Analyzing Costs for Management Decisions

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As family planning programs expand, the mandate to do more with fewer resources becomes stronger. Family planning managers must strive to improve access and quality without increasing the financial burden on already under-funded programs. Perhaps you are concerned about future sustainability and the withdrawal of subsidies. You may worry about efficiency, and how to use existing resources more effectively. The tasks you face require an understanding of the financial implications of your management decisions. Can you provide services to 10 percent more clients without increasing the number of staff? Will it be possible to reduce service costs while providing the same or higher quality services? To answer these and other financial questions, you need to know what your family planning services cost.

This issue provides basic worksheets for calculating the costs of two items that make up the largest part of most family planning programs: personnel costs and contraceptive product costs. It deals with these two cost categories for three reasons: first, they account for the majority of costs in family planning service delivery. For instance, salaries accounted for 66 percent of service delivery costs in a study of 17 facilities in Morocco [Knowles, 1991]. Secondly, personnel and contraceptive costs are controllable—you are able to determine what your staff spend their time on, and how contraceptives are dispensed. Finally, measuring personnel and contraceptive costs is not difficult, and does not require large amounts of technical assistance from a financial expert.