ADMINISTRATION

Goals of this session Understanding of the administrative process for the funding of a CERF project Understanding of the administrative process for the funding of a CERF project Ability to identify administrative issues which cause the delay of funds disbursement Ability to identify administrative issues which cause the delay of funds disbursement Ability to identify an acceptable budget from an unacceptable budget Ability to identify an acceptable budget from an unacceptable budget Successful completion of the Budget Challenge Successful completion of the Budget Challenge

The Administrative Structure The CERF is a sub-account of the UN General Trust Fund and is subject to the UN Financial Rules and Regulations, and all internal policies, which govern trust funds The CERF is a sub-account of the UN General Trust Fund and is subject to the UN Financial Rules and Regulations, and all internal policies, which govern trust funds The Controller has oversight of the financial administration of the CERF The Controller has oversight of the financial administration of the CERF CERF disbursements are actually advances, and are not included as expenditures in reports to donors (the Secretary- General report to the General Assembly) until financial reports are received for the funds CERF disbursements are actually advances, and are not included as expenditures in reports to donors (the Secretary- General report to the General Assembly) until financial reports are received for the funds

The Administrative Process Application arrives in CERF (budget reviewed) Project/budget approved by CERF/CRD Approval letter and blank LOU sent to agency Package to the Office of Programme Planning, Budgets, and Accounts (Controller’s Office)

Project packet to the Controller’s Office The project packet which goes for funding includes: The project application with budget The project application with budget The LOU signed by OCHA and the agency The LOU signed by OCHA and the agency A copy of the project approval letter to the agency A copy of the project approval letter to the agency An interoffice memo from OCHA to PPBD requesting the advance of funds to the agency An interoffice memo from OCHA to PPBD requesting the advance of funds to the agency

Why an administrative process for project funding? General Assembly resolution 60/124 of 8 March 2006: “Calls upon the Secretary-General…..to make the necessary managerial and administrative arrangements to facilitate the implementation of the grant element and set up appropriate reporting and accountability mechanisms to ensure that the funds allocated through the Fund are used in the most efficient, effective, and transparent manner possible”

Main areas of administrative delay Budget - needs to be mathematically sound and transparent (itemization, linked to the narrative, appropriate amount of costs, individual disbursements) Budget - needs to be mathematically sound and transparent (itemization, linked to the narrative, appropriate amount of costs, individual disbursements) Letter of Understanding (LOU)- should address the basics of the project and the legal agreement concerning the use of the funds Letter of Understanding (LOU)- should address the basics of the project and the legal agreement concerning the use of the funds

Budget

Most Common Problems Added incorrectly Added incorrectly Financial requirements don’t match text Financial requirements don’t match text Non-transparent/unclear cost line descriptions Non-transparent/unclear cost line descriptions Miscalculated Programme Support Costs (PSC) Miscalculated Programme Support Costs (PSC)

Programme Support Costs Project amount $500, Indirect support costs (maximum 7%) $ 35, TOTAL$535, Project amount $ 497, Indirect support costs (maximum 7%) $ 37,450.00* TOTAL$535, NOT *Please note that 7% of $497,550 is $34,828.50, not $37,450.00

Letter of Understanding

Most Common Problems Changed clauses (deleted, added, altered) Changed clauses (deleted, added, altered) Financial amounts do not match amount in approval letter from the ERC to the agency Financial amounts do not match amount in approval letter from the ERC to the agency Implementation period too long Implementation period too long Long time for receipt of LOU from agency and for correspondence for corrections Long time for receipt of LOU from agency and for correspondence for corrections

Exercises

What is wrong with this budget? Cost breakdown Cost breakdown Amount (USD) Amount (USD) A. Staff costs (salaries and other entitlements) (drivers to deliver food) A. Staff costs (salaries and other entitlements) (drivers to deliver food)$50,000 B. Travel B. Travel- C. Contractual Services C. Contractual Services- D. Operations (please itemize below; add rows if necessary) D. Operations (please itemize below; add rows if necessary) Transport of food and water containers $50,000 - E. Acquisitions E. Acquisitions F. Other F. Other- Subtotal project requirements Subtotal project requirements $200,000 $200,000 G. Indirect programe support costs (not to exceed 7% of subtotal project costs) G. Indirect programe support costs (not to exceed 7% of subtotal project costs) PSC amount (none needed) PSC amount (none needed) 0 Total cost Total cost $200,000 $200,000

What is wrong with this budget? Cost breakdown Cost breakdown Amount (USD) Amount (USD) A. Staff costs (salaries and other entitlements) (drivers to deliver food) A. Staff costs (salaries and other entitlements) (drivers to deliver food) B. Travel B. Travel C. Contractual Services C. Contractual Services D. Operations (please itemize below; add rows if necessary) D. Operations (please itemize below; add rows if necessary) Transport of food and water containers E. Acquisitions E. Acquisitions F. Other F. Other Subtotal project requirements Subtotal project requirements G. Indirect programe support costs (not to exceed 7% of subtotal project costs) G. Indirect programe support costs (not to exceed 7% of subtotal project costs) PSC amount (none needed) PSC amount (none needed) Total cost Total cost$4,000,000

A Challenge

Fix the project proposal budget Cost breakdown Cost breakdown Amount (USD) Amount (USD) A. Staff costs (salaries and other entitlements) A. Staff costs (salaries and other entitlements) B. Travel B. Travel C. Contractual Services C. Contractual Services D. Operations (please itemize below; add rows if necessary) D. Operations (please itemize below; add rows if necessary) Direct costs $500,000 Food (and other non-food items) $1,000,000 $1,000,000 E. Acquisitions (4 motorcycles) E. Acquisitions (4 motorcycles)$2,000,000 F. Other F. Other Subtotal project requirements Subtotal project requirements$2,000,000 G. Indirect programe support costs (not to exceed 7% of subtotal project costs) G. Indirect programe support costs (not to exceed 7% of subtotal project costs) PSC amount (7%) $500,000 $500,000 Total cost Total cost $2,500,000 $2,500,000

Is this budget acceptable? Cost breakdown Cost breakdown Amount (USD) Amount (USD) A. Staff costs (salaries and other entitlements) A. Staff costs (salaries and other entitlements) B. Travel B. Travel C. Contractual Services C. Contractual Services$500,000 D. Operations (please itemize below; add rows if necessary) D. Operations (please itemize below; add rows if necessary) 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 E. Acquisitions E. Acquisitions F. Other F. Other Subtotal project requirements Subtotal project requirements$3,000,000 G. Indirect programe support costs (not to exceed 7% of subtotal project costs) G. Indirect programe support costs (not to exceed 7% of subtotal project costs) PSC amount (none needed) 0% PSC amount (none needed) 0% 0 Total cost Total cost $3,000,000 $3,000,000

The End