2. Monitoring and Evaluation in Humanitarian Aid: Quality Procedures PROJECT – STRAND 1 – Training and Capacity Building

3. ANNEX II Budget in collaboration with

4. Budget formats

5. Budget ECHO – TYPES OF FUNDING ECHO funds two types of projects:  Total funding : ECHO funds 100% of the requested budget  Co-funding : ECHO co-funds the project with another donor

6. Budget The Budget: Is based on three types of different formats Is based on three types of different formats Presents significant differences with respect to the former FPA (a new conception) Presents significant differences with respect to the former FPA (a new conception) The concept of lumpsum disappears (except for indirect costs and the Reserve) The concept of lumpsum disappears (except for indirect costs and the Reserve) Is sub-divided into Titles, Chapters, Articles and Elements Is sub-divided into Titles, Chapters, Articles and Elements

7. Budget Budget: 3 types of formats Budget for Financial Request and Interim Financial Report Budget summary (by the EC) Budget for Final Financial Report Does not have details Unit, Quantity and Unit price Contains only items for Titles and Chapters Contains details Unit, Quantity and Unit price

8. Initial request and Interim Final request Budget

9. Budget FORMAT FOR ECHO BUDGET PHASES Interim Financial Report Pre-final Narrative Report (> 6 months, except Primary Emergency and Emergency) Final Financial Report Budget Breakdown Budget Summary and Financial Plan FIRST PHASE: FINANCIAL REQUEST SECOND PHASE: INTERIM REPORT THIRD PHASE: FINAL REPORT

10. Budget DIVISION OF BUDGET IN TITLES Title 0.3. “Indirect costs” Title 0.4. “Contingency reserve – pro memoria” Title 0.1. “Goods and services delivered to the beneficiaries” Title 0.2. “Supporting costs” DIRECT COSTS INDIRECT COSTS RESERVE RESERVE The division of the budget into titles is structured using a separation of direct costs, indirect costs and reserve:

11. The budget is structurated using codes of 2, 4, 6, 8 digits which must be followed in the presentation of the budget and accounting Budget BUDGET STRUCTURE DEFINITION LEVEL CODE EXAMPLE DESCRIPTIONNOTES TITLE2 DIGITS 01. […] Goods and services delivered to the beneficiaries […] The 2 digit budget is divided into 4 titles: 01. and 02. Direct costs 03. Indirect costs 04. Reserve CHAPTER4 DIGITS 01.01 […] Food security […] The 4 digit budget is divided into 22 chapters referring to title 1 (13) and 2 (9) ARTICLE6 DIGITS 01.01.01 […] Basic Food Security […] The number of articles referring to each chapter is varied ELEMENTS8 DIGITS 01.01.01.01. 01.01.01.02 […] Corn Flour Vegetable 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)

12. Budget Eligible Costs, NEW The new conception gives eligibility to cost previously non-eligible: Costs of offices on location (rent and office consumable & supplies) Costs of offices on location (rent and office consumable & supplies) Personnel in headquarters (directly connected with operations) Personnel in headquarters (directly connected with operations) Personnel in HQ for feasability studies (to concord with ECHO), monitoring and evaluations Personnel in HQ for feasability studies (to concord with ECHO), monitoring and evaluations Costs for conscienceness raising for EC operations Costs for conscienceness raising for EC operations

13. Budget Non-eligible Costs, NEW In accordance with the new EU funding norms from January 1, 2003 these are no longer eligible: Costs calculated in forfait (except Indirect costs and Reserve) Costs calculated in forfait (except Indirect costs and Reserve)

14. Practical application of the budget

15. Applications ANNEX II SUMMARY 1.Principles of budget flexibility and amendment procedures 2.Times requested for the presentation of Financial Reports (Financial Request, Interim Financial Report, Pre-Final Narrative Report and Final Financial Report) 3.Form requested for the presentation of Financial Reports 4.Sensible points and the “Trenino”: practical applications

16. Applications ANNEX II 1. BUDGET FLEXIBILITY AND AMENDMENT A.“Unilateral modification of the Budget by the NGO, notifying ECHO” B.“Exchange of written correspondence approved by ECHO” C.“Supplementary Agreement”

17. Applications ANNEX II A. Unilateral modification of budget by NGO notifying ECHO When ? A.The budget modifications introduced do not affect a basic element of the Operation; B.The financial impact is limited to a transfer between Title 01 and Title 02 equal or inferior to 15% of the total eligible direct costs, independently of the use of the reserve.

18. Applications ANNEX II A. Unilateral modification of budget by NGO notifying ECHO What type of procedure to follow ?  Formalize a modification made in the Interim Report (if foreseen) and/or address a letter to the Field Officer and Desk Officer of ECHO. Acceptance is not required by ECHO in this case.  It is always advisable to inform ECHO in writing and to file the relative correspondence.

19. Applications ANNEX II B. Exchange of written correspondence approved by ECHO When? A.For a transfer between Title 01 and Title 02 > 15% of the total eligible direct costs (Title 01. + Title 02.), independently of the use of the reserve. B.To request the use of the Reserve, in the case in which funding had been granted in the Grant Agreement C.Intend, for operational and/or contingency reasons, to carry out a change affecting a significant element of the operation (location, beneficiaries, sustainability); D.To request a change of the bank account used by the HO. E.Modification of indicators and source of verification.

20. Applications ANNEX II B. Exchange of written correspondence approved by ECHO What type of procedure to follow? 1.The NGO shall present a written request to ECHO duly founded and motivated (before such a request is made to the Desk Officer of ECHO in Brussels it should be discussed with the ECHO Field Expert [1]) [1] 2.Await the written confirmation by ECHO for acceptance or refusal of request (ECHO shall respond within 15 days, in any case silence does not mean acceptance) [1] in these cases correspondence with Field Expert and Desk Officer should be filed. [1] in these cases correspondence with Field Expert and Desk Officer should be filed. [1]

21. Applications ANNEX II C. Supplementary Agreement When ? A.If the HO wants to request an EXTENSION of the project implementation period B.If the HO wants to request a BUDGET INCREASE justified by operative reasons C.For co-financed projects, when a MODIFICATION OF THE PERCENTAGE in the co-funding quota is requested D.For modification or inclusion in the agreement of an article 9 “specific conditions” (i.e. modification or derogation to General conditions);

22. Applications ANNEX II C. Supplementary Agreement What type of procedure to follow ? A.The ONG shall present a written request to ECHO duly founded and motivated (before such request is made to the Desk Officer of ECHO in Brussels it should be discussed with the ECHO Field Expert) B.If accepted ECHO shall respond to the NGO in writing within 15 days of receiving the request, sending an amended Grant Agreement (in any case, silence does not mean acceptance) C.The amended Grant Agreement will become effective when signed by both parties (ECHO and NGO) and sent to ECHO

23. EXAMPLE “Budget flexibility and amendment” Initial budget Unilateral modifications in budget notifying ECHO

24. Exchange of correspondence with approval by ECHO Unilateral modification of budget by NGO notifying ECHO EXAMPLE “Budget flexibility and amendment”

25. Applications ANNEX II 2. TIMES REQUESTED FOR THE PRESENTATION OF FINANCIAL REPORTS A.Projects of Primary Emergency, Emergency and other projects with duration < 6 months B.Projects with duration > 6 months

26. Applications ANNEX II A. Projects of Primary Emergency, Emergency & other projects with duration < 6 months MANDATORY DOCUMENTS WHEN Presentation of project proposal Budget Breakdown Interim Financial Report (+inventory) Final Financial Report At least one month before the end of implementation period, unless otherwise specified in the Grant Agreement Within 6 weeks of end of implementation period, unless otherwise specified in the Grant Agreement

27. Applications ANNEX II B. Projects with duration > 6 months MANDATORY DOCUMENTS WHEN Presentation of project proposal Budget Breakdown Interim Financial Report Pre-Final Narrative Report (+inventory) Final Financial Report Usually halfway through project implementation period (date specified in the Grant Agreement) 1 month before the end of project implementation period Within 3 months of the end of project implementation period

28. Applications ANNEX II 1.The Report shall be presented using the standard forms supplied by ECHO in the same language of the Grant Agreement 2.All Reports must be expressed in Euro 3.The EU may request further information which must be supplied within 30 days of the request 4.Failure to respect expiration dates, without valid motivation, may cause cessation of the Grant Agreement and is considered a threat to the continuation of the FPA ATTENTION

29. ApplicaTIONS ANNEX II 3. FORM REQUESTED FOR THE PRESENTATION OF FINANCIAL REPORTS A.Projects of Primary Emergency and Emergency B.Other projects with duration 6 months

30. Applications ANNEX II A. Projects of Primary Emergency and Emergency BUDGET DEFINITION 4 Digits 6 Digits 8 Digits MANDATORY DOCUMENTS Budget Breakdown Interim Financial Report Final Financial Report

31. Applications ANNEX II B. Other projects with duration 6 months MANDATORY DOCUMENTS BUDGET DEFINITION 6 Digits Budget Breakdown Interim Financial Report Final Financial Report 6 Digits 8 Digits

32. Primary Emergency and Emergency Fase III: Final Financial Report Phase II: Interim Financial Report 4 digits 4 digits Use only format Annex II Use only format Annex II Do not fill in the Budget Summary Do not fill in the Budget Summary Use only column INITIAL Budget Use only column INITIAL Budget 6 digits 6 digits Use only format Annex II Use only format Annex II Do not fill in the Budget Summary Do not fill in the Budget Summary Highlight changes with the columns INITIAL/MODIFIED Highlight changes with the columns INITIAL/MODIFIED Insert amount spent/committed in column ACTUAL BUDGET Insert amount spent/committed in column ACTUAL BUDGET At least 8 digits At least 8 digits Use only format Annex II Use only format Annex II Do not fill in the Budget Summary Do not fill in the Budget Summary Insert Cost and Element type Insert Cost and Element type Insert Accounting Reference N° Insert Accounting Reference N° Other projects < 6 months Phase III: Pre-Final Narrative Report Use format Annex II Interim Financial Report (6 digits) in case of modifications introduced into the budget Use format Annex II Interim Financial Report (6 digits) in case of modifications introduced into the budget Phase I: Financial Request 6 digits 6 digits Use only format Annex II Use only format Annex II Do not fill in the Budget Summary Do not fill in the Budget Summary Use only column INITIAL Budget Use only column INITIAL Budget Do not fill in “Special Mandates” Do not fill in “Special Mandates” Phase IV: Final Financial Report Other projects > 6 months DIGIT

33. Primary Emergency, Emergency, other < 6 months Fase III: Final Financial Report Phase II: Interim Financial Report Presentation of project proposal Presentation of project proposal at least 1 month before the end of the implementation period (with inventory), at least 1 month before the end of the implementation period (with inventory), Unless otherwise specified by the Grant Agreement within 6 weeks of the end of the project implementation period, Unless otherwise specified by the Grant Agreement within 6 weeks of the end of the project implementation period, Unless otherwise specified by the Grant Agreement Other projects > 6 months Phase III: Pre-Final Narrative Report 1 month before the end of project implementation period (only narrative + inventory) 1 month before the end of project implementation period (only narrative + inventory) Phase I: Financial Request Phase IV: Final Financial Report Normally halfway through the project implementation period Normally halfway through the project implementation period (date specified in the Grant Agreement) Within 3 months of the end of project implementation period Within 3 months of the end of project implementation periodTIMING

34. The “Trenino”

35. Budget:Instruments To facilitate the work an instrument was created to apply to the budget and accounting expenses Trenino

36. Instruments: the “Trenino” OBJECTIVE “To facilitate writing the budget and the correct monitoring of accounting for expenses”

37. Instruments: The “Trenino” What it isn’t 1.It is not an instrument to substitute ECHO documents 2.It is not an instrument for planning and controlling the activity 3.It is not an instrument for controlling expenses met in relation to programmed expenses 4.It is not an instrument for integrating accounting & managing systems adopted by the single HOs

38. Instruments: the “Trenino” Contents 1.A summary by topic of the funding information in the various FPA documents 2.Specific charts for each budget Article with the purpose of: Supplying information (cfr. ECHO guidelines) Supplying information (cfr. ECHO guidelines) Defining eligible expenses for each Chapter Defining eligible expenses for each Chapter Define the vouchers for each article of expense Define the vouchers for each article of expense

39. The end