1. 5 CERF BUDGET AND ADMINISTRATION REQUIREMENTS TRAINING SESSION
WORKSHOP

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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.

9. 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)

10. 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

11. 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

12. 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

13. 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)

14. 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

15. 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

16. 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

17. 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

18. TRAINING 5
QUESTIONS AND COMMENTS
SESSION
THANK YOU