in collaboration with

In collaboration with

Development of integrated project and financial

management tools in conformity with the 2003 FPA

The BUDGET

BudgetBudget

The Budget:The Budget:

Is based on three types of different formatsIs based on three types of different formats

Presents significant differences with respect Presents significant differences with respect to the former FPA (a new conception)to the former FPA (a new conception)

The concept of The concept of lumpsumlumpsum disappears (except disappears (except for indirect costs and the Reserve)for indirect costs and the Reserve)

Is sub-divided into Titles, Chapters, Articles Is sub-divided into Titles, Chapters, Articles and Elementsand Elements

BudgetBudget

Budget: 3 types of formatsBudget: 3 types of formats

Budget for Budget for Financial Request Financial Request and Interim/pre and Interim/pre final Financial final Financial

ReportReport

Budget Budget summarysummary

(by the EC)(by the EC)

Budget for Budget for Final Final Financial Financial ReportReport

Does not have details Unit, Quantity and

Unit price

Contains only items for Titles and Chapters

Contains details Unit, Quantity and Unit

price

BUDGET BREAKDOWN

Total estimated budget Total direct costs of the OperationMaximum EC contributionPercentage of total eligible costs

Initial ModifiedActual Budget

01Goods & services delivered to the

beneficiaries

01.01. Food Security01. 01.01. Basic food security01. 01.02. Other food distribution01. 01.03. Food for work01. 01.04. School feeding01. 01.05. Public Canteens01. 01.06. Agricultural activities01. 01.07. Livestock01. 01.08. Fisheries01. 01.80. Training, local capacity building01. 01.99. Other food and security

HeadingCode

BREAKDOWN OF EXPENDITURE - FINAL FINANCIAL REPORT

Unit price Total in

Code Heading Quantity Unit Duration Unit in EUR EUR

01TITLE : Goods and services delivered to the

beneficiaries (direct costs)

01.01 Food Security01.01.01. Basic Food security

01.01.02. Other food distribution

01.01.03. Food for work

01.01.04. School feeding

01.01.05. Public Canteens

01.01.06 Agricultural activities

01.01.07. Livestock

01.01.08. Fisheries

01.01.80. Training, local capacity building

01.01.99. Other food and security

Initial Initial request request

and and InterimInterim

Final

Final

req

uest

req

uest

BudgetBudget

BudgetBudget

FORMAT FOR ECHO BUDGET PHASESFORMAT FOR ECHO BUDGET PHASES

Interim Financial Interim Financial ReportReport

Pre-final Pre-final Narrative Report Narrative Report (> 6 months, except (> 6 months, except Primary EmergencyPrimary Emergency and and EmergencyEmergency))

Final Financial Final Financial ReportReport

Budget Budget BreakdownBreakdown

Budget Summary Budget Summary and Financial and Financial PlanPlan

FIRST PHASE: FIRST PHASE: FINANCIAL FINANCIAL REQUESTREQUEST

SECOND SECOND PHASE: PHASE:

INTERIM /PRE INTERIM /PRE FINAL REPORTFINAL REPORT

THIRD PHASE: THIRD PHASE: FINAL FINAL REPORTREPORT

BudgetBudget

DIVISION OF BUDGET IN TITLESDIVISION OF BUDGET IN TITLES

Title 0.3.Title 0.3. “Indirect “Indirect costs”costs”

Title 0.4.Title 0.4. “Contingency “Contingency reserve – pro reserve – pro memoria”memoria”

Title 0.1.Title 0.1. “Goods and “Goods and services delivered to services delivered to the beneficiaries”the beneficiaries”

Title 0.2.Title 0.2. “Supporting “Supporting costs”costs”

DIRECT COSTSDIRECT COSTS INDIRECT INDIRECT COSTSCOSTS

RESERVERESERVE

The division of the budget into titles is The division of the budget into titles is structured using a separation of direct structured using a separation of direct costs, indirect costs and reserve:costs, indirect costs and reserve:

The budget is structurated using codes of The budget is structurated using codes of 2, 4 , 6, 8 digits which must be followed in 2, 4 , 6, 8 digits which must be followed in

the presentation of the budget and the presentation of the budget and accountingaccounting

BudgetBudget

BUDGET STRUCTURE

DEFINITION LEVEL

CODE EXAMPLE

DESCRIPTION NOTES

TITLE 2 DIGITS01.[…]

Goods and services delivered to the beneficiaries[…]

The 2 digit budget is divided into 4 titles:01. and 02. Direct costs03. Indirect costs04. Reserve

CHAPTER 4 DIGITS01.01[…]

Food security[…]

The 4 digit budget is divided into 22 chapters referring to title 1 (13) and 2 (9)

ARTICLE 6 DIGITS01.01.01[…]

Basic Food Security[…]

The number of articles referring to each chapter is varied

ELEMENTS 8 DIGITS01.01.01.01.01.01.01.02[…]

Corn FlourVegetable oil[…]

The nomenclature of the budget proposed by ECHO does not exceed 6 digits. The detail level corresponding to 8 digits is not coded, and is free (mandatory for the presentation of the final financial report)

BudgetBudget

Eligible Costs, NEWEligible Costs, NEW

The new conception gives eligibility to The new conception gives eligibility to cost previously non-eligible:cost previously non-eligible:

Costs of offices on location (rent and Costs of offices on location (rent and office consumable & supplies)office consumable & supplies)

Personnel in headquarters (directly Personnel in headquarters (directly connected with operations)connected with operations)

Personnel in HQ for feasability studies Personnel in HQ for feasability studies (to concord with ECHO), monitoring and (to concord with ECHO), monitoring and evaluationsevaluations

Costs for awareness raising for EC Costs for awareness raising for EC operationsoperations

BudgetBudget

Non-eligible Costs, NEWNon-eligible Costs, NEW

In accordance with the new EU funding In accordance with the new EU funding norms from January 1, 2003 these are norms from January 1, 2003 these are no longer eligible: no longer eligible:

Costs calculated in forfait (except Indirect Costs calculated in forfait (except Indirect costs and Reserve)costs and Reserve)

Practical Practical application of application of

the budgetthe budget

Practical Practical application of application of

the budgetthe budget

Applications Applications ANNEX IIANNEX IISUMMARYSUMMARY

1.1. Principles of budget flexibility and Principles of budget flexibility and

amendment proceduresamendment procedures

2.2. Times requested for the presentation of Times requested for the presentation of

Financial Reports (Financial Reports (Financial Request, Interim Financial Request, Interim

Financial Report, Pre-Final Narrative Report Financial Report, Pre-Final Narrative Report

and Final Financial Reportand Final Financial Report))

3.3. Form requested for the presentation of Form requested for the presentation of

Financial ReportsFinancial Reports

Applications Applications ANNEX IIANNEX II

1. BUDGET FLEXIBILITY AND AMENDMENT 1. BUDGET FLEXIBILITY AND AMENDMENT

A.A. ““Unilateral modification of the Budget by the Unilateral modification of the Budget by the

NGO, notifying ECHO”NGO, notifying ECHO”

B.B. ““Exchange of written correspondence Exchange of written correspondence

approved by ECHO” approved by ECHO”

C.C. ““Supplementary Agreement” Supplementary Agreement”


A. Unilateral modification of budget by A. Unilateral modification of budget by NGO notifying ECHONGO notifying ECHO

When?When?

Modifications that do not affect a basic element of the operation:

• modification of activities and means without changing results and specific objectives

• Variation within one title of the budget • Variation in the budget between titles I and II up to

15% of total amount of Direct costs• change of contractual arrangements regarding

procurement procedures (art. 11.1 of General Conditions)

• changes of address


A. Unilateral modification of budget by A. Unilateral modification of budget by NGO notifying ECHONGO notifying ECHO

What type of procedure to follow ?What type of procedure to follow ?

Formalize a modification made in the Formalize a modification made in the Interim Interim ReportReport (if foreseen) and/or address a letter to the (if foreseen) and/or address a letter to the Field OfficerField Officer and and Desk OfficerDesk Officer of ECHO. Acceptance of ECHO. Acceptance is not required by ECHO in this case.is not required by ECHO in this case.

It is always advisable to inform ECHO in writing It is always advisable to inform ECHO in writing and to file the relative correspondence.and to file the relative correspondence.


B. Exchange of written correspondence B. Exchange of written correspondence approved by ECHOapproved by ECHO

When?When?

A.A. For a For a transfer between Title 01 and Title 02 > 15%transfer between Title 01 and Title 02 > 15% of the of the total eligible direct costs (Title 01. + Title 02.), independently total eligible direct costs (Title 01. + Title 02.), independently of the use of the reserve.of the use of the reserve.

B.B. To request the use of the Reserve, in the case in which To request the use of the Reserve, in the case in which funding had been granted in the Grant Agreementfunding had been granted in the Grant Agreement

C.C. Intend, for operational and/or contingency reasons, to carry Intend, for operational and/or contingency reasons, to carry out a change affecting a significant element of the operation out a change affecting a significant element of the operation (change of region, (change of region, data concerning the beneficiariesdata concerning the beneficiaries, , sustainability);sustainability);

D.D. To request a change of the bank account used by the HO.To request a change of the bank account used by the HO.

E.E. Modification of indicators and source of verification.Modification of indicators and source of verification.


B. Exchange of written B. Exchange of written correspondence approved by ECHOcorrespondence approved by ECHO

What type of procedure to follow?What type of procedure to follow?

1.1.The NGO shall present a written request to ECHO duly The NGO shall present a written request to ECHO duly founded and motivated (before such a request is made to founded and motivated (before such a request is made to the Desk Officer of ECHO in Brussels it should be discussed the Desk Officer of ECHO in Brussels it should be discussed with the ECHO Field Expertwith the ECHO Field Expert

2.2.AAwait the written confirmation by ECHO for acceptance or wait the written confirmation by ECHO for acceptance or refusal of request (ECHO shall respond within 15 days, in refusal of request (ECHO shall respond within 15 days, in any case silence does not mean acceptance)any case silence does not mean acceptance)

3.3.The approval is given by the Head of the Geographical Unit The approval is given by the Head of the Geographical Unit (Information of ECHO 6) (Information of ECHO 6)The amendment is composed of:The amendment is composed of:

• the letter of Request the letter of Request • the letter of approval listing the approved modificationsthe letter of approval listing the approved modifications• Modified annexes I and/or II (Modified annexes I and/or II (If applicable)If applicable)

Digit Chapter Initial Budget 01. Goods and Services 750.000

01.02. Water & Sanitation 500.000 01.06. Non-food Items 100.000 01.13. Personnel 150.000

02. Support Costs 250.000

02.01. Personnel 130.000 02.02. Local Logistic Costs 70.000 02.03. Durable Equipment 30.000 02.06. Specialised Services 15.000 02.08. Visibility 5.000

03. Indirect Costs 70.000 04. Contingency Reserve 0

TOTAL 1.070.000

Digit Title Initial Budget

15% of direct costs

- 15% + 15%

01. Goods & Services 750.000 150.000 600.000 900.000 02. Support Costs 250.000 150.000 100.000 400.000

EXAMPLE “Budget flexibility and EXAMPLE “Budget flexibility and amendment”amendment”Initial budgetInitial budget

Unilateral modifications in budget notifying Unilateral modifications in budget notifying ECHOECHO

Exchange of correspondence with approval by

ECHO

Unilateral modification of budget by NGO notifying ECHO

EXAMPLE “Budget flexibility and EXAMPLE “Budget flexibility and amendment”amendment”


C. Supplementary AgreementC. Supplementary Agreement

When ?When ?

A.A. If the HO wants to request an EXTENSION of the If the HO wants to request an EXTENSION of the

project implementation periodproject implementation period

B.B. If the HO wants to request a BUDGET INCREASE If the HO wants to request a BUDGET INCREASE

justified by operative reasonsjustified by operative reasons

C.C. For co-financed projects, when a MODIFICATION OF For co-financed projects, when a MODIFICATION OF

THE PERCENTAGE in the co-funding quota is THE PERCENTAGE in the co-funding quota is

requested requested

D.D. For modification or inclusion in the agreement of For modification or inclusion in the agreement of

an article 9 “specific conditions” (i.e. modification an article 9 “specific conditions” (i.e. modification

or derogation to General conditions);or derogation to General conditions);


C. Supplementary AgreementC. Supplementary Agreement

What type of procedure to follow ?What type of procedure to follow ?

A.A. The ONG shall present a written request to ECHO The ONG shall present a written request to ECHO duly founded and motivated (before such request is duly founded and motivated (before such request is made to the Desk Officer of ECHO in Brussels it made to the Desk Officer of ECHO in Brussels it should be discussed with the ECHO Field Expert)should be discussed with the ECHO Field Expert)

B.B. If accepted ECHO shall respond to the NGO in writing If accepted ECHO shall respond to the NGO in writing within 15 days of receiving the request, sending an within 15 days of receiving the request, sending an amended amended Grant AgreementGrant Agreement (in any case, silence does (in any case, silence does not mean acceptance)not mean acceptance)

C.C. The amended The amended Grant AgreementGrant Agreement will become effective will become effective when signed by both parties (ECHO and NGO) and when signed by both parties (ECHO and NGO) and sent to ECHOsent to ECHO


2. TIMES REQUESTED FOR THE 2. TIMES REQUESTED FOR THE PRESENTATION OF FINANCIAL PRESENTATION OF FINANCIAL REPORTSREPORTS

A.A. Projects of Projects of Primary EmergencyPrimary Emergency, , EmergencyEmergency

and other projects with duration < 6 monthsand other projects with duration < 6 months

B.B. Projects with duration > 6 monthsProjects with duration > 6 months


A. Projects of Primary Emergency, A. Projects of Primary Emergency, Emergency & other projects with Emergency & other projects with

duration < 6 monthsduration < 6 monthsMANDATORY MANDATORY DOCUMENTSDOCUMENTS

WHENWHEN

Presentation of project proposalPresentation of project proposalBudget Budget BreakdownBreakdown

Interim Financial Interim Financial Report Report (+inventory)(+inventory)


At least one month before the end of At least one month before the end of implementation period, implementation period, unless otherwise unless otherwise specified in the specified in the Grant AgreementGrant Agreement

Within 6 weeks of end of Within 6 weeks of end of implementation period, implementation period, unless otherwise unless otherwise specified in the specified in the Grant AgreementGrant Agreement


B. Projects with duration > 6 monthsB. Projects with duration > 6 months

MANDATORY MANDATORY DOCUMENTSDOCUMENTS

WHENWHEN

Presentation of project proposalPresentation of project proposalBudget Budget BreakdownBreakdown


Pre-Final Pre-Final Narrative Report Narrative Report (+inventory)(+inventory)


Usually halfway through project Usually halfway through project implementation periodimplementation period (date specified in (date specified in the the Grant AgreementGrant Agreement))

1 month before the end of project 1 month before the end of project implementation periodimplementation period

Within 3 months of the end of project Within 3 months of the end of project implementation periodimplementation period


1.1. The Report shall be presented The Report shall be presented using the standard using the standard

formsforms supplied by ECHO in the same language of the supplied by ECHO in the same language of the

Grant AgreementGrant Agreement

2.2. All Reports must be expressed All Reports must be expressed in Euroin Euro

3.3. The EU may request further information which must The EU may request further information which must

be supplied be supplied within 30 dayswithin 30 days of the request of the request

4.4. Failure to respect expiration dates, without valid motivation, Failure to respect expiration dates, without valid motivation,

may cause cessation of the may cause cessation of the Grant AgreementGrant Agreement and is and is

considered a threat to the continuation of the FPAconsidered a threat to the continuation of the FPA

ATTENTIONATTENTION !

ApplicaTIONS ApplicaTIONS ANNEX IIANNEX II

3. FORM REQUESTED FOR THE 3. FORM REQUESTED FOR THE PRESENTATION OF FINANCIAL PRESENTATION OF FINANCIAL REPORTSREPORTS

A.A. Projects of Projects of Primary EmergencyPrimary Emergency and and

EmergencyEmergency

B.B. Other projects with duration < or > 6 monthsOther projects with duration < or > 6 months


A. Projects of Primary Emergency and A. Projects of Primary Emergency and EmergencyEmergency

BUDGET BUDGET DEFINITIONDEFINITION

4 Digits4 Digits

6 6 DigitsDigits

8 8 DigitsDigits


Budget Budget BreakdownBreakdown




B. Other projects with duration < or > 6 B. Other projects with duration < or > 6 monthsmonths


BUDGET BUDGET DEFINITIONDEFINITION

6 Digits6 DigitsBudget Budget BreakdownBreakdown



6 6 DigitsDigits

8 8 DigitsDigits

The endThe end

The endThe end

in collaboration with

Documents

food items01

local capacity building01

educational items01

survival items01

hygiene items01

domestic items01

resettlement items01

food distribution01