1. Full Application Guidance Webinar
Financial Requirements and Budgets

2. Application Process

3. Applications - financial requirements
Stage
Detail
Requirements
Concept note stage
Summary budget
Complete
Financial due diligence
Full application stage
Workplan and budget
Produce a fully costed workplan in line with UK Aid Direct Financial Guidelines
Integrity due diligence
Completed by the fund manager using details form the application
Prior to contracting
Financial management assessment
An in-depth due diligence assessment requiring presentation of documentation and cooperation with a site visit

4. Financial Guidance

5. Principles
Financial guidance available: Principles of Reporting, Budget Classification, Exchange Rates
Cash based accounting (no accruals)
Reporting on the transactions of the project not the grant holder – partner transactions should be reported alongside grant holder transactions
1st April – 31st March financial year with very little flexibility between years
Quarterly financial reporting feeding into claims/payments
Reporting through an online portal (SMILE) at transaction level
Payments are made in arrears by default but may be agreed in advance

6. Arrears Claims Advance ClaimsQ1
Expenditure
Claim
Payment Q2
Arrears Claims M1 M2 M3 M4 M5 M6 Q1
Expenditure
Claim
Payment Q2
Advance Claims
All grant holders will require some amount of internal funding or match funding to cover the gap between expenditure and payment.

7. Budget Heading / Sub-head Budget Heading / Sub-head
Budgets
Budget Heading / Sub-head
Budget Lines
Project Activities (Grouped under an Output)
Project Activity Budget Line A
Project Activity Budget Line B
Project Activity Budget Line C
Sub Total 1
Project Activities – linked to the workplan made up of Outputs and Activities
Capital Expenditure – purchase of capital items on a cash basis
Staff Costs – indicate FTEs of staff involved in the project (verifiable through timesheets)
Other Admin Costs – administration of the grant inc. verifiable overheads
M&E and Lesson Learning – costs of monitoring and evaluation
Budget Heading / Sub-head
Budget Lines
Capital Expenditure
Budget Line D
Budget Line E
Budget Line F
Sub Total 2
Staff Costs
Budget Line G
Budget Line H
Budget Line I
Sub Total 3
Other Admin Costs
Budget Line J
Budget Line K
Budget Line L
Sub Total 4
Monitoring, Evaluation & Lesson Learning
Budget Line M
Budget Line N
Budget Line O
Sub Total 5

8. Costs to include and to exclude
Don’t forget to include
Reporting costs
Audit costs
IATI compliance costs
M&E
Reasonable apportionment of overheads
Match-funded amounts (impact grants)
Spending by implementing partner not transfers to implementing partner
Not Permissible
Lobbying UK government
Petition for additional funding
Political or exclusively religious activities;
Statutory fines, criminal fines or penalties;
Severance pay, payments etc
Major capital expenditure cannot be supported as the primary focus
Land or cars
Contingency/unforeseen costs
Depreciation/amortization

9. Exchange rates Not Acceptable Acceptable Lump sum transfer
Daily spot rate
Average Market Rate
Daily Market Rate
Not Acceptable
Budgeted rate
Estimated rate
Cumulative averages across the year
Start thinking about management of the risk of currency fluctuations

10. Workplan & Budget

11. Why introduce an online work plan and budgeting tool?1
1. Reduce Grantee time and effort on financial reporting, forecasting & claims 2
2. Reduce the time spent on financial analysis and creating different views of the same information 3
3. Reduce the number of requests for information that are sent to Grantees 4
4. Improve transparency and VFM information throughout the grant lifecycle 5
Improve the link between Logframe, work plan and budget on a regular basis

12. Points to remember
Work Plan and Budget Tool (WRBR): Guidance Note for Applicants
Introduction today with a detailed case study planned for next webinar
Log-frame, workplan and budget operate together
Before you start:
Understand your log-frame outputs and activities
An idea of your budget lines and unit costs for both project activities and for your general project costs
An understanding of who you implementing partners are

13. Questions?