Non-Programme/Project-Attributable Cost (NPAC) Expenditure: Guidance for ACCOUNTABLE GRANTS

Transcription

1 Department for International Development (DFID) Non-Programme/Project-Attributable Cost (NPAC) Expenditure: Guidance for ACCOUNTABLE GRANTS 18 September 2018 Page 1

2 Instructions for completion of the Non-Programme/Project-Attributable Cost (NPAC) element of ACCOUNTABLE GRANT bids. This guidance will assist you in completing the NPAC worksheet. It explains how to calculate an appropriate share of all relevant support services and other overheads, defined as nonprogramme/project-attributable costs or NPAC. This NPAC worksheet should be used in conjunction with your usual budget templates until the launch of the full cost transparency budget template in spring The following principles apply: Refer to the department s eligible cost guidance to ensure the costs included are eligible for inclusion. Enter values in local currency. Note that total grant amount should be agreed in GBP on the Accountable Grant. Enter costs inclusive of non-recoverable taxes but exclusive of reclaimable input tax. Do not include match funding. If this is required it will be by exception. Enter or select information within yellow cells. Do not enter information in greyed or blank cells. Do not alter formula. If there is an error, contact the department. If other is selected in any category enter details in the notes section. Budget monthly in year one and annually thereafter, using resource accounting. Budget for inflation where appropriate and detail in the notes section Initial steps: Add the NPAC tab to the standard budget template you are using, as agreed with the programme manager. Enter direct costs as usual. Enter your organisation s predicted NPAC in the NPAC tab. Use the ratio calculated here to calculate your total costs on your main budget spreadsheet. Pass the NPAC tab and guidance to all downstream partners, asking them to follow the above 3 steps. 18 September 2018 Page 2

3 Detailed Guidance for completing the NPAC tab: This tab allows you to set out how your organisation s NPAC may be shared across your organisation s funded projects. Sharing your NPAC among projects on a fair and reasonable basis means: Each project s share of the NPAC is appropriate given the nature and extent of its activities (i.e., a project does not receive a share of overheads that it does not incur). There is a rational basis for the method used to share NPAC that can be justified and supported. The allocation of NPAC to the project is only an estimate. It does not have to be too detailed or time consuming. Just make sure the allocation method is fair and reasonable based on the information you have. After calculating your project s share of the NPAC you should consider if the results appear reasonable. Consider: Do the results appear reasonable from your knowledge of the project? Are the project s NPAC costs compared to the project s direct costs fair and how does this compare to other projects? Is the project s share of the organisation s entire NPAC fair and how does this compare to other project s shares? The approach to calculating NPAC for Accountable Grant bids is via the Direct Project Expenditure method. The NPAC tab has been pre-populated to guide you through this method and Tables 1 5 will guide you through the process: Table 1: Classify your organisation s NPAC into cost categories and define the method for sharing for each. Table 2: Calculate a 3-year rolling average of eligible direct costs for the whole organisation, using columns B to D to remove ineligible historical items (eg one-off costs that would be unlikely to re-occur in the future) and column F to adjust for future costs that might come onstream. Table 3: Calculate a 3-year rolling average of NPAC for the whole organisation, adopting the same approach as set out for direct costs in table 2. Table 4: Provide a breakdown of the NPAC totals shown in table 3. The cost headers shown provide a sample of likely descriptors, please annotate as appropriate. Table 5: Calculate the annual NPAC apportionment as follows: Enter an approximate annual inflationary uplift. Enter the estimated annual apportionment against each project year. Multi-partner bids lead organisation should enter partner totals where indicated. The total will calculate automatically. The annual apportionments will auto-populate tab 2. Enter any supplementary information in the notes table. NOTE: If you intend raising income for your project from other sources, we expect those sources to cover their fair share of the project s NPAC. The department will only fund its 18 September 2018 Page 3

4 share of the project s overheads. We would not expect to fund a greater share of your NPAC than the share of your direct project costs you are asking us to fund. 18 September 2018 Page 4

5 ANNEX 1: Definitions NPAC: Non-programme/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. Unit base: Unit cost: A baseline for measuring the total cost of a set of units e.g. monthly rate, daily rate. The average cost is calculated using a costing method by which the value of a pool of assets or expenses is assumed to be equal to the average cost of the assets or expenses of that pool, i.e. the total value of the pool divided by the volume of the pool. 18 September 2018 Page 5