Full Application Guidance Webinar Financial Requirements and Budgets

Application Process

Applications - financial requirements Stage Detail Requirements Concept note stage Summary budget Complete Financial due diligence Full application stage Workplan and budget Produce a fully costed workplan in line with UK Aid Direct Financial Guidelines Integrity due diligence Completed by the fund manager using details form the application Prior to contracting Financial management assessment An in-depth due diligence assessment requiring presentation of documentation and cooperation with a site visit

Financial Guidance

Principles Financial guidance available: Principles of Reporting, Budget Classification, Exchange Rates Cash based accounting (no accruals) Reporting on the transactions of the project not the grant holder – partner transactions should be reported alongside grant holder transactions 1st April – 31st March financial year with very little flexibility between years Quarterly financial reporting feeding into claims/payments Reporting through an online portal (SMILE) at transaction level Payments are made in arrears by default but may be agreed in advance

Arrears Claims Advance Claims Q1 Expenditure Claim Payment Q2 Arrears Claims M1 M2 M3 M4 M5 M6 Q1 Expenditure Claim Payment Q2 Advance Claims All grant holders will require some amount of internal funding or match funding to cover the gap between expenditure and payment.

Budget Heading / Sub-head Budget Heading / Sub-head Budgets Budget Heading / Sub-head Budget Lines Project Activities (Grouped under an Output) Project Activity Budget Line A Project Activity Budget Line B Project Activity Budget Line C Sub Total 1 Project Activities – linked to the workplan made up of Outputs and Activities Capital Expenditure – purchase of capital items on a cash basis Staff Costs – indicate FTEs of staff involved in the project (verifiable through timesheets) Other Admin Costs – administration of the grant inc. verifiable overheads M&E and Lesson Learning – costs of monitoring and evaluation Budget Heading / Sub-head Budget Lines Capital Expenditure Budget Line D Budget Line E Budget Line F Sub Total 2 Staff Costs Budget Line G Budget Line H Budget Line I Sub Total 3 Other Admin Costs Budget Line J Budget Line K Budget Line L Sub Total 4 Monitoring, Evaluation & Lesson Learning Budget Line M Budget Line N Budget Line O Sub Total 5

Costs to include and to exclude Don’t forget to include Reporting costs Audit costs IATI compliance costs M&E Reasonable apportionment of overheads Match-funded amounts (impact grants) Spending by implementing partner not transfers to implementing partner Not Permissible Lobbying UK government Petition for additional funding Political or exclusively religious activities; Statutory fines, criminal fines or penalties; Severance pay, payments etc Major capital expenditure cannot be supported as the primary focus Land or cars Contingency/unforeseen costs Depreciation/amortization

Exchange rates Not Acceptable Acceptable Lump sum transfer Daily spot rate Average Market Rate Daily Market Rate Not Acceptable Budgeted rate Estimated rate Cumulative averages across the year Start thinking about management of the risk of currency fluctuations

Workplan & Budget

Why introduce an online work plan and budgeting tool? 1 1. Reduce Grantee time and effort on financial reporting, forecasting & claims 2 2. Reduce the time spent on financial analysis and creating different views of the same information 3 3. Reduce the number of requests for information that are sent to Grantees 4 4. Improve transparency and VFM information throughout the grant lifecycle 5 Improve the link between Logframe, work plan and budget on a regular basis

Points to remember Work Plan and Budget Tool (WRBR): Guidance Note for Applicants Introduction today with a detailed case study planned for next webinar Log-frame, workplan and budget operate together Before you start: Understand your log-frame outputs and activities An idea of your budget lines and unit costs for both project activities and for your general project costs An understanding of who you implementing partners are

Questions?