Evaluation Plan

Over 2 million + professionals use CFI to learn accounting, financial analysis, modeling and more. Unlock the essentials of corporate finance with our free resources and get an exclusive sneak peek at the first chapter of each course. Start Free

What is an Evaluation Plan?

An evaluation plan is part of the planning for a project – the part that is related to deciding how the project will be monitored and assessed to determine the project’s success and effectiveness. An effective evaluation plan should show how the project will be monitored and how its objectives will be met.

To effectively complete or implement most projects, an evaluation plan is needed. There are two basic types of evaluation plans:

Formative Evaluation Plan

A formative evaluation plan is completed before or during the project. A formative evaluation has the following characteristics:

• Evaluates upcoming or continuing activities of a project
• Covers activities from development to implementation stages
• Contains reviews from principal investigators, evaluators, and governing committees

Summative Evaluation Plan

A summative evaluation plan “sums” up the project. As such, it is written at a project’s completion. A summative plan is characterized by having the following features:

• Evaluates whether the goals that were achieved are the goals that were set. If not, the evaluation should state the extent of the variation and the reasons for it.
• Contains the details of the outcomes and information obtained during the project.
• Reports the outcome of the project to the principal investigator of the project, evaluators, and any governing committees.

There are some common content elements that should be included in an evaluation plan regardless of whether it is classified as formative or summative. They are as follows:

• The project to be evaluated
• Purpose of evaluation
• Key evaluation questions
• Notation of methods used, including methods for collecting and analyzing all the necessary data
• The reports and reviews of the stakeholders and investors directly involved in the project
• Resources needed to fund and facilitate the project
• Expected findings and outcomes of the project, as well as the expected time of the final report

How to Write an Evaluation Plan

Before writing an evaluation plan for your business, it is advisable to consult prior plans to see if certain formats are preferred. In general, however, the plans should include methods such as interviews, administration of questionnaires, and consultation that will be carried out during the project. Other items include:

1. Clear title – The recommended way of writing the title is that you should write it on a page of its own. The title page should contain a recognizable name of the project, dates of the project, and the general focus of the evaluation plan.
2. Uses and Users of the Evaluation Plan – It is essential to describe the use of the evaluation plan clearly. For transparency and accountability, under this section, you should clearly show the users of the plan. Again, you should describe the involvement of stakeholders and the financiers of the project in this same section.
3. Project Description – Under this section, the developer of the evaluation plan should critically assess and describe what the entire project is all about. Here, it is essential to state what the project focuses on achieving, and the process for evaluating how successfully the project met its goals.
4. Methodology – In this section, an evaluation plan should clearly state the methods that will be used to collect data, expected data sources, and the roles and responsibilities of each participant in the project. This is the section that should also describe which methods will be used to ensure that the project is completed successfully.
5. Analysis – This section contains a thorough analysis of the project. It will show findings and reasons for any unexpected outcomes. It may also contain data analyses done before the projection’s completion and how it affected the project’s continuation.
6. Sharing Plan – In most cases, the sharing plan section is often overlooked, despite the fact that it can play a major role. Toward the end of the plan, there should be a proper way of sharing evaluation findings. This section should also state how the findings and outcomes of the project will reach (be reported to) the involved stakeholders.

The Importance of an Evaluation Plan

• An evaluation plan is a valuable asset that can help ensure that a project runs smoothly. A well-documented plan states the roles of all participants in the project and the sources of all resources. This implies that there should be minimal delays. as everything should have been communicated ahead of time. Furthermore, if the plan clearly states the dates on which specific activities should take place, then the involved participants will be encouraged to be right on schedule.
• A good evaluation plan should cater to the smooth running of the project from its initial stages to its completion.
• An effective evaluation plan will also ensure better results in upcoming projects of the same nature.
• A well-documented evaluation plan enhances transparency and accountability. Involved participants, contractors, and stakeholders share the plan among themselves. The methodology section clearly outlines and describes how they obtained each finding and outcome.
• The practice of using evaluation plans should improve the success and effectiveness of projects undertaken by an organization. If the plans are well documented and filed, the organization can learn from previous projects and be able to better gauge the success of certain projects and project practices. The plans can also come in handy in helping the foundation or organization make critical decisions. This is because the information in the plan is not just gathered randomly – it is obtained after thorough research and evaluation of the project.

Takeaways

• A written evaluation plan is good for future references and for greater transparency and accountability.
• It is recommended that the data recorded in the plan be quantitative. However, the incorporation of both qualitative and quantitative data is important.
• Information in the evaluation plan describing the input, output, and activities of the project or program is vital. A table often makes it easier to obtain information at a glance.
• Be brief and straightforward in descriptions.
• It is advisable to keep the evaluation plan simple and concise. Information should be obtained from the plan with ease.

Additional Resources

CFI is a leading provider of financial certifications and analyst training. To continue learning and advancing your career, these additional CFI resources will be helpful:

• Audit Materiality
• Due Diligence
• Payback Period
• Project Budget Template
• See all accounting resources

Accounting Crash Courses

Learn accounting fundamentals and how to read financial statements with CFI’s online accounting classes.
These courses will give you the confidence to perform world-class financial analyst work. Start now!

Boost your confidence and master accounting skills effortlessly with CFI’s expert-led courses! Choose CFI for unparalleled industry expertise and hands-on learning that prepares you for real-world success.

• Share this article