Project Budget Finance is a key part of the proposal


НазваProject Budget Finance is a key part of the proposal
Дата конвертації26.04.2013
Розмір445 b.
ТипПрезентации


Building a Robust Proposal – Drawing up the Budget Robert Sanders Head of International Projects EBN Ukraine 19th_21st July 2011


Project Budget

  • Finance is a key part of the proposal

  • Must be seen to « deliver value for money »

  • Real, accurate market rates should be used

  • The budget should be balanced ; according to the work/activities to be done by the partners

  • Consider carefully the level of co-financing from the donor, typicaly from 50% to 100%

  • Consider how you are going to finance the balance



Types of Costs

  • Human Resource & Overheads

  • Travel & Subsistence

  • Equipment (Capital)

  • Subcontracting or Third Party Assistance

  • Consumables

  • Other Costs



Human Resource and Overheads

  • Human Resource usually has different elements:

    • Basic pay to individual
    • Oncosts, such as Pension and Social Security etc
  • Overheads

    • Examples elements include – office/space rental, electricity, heat, recruitment, central administration (payroll, finance, etc), furniture, any centrally provided capital equipment not covered under project capital equipment, (e.g. central telephone equipment costs).
    • Usually a fixed percentage of HR costs.
    • Normally decided at the start of the project and are based on end of year company accounts.


Travel & subsistence

  • Train, plane, automobile costs

  • Petrol, taxi, etc

  • Meals, hotel accommodation, etc

  • Overseas allowances

  • Per Diems



Equipment (Capital)

  • Any capital items such as computers, desks printers, etc. They are bought specifically for the project or used on the project from existing resources (using life expectancy model).

  • Can only claim depreciation on items. Usually straight line method. Electronic goods over three years, most other over five years.

  • These items do not usually appear in project accounts as they are capitalised into a general area. These items are handled separately in company accounts



Subcontractors or Third party assistance

  • Services bought from other organisations to help deliver project targets.

  • No overhead on staff costs, assumed included in invoiced amount.

  • E.g. Technology auditors, consultants, experts

  • Usually for tasks that the partner cannot deliver themselves



Consumables

  • Anything which is consumed

  • Includes capital items with a life span of less than one year (e.g. some organisations includes items less than €1000)

  • Printer toner, floppy disks, paper, pens, etc



Other costs

  • Anything else project related

  • Telephone charges

  • Communication charges

  • External venue costs

  • Printing costs



Typical project profile



Budget Example



Can you make any profit?

  • Your project budget is 100 000 €

  • The project is funded at 75 % = 75 000 € , Funding

  • You must contribute 25 000 €

  • Budget Breakdown

    • Human Resource 60 000 €
    • Subcontracting 10 000 €
    • Overheads 12 000 €
    • Other Costs 18 000 €
    • TOTAL 100 000 €

Any ideas?!

Balancing the books

  • Careful analysis of Human Resource (both capacity and cost)

  • Limit direct costs if % of Co-funding is low

  • Consider match funding, that means other « income » from other sources

  • Similar projects in the portfolio = less administrative costs as procedures are similar



Why you need to know about match funding

  • Some organisations rely on an increasing number of contracts from European Commission sourced funds

  • More staff involved in running projects

  • Need to be aware of opportunities

  • Need to maximise matched funding contributions

  • Many projects are funded at 50% to 75% of auditable spend (need to maximise auditable spend)



Types of match funding

  • In-kind contribution

  • Direct income

  • Indirect income

  • Sponsorship / External funding

  • Shared activities



In-kind contribution

  • Others giving free services to the project

  • Examples are time, venue, resources

  • Must be recorded at full market price (if not auditable through accounting system, must be a fair and honest price for the services given. Usually made by comparing similar charged services).



Direct income

  • Charges for events and services

  • Recovered travel and subsistence expenses.

  • Consultancy payment for presentations or advisory sessions related to the work of the project.

  • This is matched income, but can be seen as profit under some schemes/programmes!



Indirect income

  • Profit derived from in-direct activities outside of the contract

  • Seen as own contribution in-kind

  • Usually used to balance shortfall in project income



Sponsorship / external funding

  • Financial gifts given directly to the project to aid its delivery

  • Non EC grants received from bodies to match fund the activities of the project. (Such as Business Links, Government Offices, Councils, etc)

  • Ideal matched funding - But you do need to make sure it did not originate from Europe



Shared activities

  • These are joint activities undertaken with other organisations. Where both organisations are meeting their own project targets.

  • The total costs of the activity can usually be claimed by both parties provided they are not both EC funded.



Things to remember

  • Do not need to match fund every activity

  • Need to get expenses and invoices in as quickly as possible to aid financial management

  • Need to get letters of support for in-kind contribution. If it costs, make sure it is recorded.

  • The portfolio team match funds its activities

  • Do not mix external accounting with internal accounting



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