Starting and Closing Projects Funded by EuropeAid

1. Starting and Closing Projects Funded by EuropeAid FoRS 9-10 November 2009 Handout 2

2. Workshop learning objectives By the end of the workshop, participants should: • Be able to prepare appropriate and quality final narrative and financial reports to EC. • Be able to prepare audits. • Understand the requirements of the Standard Contract and the roles and responsibilities of all stakeholders in managing EU funded contracts. • Understand the roles and responsibilities of the members of project consortia. • Be able to learn from previous experience in order to prepare better quality projects.

3. Session 1: Preparatory steps for end of project reporting. Topics covered: • Why Monitoring and Evaluation (M & E)? • Information required by EC • M & E - 3 essential steps • Key M & E questions • Types of M & E methods used • Techniques used to gather information

4. 1. Identification 6. Evaluation 2. Design and Appraisal 5. Completion 3. Financing . 4. Implementation The Project Life-cycle

5. Logframe Basics Objectively Verifiable Indicators Sources of Verification Intervention Logic Risks & Assumptions Overall Objectives Specific objective Results Means Cost Activities Pre-conditionss ‘... IF results are delivered, AND assumptions hold true, THEN the project purpose will be achieved ...’

6. Significance of project logframes • It forms part of the reporting requirements of the EC • It summarizes the project • It states what will be achieved • It shows how the project will be realized • It highlights risks and assumptions • It provides the basis for project planning and management • It enables comparisons between planned and actual activities

7. Reporting pre-requisites • A Logical Framework as basis for M & E • Baseline studies • A monitoring plan • Financial reports (minimum quarterly) • Annual reports • Case studies • A final evaluation

8. Why M & E? To identify the impact and sustainability of the project To record and share lessons To account to stakeholders To improve your NGO’s future project design To ensure funds used effectively and efficiently to deliver results To enable EC to monitor performance of projects they have funded

9. Information required from M&E • What significant difference/changes have been made to the lives of those involved? Are these sustainable? • How have cross-cutting issues been mainstreamed (Human rights, gender equality, democracy, good governance, children’s rights, environmental sustainability, combating HIV/AIDS etc) • Partnership, management and capacity building • Participation of beneficiaries in M&E and their feedback • Learning from the action, how this has been utilised and disseminated.

10. M & E - 3 essential steps • Monitor– to ensure the project activities are on track • Review– to consider whether the project activities are achieving the intended results • Evaluate– to assess the overall impact of the project

11. Key M & E questions • How does the M & E process encourage participation? • Does it develop capacity and equity? • How does it empower people? • How does it affect/take account of gender disparity? • What indicators will you use to measure participation, improved capacity, accountability, empowerment and sustainability?

12. Questionnaires, surveys, checklists Interviews Documentation review Observation Focus Groups Case studies Types of M & E methods used

13. Case studies: interviews with selected stakeholders using pre-set questions for comparison purposes Focus groups: facilitated stakeholder group discussions around specific issues which ensure that all voices are heard Individual interviews: in-depth exploration using non-directive questioning Some techniques used to gather information

14. Session 2: Financial Management Issues Points covered: • Financial management issues that will be checked by auditors • Budget changes and reallocations • Audits

15. Changes that do not require a budget amendment (reallocations) The 15% variance rule. (Article 9.2 of EC SC) You can modify the budget and inform the EC in writing as soon as possible: • Where the financial impact is limited to a transfer between items within the same main budget heading including cancellation or introduction of an item (this specific wording since SC 2007) • A transfer between main budget headings involving a variation of 15% or less of the amount originally entered

16. Reallocations • You are advised to re-submit the all-years budget with a set of extra columns showing the re-allocations made. • Do not continually make re-allocations but do so e.g. at end of year when you are clear about changes that you would like to make. As a general rule, it is good practice to submit the re-allocated budget to your EC desk officer ahead of time for discussion.

17. Budget amendments • Where the change means increasing a Main budget heading by more than 15% you will need to request an amendment to the contract. • This must be done at least 1 month in advance of making the change. • Do not leave budget amendment requests until too close to the end of the project: they may be refused.

18. EC Audit requirements Standard Contract Versions August 2006, 2007 and 2008 • Minimum audit requirements. Article 15.6 • Any request for payment of the balance in the case of a grant of more than Euro 100,000. • Any request for an interim payment for a grant of Euro 750,000 or over

19. Annex VII of Standard Contract sets out the terms for audit The auditor will look at: Eligibility of Direct Costs Accuracy and recording Classification Reality (Occurrence / existence) Compliance with procurement, nationality and origin rules Administrative (indirect) costs Contingencies

20. Eligible costs Only costs that have been approved in the project budget in Annex III are eligible. Article 14.2. Of SC gives a list of basic eligible costs. Be careful that you respect the procurement rules in Annex IV.

21. Eligible Costs Article 14.1 • Eligible costs are those incurred during the implementation of the action EXCEPT the costs relating to final reports, expenditure verification and evaluation.

22. Article 14.1 Contracts for goods/services/works • You can award a contract for goods/services/works BEFORE the implementation period starts • These goods/services/works must be used/provided/delivered during the implementation period. • They must be paid for before the final report is finalised. • Wording for this is different in SC 2008

23. Documentation to keep • Article 16.3 of SC gives a list of the records to keep. • This is a useful checklist for any donor. • Remember that you, and your partners, must comply with international auditing standards.

24. Taxes & VAT are not eligible costs for most EC budget lines e.g. DCI including all thematic programmes such as NSA • EC Article 14.6 says • Taxes including VAT are INELIGIBLE unless the signatory to the contract or his partners cannot reclaim and the applicable regulations authorise coverage of taxes. • The DCI Regulation does not permit using funds for taxes. • You and your partners are expected to get exemption.

25. Keeping documentation • The EC has a long memory. • Article 16.2. Says that the EC may inspect your accounts up to 7 years after the payment of the balance of the grant. • Ensure all your files are kept in order for at least this period of time.

26. Session 3: Financial reporting Points to be covered: • Report formats. • When to report • Coping with delays • Exchange rates • Reporting on unit costs • Recording reallocations

27. Interim and Final Reports for the EC The information on how and when to report is found in Article 2 and Article 15 of Annex II of the Standard Contract

28. Final reports • Final reports must be presented not later than 3 months after end date of implementation. (Art. 2.3.) • However, the final report can be sent at the latest 6 months after the end date of the project if the grant beneficiary does not have its seat in the country of implementation.

29. When to report • There are no fixed dates for submission of interim reports (Art.2.3. Says that an interim report must accompany every request for payment). • You should have spent 70% of the most recent EC instalment and 100% of any previous instalments in order to report. (Art.15.1.) • However, Interim reports should normally be presented at the latest by the end of each 12 month period following the start date of the project (Art.2.5.)

30. If you have not spent 70% • Article 15.1. Says that if expenditure is less than the required 70% (and 100% of previous tranches) then the new pre-financing will be reduced by the unused amount. • This means that you no longer need to delay reporting if you have not spent enough.

31. Financial information required • Statement of income received during reporting period and cumulative since start of project • Statement of expenditure against agreed budgets during reporting period and cumulative since start of project. • Report of interest earned • Forecast budget for next phase/year.

32. SC August 2006 Article 2.1.Extra Information required • ‘A list detailing each item of expenditure incurred in the period covered by the report and indicating for each its title, amount, relevant heading in the budget of the project and the reference of the justifying document is annexed to it’(the financial report).

33. Delays • If the project is delayed for any reason, the EC must be informed before the due date of the report. • GOLDEN RULE. Always keep the EC informed. • You can delay the first report without having to change the end date of the contract.

34. No cost extensions • If you want to extend the project implementation period, you can ask for a no-cost extension (within the limits of maximum project duration allowed by Call Guidelines). • However, the EC has become much tighter on granting these. • DO NOT ASSUME THE EC WILL AGREE TO AN EXTENSION. There must be very good reasons. • Under-expenditure alone is not considered a good reason.

35. Reporting on variances • Justification of variances between expenditure and approved budget only required in final report. • See Article 9.2.

36. Exchange rate system • Guidance is found in Article 15.9 • Financial reports are now written in the currency in which local expenditure is made. • You may have to use several currencies in a report • Expenditure is converted into Euros at the rate made up by the average of the rates published in InforEuro for the months covered by the relevant report.

37. Reporting the holdback • Remember that to get the 10% holdback, you must pre-finance the EC and claim the money back when you present the final report. • In the interim reports, you will report the pre-financing under your own income to the project. • You will calculate any holdback due to you and claim this by filling in an Annex VI to be submitted with the final financial report.

38. Interest earned on the EC grant • Interest earned on both HQ bank accounts and field accounts including those of partners must be reported. • However you do not have to have an interest bearing account.

39. Article 15.9 Interest rules 2007 • SC 2007: Interest accruing from EC pre-financing equal to or below EUR 250,000 need not be paid back and can be invested in the project. • If pre-financing is more than EUR 250,000, interest shall be paid back by deducting it from the balance due at the end of the contract.

40. Interest rules 2006 • These rules do not allow you to keep the interest. It must be recorded but will be deducted at the end of the project from the holdback.

41. Session 5: Narrative reports Points covered: • Information required for final narrative reports • EC criteria for evaluating the success of a project.

42. New final narrative reports • Report on the last phase of activities (since last report) • Results of entire project using logframe indicators • Report on outcomes on final beneficiaries • List publications and contracts awarded over EUR 5,000 • Sustainability issues. • Report on gender equality, disabilities etc • Monitoring and evaluation methodology used and feedback from beneficiaries. • Lessons learned and how disseminated.

43. Final reports…. continued • Section 3 of format requires information on relationships with partners and others. • Section 4. Requires a report on Visibility actions undertaken. • Proof of transfer of ownership of equipment. Ensure at project planning stage that good monitoring plans are prepared to collect all this information.

44. EC criteria • Efficiency • Effectiveness • Sustainability • Replicability Does the information in your report provide evidence for the above?

45. Session 6: Partnerships Points covered: • The importance of relationships • Principles for partnership • Capacity building • Practical partnership issues • First steps • Formalised agreements with partners • Project management structures

46. Why build relationships? • To deliver the overall objectives of the project • To build capacity of partners for sustainable participatory development • For mutual enrichment between civil society north-north, north-south and and south-south.

47. Principles for partnership • Develop relationships of trust • Develop shared common values – e.g. Participatory approaches • Take joint responsibility for delivering the project • Establish collaborative working relationships

48. Capacity building • EC says: All NSA projects must contain some elements of capacity building and empowerment of civil society actors. • Need to analyse partner/stakeholder capacities at outset to define skill training needs and other types of support (mentoring, management support etc) • Ensure support included in plans, budgets, M&E, project protocols etc.

49. Practical partnership issues • Lines of responsibility • Protocols for communication • Ensuring implementation takes place according to agreed plans • Ensuring donor requirements are met • Measuring project outcomes and impact • Money management issues

50. Formalised agreements with partners • You and your partners have joint responsibility for project delivery and reporting. • How will you ensure that all parties fulfil their obligations towards each other and the donor? • Contracts, MOUs