THE FINANCIAL GUIDELINES

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THE FINANCIAL GUIDELINES

• Introduction
• The IUC budget lines
• Non Project activity related expenditure - PSU
• Project level budgeting
• Budget management and flexibility

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1. INTRODUCTION

• Core document http//iuc.vliruos.be/downloads/IU
  C_Financial_Guidelines_12_03_09.doc
• VLIR-UOS Scholarship rates 2008/2009
  http//iuc.vliruos.be/downloads/index_2009_ENG(2).
  doc
• Negotiated and agreed upon with DGDC
• Applicable to activities of all IUC stakeholders
  (academics, VLIR-UOS, partner universities etc)
• Covering full IUC programme cycle
• Basis for budgeting and reference document in
  terms of financial accountability a must know
  document
• Please consider that
• These guidelines must be aligned to the financial
  guidelines of the partner universities through
  negotiation some guidelines will be partnership
  specific (e.g. local scholarships)
• No guidelines can capture and/or foresee reality
  in full
• For interpretation or clarification pls. consult
  with programme manager, ICOS and/or VLIR-UOS

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Financial framework of the IUC Programme budgets

• The total budgets per year (in EUR)

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Financial framework of the IUC Programme budgets
(cont.)

• 3. The operational budgets per year (in EUR)
• total budget fixed budget

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2. THE IUC BUDGET LINES

• B. Investment costs
• C. Operational costs
• D. Personnel costs
• E. Scholarship costs
• F. International travel costs
• G. Board and lodging costs
• H. Shipping costs
• K1. Coordination costs North
• K2. Coordination costs South

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BUDGETLINES INVESTMENT COSTS (B)

• Definition
• Investment costs are costs related to all items
  purchased that have a long service life and/or
  are considered as assets that are being
  depreciated
• Examples
• LAN, satellite dishes, PCs, servers, printers,
  UPS,
• Fax machines, telephone sets, photocopy machines,
  
• Software licenses (unless annually renewable)
• Lab equipment
• Vehicles
• Furniture
• Airconditioning
• Installation / rehabilitation of a lab, lecture
  hall, IUC office,

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BUDGETLINES INVESTMENT COSTS (B) (cont)

• Guidelines and principles
• All goods are intended for the partner university
• Goods must be purchased at the most advantageous
  price-quality ratio (including transport)
• For each purchase beyond 5.500 at least three
  quotations must be requested
• All costs relating to the shipment of material
  and equipment, including packaging, transport and
  insurance, are to be included in B (not in H
  unless separate invoices)
• Negotiations with national government in view to
  obtain tax exemption and or import duties
• No tax accepted for goods bought in Belgium that
  will be exported (tax exemption to be arranged
  for unless amount is smaller than 125)
• Guest houses only rehabilitation costs no
  recurrent costs
• All investment goods are to be listed in the
  university inventory (English!)
• Labelling
• Remarks
• VLIR-UOS guidelines may differ from local
  guidelines
• Relevant goods of former OI must be pooled into
  the IUC partnership ! (e.g. vehicles)

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• TENDER FILES
• For each purchase beyond 5.500 at least three
  quotations must be requested on the basis of the
  same call, on the same date.
• The call has to contain detailed information on
  the type of good or service wanted, with clear
  reference to the closing date for submission of
  quotations.
• In principle the quotation with the most
  advantageous price-quality ratio must be
  selected.
• In case the cheapest offer has been selected, no
  further explanation is to be given on the choice
  of the supplier.
• In case a supplier has been selected the offer of
  whom is not the cheapest one, one has to justify
  why this supplier has been selected, taking into
  account also other criteria than the price (e.g.
  quality, delivery time, match with already
  existing material, maintenance conditions, ...).
• In case a good or service which costs more than
  5.500, can only be provided in the partner
  country by one single company, a declaration is
  to be added on the fact that the supplier for the
  specific good or service needed is the only one
  in the country/region ("unique / sole supplier").

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BUDGET LINES OPERATIONAL COSTS (C)

• Definition
• Operational costs are programme implementation
  related costs which are incurred for the purchase
  and/or operational use of goods or services which
  are not written off for depreciation. These goods
  and services can be distinguished from goods
  which are classified under investment costs by
  the fact that they
• (1) have a limited service life, or
• (2) cannot function on their own (e.g. spare
  parts), or
• (3) are strongly activity-related 
• Examples (not exhaustive list !)
• Maintenance of material
• Liquid substances, chemicals,
• Consumer goods
• Documentation and books
• Small material, spare parts
• Office supplies
• Mileage allowance
• Reprography
• Communication use of phone, fax, e-mail,
  internet,
• Local travel, both in Belgium and in the partner
  country (institutional allowances excluding
  permanent expert receiving 15 per day)
• Local per diem
• Subscription to internet, electronic
  publications, ..

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BUDGET LINE PERSONNEL COSTS (D)

• Basic principles
• Academic staff that bears responsibility for the
  implementation of (parts of) the partner
  programme is made available by both the Flemish
  university and the partner institution. Their
  wages are not included in the programme budget,
  not even partially.
• Only the wages of so-called permanent experts
  that are employed in the partner institution via
  a contract of employment with the coordinating
  Flemish university can be booked on the programme
  budget.
• Visiting lecturers do not receive any salary.
• No personnel can be hired on the programme for
  employment in Belgium.
• Topping-up is not allowed under D (See K2)
• Exceptionnally personnel in support of
  scholarship support

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Types of payment of input of personnel

• In case of personnel responsible for the
  implementation of one or more of the projects
• Permanent experts
• Employee of university of Flemish coordinator
• Only in case of broad based assignments
• All costs salary, expatriate fee, insurance,
  annual plane tickets, shipment costs, school
  costs for children, if applicable contribution
  from the programme to the housing related costs
  (up to a max. of 250/month),
• For details please consult guidelines
• Service contracts
• In case of personnel engaged for the coordination
  of the programme PSU
• D Local programme manager
• K.2. Secretary, accountant, drivers,

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SUMMARY TABLE PERSONNEL
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OPERATIONAL COSTS AND PERSONNEL

• Service contracts
• Technical or non-technical (research assistant)
  ad-hoc support services (enumeration, lab work,
  data collection and basic analysis)
• Consultants only selectively
• Flemish expertise not available or too costly
  (travel)
• Institutional experts not available

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BUDGETLINE SCHOLARSHIP COSTS (E)

• Definition
• Scholarship costs are costs linked to having
  scholars study / conduct research either in
  Belgium or in the region
• Types of scholarships
• In Belgium
• 1. Training scholarship
• 2. Recycling scholarship
• 3. M.Sc. Scholarship
• 4. Ph.D. scholarship
• Local scholarships local regulations (Belgian
  rates are the maximum)
• Composition of a scholarship
• Payments directly to the scholar
• Monthly/weekly allowance
• Family allowance
• Installation fee
• Fee for didactics
• Fee for mailing of didactics
• Payments taken care of by the host university

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SOME REMARKS

• Allocation of some costs
• Conference (C, F en G)
• Following costs cannot be charged
• Local travel in Belgium
• Thesis defense related costs
• Local training can be C or E depending on
  duration and outcome (hotel/per diem max. 21
  days)
• When budgeting please bear in mind the following
• Msc. are relatively more expensive than sandwich
  Ph.D.s
• For Ph.D.s mostly pre-doc (master level
  scholarship) to be
• foreseen
• Deviation of sandwich formula can be requested
  with proper justification (bench fee however
  limited to 16 months)

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BUDGET LINE INTERNATIONAL TRAVEL COSTS (F)

• Definition
• International travel costs are the costs linked
  to the travel from door to door, both by Belgians
  and by local personnel
• Types of expenses
• Plane ticket, including airport tax
• Service fee of the travel agent or airline
  company
• Indirect travel costs
• Visa
• International passport
• Costs arising from obtaining the necessary
  certificates
• Obligatory vaccinations
• Travel insurance

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BUDGET LINE RESIDENTIAL COSTS (G)

• Definition
• Residential costs are costs linked to the stay
  abroad of Belgians or local personnel.
• Types of expenses
• Hotel accommodation costs in the partner country
  (no breakfast)
• Hotel accommodation in Belgium max. 100 /
  night
• Per diem
• Calculation of the per diem
• Number of nights abroad
• In Belgium 75 / day
• In case of a permanent expert 75 / day for
  board and lodging !
• Mission max. three weeks !

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BUDGET LINE SHIPMENT COSTS (H)

• Definition
• All costs related to the shipping of materials
  and equipment, including packaging, transport and
  insurance
• Types of expenses
• Local costs storage, customs clearance, local
  transport, rent of a container,
• Procedures
• Mainly to be accounted for under B or C

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3. NOT PROJECT ACTIVITY RELATED EXPENDITURE PSU
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Financial framework of the IUC Programme
projects/Programme Support Unit (PSU)

• Projects generate project activity related
  expenditure
• Programme Support Unit generates not project
  activity related expenditure

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PROGRAMME SUPPORT UNIT (PSU)

• PSU project harbours all fixed amounts that
  cannot be related to project level activities
• K1 Coordination costs Flemish university
• K2 Coordination costs Local university
• Compensation department Flemish project leaders
• Compensation department Flemish coordinator
• PSU also covers not fixed programme management
  related expenditure (not attributable to a single
  project)

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Programme support unit (PSU) budget

• Definition
• PSU is to be regarded as a separate project with
  a separate budget, for which all budget lines
  (B-K) are applicable except scholarships
•  Key principles
• In principle, the major investment costs linked
  to the installation of the VLIR-UOS IUC office
  should have been made in the context of the
  preparatory year (Pre Partner Programme).
  Consequently, in principle no more investment
  costs can be made as of year 1, unless the
  purchase of programme cars. All minor investments
  for the programme co-ordination are to be funded
  by the local administration budget.
• The PSU budget is to be kept as small as
  possible.

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PSU budget

• B. Investment costs
• Programme cars (purchase only)
• C. Operational costs
• Compensation of input by the Flemish coordinator
  ( 15000 per year)
• Compensation of input by the Flemish project
  leaders (max. 3750 per year)
• Costs linked to the missions of the people (N/S)
  involved in the coordination of the programme
  (programme coordinator, programme manager, ICOS,
  Rector, ) (C, F, G)
•  
• D. Personnel costs
• Salary of the permanent expert in case he/she has
  coordination tasks (D), and all costs related to
  his/her employment
• Salary of the local programme manager (as per
  university scales, possible differences to be
  charged to K2)
•  

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PSU budget (continued)

• E. Scholarship costs
• Not applicable.
•  
• F. International travel costs
• Costs linked to the missions of the people (N/S)
  involved in the coordination of the programme
  (programme coordinator, programme manager, ICOS,
  Rector, ) (C, F, G)
• G. Residential costs
• Costs linked to the missions of the people (N/S)
  involved in the coordination of the programme
  (programme coordinator, programme manager, ICOS,
  Rector, ) (C, F, G)
• K. Administration costs
• K.1. Belgian administration costs
• K.2. Local administration costs

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K1 and K2 Coordination costs

• K1 Coordination costs Flemish university
• Lump sum of 22.500
• Personnel, accountants, communication, central
  support and administration (e.g. hosting and
  facilitation visits)
• FLEMISH UNIVERSITY HAS ABILITY TO PROVIDE
  SUPPORT SERVICES
• K.2. Local coordination costs
• Lump sum of 37.500
• 15.000 as institutional overhead
• 22.500 as budget for the local administration
  of the programme
• LOCAL UNIVERSITY HAS ABILITY TO PROVIDE SUPPORT
  SERVICES, INCENTIVES AND CREATE RESERVES IN CASE
  OF FINANCIAL ISSUES ARISING

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K2 INSTITUTIONAL OVERHEAD ( 15.000)

• Lump sum for unconditional use by partner
  university
• Meant to cover the following costs
• Personnel, accounts, central reporting
• Governance
• VLIR-UOS advice to use balance as follows
• Pool all donor overheads to be used as an
  incentive policy system
• Reserve fund in case of rejected expenses
• No money is no longer an excuse!

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K2 Local coordination and administration costs
( 22.500)

•  B. Investment costs
• PCs, printers, fax machines, photocopy machine,
  phone sets, ..
• installation of internet connection, LAN, ...
• installation of the VLIR-UOS IUC office
  furniture, etc.
• mobile phones
•  C. Operational costs
• photocopy costs of the VLIR-UOS IUC office and
  all other support services (financial office,
  university store, )
• communication costs of the VLIR-UOS IUC office
  (fax, e-mail)
• labels
• PR materials, letter paper, paper, stationery
• representation costs
• Electricity, renting of rooms, meeting costs
  (drinks, snacks etc.)
• local travel of the members of the VLIR-UOS IUC
  office and support offices mileage allowance,
  per diem of the driver, ...
• pick-up at the airport of guests coming in the
  context of the IUC partnership
• local per diem for members of the VLIR-UOS IUC
  office etc....
• D. Personnel costs
• Salary of the assistant, secretary, accountant
  and possible drivers
• Budgetline E, F, G, F and H are not applicable

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Financial framework of the IUC Programme budgets
(cont.)

• 2. The fixed budgets per year (in EUR)

• Consist of
• Coordination costs Flemish coordinating
  university (K1)
• Coordination costs IUC university (K2)
• Compensation department Flemish coordinator
  (Fl.C)
• Compensation department Flemish project leaders
  (Fl.Pl.)

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OTHER IMPORTANT REMARKS

• Topping-up under K2
• Revolving funds
• Car policy
• Only the purchase of the car can be accounted for
  under PSU as a separate cost, an investment cost.
  All operational costs such as insurance, fuel,
  spare parts, maintenance, etc. are to be paid for
  from the budget that is created by charging a
  fixed amount of money per km (mileage allowance).
  
• For photocopies
• Only the purchase of the photocopy machine can be
  accounted for under PSU as a separate cost. All
  operational costs such as paper, ink,
  maintenance, etc. are to be paid for from the
  budget that is created by charging a fixed amount
  of money per copy (copy unit cost).
• Project level billing encouraged
• Lab analysis by one project on behalf of another
  project

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4. PROJECT LEVEL BUDGETING
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Project budget calculation

• 1. Calculate total of lump sum payments
• Local administration costs 37.500
• Belgian administration costs 22.500
• Input Flemish co-ordinator 15.000
• Input Flemish projectleaders max. 22.500
• TOTAL 97.500, balance 647.500
• 2. Operational budget 647.500
• Operational budget to be divided based on the
  priorities attached to each project project
  budgets
• Identification Phase Partner Programme budgets
• Instructions to be provided by coordinators
• Spreading over time subject to negotiations among
  projects in view of needs and feasibility

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BUDGET LINES APPLICABLE
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EXAMPLE OF AP BUDGET
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4. BUDGET PLANNING, MANAGEMENT AND FLEXIBILITY
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BUDGETING BASICS AND PRINCIPLES

• Basic figures
• Local per diems, stipends and related
  institutional allowances
• VLIR-UOS allowances
• Reference amounts to be agreed upon (ticket, or
  trip unit cost)
• Basic programme level principles
• North or South
• Consumables, books and hardware
• Per diems
• Scholarships
• Local, regional, international
• Project or Programme (PSU) level
• Permanent expatriate staff
• Vehicles
• Expensive equipment
• Duration of AP (12 months)

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• Original invoices are ALWAYS required for each
  expense
• IUC budgets are annual budgets i.e. activity
  programme based funding (in principle 745.000
  for a 12-month period)
• Balances cannot be rolled over unspent money is
  lost
• Only invoices dated within activity period (12
  months) are acceptable
• Distinction between date of order and invoice
  date
• Date related expenses (e.g. mission related
  expensens, subscription costs, scholarship costs,
  etc.) need to be accounted for in the respective
  activity programme year
• 15 flexibility in implementation compared to
  planning budget shifts in between projects are
  possible (precise guidelines still to be
  developed by the VLIR-UOS)
• Need for a systematic ex ante check with the IUC
  guidelines and the project budgets as approved
  all involved should have a basic knowledge of the
  guidelines especially the programme manager and
  IUC accountant (risk of rejected expenses)
• What types of expenses are allowed ?
• How is an expense to be justified and accounted
  for ?
• Interests on the local account report on it
  proposal to be developed per partner programme
  requires approval by Steering committee