STEPPING STONES

1
STEPPING STONES

• Financial Monitoring requirements by
• Clair Leach - EISS

2
Overview

• Budget and Community Funding
• Contribution by Partners/Match Funding
• Financial Monitoring
• systems, expenditure, eligibility, ineligibility,
  exchange rates
• Personnel Costs
• Payment
• conditions, entitlement
• Audit

3
Budget and Community Funding

• Approved amount is fixed and upper limit
• No increases to bottom line
• Changes of less than 10 accepted within budget
  lines
• Changes to budget headings must be agreed by
  National Agency
• No transfers into staff costs from operating or
  subcontracting costs
• No profit

4
Contribution by Partners/Match Funding

• Based on ACTUAL not NOTIONAL costs
• eligible contribution
• covers Leonardo eligible expenditure
• staff must be salaried not volunteers
• value of match cannot include profit
• premises can be used for in kind match funding at
  cost price

5
Financial monitoring-Systems

• Analytical accounting system to identify
• sources of project funding
• project expenditure
• Simple and standardised across partners (see
  sample spreadsheet for reporting)
• Submitted following completion of each work
  package
• Variances recorded and verified

6
Expenditure

• Audit trail - from source documentation
• Invoices/with receipts/petty cash vouchers
• Cash books / bank statements
• Working papers
• No Audit trail no payment!

7
Financial Monitoring-Eligibility (1)

• Costs must be
• Directly connected to activities in the Agreement
• Actual costs - except where accepted lump sums
• Substantiated
• Incurred in contract period
• Value for money

8
Financial Monitoring -Eligibility (2)

• Personnel Costs (lump sum)
• Travel and Subsistence costs (see applicable
  daily rates included in handout)
• Information and IT costs (max 15)
• Production costs
• Overheads (max 7)
• Other costs
• Sub contracting costs (max 30)

9
Financial Monitoring-Ineligibility

• Costs incurred outside the contract period
• Costs already financed from another source
• Purchases of capital assets
• Financial costs relating to exchange rate cost,
  bank charges

10
Personnel Costs

• Covered by lump sum
• No timesheets
• Costs calculated on actual fee including
  contributions paid by employer and excluding any
  bonuses

11
Payment - Conditions

• Payment made ONLY on submission of monitoring
  spreadsheet within agreed timeframe
• Payment made ONLY if required level of activity
  has been achieved according to the workplan
• Payment made ONLY if all costs substantiated ie
  copies of invoices attached except for lump sum
  costs.

12
Payment - Entitlement

• Upon completion of WP 1 20 of lump sum personnel
  costs incurred and eligible operational and sub
  contracting costs - less partner contribution
• Upon completion of WP 2 30 of lump sum personnel
  costs as above
• Upon completion of WP 3 30 of lump sum personnel
  costs as above
• Upon completion of WP 4 20 of lump sum personnel
  costs as above

13
Conversion rate / exchange rate

• Use rate of exchange used for bank transactions
• Use rate at date payment received in bank
• Ensure date and exchange rate given are recorded
  in working papers

14
Audit

• All original records must be kept for FIVE YEARS
  after submission of final account to National
  Agency
• Must be clear audit trail from invoice to payment
• Transparency and consistency
• Subsequent actions - no audit trail potential
  demand for repayment!