In collaboration with

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Development of integrated project and financial
management tools in conformity with the 2003
FPA
The BUDGET
In collaboration with
2
Budget

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

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Budget
Budget 3 types of formats
Budget for Financial Request and Interim/pre
final Financial Report
Budget summary (by the EC)
Budget for Final Financial Report
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Budget
Initial request and Interim
Final request
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Budget
FORMAT FOR ECHO BUDGET PHASES
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Budget
DIVISION OF BUDGET IN TITLES
The division of the budget into titles is
structured using a separation of direct costs,
indirect costs and reserve
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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 DESCRIPTION NOTES
TITLE 2 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
CHAPTER 4 DIGITS 01.01 Food security The 4 digit budget is divided into 22 chapters referring to title 1 (13) and 2 (9)
ARTICLE 6 DIGITS 01.01.01 Basic Food Security The number of articles referring to each chapter is varied
ELEMENTS 8 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)
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Budget

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

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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)

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Applications ANNEX II

• SUMMARY
• Principles of budget flexibility and amendment
  procedures
• Times requested for the presentation of Financial
  Reports (Financial Request, Interim Financial
  Report, Pre-Final Narrative Report and Final
  Financial Report)
• Form requested for the presentation of Financial
  Reports

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Applications ANNEX II

• 1. BUDGET FLEXIBILITY AND AMENDMENT
• Unilateral modification of the Budget by the
  NGO, notifying ECHO
• Exchange of written correspondence approved by
  ECHO
• Supplementary Agreement

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Applications ANNEX II

• A. Unilateral modification of budget by NGO
  notifying ECHO
• When?
• Modifications that do not affect a basic element
  of the operation
• modification of activities and means without
  changing results and specific objectives
• Variation within one title of the budget
• Variation in the budget between titles I and II
  up to 15 of total amount of Direct costs
• change of contractual arrangements regarding
  procurement procedures (art. 11.1 of General
  Conditions)
• changes of address

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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.

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Applications ANNEX II

• B. Exchange of written correspondence approved by
  ECHO
• When?
• For a transfer between Title 01 and Title 02 gt
  15 of the total eligible direct costs (Title 01.
  Title 02.), independently of the use of the
  reserve.
• To request the use of the Reserve, in the case in
  which funding had been granted in the Grant
  Agreement
• Intend, for operational and/or contingency
  reasons, to carry out a change affecting a
  significant element of the operation (change of
  region, data concerning the beneficiaries,
  sustainability)
• To request a change of the bank account used by
  the HO.
• Modification of indicators and source of
  verification.

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Applications ANNEX II

• B. Exchange of written correspondence approved by
  ECHO
• What type of procedure to follow?
• 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
• 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)
• The approval is given by the Head of the
  Geographical Unit (Information of ECHO 6)
• The amendment is composed of
• the letter of Request
• the letter of approval listing the approved
  modifications
• Modified annexes I and/or II (If applicable)

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EXAMPLE Budget flexibility and amendment
Initial budget
Unilateral modifications in budget notifying ECHO
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EXAMPLE Budget flexibility and amendment
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Applications ANNEX II

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

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Applications ANNEX II

• C. Supplementary Agreement
• What type of procedure to follow ?
• 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)
• 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)
• The amended Grant Agreement will become effective
  when signed by both parties (ECHO and NGO) and
  sent to ECHO

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Applications ANNEX II

• 2. TIMES REQUESTED FOR THE PRESENTATION OF
  FINANCIAL REPORTS
• Projects of Primary Emergency, Emergency and
  other projects with duration lt 6 months
• Projects with duration gt 6 months

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Applications ANNEX II
A. Projects of Primary Emergency, Emergency
other projects with duration lt 6 months
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
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Applications ANNEX II
B. Projects with duration gt 6 months
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
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Applications ANNEX II
ATTENTION

• The Report shall be presented using the standard
  forms supplied by ECHO in the same language of
  the Grant Agreement
• All Reports must be expressed in Euro
• The EU may request further information which must
  be supplied within 30 days of the request
• 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

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ApplicaTIONS ANNEX II

• 3. FORM REQUESTED FOR THE PRESENTATION OF
  FINANCIAL REPORTS
• Projects of Primary Emergency and Emergency
• Other projects with duration lt or gt 6 months

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Applications ANNEX II
A. Projects of Primary Emergency and Emergency
6 Digits
8 Digits
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Applications ANNEX II
B. Other projects with duration lt or gt 6 months
6 Digits
8 Digits
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