CERF TRAINING
TRAINING
SESSION
CERF BUDGET AND
ADMINISTRATION
REQUIREMENTS
WORKSHOP
CERF BUDGET & ADMINISTRATION REQUIREMENTS
Objective of this session
• Understand administrative process for the funding of a
CERF project
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• 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
CERF TRAINING
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
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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
CERF BUDGET & ADMINISTRATION REQUIREMENTS
The Administrative Process (2)
Process within the Controller’s Office
Receive packages from CERF
by Program Planning & Budget Division (PPBD)
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Allocate funds to CERF
by PPBD
Raise advances for projects
by Accounts Division
Transfer funds to agencies
by Treasury
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:
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 Slow response to budget comments;
 Delay in returning the counter-signed approval letter to CERF
CERF BUDGET & ADMINISTRATION REQUIREMENTS
Budgetary issues linked to programme
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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
CERF BUDGET & ADMINISTRATION REQUIREMENTS
Budgetary issues linked to programme
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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
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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.
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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:
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•
•
•
•
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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%
CERF BUDGET & ADMINISTRATION REQUIREMENTS
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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)
CERF BUDGET & ADMINISTRATION REQUIREMENTS
Budget template structure
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•
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
A. Supplies/ commodities/ equipment/ transport (please itemize
expendable operational inputs. e.g. quantity of food, medical supplies
etc. and asset purchases)
Total (USD)
-
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B. Personnel (staff, consultants, travel) (please itemize travel costs,
salaries and entitlements of UN staff and consultants)
C. Training of counterparts
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D. Contracts (please list and provide general cost breakdown for each
implementing partner)
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E. Other Direct costs
Subtotal project requirements
-
Indirect program support costs (PSC)
(not to exceed 7% of subtotal project costs)
-
Total CERF project cost
-
CERF BUDGET & ADMINISTRATION REQUIREMENTS
Programme Support Costs
Subtotal project requirements
Programme Support Costs
(maximum 7%)
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TOTAL
Subtotal project requirements
Programme Support Costs
(maximum 7%)
TOTAL
8
$ 500,000
$ 37,635
$ 537,635
$ 500,000
$ 35,000
$ 535,000
It is 7% of the total,
but NOT 7% of subtotal
PSC must not exceed 7% of
the PROJECT SUBTOTAL,
not the total!
7% of $500,000
is $35,000
CERF BUDGET & ADMINISTRATION REQUIREMENTS
CERF TRAINING
What will happen when we do not fix budget problems?
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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)
CERF BUDGET & ADMINISTRATION REQUIREMENTS
In summary…
Funds are more rapidly disbursed when:
• CERF applications include transparent and accurate budgets
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• The turnaround time for corrected or revised budgets is minimal
• Agency quickly return the counter-signed approval letter to CERF
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TRAINING
QUESTIONS AND
COMMENTS
SESSION
THANK YOU