Grant implementation

STOP TB workshopDecember 2005

OUTLINE

1- The grant cycle revisited

2- Progress reporting and disbursement requests

3- Budget revision

4- Annual reports

5- Annual audit

Grant process key dates

Proposals Submitted

1.3 Screening

Eligible Proposals Selected

1.4 TRP

Review

TRP Recommend

ations

TRP Chair/Vice Chair Sign-off (Final Board

Approval)

1.5 Board

Approval

1.6 TRP Clarification

(as required)

Call for Proposals

1.1 Future Round Planning

1.2 Guidelines for Proposal

Refinement & Call for

Proposals

Board Approval

I. Proposals Management

Board Approval

Grant Start

Grant Renewal (2 years)

Grant End (up to 5 years)

The Global Fund grant process

Grant Signing

2.1 CCM Confirmation

of PR Nomination

PR Nomination Confirmed Grant Signing &

First Disbursement

2.2 LFA Selection and Contracting

II. Grant Negotiation and First Disbursement

Grant Negotiations

2.4 Review of Budgets, Workplan, and Indicators

2.5 Negotiation (including conditions

precedent)

2.6 First Disbursement Preparation

LFA Contracted

2.3 PR Assessments

18 months since first disbursement

3.3 Phase 2 Grant Renewal

Process

Updated Grant

Agreement

3.5 LFA Management

Phase 2 Go/No Go Decision

3.4 Grant Extension

3.6 Grant Support

Performance-based Funding

3.1 Ongoing Reviews &

Disbursements

3.2 Grant Revisions

III. Performance-Based Funding and Grant Support

Performance-based Funding

3.1 Ongoing Reviews &

Disbursements

3.2 Grant Revisions

End of Phase 2 Support

ARCH/300704/3

Reporting – Background

PR will submit a DR/PU normally on a quarterly or semi-annual basis

The frequency is agreed during initial grant negotiations and can change during implementation

The frequency is influenced by:– Country characteristics– Grant characteristics– Partner involvement and grant harmonization

Funding is provided in advance for the next reporting period plus a buffer of 1 quarter

Disbursement Request and Progress Update (DR/PU)

Grant start date

S1

1 year45 days45 days 45 days

1st DR/PU: funds

needed for Q1 - 3

S2 S3

Grant end date

S4

2nd DR/PU: funds

needed for Q3 - 5

3rd DR/PU: funds

needed for Q5 - 7

4th DR/PU: funds

needed for Q7 - 8

DR/PU Request Summary: periods covered

Reporting - semi-annual basis

Reporting – Program Expenditures

Section 2: Programmatic and Financial Progress Update

Country:Disease:Grant number:Principal Recipient:Disbursement period beginning date:Disbursement period end date:Disbursement Request number:Currency: USD

B: PROGRAM EXPENDITURESBudget Actual

11.a. PR's total expenditures

1.b. Disbursements to sub-recipients (by sub-recipient)

Other program results, issues and lessons learned:

Planned changes in program, includingresolutions to mitigate issues, if any*:

Changes in budget forecasts,including for next disbursement period*:

* If appropriate, please provide an updated template for Intended Program Results and Budget

Total actual expenditures vs. budget

Reason for variance

Reporting – Cash Reconciliation

Section 3: Cash Reconciliation and Requirement

Country:Disease:Grant number:Principal Recipient:Disbursement period beginning date:Disbursement period end date:Disbursement Request number:Currency:

A: CASH RECONCILIATION

1. Cash Balance: Beginning of disbursement period (line 5 from previous disbursement period Cash Reconciliation):

2. Add: Sources of Cash during the disbursement period (from PR's Statement of Sources and Uses of Funds (Cash Flow Statement))

2.a. Interest received on bank account, user fees and other income received*:

2.b.Cash received from the Global Fund (last disbursement):

2.c.Total sources of cash (line 2.a. plus line 2.b.):

3. Total cash available for disbursement period (line 1 plus line 2.c.):

Less: Uses of Cash during the disbursement period (from PR's Statement of Sources and Uses of Funds)

4. Total program expenditures during disbursement period (same as Section 2. B. 1. "Actual"):

5. Cash Balance: End of disbursement period (line 3 minus line 4):

B: CASH REQUIREMENT

6. Total forecasted net cash expenditures by the Principal Recipient for next disbursement period plus one additional quarter**:

7. Next disbursement period beginning date: end date:

8. Subsequent quarter beginning date: end date:

Less: Cash Balance: End of disbursement period (line 5)

9. Cash requirement from the Global Fund for next disbursement period plus one additional quarter:

USD

Reporting – Example

Program start date: 1 January 2005

Year 1 budget: Q1:$210k; Q2:$450k; Q3:$290k; Q4:$600k

Frequency of reporting: semi annual

1st Disbursement (9 months): US$950k

Cash balance on 30 June 2005: US$400k consisting of:

– US$ 50k savings

– US$10k interest earned

– US$50k delayed activities

– US$290k buffer

Revised budget for period 1 July to 31 December 2005 is US$700k; and for period 1 January 2006 to 31 March 2006 is US$250k

What is PR’s next disbursement?

Budget Revision – Change in Scope

A change in scope arises when PR wants to:

– Add a goal, objective or service delivery area;

– Drop a goal, objective or service delivery area;

– Alter the balance between two or more goals, objectives or service delivery areas

Where a change in scope occurs special procedures apply

Budget Revision – Change in Scope

Recommendation

•CCM must approve change

•LFA reviews and makes recommendation

•GF will make decision (may consult TRP)

CCMJustify change

PRNew

workplan, targets &

budget

LFA Review FPM GF

Process

Special procedures for a change in scope

Budget Revision – Practical Considerations

Changes in: Assess impact on: Review/recommendation by:

• Demand for services;

• Treatment regimen;

• Input prices;

• Input mix and usage rates;

• Taxation;

• Currency exchange rates;

• Inflation rates; etc

• Goals

• Objectives

• Service Delivery Areas

• Activities

• Tasks

Practical Budgetary Considerations

Notes: Currency fluctuation can be a reason for Phase 2 acceleration Document decisions LFA review during periodic verification of implementation

GF,LFA,CCM, PR

PR

Budget Revision – Example

TB drug cost savings of US$150k due to:

– A reduction in unit price by 25%;

PR intends to spend US$150k savings on training of microscopists

Is this a change in scope or not?

How should this change be dealt with?

Budget Revision – Example 2

Cost of identification of infectious cases has increased by US$94k due to:

– 50% appreciation of local currency against US$;

– the fact that all cost in the SDA are local currency denominated;

PR intends to pay for this by reducing budget for training. This implies that 35% less people will be trained.

Is this a change in scope or not?

How should this change be dealt with?

Annual reports

Annual reports are required as part of programmatic progress reports (Art 15 b.ii of grant agreement)

Contain aggregated information on grant progress

Audits: GF Requirements

SWAps – single audit acceptable but GF funded expenditures should be clearly identifiable

UNDP as PR –

• Annual financial statements certified by comptroller

• Biennial financial statements externally audited

UNDP as PR in additional safeguards country – general rule applies

GF funding forms a substantial proportion of PR’s source of funding – PR audit acceptable

General rule: need for annual audit of program financial statements

Program financial statement sources and uses of funds statement

Note following special situations:

Audits - When due

General rule: coincides with the PR’s fiscal year and not anniversary of the grant start date. Audit report due within six months of end of fiscal year. Note:

M6 M12 M18 M24

PR’s Fiscal Year 1

When program starts before M6, audit is due

by M18

When program starts after M6, audit is due

after M18

audited accounts may not be available at the time of Phase 2 renewal

review

Audits: Responsibilities

Responsibilities of PR, LFA and FPMs

PR

• Engages the services of the auditor

• Develops audit plan for SR

• Facilitates performance of audit

• Submits audit reports • Responds to and

implements recommendations

1LFA

• Reviews acceptability of auditor, ToR and SR’s audit plan

• Reviews audit reports and advises GF

• Reviews PR’s implementation of audit recommendations

2 FPM3

• Decides on the acceptability of the auditor, ToR and SR audit plan

• Decides on appropriate remedial actions in response to audit findings and recommendation