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Budget Lines

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Budget Lines

     Save the Children Denmark Tool 4.5.4-05 Revised 2002-11-01 Page 1 of 4

    Non-framework Budget Preparation Considerations

    ; A non-framework project budget must be prepared and presented in the appropriate SCD- or donor

    standard format. Budget assumptions must be annexed.

    ; It is expected that project budgets are prepared very realistically. Approval for the release and use of the

    project contingency funds is at the discretion of HQ and donor, taking into account that other unforeseen

    project needs might occur up.

    ; The preparation must take into account a number of vital considerations that concern budget lines,

    budget periods, budget assumptions, prices and currencies.

Budget Lines

    A non-framework project budget is made up of a number of different budget lines. A budget line coves a specific type of activity. When preparing the budget, the total estimate has to be divided into budget lines according to the required SCD- or donor budget format.

    Each of the main budget lines may be divided into sub-lines, detailing the type of expenditure/activity.

Example, sub-lines

The main budget line "1. Investments" may be the sum of the following sub-lines:

    1.01 1 Vehicle

    1.02 4 Motor Cycles

    1.03 2 Computers

    The required SCD- or donor budget format consists of a number of prefixed budget lines. Some are to be managed by the field, others by HQ.

    The SCD standard budget format for non-framework projects (except humanitarian assistance projects - see further below) contains the following prefixed budget lines:

Non-framework Budget Lines Managed by the Field

     1. Investments

     3. Local Personnel

     4. Activities, Running Costs

     5. Local Administration

    Non-framework Budget Lines Managed by HQ

     2. Expatriates

     6. Project Related Information

     7. Project Specific Consultancy

     7.01 Capacity Support (to be invoiced by CO)

     7.02 Programme Implementation Support (to be invoiced by HQ)

     8. Evaluation

     9. Other Expenses

    10. Audit in DK

    13. Administration in DK

    Non-framework Budget Lines Managed by HQ Contingent on Approval

    (Funds Released and Used Contingent upon Prior Donor/SCD HQ Approval)

     11. Contingencies

     Save the Children Denmark Tool 4.5.4-05 Revised 2002-11-01 Page 2 of 4

    The SCD standard budget format for non-framework humanitarian assistance projects contains the following prefixed budget lines:

Non-framework Humanitarian Assistance Budget Lines Managed by the Field/HQ

     1. Material Assistance

     2. International Transport of Goods

     3. Storage/Warehousing

     4. Equipment incl. Vehicles

     5. Local Transport/Distribution/Running Cost

     6. Local Administration

     8. Local Personnel

     9. Other

    Non-framework Humanitarian Assistance Budget Lines Managed by HQ

     7. Expatriates

    10. Monitoring/Evaluation/Consultancy

    10.01 Capacity Support (to be invoiced by CO)

    10.02 Programme Implementation Support (to be invoiced by HQ)

    13. Administration in DK

    Non-framework Humanitarian Assistance Budget Lines Managed by HQ Contingent on Approval

    (Funds Released and Used Contingent upon Prior Donor/SCD HQ Approval)

     11. Contingencies (max. 10% of 1-10 above)

The sub-lines should, to the greatest possible extent, be structured according to the outputs in the project

    matrix and in a way that allows financial and narrative reporting to be coherent and easily comparable.

Budget Periods

    When preparing a non-framework project budget, the total project estimate must be divided into budget periods. This is done in order to facilitate a continuous budget monitoring.

The total project period divided into budget periods:

    stndrdthBudget Lines Project 1 Budget 2 Budget 3 Budget 4 Budget Etc.

    Budget Period Period Period Period 2 3 4 5 1=2+3+4+5+

    1

    2

    etc.

    etc.

    Total

    For non-framework humanitarian assistance projects, the budget periods should, as a general rule, be 6 months long, calculated from the date of project initiation.

    For micro projects and sponsorships, the budget periods should, as a general rule, be 12 months long.

     Save the Children Denmark Tool 4.5.4-05 Revised 2002-11-01 Page 3 of 4

    For non-framework development/transitional development projects, the budget periods should, as a general rule, correspond with calendar years.

Budget Assumptions

    When preparing a project budget the estimated costs are to be based on the project expenditure/activities as

    outlined in the Project Document. The estimation of the project activities will be based on a number of assumptions about prices, the number of activities, etc. It is necessary to:

1. estimate the number of activities per budget period as well as estimate the number of the activities for the

    total project period

    2. estimate the cost/price of a given activity

Estimation of a budget is basically an estimation of expenses/activity quantity multiplied by the cost/price

    per activity.

Example 1, budget assumption (estimation of budget)

    Expenses/Activity (unit) Price per unit Budget Quantity

    (number of units)

    Vehicle 1 100.000 100.000

    Motor Cycle 4 50.000 200.000

    Computer 2 20.000 40.000

    Investments Total 340.000

Some expenses and activities are more complicated to estimate than others, e.g. salary expenses and training

    activities.

Example 2, budget assumption (estimation of budget)

Sub-line on Teachers' Salary:

    - Salary = number of teachers X number of man months X monthly

     salary (salary includes insurance, holiday allowance, social

     security cost and benefits)

Sub-line on Child Rights Workshops:

    - Feeding = number of participants X cost per meal X number of days

    - Facilitator = cost per day X number of days

    - Venue = cost of venue per day X number of days

    - Fuel = litres to be used X price per litre

    - Cost per workshop = total of above

    - Total for sub-budget line = cost per workshop X number of workshops

Sub-Line on Vehicle Running Cost:

    - Fuel Cost = number of vehicles X litres* X price per litre

     (*litres = kilometres/kilometres per litre) - Repairs and maintenance = replacement of tyres + periodic services + other repairs and

     replacements

    - Insurance

     Save the Children Denmark Tool 4.5.4-05 Revised 2002-11-01 Page 4 of 4

    - Road licensing/taxes/fees

    - Total for sub-line = total of above

    The budget assumptions have to be presented in a short and concise way, in an annex to the project budget. Each budget assumption should be numbered (referenced) according to the main budget line or sub-line being addressed.

Prices and Currencies

    Consideration of prices and currencies depend on the type of project financing/donor. Please consult the

    responsible Programme Manager at HQ.

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