfolio is
secured and then made available as required. Funding for standalone projects may be via a single
source or through multiple investors (APM 2020).

1.8 Limitation

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE
This chapter reviews relevant past literature on the concept of grant management system and
project success. Issues considered in this section include Theoretical review, Empirical evidences
and Conceptual framework. Therefore, theoretical review elaborates the grant management
system and project success. Empirical evidence presents findings of other studies on the
relationship between Grant management system and project success. Conceptual framework
presents grant management and project success.

2.1 Theoretical Literature Review

A grant is a legal instrument used when the main purpose is to transfer anything of value (i.e.
money, property, or services) to a recipient in order to accomplish a public purpose of support or
stimulation authorized by donor. Grant is one from many different forms of federal financial
assistance. Federal financial assistance is a broad term to refer to the various ways the U.S.
government redistributes resources to eligible recipients. Grant is a way the government funds
ideas and projects to provide public services and stimulate the economy. Grants support critical
recovery initiatives and innovative research and many other programs (USAID, 2018).

According to (Financial Accountability Handbook 2017), Grant is a generic term applied to

funding or other incentives provided to individuals or bodies including community groups,
statutory bodies or commercial enterprises that show characteristics of a transfer to a recipient
which may be in return for compliance with certain terms and conditions. A transfer which may
not directly give equal value in return to the government. That means, there is a non-exchange
transaction or subsidization, and a recipient may have been selected on merit against a set of
program-specific criteria. A grant is a direct financial contribution, by way of donation, in order
to finance an action intended to support achievement of a specific objective. A grant is made for
an operation which is proposed to the grantee by a potential beneficiary and falls within the
normal framework of the beneficiary's activities. A grant can only be made for an operation
whose immediate objective is non-commercial. Under no circumstances may the grant give rise
to profits. That means, it must 9 be restricted to the amount required to balance income and
expenditure for the action. Grant beneficiaries are generally non-profitmaking. A beneficiary is
responsible for implementing the operation and retains ownership of its results (AU, 2010). Grant
management is the condensation of description of time progression and the projects all the way

13
through the existence of the project. It includes the donation, proper forecast, implementing,
monitoring, evaluating, controlling and reporting of financial as well as non-financial resources
based on the agreed terms with the grantor by taking the rules, directives, policies, guidelines
standards into consideration (Hall, 2010). Simply it is ensuring that you are achieving the goal(s)
of the grant or agreed project activities (Corey, 2014). The phase of the grant management
process begins when the grantee signs a binding agreement with the grantor to receive the grant
award and becomes the recipient. This is related to all of the management duty required to
properly maintain the fund collected from donors and the adherence of the generally accepted
standards as well as the requirements of the funding source (Alemu, 2018)

Stages of Grant Management

The grant process follows a lined lifecycle that includes creating the funding opportunity,
collecting proposals, making award decisions, and successfully implementing the award.
According to (Kracunas & Susko, 2015) grant process has two stages, the pre-award and
postaward stages.  Pre-award The pre-award phase represents the beginning of the grant
lifecycle, which includes announcing opportunities, collecting applications, and reviewing
applications. According to (ADS 2014), a formal pre-award survey is required to be undertaken
in determining whether potential recipient are examined and the prospective recipient has the
necessary organizational experience, accounting and operational controls, and technical skills in
order to achieve the objectives of the program, or whether specific conditions will be needed.
(ADS, 2018) The purpose of the pre-award is to verify the organization„s capacity to adequately
perform in accordance with the Funder‟s rules and regulations. The extent of the pre-award
assessment and financial reviews will reflect the type of the sub award mechanism (PSI, 2011).
Pre award assessments are used to assess the quality of proposals against the set of objectives and
priorities, so that grants are awarded to the actions which maximize the overall effectiveness of
projects. Project is being awarded to the quality, expected impact and sustainability of the action,
and to its cost-effectiveness (AU, 2010). The pre-grant assessment stage of funding includes all
evaluations preceding grant disbursement. Therefore, inclusive of such determinations as where
financial contributions should be directed, what specific organizations should be beneficiaries,
and further how grants may best be structured for maximum impact. In addition, it is necessary
that the pre grant assessment also include a comprehensive examination of the potential grantee,
including review of its institutional structure, financial viability, and personnel compensation.
Specifically, the current organizational performance, organizational motivation and
organizational capacity that enables to perform activities (William & Flora, 2006)

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Project fund management component

The major components of Project fund management are • Planning: it involves estimating
resource requirements at the project life cycle's planning stage. The process of establishing what
resources (people, equipment, services, and material) and in what quantities are required to finish
a project is known as resource requirements. The project's WBS, scope statement, historical data,
resource data, and policies are all used as inputs to determine the project's resources. The major
result is a list of resource requirements, which serves as a foundation for budget estimating and
budget controls, as well as providing useful information to the project resource management
process. • Budget Estimate: Following the documentation of all project requirements, the
following stage is to establish the expenses of each requirement, which leads to the formulation
of the project budget. A cost estimate is a method of estimating the costs that the project will
incur in acquiring or using project resources. The project manager or persons in charge of
supervising the work activities provide budget estimates. They provide the necessary skills to
make the estimate, as well as buy-in and accountability for the operations itself. The The effect of
project fund management practices in Non-Governmental Organizations: in Addis Ababa Abeba
Mulugeta: GSD/0620/07 25 members of the team identify the persons or labor categories needed
to complete the task and multiply the labor cost by the number of hours or days it will take to do
it. The single most challenging aspect of calculating a cost estimate is determining how long the
work will take to complete. Vacation time, sick leave, breaks, meetings, and other day-to-day
activities should all be factored into the labor costs. Both the schedule and the cost estimations
are jeopardized if these elements are not taken into account. Material expenditures, travel,
computer equipment, and vehicle expenditures are examples of nonlabor charges. As with
developing a project schedule, documenting assumptions made while developing the project
budget are critical to the success of the project. Without a clear documentation of these
assumptions, tracking the budget is not only difficult but risky. • Budget Development: It entails
bringing everything together, including information from the organization on cost recovery fees,
shared cost pools, taxes, fees, and donor requirements and limits. This step also entails the
production of a document, referred to as the project budget management plan, that establishes
budget authority and control methods. The budget for the project is used to convey how much
money will be spent on each category of resources within a given time. Budget development
evolves the following components: ✓ Reports Requirements: reporting requirements come from

15
different stake holders: the donor/stake holders, management and the project. Different donor has
their own specific reporting requirements of the project budget. Project must determine the
reports that properly manage the budget and ensure that all activities are using the assigned
budget resources as planned. ✓ Budget Management Plan: describes how budget variances will
be managed at the project, the level of authority for approving changes to the budget and the
process to request changes to the budget/budget revision. The plans can be as simple as a one-
page document or complicated to include detailed policies and procedures.

✓ Budget Approval: The final steps in estimating the budget are getting approval. The completed
project budget should be reviewed by the project team and the representative of concerned
departments. Once the project budget has been completed the next steps is to get approval for the
project budget, this occurs at The effect of project fund management practices in Non-
Governmental Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07 26 three times
during the project lifecycle, During project negotiations with the donor which leads to the contact
budget, during the

Planning phase of the project when the project budget is developed in more detail, following the
organization chart of accounts, and becomes the baseline budget. Approval of the project budget
can result in negotiations between the organization and the donor, depending on the size of the
budget the negotiation can take some time before the budget is approved and a contract is signed.

• Execution: This is the step occurs after the budget has been approved and authorized to start the
activities as per the plan. Executing the budget is the action of authorizing the expenses approved
in the project budget, the project manager then initiates to carry the activities that lead to hiring
project staff, purchase of equipment, materials and services, all according to a project
procurement plan developed during the resource management process.

• Monitoring and Control ensures that only the appropriate project changes are included in the
budget baseline, that information about authorized changes are communicated and corrective
actions are taken by those in charge. The action of budget control is also a process of managing
the budget. Controlling the budget is a critical responsibility of the project manager, and it is
equally important that the organization defines the roles and responsibilities of all parties
involved in budget control. Usually the finance department's responsibility is to record, track and
monitor the budget from a cost accounting perspective and generates reports for the organization
management and the donor as part of the compliance requirements such as ensuring the correct
accounts are properly used and recorded.

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Approaches of Project Fund Management – Effective tools and techniques

• Planning and budgeting: Financial planning involves analyzing financial flow of an

organization. It also involves forecasting the consequences of various program and services
rendered that helps NGOs to achieve objectives (Kalmalwendo, 2005). Elahi (2008) noted that
financial planning and budget has important values that increases the quality of organizations
performance. The financial planning of an organization The effect of project fund management
practices in Non-Governmental Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07
27 consists of the stages, preliminary contract, organizations directives, mission and vision,
resource assessment. Arasa and K’Obonyc (2012) indicated that financial planning helps
manages in decision making and permits them to look the organization as whole and
interrelationships between parts. In summary, financial planning make NGO to be more
responsible and viable instrument for socio economic development and also make the fund
management to be attainable • Financial monitoring and reporting As Pfister (2009) noted
financial monitoring and controlling is a financial systems and procedures put in place to ensure
the organizations run the activities in an efficient and effective manner and to safeguard
organizations asset. Leitch (2008) argued that monitoring and control eliminates fraud and theft
and illegal actions, safeguard assets and manage internal risk. It also helps to prevent over use of
NGOs resources and protect the staff involved in financial affairs from opportunistic theft and
detect errors and omission of in the financial records. Graham (2008) said that financial
monitoring and control are intended to safeguard assets and other resources and ensures the
transactions recorded properly. It provides a framework for efficient management of fund. It also
encourages adherence to the policies and, laws and regulations prescribed. • Internal control
system is one of the major factors affecting fund management sustainability in NGOs

Review of Project Success

Project success is one of the most researched topics in project management because of the
importance in understanding how to define success and what factors contribute to achieving it.
Despite this, the phrase "project success" remains ambiguous and often subjective (Judgev &
Müller, 2005). According to Morris and Hough, the dependent variables that quantify success are
the metrics used to determine the success or failure of a project, called success criteria (1987).
Defining and agreeing on project success criteria is one technique to make project success
measurable. The effect of project fund management practices in Non-Governmental
Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07 28 Project success criteria:
Project success criteria are a set of principles and standards that will be used to determine

17
whether or not a project was successful in the end. The so-called Iron Triangle of ‘Time, Cost,
and Quality' was adopted as the set of rules for evaluating the success of a project. Time, budget,
and deliverables have all been used to determine project success (Flaman and Gallagher, 2001).
According to a study (Frese and Sauter, 2003), a project can only succeed if it is well-planned. A
project has four primary resources that must be handled in order for the project to succeed.
People, time, money, and scope are examples of these resources. The project team must select the
appropriate processes required to meet the project objectives, use a defined approach that can be
adapted to meet requirements, comply with requirements to meet stakeholder needs and
expectations, and balance competing demands of scope, time, cost, quality, resources, and risk to
produce a specified product, service, or result in order to ensure project success. No organization
has infinite resources to spend on projects, so all initiatives/projects are governed by a budget.
Projects also compete with one another for resources. In order to make the best use of resources,
projects must stick to a budget that has been approved. As a result, one of criterion for project
management is whether or not it is finished within budget constraints (Pinto, 2013). Project fund
management aim at maintaining an optimal balance between each of the project fund
components, which are cash, receivables, inventory, and payables, which is a fundamental part of
the overall corporate strategy to create value. It is an important source of competitive advantage
in project management (Deloof, 2003). The existence of efficient fund management practices
makes a substantial difference between the success and failure of a project. Project success has
been historically defined as a project that meets its objectives under budget and under schedule.
This evaluation criterion has remained as the most common measure in many industries. But for a
development project, success goes beyond meeting schedule and budget goals, it includes
delivering the benefits and meeting expectations of beneficiaries, stakeholders, donors or funding
agencies. But defining these dimensions of success is more difficult and some can only be
evaluated years after the project has been completed, and for many organizations these types of
evaluations are difficult to do due to lack of funding. The effect of project fund management
practices in Non-Governmental Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07
29

To help organizations make an assessment of success a distinction must be made between project
success and project management success. Project success can be measured as a level of
effectiveness, were the project deliverables are measured in terms of benefits and stakeholder
satisfaction, in other words the extent to which the project ultimate objectives are attained.
Project management success is defined by the level of efficiency the project achieved to reach the
project objectives. Efficiency is related to how the project manages its limited resources to meet

18
the goals while building good relationships with internal and external stakeholders. On the other
side there are many ways a project can fail, a project can fail in meeting the budget, schedule and
scope goals, but be a success in meeting the development objectives, likewise, a project can meet
the budget, schedule and scope goals and fail in meeting the final development objectives.

Factors affecting grant management system in project success

What determines project success, referred to as success factors, is also approached and considered
to be most important. Project success was recognized to be a complex and multidimensional
concept encompassing many attributes (Pinnington, 2014). Success factors can be perceived as
main variables that contribute to projects‟ success (Dvir, 1998), as devices that can be operated
by project managers to increase chances of obtaining the desired outcomes (Westerveld, 2003). A
combination of factors determines the success or failure of a project and influencing these factors
at the right time makes success more probable (Savolainen, 2012). Success factors determine the
positive outcomes of implementing projects. They must be identified before projects‟
implementation, from the conception phase. But projects environments are dynamic, so success
factors might change their level of influence in time. As, a permanent monitoring of these factors
is needed and whenever necessary the project manager should influence certain factors in order to
increase chances of accomplishing success criteria (Crisan, 2014)

Grant Monitoring & Evaluation

Monitoring is often coupled with evaluation and can be defined as an ongoing process to verify
systematically that planned activities or processes take place as expected or that progress is being
made in achieving planned goals and output (William & Flora, 2006). Effective grant
management is all processes throughout the projects‟ life span be followed. Monitoring the
performance of the project is very mandatory that grantees are required to monitor the
programmatic activities and their progress be monitored (Mango, 2014), Checking whether such
projects are being implemented and expenditures made in line with the approved budget, whether
the payments are effective in line with the agreements entered with the grantor, and whether the
projects are granted either from restricted or unrestricted funds are among the vast advantages of
monitoring. The grant monitoring and evaluation stage includes those evaluations conducted after
funding has been disbursed to the selected organization(s). Monitoring and evaluation is primarily
directed toward ascertaining the degree to which the grantee has proved successful in
strengthening its own organizational capacity (William & Flora, 2006).

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2.2 Review of Empirical Studies
Researchers have done studies locally and internationally in relation to grant management
focusing on effective and efficiency of grant. Few researchers were conducted on grant
management and project success with the major focus on post and pre award process
investigation. Here below significant study focused on grant management in different dimensions.
The Study conducted by Abnet (2016) assessed grant management system & its contribution for
project success. The study concludes the presence of a strong grant management system is a one
important factor to ensure successful project implementation and completion. In this regard there
was a major challenge observed consistent application of the existing procedures and tools even
the entities have good grant management system. Study by Woderyelesh (2016) was carried out
to examine efficiency & effectiveness of grant management system. The result confirms that pre-
award assessment is a key factor for grant management efficiency & effectiveness. The outcome
of pre-award assessment is used for measuring risk and identification sub grantees capacity gap.
Alemu (2018) assessed grant management system in Ethiopian local NGOs. Finding of the study
shows that there are different policy documents that guide and regulate grant management as well
as the planning and reporting of programs and finances.

Various requirements dictated by the Government and grantors are sporadically adhered. For
example, the 70/30 seems to be complied by aggregate at the Association level. Yet, a cross-
section view of the proportion by Area Offices revealed that the directive is not complied
accordingly. Once grants were awarded from a dozen of grantors, it was presumed to be utilized
to achieve the intended objectives within the agreed period. However, the study revealed that the
Association had not fully utilized the grants awarded and obtained from the grantors. For
instance, about Birr 21.6 million in 2016 and more than Birr 12 million in 2017 were not utilized.
Learn & Serve (2005) clearly states that grantees should develop a risk-based monitoring system
to ensure adequate oversight of all sub-grantee funds. Moreover, managing sub-grantee funds and
programs is a key grantee responsibility. Grantors should communicate compliance and reporting
requirements, including all grant provisions to their sub-grantees. Providing sub 19 grantees with
the training they need to implement strong programs is a major component of sub grant
management. Grantees should conduct a formal or informal needs assessment and then develop a
plan for providing training, technical assistance, and conducting site visits.

20
To help design effective training and technical assistance efforts. According to risk management
for non-profit organization Australia (NSW 2013), risk is the effect of uncertainty on an
organization‟s objectives. In this regard, risk includes both potential threats to achieving those
objectives (negative risk), and potential opportunities for achieving those objectives (positive
risk). Therefore, risk is any uncertainty about a future event that threatens organization‟s or
program‟s ability to accomplish its mission. Thus, an organization which received grant should
be able to identify circumstances that increase the organization and program‟s potential risks and
manage their programs to prevent those risks from occurring.

According to Helen (2012) donors and/or government provide grants and other resources to
recipients that enable accomplishment of project objectives that are consistent with the policy of
the government. Project grants of NGOs are various in their arrangement, function and future
threat, and their answerable demands that ranges from extremely complex to somewhat easy
ones. As almost all projected grants by NGOs involve the utilization of public funds, grantees are
accountable for the granted resources. Likewise, grantors are also required to comply with and
adhere to government rules, laws, proclamations, regulations and regulatory obligations that are
stipulated under functional federal and regional legislations According to Helen (2012), stated
that the effectiveness of NGO‟s project‟s performances be supervised and evaluated and
measured by the government to make sure that projects under consideration have achieved the
project objectives and attained intended the overall goal. A project monitoring strategy provides a
framework for projects to assess and evaluate the effectiveness of the grant, its management
practices in achieving the project‟s objectives and NGOs required complying with and adhering
to the provisions stipulated under the legally binding agreement entered between the two
contracting parties

According to United Nations (2009), most NGOs in Africa in general, depend on donor funding
or external support agents to sustain their programs and projects. This explains why their
financial resources follow a boom-and burst trend leading to close down of many NGO‟s without
a clear vision and mission. After getting the funds, some organizations do not bother to prepare
the financial statements stating the uses of these moneys. This is why there is no proper
leadership and management of the funds. Where funds are misappropriated, the result is the
subsequent withdrawal by donor agencies leading to collapse of projects. As the For-Profit
Organizations are focused on profit maximization, and NPO are meant to render service to the
society, there are also certain variations in the accounting system and practices followed in the

21
corporate sector and NPO sector. For Non-profit organizations, the programoriented fund-based
accounting for the different projects and programs of the organization linking them to activities
and results, is an important accounting practice. Financial reporting in nonprofit organizations too
differs from for profit organizations. (Kandasami, 2006). As Karanth (2015) indicated fund
management is important for NGOS that primarily NGOs generally lacks the financial flexibility
of profit organizations as it depends on resource providers who are not engaged in an exchange
transaction. Secondly, for-profit organizations focus on profitability and maximizing shareholder
value whereas NGOs primary goal is not to increase shareholder value but to provide some
socially desirable need on an on-going basis. Gashuga (2016), did a cases study to investigate
Effects of Fund management on project performance on Dairy Community processing center
project Burera district. The authors The effect of project fund management practices in Non-
Governmental Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07 30 concluded that,
budgeting, fundraising, funds control and funds allocation plays a big role towards performance
of the project. But the techniques used during this process of budgeting are supposed to make
sure that effective management of funds is done. All departments work together to make sure
that, management functions are clear so that planning is coordinated. Budgets are prepared to
anticipate a future flow of funds as result of putting a specific plan in place. Therefore, budget is
significant incense that it is expressive of the desired future activities of the project given
available resources and opportunities at hand. Control and allocation of funds guide operating and
this means managers do not have to give general answer regarding project’s forecasts. In relation
to the cost and expenses used, her study concluded that managers of the projects analyze the cost
and expenses that occurred during implementation process compared to the budget allocated for
works, goods and services in operations plan Even if some project managers humanize corruption
and irregularities through budgeting, budgeting is a very important tool in project management.
This implies that, there should be some project plan that tend to corruption and irregularities.

Study by Rehema, (2014), on challenges facing local NGOs in resource mobilization, it was
discovered that funding sources are frequently insufficient to meet needs, and project
implementation expenses are rising. In Africa despite vast differences among the NGOs most
share a common challenge of unlimited needs chasing limited resources. Finally, the author found
that resource mobilization requires a lot of time and skills to seek resources from different
sources and the pressure to mobilize resources may lead the organizations to use methods that
compromise the values they are fighting for through their work. In relation to financial
accountability, the study by Mary (2014), on the effects of financial accountability on the
efficiency of NGOs in governance sector concluded that financial accountability has positive and

22
significant effect on efficiency of nongovernmental organizations in governance sector in Nairobi
County. This is because appropriate financial accountability limits fraud and mismanagement of
funds and hence promoting efficiency. This is not outstanding the fact that financial
accountability empowers beneficiaries and other stakeholders and makes achievement of future
project achievement easier. Yilma M. (2018), in his study of Measuring Project Management
Maturity: The Case of Non-Governmental Organizations (NGO) in Ethiopia, concluded that the
maturity level of project cost management is at the lowest level which might be due to lack of
proper cost estimation, no system/tool to control costs, and budgeting was based on experiences,
expert judgments and The effect of project fund management practices in Non-Governmental
Organizations: in Addis Ababa Abeba Mulugeta: GSD/0620/07 31 rough estimates without
following the detail process as expected. The cost ceiling for each project was given by donors,
and the role of NGOs was to identify activities and allocate budget until it reached the donor’s
budget level.

2.3. Conceptual framework of the study

A conceptual framework is a set of broad ideas and principles taken from relevant fields of
enquires and used to structure a subsequent presentation (Bogdan & Biklen (2003). Grant
management is fundamental in this study. Conceptual framework for grant management showing
the Challenges and factors affecting grant management with the linkage to the project success. It
is designed by the researcher by using inputs from various literatures.

Figure?

Service
System Inputs Outputs Outcomes
Delivery

23
Governance and

CHAPTER THREE
RESEARCH METHODOLOGY
This chapter will explain the selected research design as well as the population, sample size and
sampling techniques. Moreover, sources of data, instrument and procedures of data collection will
be discussed Methods of data analysis, validity and reliability, and ethical considerations will also
be described in this chapter.

24
3.1 Description of the study Area

Adama City has 6 Sub Cites and 18 kebele . It is roughly located at latitude of 54 0 at
8.54 N and 39.270 E. the boundary areas are Mojo in the west, Walanchiti in the East,
Awasha Malksa in the North

3.2. Research Design

The purpose of this study is to investigate effects of grant management in project success. To this
end, the researcher will apply descriptive research design which provides an accurate and valid
representation of variables that are relevant to the research question. Descriptive, and explanatory
research presents picture of specific details of a situation, setting or relationships. The major
purpose of descriptive research, as the term implies is to describe characteristics of population or
phenomena (Abdurazke et.al 2014).

3.2 Population and Sample

This research will take place in OSCO (siinqee Bank), and it focuses on the project and financial
data and some of the professional staff members of the organization for which the research has
incorporated the Head Office and all the five areas (branches) of the company.

OSCCO, currently, manages five branches including one District Office , 5- branches etc The
Head Office of the company as well as one of its Area Offices is found in the Federal Capital –
Addis Ababa while the Area Offices are located in the main cities of different Oromia woredas

Purposive sampling technique will apply in the study which is categorized in non-probability
sampling. The main goal of purposive sampling is to focus on particular characteristics of a
population that are interest of which would be best enabled to answer the research questions.
Program staff members are directly involved in the project main activities and involved directly
with the grant making process of OCSSCO . And support staffs are indirectly contributed for
project activity by facilitating office operation. As per the human resource data currently reported
( September 2019) siinqee Bank Oromia has more than 7000 total staff which consist of
465 Branch office working in the position of Prized ant , Vis Prized ant, Director , Brach
Manger Custemer Service Manger , Accountant & Casher and. Among the total
population, staff members who don‟tdon’t have direct involvement to the subject matter under
study excluded by using purposive (judgmental) sampling. The number of excluded staffs is 90
which is members of Manger ,customer Relation Officer , Accountant &. Thus, the target
population considered for this study will participate 107 member of which:
Project/Program/Finance/Grant Director 1 Project/Program/Finance/Grant Manager 3,
25
Project/Program advisor 2, Program/Project specialist 5, Project expert 96 Project/Grant
coordinator and Project facilitator

3.3 Data Collection

The study will use both primary and secondary data. In order to collect relevant data, the
researcher use questionnaire and interview. Shao (1999) defines a questionnaire as a formal set of
questions or statements is designed to gather information from respondents that accomplish
research objectives. Primary data will collect by using structured questionnaire and interview
from targeted OSCCO staff to get first-hand information on their insight on grant management
system (Pre & Post award process) and perceive effect on project success. The standard
instrument will adopt for this research which is grant management efficiency and effectiveness
use Bestuse Best Practices for Funding the (William & Flora 2006) will implemented to measure
the effect of pre award assessment and post award monitoring.

3.4 Data Analysis

The data obtain through surveying analyses is with the use of the SPSS (statistical package for
the social sciences) program 22-23v and also descriptive statistical computation such as,
percentage and frequency distribution will be utilized.

3.5 Reliability and Validity test

Test of reliability is another test of sound measurement. A measuring instrument is reliable if it
provides consistent results. If the quality of reliability is satisfied by an instrument. Then while
using it we can be confident that the transient and situational factor are not interfering
(Abdurazke et.al 2014). Reliability test meet the need of finding an objective way of measuring
the internal consistency or reliability of an instrument used in a research work (Cronbach, 1951).

3.6 Ethical Consideration

Participants will give the assurance that their identification will be anonymous in order to
uphold privacy so as to avoid any repercussions that can follow their private life.
Therefore they will ask not to write their names on the questionnaire. The participants
will assure that all information obtained from them will be confidential and will only to
be used for the purpose of this study only

26
 Work Plan and Budget
WORK PLAN
The work plan outlines activities to be carried out the research in the specific period of time.
Hence, the proposed project work scheduled from starting to the completion period is
presented as follows:

Duration of the Year, 2015

S. No. Activities to be carried out

Auguest
March

April

June
May

July
1 Literature Review X X X
2 Preparation of Interview Schedule X
3 Pre-testing of Collection of Tools X X
4 Enumerators Training X
5 Data Collection X
6 Data Processing X
7 Report Writing X X
8 Submission of First Draft X
9 Submission of Final Thesis X
Description of the work and Duration

LOGISTICS
Details of Expenses
Stationery Expense

S. No. Items Unit Quantity Unit cost Total Cost

1 Penlaxi Pcs 10 25 250

2 Pencil Pcs 5 5 25
3 Printing paper Pkt 5 125.00 625.00
4 Thesis binding Pcs 5 15 75.00
Sub Total 975.00

27
Personnel Expenses

 S. No. Particulars Number Duration Payment Total

(in days) per day
1 Supervision fee 1 - - 2000

2 Wage for enumerators 6 10 200 12000.00

3 Respondents refreshment lump sum 10 400.00 4000
cost
Sub Total 18,000.0
0

Budget Summary

S. No. Details Expenses

1 Stationery 1,958.00
2 Personnel expenses 12,400.00
Grand Total 14,358.00

28
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