ADMINISTRATION REQUIRIMENTS

Transcription

1 DAY ONE TRAINING CERF BUDGET AND SESSION ADMINISTRATION REQUIRIMENTS WORKSHOP

2 Objective of this session Understand administrative process for the funding of a CERF project Understand administrative issues causing delay of project approval and funds disbursement Understand eligible and non-eligible costs Be able to review a CERF project budget

3 The Administrative Structure CERF is a sub-account of the UN General Trust Fund, subject to the UN Financial Rules and Regulations, and all internal policies that govern trust funds UN Controller has oversight of the financial administration of the CERF CERF disbursements are actually advances which will not be reported to donors as expenditures until all projects financial reports are received from agencies

4 The Administrative Process Application arrives in CERF Project and budget reviewed by CERF Secretariat Project and budget approved by ERC Approval letter (requires counter-signature) and final project proposal sent to agency Agency returns counter-signed approval letter to CERF CERF sends funds disbursement package to OPPBA Funds disbursement by OPPBA (involving PPBD, Accounts Division, Treasury)

5 The Administrative Process Delay in any step in the process can cause delay in receipts of funds! Major finance-related delays by agencies: Slow response to budget comments; Delay in returning the counter-signed approval letter to CERF

6 Budgetary issues linked to programme Budgets must: Be mathematically sound Transparent (itemized, based on real costs) Show clear links to activities (consistent with the narrative) Justify amounts requested for each class

7 Budget template structure Direct Costs: Costs as a direct consequence of the operation or deriving directly from the requirements of the grant. A. Staff and Other Personnel Costs (staff, consultants, others) B. Supplies/Commodities/Materials C. Equipment D. Contractual Services E. Travel F. Transfers and Grants to Counterparts G. General Operating and Other Direct Costs Subtotal Direct Project Costs Indirect Programme Support Costs (PSC): General recurring costs of running an organisation, expenditures not included in other parts of the budget. CERF may consider eligible indirect costs up to 7% of the total of eligible direct costs. Total CERF Project Costs (direct costs & indirect PSC)

8 Cost breakdown Cost breakdown Unit Quantity Unit cost Total (USD) A. Staff and Other Personnel Costs (please itemize costs of staff, consultants and other personnel to be recruited directly by the agency for project implementation) B. Supplies, Commodities, Materials (please itemize costs of consumables to be purchased under the project, including associated transportation, freight, storage and distribution costs) C. Equipment (please itemize costs of non-consumables to be purchased under the project) D. Contractual Services (please list works and services to be contracted under the project) E. Travel (please itemize travel costs of staff, consultants and other personnel for project implementation) F. Transfers and Grants to Counterparts (please list transfers and sub-grants to project implementing partners) G. General Operating and Other Direct Costs (please include general operating expenses and other direct costs for project implementation) Subtotal Direct Project Costs Indirect Programme Support Costs (PSC) Total CERF Project Costs

9 Budgetary issues linked to programme A) Budget proposal shall be consistent with narrative project proposal B) Provide Cost breakdown (transparency, details) Budget shall specify the costs required to implement the activities, e.g. personnel, goods, equipment, travel, training, operational facilities. If not possible to describe quantity of inputs, the budget shall split costs by outputs/results, e.g. explain no. of people to be trained, no. of latrines to be constructed. To the extent possible, the budget shall indicate unit, quantity and cost per unit for each item.

10 Budgetary issues linked to programme C) Non-eligible expenditures Any expense beyond the implementation period deadline Government staff salaries Regular/recurrent agency operations (e.g. maintenance, reserve or stock supplies, capacity building or training) Purchase of cars, ambulances, boats, motorbikes Security cost (such as purchase of goods and services to ensure the security and protection of personnel in one agency), or costs associated with MOSS compliance Facilitation of coordination General Operating Expenses Hospitality cost

11 Budgetary issues linked to programme D) CERF normally doesn t finance 100% of a project E) Annexes: For projects including large or complex acquisitions or contractual service arrangements, an annex should be attached indicating cost per item and quantity. Shall indicate total costs and reference to the annex in the main budget table. F) Rounding: The amounts (except for unit cost) shall be rounded to the nearest USD amount. G) Acronyms: Spell out all acronyms the first time. Providing a list of acronyms and abbreviations in an annex will be useful. H) Implementation Period: Budget shouldn t exceed 6 months for Rapid Response Window, and normally around 9 months for Underfunded Window. I) Programme Support Cost (PSC): Maximum 7% of direct project costs.

12 Most common budget problems Miscalculation of budget lines Financial requirements don t match narrative project proposal Inclusion of non-eligible items Lack of necessary details, non-transparent / unclear cost descriptions Miscalculated Programme Support Costs (PSC)

13 Programme Support Costs Subtotal Direct Project Costs $ 500,000 Programme Support Costs (maximum 7%) $ 37,635 Total CERF Project Costs $ 537,635 This is 7% of the Total, but NOT 7% of Subtotal Direct Costs. PSC must not exceed 7% of the Subtotal. Subtotal Direct Project Costs $ 500,000 Programme Support Costs (maximum 7%) $ 35,000 Total CERF Project Costs $ 535,000 7% of $500,000 is $35,000 8

14 8 EXERCISES EXERCISES 1 WARMING-UP EXERCISES 2-3 A BIT MORE CHALLENGING 8

15 Exercise 1- What is wrong with this budget? Cost breakdown Unit Qty Unit cost Total ($) A. Staff and Other Personnel Costs (please itemize costs of staff, consultants and other personnel to be recruited directly by the agency for project implementation) 50,000 B. Supplies, Commodities, Materials (please itemize costs of consumables to be purchased under the project, including associated transportation, freight, storage and distribution costs) Transport of food and water containers 50,000 C. Equipment (please itemize costs of non-consumables to be purchased under the project) D. Contractual Services (please list works and services to be contracted under the project) E. Travel (please itemize travel costs of staff, consultants and other personnel for project implementation) F. Transfers and Grants to Counterparts (please list transfers and sub-grants to project implementing partners) G. General Operating and Other Direct Costs (please include general operating expenses and other direct costs for project implementation) Subtotal Direct Project Costs 200,000 Indirect Programme Support Costs (PSC) Total CERF Project Costs 200,000

16 Exercise 1- What is wrong with this budget? Cost breakdown Unit Qty Unit cost Total ($) A. Staff and Other Personnel Costs (please itemize costs of staff, consultants and other personnel to be recruited directly by the agency for project implementation) B. Supplies, Commodities, Materials (please itemize costs of consumables to be purchased under the project, including associated transportation, freight, storage and distribution costs) Food transport and storage costs (storage $150,000 for 3 months, handling $150,000 for 3 months; transport by sea $200,000) 500,000 Food (rice, corn, oil, high energy biscuits) 2,000,000 C. Equipment (please itemize costs of non-consumables to be purchased under the project) D. Contractual Services (please list works and services to be contracted under the project) E. Travel (please itemize travel costs of staff, consultants, other personnel for project implementation) F. Transfers and Grants to Counterparts (please list transfers and sub-grants to project implementing partners) CARE: food distribution to 50,000 beneficiaries 500,000 G. General Operating and Other Direct Costs (please include general operating expenses and other direct costs for project implementation) Subtotal Direct Project Costs 3,000,000 Indirect Programme Support Costs (PSC) Total CERF Project Costs 3,000,000

17 Exercise 1- What is wrong with this budget? Cost breakdown Unit Qty Unit cost Total ($) A. Staff and Other Personnel Costs (please itemize costs of staff, consultants and other personnel to be recruited directly by the agency for project implementation) B. Supplies, Commodities, Materials (please itemize costs of consumables to be purchased under the project, including associated transportation, freight, storage and distribution costs) Rice MT 1,000 1,000 1,000,000 laptop computers laptop 4 2,500 10,000 Storage & handling of food month 2 245, ,000 C. Equipment (please itemize costs of non-consumables to be purchased under the project) D. Contractual Services (please list works and services to be contracted under the project) E. Travel (please itemize travel costs of staff, consultants, other personnel for project implementation) F. Transfers and Grants to Counterparts (please list transfers and sub-grants to project implementing partners) G. General Operating and Other Direct Costs (please include general operating expenses and other direct costs for project implementation) Subtotal Direct Project Costs 1,500,000 Indirect Programme Support Costs (PSC) 105,000 Total CERF Project Costs 1,605,000

18 What will happen when we do not fix budget problems? Agency may not get all their proposed financial requirements Project held up within CERF Secretariat and/or UN Controller s Office Funds can not be disbursed until all budget problems are resolved Audit issues Discrepancies in files will cause negative audit observations by internal (OIOS) and external (Board of Auditors) auditors for OCHA and/or Controller s Office.

19 In summary Funds are more rapidly disbursed when: Project proposal include transparent and accurate budgets Agency quickly clarify, correct or revise budgets as required Agency quickly return the counter-signed approval letter to CERF

20 DAY TWO TRAINING QUESTIONS AND SESSION COMMENTS THANK YOU