Appendix 31 – REQUIREMENT FOR THE IMPLEMENTING PARTNER/GRANT BENEFICIARY
1. INTERNAL CONTROL
BENEFICIARY
SYSTEMS
OF
THE
IMPLEMENTING
PARTNER/GRANT
Internal control systems are necessary to ensure that funds are properly used and achieve intended results.
Internal control shall be designed to provide reasonable assurance that operations are effective and efficient, that
financial information is reliable and that the Contractual Conditions have been met.
All beneficiaries shall organise their activities in accordance with the internal control principles as set in Chapter
2 Internal Control of this Financial Management Manual, to the extent possible.
Minimum requirements in relation to internal controls are the following:
 Segregation of duties between authorisation and accounting of transactions;
 Prohibition of conflicts of interest and confidential payments (i.e. bribes, secret commissions);
 Conducting regular checks to ensure that the assignment has been implemented correctly;
 Setting up measures to prevent, irregularities, fraud and corruption.
The checklist on internal controls is included in Appendix 33.
2. ACCOUNTING
The implementing partner/grant beneficiary shall keep accurate and regular accounts of the implementation of
the funds using an appropriate accounting and double-entry bookkeeping system.
This system shall be run in accordance with one of the following:



International Financial Reporting Standards (IFRS) or International Public Sector Accounting Sector
Standards (IPSAS)
Locally accepted accounting principles (i.e. generally accepted accounting principles applicable in the
implementing partner/grant beneficiary’s country of origin)
Specific accounting principles of the Contributor/ Donor
These accounting principles and rules generally prescribe accruals based accounting.
These systems may either be an integrated part of the implementing partner/grant beneficiary’s regular
accounting system or a supplement to that system.
Accounts and expenditures related to the grant have to be easily identifiable and verifiable.
The implementing partner/grant beneficiary may opt to keep a separate set of accounts specifically for the
implementation of the assignment, or to include the assignment related accounts in their own accounting system.
If the assignment accounts are integrated in the implementing partner/grant beneficiary’s accounting system, the
implementing partner/grant beneficiary should have a method of ensuring that the assignment related records
are still easily identifiable, for example, by identifying the assignment related operations through analytical
accounting codes.
The implementing partner/grant beneficiary shall ensure that its financial report can be properly and easily
reconciled to its accounting and bookkeeping system and to the underlying accounting and other relevant records.
For this purpose, the implementing partner/grant beneficiary shall prepare and keep appropriate reconciliations,
supporting schedules, analyses and breakdowns for inspection and verification.
The implementing partner/grant beneficiary will generally record assignment related expenses in the local
functional currency. But the financial report will have to be drafted using the currency stipulated in the special
conditions of the Implementing partner/grant beneficiary agreement usually the euro. In the financial report,
local currency expenses will need to be converted into euros using the actual rate applied by the receiving bank on
the day of transaction. This principle shall be applied on each subsequent receipt. In case of multiple transactions,
the implementing partner/grant beneficiary shall spend the cash on the first-in first-out basis.
The checklist is included in Appendix 33.
Assets
The implementing partner/grant beneficiary shall ensure that its assignment related assets are kept safe, properly
used and duly and physically identified (e.g. by stickers, tag numbers, etc.). A fixed asset register must be kept.
Valuation of fixed assets depends on the implementing partner/grant beneficiary’s accounting principles.
An annual count of fixed assets and inventories (tools and consumables) shall be performed at least once a year.
In case of discrepancies between the count results and the accounting records, such differences shall be
investigated.
Asset losses/thefts shall be recorded in an account dedicated for that purpose and disclosed in the financial
report. Such write-off entries should be approved by the relevant implementing partner/grant beneficiary’s
management.
Cash








Segregate the duties in payment procedures;
Segregate accounting and cash custody duties;
Use assignment-dedicated, specific bank accounts even if it is not required;
Perform cash-flow reconciliations at least on a quarterly basis to ensure that cash/bank transactions
reconcile with the bank balances;
Perform bank reconciliations and petty cash counts, at least on a quarterly basis.
Check payment documents against the supporting documents;
Make payments by bank transfer, preferably;
Ensure that the bank/ cash reconciliations are performed by people who do not have custody of the bank/
cash funds, if possible.
Timesheets and payroll
Unless specified by the Implementing partner/grant beneficiary agreement, the implementing partner/grant
beneficiary shall set up a timesheet system to record and control the time spent by the staff on the implementation
of the assignment financed by the grant. Once the timesheets have been approved by the supervisor or team
leader, the staff shall no longer be able to amend it.
Timesheets shall be prepared by the staff themselves, on a timely basis and periodically.
Payroll records shall be kept in accordance with the relevant national legislation (by staff and in total).
The implementing partner/grant beneficiary shall ensure that any allowances paid to staff are justified.
For allowances related to the assignment, appropriate documentation shall be kept showing that the
implementation of the assignment actually took place (travel orders, travel reports, boarding passes for
international travel, copies of hotel bills showing the dates of arrival and departure, etc.).
3. REPORTING
The standard system of reporting for implementing partner/grant beneficiarys to the RCC Secretariat, except in
cases where donors/ contributors have their own specific reporting requirements, shall be as follows:



Narrative quarterly reports
Interim progress reports, to be included with financing requests,
Annual financial reports
The narrative quarterly reports shall include:
 A short description of activities undertaken during the quarter, against set objectives;
 Issues arising (if any) and actions taken to address these;
 A short overview regarding planned activities for the next quarter.
The interim progress reports shall include:
 A short description of activities undertaken during the quarter, including the comparison between the
budget and actually spent amounts;
 Details of expenses incurred;
The Annual financial report shall include:
 Income and expenditure statement
 Balance sheet
 Cash-flow statement

Narrative explanation of the financial results and budget variances
Financial reports for the assignment should use the same classifications as the assignment’s budget.
Narrative quarterly reports shall be prepared by the accounting, approved by the implementing partner/grant
beneficiary’s manager and submitted to RCC within 45 days of the quarter-end.
Interim progress reports shall be prepared by the accounting, approved by the implementing partner/grant
beneficiary manager and submitted to RCC prior to additional disbursements.
Annual financial reports shall be prepared by the accounting, approved by the implementation of the assignment
manager and submitted to RCC within 90 days of the year-end or of the assignment-end. Annual financial reports
shall be subject to an external audit requirement.
The checklist is included in Appendix 33.
4. REFUND OF UNSPENT FUNDS
For funds paid in advance, based on a defined budget period, the implementing partner/grant beneficiary shall be
responsible for informing the RCC Secretariat of differences arising between the budget and the disbursed
amounts, during the implementation of the assignment.
In case of sub-delegation, the implementing partner/grant beneficiary shall submit each request for payment of
invoices together with a table including initial budget, incurred expenses to date, on-going activities and
remaining forecasted amount to be spent to complete the implementation of the assignment, unless an extension
is agreed.
Unless there is a specific agreement, an implementing partner/grant beneficiary is required to pay back unspent
funds at the completion of the assignment and no later than six months after completion of the assignment.
5. PROCUREMENT
The basic principle governing the award of contracts is competitive tendering. The purpose is to ensure
transparency of operations and to obtain the desired quality of services or supplies at the best possible price.
Rules for applying procurement procedures are based on those followed by other international organisations,
generally accepted best practices and in particular the EC Procurement Directives.
All beneficiaries shall organise their activities in accordance with the procurement procedures as set in Chapter 6
Procurement procedure of this Financial Management Manual, to the extent possible.
Minimum requirements are as follows:
 Prepare a document describing the steps followed, from the initial identification of suppliers through to
the final contracting decision, as it will help to demonstrate the management of the entire process at a
later date.
 All the information given in the contract with the supplier/consultant/contractor should match that given
during the procurement process.
 The contract shall be signed during the correct period i.e. period of implementation.