Understanding the Financial Management of Your Cooperative Agreement Quito, Ecuador October 2009

Demystifying Finance Jargon Award/Ceiling Amount Obligation Amount Pipeline Burn Rate Financial Modification Accruals

Fundamentals of Financial Management Award Amount Obligated Amount Pipeline The total amount that is anticipated to be spent by the USG over the life of the project The amount the USG has committed to spending on the project to date The amount of funds obligated but not yet spent $3,000,000 $2,000,000 Obligation $ 2,000,000 – Expenses $ 1,500,000 Pipeline/Balance $ 500,000 Burnrate The rate at which the obligation is being spent. It will give you an indication of how many months left before you need an additional obligation NOTE: It is the Grantees responsibility to track obligation funds spent – when 75% spent inform USAID to increase obligation amount $1,500,000/24 months = $125,000 per month # months before obligation spent = $500,000 /$125,000 = 4 Months

Project Financial Reporting Cycle 1 Oct Sep 2010 SF 269 Financial Report/ SF 1034 Liquidation Report 31 Dec 0931 Mar June SF 1034 Cash Advance 3 SF 1034 Cash Advance 3 SF 1034 Cash Advance 3 SF 1034 Cash Advance 3 SF 1034 Cash Advance SF 269 Financial Report/ SF 1034 Liquidation Report SF 269 Financial Report/ SF 1034 Liquidation Report SF 269 Financial Report/ SF 1034 Liquidation Report SF 269 Financial Report/ SF 1034 Liquidation Report

Budget Tracking Tool that shows what a project has been doing Not just a finance tool, but an important tool for technical staff, too Burn rate will fluctuate over project life Accurate projections are important and require good communication

Standard Form-269 Quarterly Financial Status Reports – SF-269 Submitted within 30 days after the end of the quarter Shows how USAID funds have been used Monitors cost chare contributions Reflects a project’s current pipeline

SF-269: Steps to Completion (Administrative Information) 1. USAID/GH/OHA 2. Cooperative Agreement number 3. Organizational Information 4. EIN as assigned by the IRS 5. Internal Reference Number 6. Final – Yes or Progress report - No 7. Cash recommended

SF-269: Steps to Completion (Administrative Information) 8. Cooperative Agreement Start and End dates 9. Current reporting quarter 10. Case Study Exercise 11. Refer to Cooperative Agreement as applicable 12. Certification by Authorized Signatory

December 1, 2006 November 30, 2009 Four Options: 1.October 1 2.January 1 3.April 1 4.July 1 Four Options: 1.December 31 2.March 30 3.June 30 4.September 30

This should capture what has been spent (both USG and Cost Share) accumulative to the beginning for the quarter that is being reported on. This box should be the total of the two columns below, combined. This box is the cost share expended to the start of the quarter that is being reported on. This box is the USG dollars expended to the start of the quarter that is being reported on.

This should capture what has been spent (both USG and Cost Share) over the quarter capture in #9 (This box should be the total of the two columns below combined). This box is the cost share expended during the quarter that is capture in #9. This box is the USG dollars expended during the quarter that is captured in #9.

This is all USG funding that is expended to date (including the quarter captured in #9). Both boxes are the same (IIIc and IIIg). This is all the USG funding that has been obligated to date (including the quarter captured in #9). This is the remainder of all the USG funding that has been obligated to date (including the quarter captured in #9) - your pipeline.

SF- 269 Exercise “Your NGO” has had the following expenditure – please complete the SF 269 for January to March 2009: The award amount for “Your NGO” organization is $4,000,000 and the obligated amount to date is $3,000,000 From the start date of the agreement through December 2009 Jan-March 2010 Total Project Expenses$ 2,500,000$ 500,000 Of total that total Project Expenses, funded by USAID $ 2,000,000$ 400,000 Of that total Project Expenses, Cost Share Funded $ 500,000$100,000

Standard Form-1034  SF 1034 is the public voucher for purchases and services other than personal  You will use it to request funds and liquidate funds from USAID

SF-1034  Three month rolling advance  In the first month you will submit the SF 1034 for the first quarter covering the second, third and fourth months.  This is designed for your organization to maintain a uniform cash flow  At the end of the quarter you will submit another SF 1034 for liquidation of the advance.  You must submit to the paying office indicated in the grant letter an original and three copies of SF-1034.

SF Voucher  You will submit three SF-1034s requesting three separate advance payments for the quarter (one for each month).  Each voucher must be identified by the agreement number and must state the total costs for which advance is being requested.  SF 1034s must be marked at the top of the form with “Request for Advance”.  To liquidate advances the form must be marked at the top with “Liquidation of Advances”.

Standard Form-1034 Timing for advances and liquidation Initial Advance First Quarter Advance Payments Second Quarter Advance Payments (3SF 1034s each for 30 Days) (3 SF 1034s each for 30 Days) 1 st Month2 nd Month3 rd Month4 th Month5 th Month6 th Month7 th Month First Quarter Liquidation PeriodSecond Quarter Liquidation Period (3 Months’ Advance in 1 Voucher)(3 Months Advance in 1 Voucher)

Leave Blank Schedule number; paid by; date invoice received should be left BLANK Include your organization’s name and mailing address as it is found in your Cooperative Agreement

change Insert the names and address of the relevant finance office. Details are found in your Agreement Don’t forget to include the date! Request for Advance should be numbered. Don’t forget to change the numbers every time you fill a form!

You may use this space to keep track of the account or job number assigned to the agreement or you may leave it blank Show the month, day and year, beginning and ending dates of the incurrence of costs claimed for reimbursement.

SF-1034 Exercise  “Your NGO” in Ecuador is requesting funds for October- December The approved budget is $1,000,000, the cumulative advances $500,000, cumulative expenditures through December $420,000, the projected expenditures for September is $20,000; the organization needs $20,000 in advance for each month. The expenditures for the quarter are $18,000 for July, $21,000 for August and $19,000 for September.  Complete the SF-1034 & Report of Expenditures and Advance Control