Yellow cells denote information required to be entered. Grey cells denote no information should be entered.

Transcription

1 A guide and toolkit on project budgeting and cost allocation This guide contains a budget template to help organisations calculate the full cost of a particular project or service, including an appropriate share of all relevant support services and other overheads, defined throughout this guide as non-project attributable costs or NPAC. The guide has been designed to increase transparency, clarity and consistency in our grant agreements and directly procured contracts, and should be referred to in conjunction with DFID s eligible cost guidance. 1 Information tab should be entered. Guidance on the information required to complete the project budget key information table is provided below. This table captures the basic project information. 1.1 Lead organisation: Enter the name of your organisation. 1.2 Project name: Enter the name of the project you are asking us to fund or are submitting a tender for. 1.3 Project number: Enter the number of the project you are asking us to fund or are submitting a tender for. 1.4 Project start date: Enter the month and year the project will commence. 1.5 Project end date: Enter the month and year the project will end. 1.6 Total project cost in GBP: Enter the total value of the project including direct project costs and NPAC. Definitions are found at the foot of this guide. 1.7 Operating currency if not GBP: If applicable enter your organisation s local operating currency if not GBP. 1.8 FX conversion rate: If applicable enter the rate and source used to convert local operating currency to GBP. 1.9 Project country: Select the country or region that the project will support Thematic sector: Select the thematic sector that the project will support Budget version: Enter the budget version number. For version control the master budget is 1.0, proposed but not approved budget revision is 1.1, and approved budget revision is 2.0. Version 1.1 Page 1

2 1.12 Date of budget revision submission: Enter the month and year the budget revision was submitted for approval Prepared by: Enter the name of the person that prepared the budget. Guidance on the information required to complete the subcontractor budget split tab is provided below. It is recommended that this section is completed after the template is populated. This table captures the split of subcontractor spend across three key cost categories Name: Enter the name of your organisation and the name of each subcontractor, if applicable Frontline project delivery: Enter the value of project costs attributable to frontline project delivery, allocated between your costs and your subcontractors costs. The table will automatically populate the total project frontline project delivery costs Programme management: Enter the value of project costs attributable to frontline project delivery, allocated between your costs and your subcontractors costs. The table will automatically populate the total project programme management costs Programme support and administration: Enter the value of project costs attributable to frontline project delivery, allocated between your costs and your subcontractors costs. The table will automatically populate the total project programme support and administration costs Total project cost in GBP: The template will automatically populate the total project cost. This should reconcile to the total project cost reflected in the project budget key information table. 2 Budget template tab should be entered. Red cells indicate formulae values will be automatically populated from the NPAC. Do not override any formulae within the template without the express permission of your DFID contact. The budget categorises costs as direct project costs (frontline project delivery costs, capital expenditure items, staff costs, travel, subsistence and accommodation, monitoring and evaluation, fund management costs and other director costs) or NPAC. The total cost for each budget line should be forecast monthly in year one and annually from year two onwards. Enter values directly in the template. The year one total and budget line total will populate automatically and the formulae should not be amended. Enter the number of units and standard or average unit cost, or total cost if the line item is a single expenditure item. The exception is for those cost lines which specify that details should be input on additional worksheets. The template includes a generic tab which can be used to provide detailed information on line items which are not mandated as requiring further information. Profit and local government taxes including any VAT should be included as a separate budget line item. Guidance on the column headers is provided below: Version 1.1 Page 2

3 2.1 Primary cost category: Project costs have been categorized across the budget lines listed. Rows 18 to 21 allow for input of specific frontline project delivery costs which have not been captured elsewhere in the template. These are the only editable fields and no other categories should be amended without the permission of your DFID contact. 2.2 Secondary cost category: A default secondary cost classification has been selected. The budget template allows for the default to be altered however it is expected that any deviation will be minimal. If the default is altered the cell should be highlighted appropriately. The three secondary cost categories are frontline project delivery, programme management and project support and administration. 2.3 Cost type: Select the cost type applicable to the budget line item. Definitions are at the foot of this guide. 2.4 Unit rate: Select the unit rate that has been used to calculate the budget line item. If a unit rate cannot be provided, for example where a budget line includes multiple expense types such as freight and driver salary, enter a total amount only and provide details of the calculation in the notes tab. 2.5 Unit cost (standard average): Enter the standard or average unit cost used to calculate the budget line item. If a unit cost cannot be provided, for example where a budget line includes multiple expense types such as freight and driver salary, enter a total amount only and provide details of the calculation in the notes tab. 2.6 Unit numbers: Enter the number of units used to calculate the budget line item. A one off expenditure item will be one unit. 2.7 Total: The template will automatically populate when you have entered the total cost for the budget lines in accordance with the guidance in section two of this document. Guidance on the row headers is provided below: 2.8 Frontline project delivery costs: Enter commodity details on the commodities tab and disbursement details on the disbursement tab. The respective totals will automatically calculate. Profile the totals across months one to twelve in year one and annually in all remaining years. The year one totals will automatically calculate. Guidance on the completion of the commodities tab is provided in section three of this document. Enter the values of the remaining cost lines directly in the budget. Profile monthly in year one and annually for all remaining years. The year one total and project total will automatically calculate. Transport of commodities should include port handling, truck rental, international shipping and similar expenditure. Driver salaries should be included within other travel in the travel, accommodation and subsistence tab. Disbursements to beneficiaries include cash transfers and grant disbursements but exclude the transfer costs associated with making the disbursement. Monies provided by DFID as a fund, for example a challenge fund, should be detailed under fund management costs. If you require clarification on any cost category within this primary category please contact your DFID representative. 2.9 Capital expenditure items: Enter details on the capex tab. The totals will automatically calculate. Profile the totals across months one to twelve in year one and annually in all remaining years. The year one totals will automatically calculate. Guidance on the completion of the capex tab is provided in section five of this document. Version 1.1 Page 3

4 2.10 Staff costs: Enter details on the staff costs tab. The totals will automatically calculate. Profile the total across months one to twelve in year one and annually in all remaining years. The year one totals will automatically calculate. Guidance on completing the staff costs tab is provided in section six of this document. Drivers salaries should be included in travel, subsistence and accommodation tab and staff costs relating to monitoring and evaluation should be included in the monitoring and evaluation cost category Travel, subsistence and accommodation: Enter details on the travel and subsistence tab. The totals will automatically calculate. Profile the totals across months one to twelve in year one and annually in all remaining years. The year one totals will automatically calculate. Guidance on completing the travel, subsistence and accommodation tab is provided in section seven of this document. Travel, subsistence and accommodation costs associated with monitoring and evaluation should be included within the monitoring and evaluation category. Drivers salaries should be included in other travel Monitoring and evaluation: Enter details in the budget note tab of what is covered, for example visits by the UK office of the organisation, an independent evaluation by consultants, and costs should clearly link to the monitoring and evaluation plan as set out in the narrative proposal. Staff costs specific to monitoring and evaluation should be included in this cost category. All information required in the travel, subsistence and accommodation tab should be clarified in the notes tab for monitoring and evaluation. Enter the values of the cost lines directly in the budget. Profile monthly in year one and annually for all remaining years. The year one total and project total will automatically calculate. If you require clarification on any cost category within this primary category please contact your DFID representative Fund management costs: Enter details of the calculation behind the management fee in the budget note tab. Monies provided by DFID as a fund, for example a challenge fund, should be detailed under this category. Enter the values of the remaining cost lines directly in the budget. Profile monthly in year one and annually for all remaining years. The year one total and project total will automatically calculate. If you require clarification on any cost category within this primary category please contact your DFID representative Other direct costs: Enter details of any other direct costs that have not been captured in the template. Enter the values of the remaining cost lines directly in the budget. Profile monthly in year one and annually for all remaining years. The year one total and project total will automatically calculate. If you require clarification on any cost category within this primary category please contact your DFID representative. Version 1.1 Page 4

5 2.15 Non-project attributable costs (NPAC): You are required to calculate the total annual NPAC of your organisation in line with the three budget cost categories. The calculations should be completed on the NPAC tab and guidance is provided in section eight of this document. The totals will automatically calculate. Profile the totals across months one to twelve in year one and annually in all remaining years. The year one totals will automatically calculate Profit: Profit, where applicable, should be calculated on the total project costs and adhere to the maximum permitted profit clause within the supplier terms and conditions. Enter the values directly in the budget. Profile monthly in year one and annually for all remaining years. The year one total and project total will calculate automatically Local government taxes: Local government taxes should be forecast monthly in year one and annually for all remaining years. Enter values of all applicable UK and local government taxes directly in the template. The year one total and project total will calculate automatically Revenue: Enter details on the payment tab. The total will automatically calculate. Profile the total across months one to twelve in year one and annually in all remaining years. The year one total will automatically calculate. Guidance is provided in section nine of this document Cash surplus or deficit: All totals will automatically populate. Enter details in the budget note tab of how any deficit will be met, for example from cash reserves. 3 Commodities tab should be entered. Do not override any formulae within the template without the express permission of your DFID contact. Enter details of each commodity type purchased under the project scope. Enter the estimated quantity to be purchased and the estimated standard or average unit cost per commodity. The individual totals will automatically calculate and a grand total will automatically calculate. This will populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. 4 Disbursements tab should be entered. Do not override any formulae within the template without the express permission of your DFID contact. Enter details of each disbursement type under the project scope. If disbursements are made to a tier one partner for distribution, enter details in column B. Enter details of the number of ultimate beneficiaries and estimated average or standard disbursement value. Do not include disbursement costs associated with the transfer, for example cash transfer fees. Monies provided by DFID as a fund, for example a challenge fund, should be detailed under the fund management cost category. The individual totals will automatically calculate and a grand total will automatically calculate. This will populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. Version 1.1 Page 5

6 5 Capex tab should be entered. Do not override any formulae within the template without the express permission of your DFID contact. Select the capex categorization, sub-categorization and equipment categorization. Enter the equipment description, the estimated number of units to be purchased and the estimated standard or average unit cost. The individual totals will automatically calculate and a grand total will automatically calculate. This will populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. Rental cost, hire purchase and any maintenance fee in lieu of capital purchase of motor vehicles should be included within this category. 6 Staff costs tab should be entered. Do not override any formulae within the template without the express permission of your DFID contact. Select the job family, job title, TA discipline, experience, delivered by partner (enter the partner tier level), project term and project phase. Enter an alternative job title (if applicable), the individual s name, the consortium partner s name and the country of operation. If an individual is working across more than one job family, estimate the time attributable to each element. This ensures the split between programme management, frontline project delivery and programme support and administration is reflected accurately. Enter the estimated number of days the individual will work in year one and the estimated number of days over all remaining years. Staff costs include permanent members of staff and contractors directly employed by the lead organization, and staff and contractors engaged and invoiced through sub-contractors. For the lead partner (tier one): Enter the net daily fee rate payable to the individual in column S. This amount is inclusive of all associated local and UK taxes and benefits but exclusive of overheads and profit. This is the figure used to populate the budget template tab, as overhead and profit are detailed as separate line items in the budget template. Where a reasonable estimate can be made enter the overhead and profit applicable to that individual in columns T and U. The total charge to your organization for that individual will automatically populate. For sub-contractors: Enter the daily fee rate invoiced amount in column R. This is the figure that the budget template tab will populate from. The rationale being that overhead and profit have been included by the supplier and this is the cost to your organization. Where provided by the supplier or where a reasonable estimate can be made strip out the overhead and profit applicable to that individual and enter in columns P and Q. The net charge to that supplier for that individual will automatically populate. Version 1.1 Page 6

7 The individual totals for year one and all remaining years will automatically calculate and a grand total will automatically calculate. Populate the sub-totals for each job family and ensure these reconcile to the main table. The job family table will automatically populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. Drivers salaries should be included in the travel, subsistence and accommodation tab and staff costs relating to monitoring and evaluation should be included in the monitoring and evaluation cost category. 7 Travel, accommodation and subsistence tab (excludes costs associated with monitoring and evaluation) should be entered. Do not override any formulae within the template without the express permission of your DFID contact. Select from all drop down options in each table. Enter details of the estimated number of trips, individuals or days as indicated. Enter details of the estimated standard or average unit cost. Drivers salaries should be included as other travel. Enter details of the expected number of drivers required (in the estimated number of trips column) and the estimated cost per driver (in the estimated unit cost). The individual totals will automatically calculate and a grand total will automatically calculate. Enter travel cost sub-totals. These should reconcile to the main travel table grand total. The respective grand totals will populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. Travel associated with monitoring and evaluation staff should be included in the monitoring and evaluation category. 8 NPAC tab The template allows you to calculate your organization s NPAC and apportion an appropriate amount to the project. Refer to the detailed information within the eligible cost guidance as to what constitutes NPAC and how to allocate under the defined cost categories. Your NPAC costs should, as best possible, align with your organisation s financial statements (audited accounts if applicable). Financial statements must be provided when submitting your budget and will be reviewed by the relevant DFID staff member. If your organisation s reporting format does not adhere to this requirement you must raise this with the relevant DFID staff member who will determine an appropriate alternative. Yellow cells denote information required to be entered. Red cells indicate where values are transferred to the budget template. Do not override any formulae within the template without the express permission of your DFID contact. You should work through the template from top to bottom. Enter details of all premises and office costs. The template will automatically calculate a grand total. The template apportions premises and office costs on the basis of staff numbers. Enter the estimated number of staff working under each of the function headers. Version 1.1 Page 7

8 The template will automatically calculate the percentages within each area and the total premises and office cost will be apportioned automatically. The amount attributable to the project will be entered automatically in the budget template and amount attributable to other areas will be entered automatically in the NPAC tab. Enter details of all Board of Directors costs. The share of premises and office costs will have automatically populated. The template will automatically calculate a grand total. The template apportions Board of Directors costs on the basis of time spent. Enter the estimated percentage of time spent by the Board under each of the function headers. The template will automatically apportion the grand total. The amount attributable to the project will be entered automatically in the budget template and amount attributable to other areas will be entered automatically in the NPAC tab. Enter details of all support function costs. The share of premises and office costs and Board of Directors costs will have automatically populated. The template will automatically calculate a grand total. The template apportions central function costs on the basis of time spent. Enter the estimated percentage of time spent by the central functions under each of the function headers. The template will automatically apportion. The amount attributable to the project will be entered automatically in the budget template and amount attributable to other areas will be entered automatically in the NPAC tab. Enter details of all external governance and strategic development costs. The share of Board of Directors costs and support function costs will have automatically populated. The template will automatically calculate a grand total. The template apportions governance and strategic development costs on the basis of expenditure as a percentage. Enter the estimated percentage of expenditure spent on each of the function headers. The template will automatically apportion the grand total. The amount attributable to the project will be entered automatically in the budget template and amount attributable to other areas will be entered automatically in the NPAC tab. In the event the totals on the budget template do not reconcile please contact your DFID representative who will review the formulae. Whilst we have endeavoured to make this structure intuitive and fit across different organisations with different financial structures we recognise that an organisation s cost categories may not naturally map exactly to the cost categories identified. The overarching principal of the calculation however is to allow for the organisation s NPAC to be appropriately apportioned to the project we are funding and you should therefore align your NPAC with these cost categories. For CSOs with multiple (more than five) grants or a cumulative grant total of more than 2 million per year, we propose agreeing a single organisational (central) overhead cost rate. Rates will be adjusted periodically to mirror the changes in the CSO grant portfolio, and subject to annual independent audit. Only in these circumstances will deviation from the template be accepted. The format change should be agreed in advance with your DFID representative. 9 Payment tab The template includes a payment tab which is used to estimate the expected profile of payments over the life of the project. It is recognized that all projects may not have clear payment structures at the bid or application stage and that this is an estimate used to calculate any initial cash deficit. Yellow cells denote information required to be entered. Select the payment frequency. Do not override any formulae within the template without the express permission of your DFID contact. Version 1.1 Page 8

9 A grand total and contract percentage will automatically calculate. This total will automatically populate the budget template tab. In the event the totals do not reconcile please contact your DFID representative who will review the formulae. 10 Notes tab The template includes a notes tab which is used to provide further information on inflation, foreign exchange, monitoring and evaluation costs, fund management fees, and any cash deficit. You may also enter any other details which are relevant in supporting the calculations within your bid or application. This should not be used for narrative to support the bid itself. Yellow cells denote information required to be entered. 11 Generic tab The template includes a generic tab which can be used to provide detailed information on line items which are not mandated as requiring further information. Yellow cells denote information required to be entered. Do not override any formulae within the template without the express permission of your DFID contact. The individual totals will automatically calculate and a grand total will automatically calculate. This will not automatically populate the budget template tab. Ensure that the amount in the tab reconciles to the budget template tab. 12 Variance tab The template includes a variance tab which is used to provide the updated budget position on an annual basis (or more frequently as required by your DFID contact). Yellow cells denote information required to be entered. Do not override any formulae within the template without the express permission of your DFID contact. The original budget will populate automatically. Populate the actual spend for year one and the estimated revised spend for all remaining years of the project. A revised budget total will automatically calculate and a variance between the original budget and current revised budget will automatically calculate. This process should be repeated annually (or more frequently as required by your DFID contact), with the current year s actual spend being populated and all remaining years of the project being revised accordingly. Further guidance can be provided by your DFID contact. Definitions Fixed cost: A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Frontline project delivery: Activities associated with delivering the project outputs or outcomes for end beneficiaries. Version 1.1 Page 9

10 NPAC: Job families: Stepped cost: Variable cost: Non-project attributable costs. These are overhead costs that relate to the overall operations, management and identity of the delivery partner rather than to programme services. These costs are necessary for programmes to function although cannot be clearly linked to specific project outcomes and results (i.e. business expenses not including or related to direct labour, direct materials or third-party expenses that are charged directly to projects). Typically they include overall management and employee costs, administration and support, equipment, space and premises costs, and activities that relate to the whole organisation and partly support your project, but also support your other projects. NPAC are often also called indirect, core, central or support costs. A job family is a skill category under which various job titles or descriptions can be aligned. For example, under the job family programme leadership, certain job titles can be associated such as Programme Director, Project Team Leader and Project Deputy Team Leader. It is expected that, under any given Job Family, the level of skill/expertise and therefore the associated daily fee rate can be compressed into a more concise range. A stepped cost is a business expense that is constant for a given level of activity, but increases or decreases once a threshold is crossed. Stepped costs are those costs that change when a business' production levels increase or decrease. A variable cost is a corporate expense that varies with production output. Variable costs rise as production increases and fall as production decreases. Version 1.1 Page 10