5 CERF BUDGET AND ADMINISTRATION REQUIREMENTS TRAINING SESSION WORKSHOP

Understand administrative process for the funding of a CERF project CERF BUDGET & ADMINISTRATION REQUIREMENTS 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 evaluate a CERF budget

CERF BUDGET & ADMINISTRATION REQUIREMENTS The Administrative Structure Sub-account of the UN General Trust Fund, subject to the UN Financial Rules and Regulations, and all internal policies, which 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

CERF BUDGET & ADMINISTRATION REQUIREMENTS The Administrative Process (1) 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 return counter-signed approval letter to CERF Funds disbursement package goes to the Controller’s Office for funds disbursement 4

Process within the Controller’s Office CERF BUDGET & ADMINISTRATION REQUIREMENTS The Administrative Process (2) Process within the Controller’s Office Receive packages from CERF by Program Planning & Budget Division (PPBD) Allocate funds to CERF by PPBD Raise advances for projects by Accounts Division Transfer funds to agencies by Treasury 5

CERF BUDGET & ADMINISTRATION REQUIREMENTS The Administrative Process (3) 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

Show clear links to activities (consistent with the narrative) CERF BUDGET & ADMINISTRATION REQUIREMENTS Budgetary issues linked to programme Budgets must: Be mathematically sound and transparent (itemized, based on real costs) Show clear links to activities (consistent with the narrative) Justify amounts requested for each class 7

CERF BUDGET & ADMINISTRATION REQUIREMENTS Budgetary issues linked to programme A) Cost breakdown The budget shall specify the costs required to implement the activities, e.g. personnel, equipment, goods, training, travel, operational facilities. If not possible to describe quantity of inputs, the budget shall split costs by outputs/results, e.g. explain number of people to be trained, quantity of water to be provided. To the extent possible, the budget shall indicate unit, quantity and cost per unit for each item.

CERF BUDGET & ADMINISTRATION REQUIREMENTS Budgetary issues linked to programme B) 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 Fees (such as bank fees) which should be included under Programme Support Costs (PSC)

CERF BUDGET & ADMINISTRATION REQUIREMENTS Budgetary issues linked to programme D) 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. E) Rounding: All amounts shall be rounded to the nearest dollar amount. F) Acronyms: Spell out all acronyms the first time. Providing a list of acronyms and abbreviations in an annex will be useful. G) Implementation Period: Budget shouldn’t exceed 6 months for the Rapid Response Window, and normally 9 months for the Underfunded Window. H) Programme Support Cost (PSC): Maximum 7% of direct project costs

CERF BUDGET & ADMINISTRATION REQUIREMENTS Budgetary issues linked to programme Key issues to take into account: Budget proposals shall provide cost breakdown CERF normally doesn’t finance 100% of a project Be aware of non-eligible expenditures Annexes to be included for complex acquisition or contractual services. Need for rounding costs. Provide a list of acronyms. Implementation period (6 for rapid response / 9 for underfunded window) Programme Support Cost limited at 7% 11

Miscalculation of budget lines CERF BUDGET & ADMINISTRATION REQUIREMENTS 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) 12

CERF BUDGET & ADMINISTRATION REQUIREMENTS Budget template structure Direct costs: costs as a direct consequence of the operation or deriving directly from the requirements of the grant. A. Supplies/commodities/equipment/transport B. Personnel (staff, consultants, travel) C. Training of counterparts D. Contracts E. Other Direct costs Subtotal project requirements 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 cost (direct costs & indirect PSC)

CERF BUDGET & ADMINISTRATION REQUIREMENTS Cost breakdown Cost breakdown Total (USD)  A. Supplies/ commodities/ equipment/ transport (please itemize expendable operational inputs. e.g. quantity of food, medical supplies etc. and asset purchases) - B. Personnel (staff, consultants, travel) (please itemize travel costs, salaries and entitlements of UN staff and consultants) C. Training of counterparts D. Contracts (please list and provide general cost breakdown for each implementing partner) E. Other Direct costs Subtotal project requirements Indirect program support costs (PSC) (not to exceed 7% of subtotal project costs) Total CERF project cost 14

PSC must not exceed 7% of the PROJECT SUBTOTAL, CERF BUDGET & ADMINISTRATION REQUIREMENTS Programme Support Costs Subtotal project requirements $ 500,000 Programme Support Costs (maximum 7%) $ 37,635 TOTAL $ 537,635 It is 7% of the total, but NOT 7% of subtotal PSC must not exceed 7% of the PROJECT SUBTOTAL, not the total! Subtotal project requirements $ 500,000 Programme Support Costs (maximum 7%) $ 35,000 TOTAL $ 535,000 7% of $500,000 is $35,000 8 15

CERF BUDGET & ADMINISTRATION REQUIREMENTS What will happen when we do not fix budget problems? Agency may not get all financial requirements approved by the ERC Project held up within CERF Secretariat and/or UN Controller’s Office Funds can not be disbursed until discrepancies 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 (which is audited separately) 16

Funds are more rapidly disbursed when: CERF BUDGET & ADMINISTRATION REQUIREMENTS In summary… Funds are more rapidly disbursed when: CERF applications include transparent and accurate budgets The turnaround time for corrected or revised budgets is minimal Agency quickly return the counter-signed approval letter to CERF 17

TRAINING 5 QUESTIONS AND COMMENTS SESSION THANK YOU