SKILLS DEVELOPMENT FACILITY ORIENTATION OF GRANTEES IN FINANCIAL REPORTING AND ACCOUNTABILITY FOR SDF GRANT 13th APRIL 2018

Introduction Purpose of the presentation Have common understanding of SDF financing and accounting for the grants Roles and obligations of grantees (implement the grant and account for funds) Roles of SDF (Ensure financing and accountability for grants) Guiding principles – (economy, efficiency and effectiveness) Legal Requirements and financial Guidelines for management of the grant (FA, PFM Act 2015, Audit Act 2008, POM, Grant Agreement) Financing and accountability requirements (details in slides) Ineligible expenditure (details in slides) Accountability challenges so far encountered

General implementation guidelines This grant is money that has been borrowed from World Bank to support private sector through skills enhancement. Delegated to PSFU to implement through grants to private sector enterprises. There are guidelines for donor(WB) and government of Uganda which must be adhered to Detailed financial management guidelines: WB financial management guidelines, public finance management Act, Audit act, grant agreement, project operations manual, financing agreement among others Funds must be used for intended purpose to ensure Economy, Efficiency, Effectiveness ‘’value for money’’

General implementation guidelines The implementation of this matching grant shall be guided by Project Operations Manual(POM). Manual is available on website(www.sdfuganda.org). The grant agreement is designed basing on POM. It is therefore important for grantees to be conversant with sections of grant agreement Any deviations from this agreement are not allowed unless they are provided for in contract and prior approvals obtained from PSFU.

General implementation guidelines cont’ Sections in agreement: period, total amount, budget, reporting, record keeping, monitoring, report, assets, environment issues, corruption, conflicts, termination e.t.c Reporting: monthly reports are expected within 10 days after end of the month or based on reporting requirement stipulated in the grant agreement. Record keeping: records are expected to be kept for seven(7) years after closure of the grant. Assets(equipment): if a grant make contribution toward assets to enhance training ,Assets must be identified with SDF Logos/engraved. Disposal of such assets must take place upon written approval from SDF.

General implementation guidelines cont’ You are expected to implement within agreed timelines given that your reports are a prerequisite for SDF to get funding from the World Bank In place we have due diligence consultants, world Bank monitoring team, M& E firm, OAG, auditors who may choose to visit any of you to check on progress. You are therefore expected to implement all activities in grant and within agreed timelines. It is important to follow the grant agreement and spend within agreed budget lines

Payment methods 1.Advance payment: part payment of a particular percentage on total grant amount based upon agreed deliverables A good financial system in place which demonstrate segregation of duties An active bank statement for the last six (6) months’ Experience in managing a grants of amount equivalent to current grant Audited financial reports for atleast one year, additional project deliverables Recommendation-open up a dedicated account or not

Payment methods cont’s 2.Reimbursement: means repaying the money already spent Fulfilling grant agreement terms Submission of satisfactory accountabilities Funds are spent on eligible activities Satisfactory M & E report Submission of end of project report Note. The last installment shall be a reimbursement 3.Direct payment: SDF makes payment to service providers or suppliers on behalf of the grantee

Payment methods cont’s Conditions for direct payment Evidence of proper procurement and contractual obligations with a service provider or supplier and request to SDF to make direct payment to such service provider or supplier Special cases where large procurements are undertaken as part of project skills enhancement and a grantee requires large sums of money on first request If the grantee fails financial capability assessment to manage SDF funds  Possibility of fraud or miss-use of SDF funds exhibited in the first accountability submitted

Requests for funds Fund requests must be submitted officially in writing on the grantee’s letter head to SDF. In instances where letter heads are not available, the request letter should bear the grantee’s stamp. Contents of the request Name of the grantee, Grant number assigned by SDF, Date Cash at hand that SDF provided at the time the request was prepared, Description of the purposes for which the funds will be used, Currency in which the disbursement is requested Amount requested, Banking information Signature, Name and title of the person making the request and period for which the requested funds will be used. Must be stamped Cash expenditures above one million (1,000,000)

Ineligible expenditure Ineligible expenditure: are expenditures not supported under SDF Expenditures prior to agreement approval and after agreement a period Expenditures on activities not included in the budget Sub-contracting without approval (Sub grantee) Capital expenditures/items or assets not related to training Payment for facilitation to a media personnel or company apart from fees for media company Expenditures on alcohol. Expenditure for demonstration places like purchase of land, ploughing, weeding, hiring land e.t.c Expenditures without receipts, requisitions, acknowledgements

Ineligible expenditure cont’s Budget re-allocations without prior approval by SDF Transport allowance to trainees Transport and travel in other cases: only as per governing rates Perdiem in other cases only as per governing rates Allowances, honorarium to officers financed under the project Re-allocation of funds across budget lines are not accepted without prior clearance from SDF Purchase of equipment above 10% and equipment which are not related to skills enhancement Using other suppliers other than those in the quotations/pro-forma invoices attached on the request for funds without genuine explanations

Eligible expenditures Description Percentage allocation (100%) Remarks Training materials 15 Training tools/tool kits Trainers fees(fees, transport, e.t.c) 20 Shs.100,000 per day Safety gadgets 5 Meals and venue maximum Shs.10,000 per person Equipment 10 In-kind contribution Certification costs M & E

Procurement procedures The purpose of procurement procedures is to ensure that: Procurements are made to the maximum extent possible on a practical, open and freely competitive basis. The grant recipient obtains the maximum value for money on all its procurements of goods and services. Procured goods and services are delivered in the correct quantity and quality and in a timely manner. Procurement methods for SDF grantees Shopping Direct contracting

Procurements cont’s Shopping. This shall follow the request for quotations procedures as defined in the PPDA Act and Amendment regulations subject to the provisions in National Competitive Bidding(NCB) Direct contracting. This is where an entity does not go through other bidding procedures because of limited time or having a specialized procurement. Any requests for procurement will be prepared and approved within grantee procurement guidelines. Direct procurement for grantees is not allowed unless supported and in any other case, procurement above Shs.500,000 (five hundred thousand shillings) must be supported with at least three (3) invoice to ensure competition.

Procurement cont’s required documents and accountability Requisition duly signed Payment vouchers Pro-forma invoices/quotations Invoices Delivery note Goods received note if any Supplier receipts/copies of EFT Photo graphs of items for tools and equipment List of equipments (item,Serial No., Amount Technical verification of items procured(infrastructures, equipment etc)

Accountabilities challenges Poor book keeping and records. Expenditures out of approved budget lines. Too much cash transactions Changes in payment plan. En-eligible expenditures, receipts not headed, forged receipts, disco receipts Field Monitoring reports Changing procurements without minutes and SDF approval Buying equipment which are not for skills enhancement

Accountability challenge continues High prices from actual market prices exhibited in accountability Poor report writing of the training progress. Occurrence of technical changes in the budget and trainer during the grant application without form information from SDF head and grant specialist. Absence of evaluation reports for trainers Paying training without a trainer requesting for funds and technical report

Accountability procedures continues Trainer’s fees payment: verifiable out put Other costs for trainers e.g. transport, accommodation, airtickets (economy) etc must be supported by accountabilities Tax issues in regards to trainer’s fees It is also important to seek approval in-case of remaining budget balances. Trainees attendance registers ESCROW account in case you require over 50% advance Exchange losses not catered for

Expected accountability Official bank statement indicating movement of SDF funds and own funds well high lightened List of equipment purchased (Item, Serial No., Amount), beneficiaries of tool kit Minutes of project implementation committee on all procurements/service providers Original vouchers/Invoices/receipts/Acknowledgement Original daily attendance lists (Training dates, names, IDs, signature, telephone numbers) Training report (activities, budget performance and accountability, on site photos)  official submission of accountability on letter head Accountability file must be well organized

Accountability continues Accountability must be submitted officially to PSFU on grantee headed letter and stamped. Only original accountability documents(receipts) shall be accepted by PSFU. It is advisable that grantee shall remain with photo copies of such documents Registration of suppliers details on line: http:www.finance.go.ug/mofped/employeesupplier-eregistration – TIN

Grantee payment plan Copy of signed agreement No Description Deliverables 1 30% advance Copy of signed agreement Copy of MOU with the trainer. Inception report by Trainer (training plan and modules) Budget for requested costed items (30%) Final list of the trainees with individual telephone number and employee/national ID number Proforma invoices of the following: (Tools/Materials/equipment/meals/Venue) 2 Accountability report for the 1st instalment complete with attachments. Narrative progress report by grantee Training Report by consultant Attendance lists of trainees and pictures of the training activity Proof of atleast 30% of own contribution payment 3 40%-after implementation Accountability report for the total project budget/End of project financial report End of project narrative report. Proof of 70% own contribution payment. Final M&E consultant report

Trainer’s payment plan NO PERCENTAGE PAYMENT GIVEN TO GRANTEE BY SDF PERCENTAGE PAID TO TRAINER BY THE GRANTEE TRAINER PAID AFTER THE FOLLOWING DELIVERABLES 1 1st Instalment (20%) 40% Inception report by Trainer (actual training plan, methodology and modules) Initial commencement of the training activities 60% Continued training / complete the first phase of training activities Report endorsed by Grantee Request for payment 2 2nd Instalment (40%) 30% Acknowledgement receipt of the previous money disbursed for the first instalment Continued training activities 70% Continued training activities with attendance lists of trainees and pictures of the training activity Training Report endorsed by Grantees 3 3rd/Last Instalment (40%) 100% Acknowledgement receipt of the previous money disbursed for the second instalment End of project training report M&E report by the grantee

Bank Statement transactions CASH BOOK Date Payee Description Document no/cheque no etc Receipts Payments Balance X??     disbursement from SDF  X  -  XX  Cash  meals  XY  Training fees  XZ  Z  Etc

Budget performance Funds Expenditure Report GPeriodrantee name…………………………….No…………………………….Date……………… …………………………………………….. SN. Activity/budget line Approved Budget amount Actual expenditure Variance Reasons for the variance 1 Training fees   2 Tools 3 Materials 4 …… Total

Accountability guidelines No Item Description Source Documents required Mode of Payment 1 Training Materials Materials used by trainees during practical training Quotation LPO, Delivery note, Goods received note, Invoices, receipts, Bank Statements Direct payment to supplier by SDF upon request and submission of the supporting documents by the training firm Reimbursement to the training firm 2 Tool Kits/gargets Training safety and protective gargets used by trainees Quotation LPO, Delivery note, Goods received note, Invoices, Receipts, Bank Statements 3 Accommodation & Meals This includes housing and meals provided by the training Firms Daily register Signed by each trainee , invoices by the firms/service providers Reimbursement to the training firm with supporting documents

Administration issues Administrative procedures Administration issues No Item Description Deliverables 1 Progress Report Narrative overall activities undertaken by interns ,photos during training sessions must be attached Complete narrative report signed and stamped by the grantee, 2 Cash expenditure report This includes the breakdown of the expenditure as approved with in the budget and original supporting documents Expenditure Supporting documents and proof of variances 3 Trainee register These Documents include among others daily and weekly training activities executed by the trainees Weekly report signed both by trainee and trainer. 4 Attendance lists Daily attendance of trainees Daily attendance sheets Signed by trainees. In addition to general contents of attendance sheet , must also include a column for male and Female. 5 Budget performance report   Includes approved activity budget, actual expenditure, variances and reason for the Variance. Complete financial break down as approved in the budget signed and stamped by the grantee,

THE END THANK YOU VERY MUCH MWEBALE NNYO, ASANTE SANA, XIE XIE We meet as strangers, grow into a big family that is not divided by color, religion, politics & cultures. We are grateful for such an enriching opportunity, words cannot express it all. THANK YOU VERY MUCH MWEBALE NNYO, ASANTE SANA, XIE XIE