Download CERF_Administration_November_2007

ADMINISTRATION
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Goals of this session
Understanding of the administrative process for
the funding of a CERF project
 Ability to identify administrative issues which
cause the delay of funds disbursement
 Ability to identify an acceptable budget from an
unacceptable budget
 Successful completion of the Budget Challenge

The Administrative
Structure
The CERF is a sub-account of the UN General Trust Fund and
is subject to the UN Financial Rules and Regulations, and all
internal policies, which govern trust funds
 The Controller has oversight of the financial administration of
the CERF
 CERF disbursements are actually advances, and are not
included as expenditures in reports to donors (the SecretaryGeneral report to the General Assembly) until financial reports
are received for the funds

The Administrative Process
Application arrives in CERF (budget reviewed)
Project/budget approved by CERF/CRD
Approval letter and blank LOU sent to agency
Package to the Office of Programme Planning,
Budgets, and Accounts (Controller’s Office)
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Project packet to the
Controller’s Office
The project packet which goes for funding includes:

The project application with budget

The LOU signed by OCHA and the agency

A copy of the project approval letter to the agency

An interoffice memo from OCHA to PPBD requesting
the advance of funds to the agency
Why an administrative
process for project funding?
General Assembly resolution 60/124 of 8 March 2006:
“Calls upon the Secretary-General…..to make the necessary
managerial and administrative arrangements to facilitate
the implementation of the grant element and set up
appropriate reporting and accountability mechanisms to
ensure that the funds allocated through the Fund
are used in the most efficient, effective, and
transparent manner possible”
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Main areas of administrative
delay

Budget - needs to be mathematically sound and
transparent (itemization, linked to the narrative,
appropriate amount of costs, individual
disbursements)

Letter of Understanding (LOU)- should address
the basics of the project and the legal
agreement concerning the use of the funds
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Budget
Most Common Problems
Added incorrectly
 Financial requirements don’t match text
 Non-transparent/unclear cost line
descriptions
 Miscalculated Programme Support Costs
(PSC)

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Programme Support Costs
Project amount
$500,000.00
Indirect support
costs (maximum
7%)
$ 35,000.00
TOTAL
$535,000.00
NOT
*Please note that 7% of $497,550 is $34,828.50,
not $37,450.00
Project amount
$ 497,550.00
Indirect support
costs (maximum
7%)
$ 37,450.00*
TOTAL
$535,000.00
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Letter of
Understanding
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Most Common Problems
Changed clauses (deleted, added, altered)
 Financial amounts do not match amount in
approval letter from the ERC to the agency
 Implementation period too long
 Long time for receipt of LOU from agency and
for correspondence for corrections

Exercises
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What is wrong with this budget?
Cost breakdown
Amount (USD)
A. Staff costs (salaries and other
entitlements) (drivers to deliver food)
$50,000
B. Travel
-
C. Contractual Services
-
D. Operations (please itemize below; add rows if necessary)
Transport of food and water containers
$50,000
-
E. Acquisitions
F. Other
Subtotal project requirements
$200,000
G. Indirect programe support costs (not to exceed 7% of subtotal project costs)
PSC amount (none needed)
Total cost
0
$200,000
What is wrong with this budget?
Cost breakdown
Amount (USD)
A. Staff costs (salaries and other
entitlements) (drivers to deliver food)
B. Travel
C. Contractual Services
D. Operations (please itemize below; add rows if necessary)
Transport of food and water containers
E. Acquisitions
F. Other
Subtotal project requirements
G. Indirect programe support costs (not to exceed 7% of subtotal project costs)
PSC amount (none needed)
$4,000,000
Total cost
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A Challenge
Fix the project proposal budget
Cost breakdown
Amount (USD)
A. Staff costs (salaries and other
entitlements)
B. Travel
C. Contractual Services
D. Operations (please itemize below; add rows if necessary)
Direct costs
$500,000
Food (and other non-food items)
$1,000,000
E. Acquisitions
$2,000,000
(4 motorcycles)
F. Other
Subtotal project requirements
$2,000,000
G. Indirect programe support costs (not to exceed 7% of subtotal project costs)
PSC amount (7%)
$500,000
Total cost
$2,500,000
Is this budget acceptable?
Cost breakdown
Amount (USD)
A. Staff costs (salaries and other entitlements)
B. Travel
C. Contractual Services
$500,000
D. Operations (please itemize below; add rows if necessary)
Food transport and storage costs (storage $150,000 for
3 months, handling $150,000 for 3 months; transport by
sea $200,000)
Food (rice, corn, oil, high energy biscuits)
$500,000
$2,000,000
E. Acquisitions
F. Other
Subtotal project requirements
$3,000,000
G. Indirect programe support costs (not to exceed 7% of subtotal project costs)
PSC amount (none needed) 0%
Total cost
0
$3,000,000
The End
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