Session 5: Successfully managing a grant contract end to end with practical tips
Session layout
- Budget, types, budget monitoring and control
- Grant contract terms and condition
- Challenges and Tips for grant management
Budget basics
- A budget is estimation of revenue and expenses over a specified future period, usually the project period for a grant.
- It is financial plan (blueprint) of the project plan. One need to budget the plan and not vice versa.
- Budget is a Planning (align with objectives)Tool, Control (within policy framework) Tool, Compliance (ceiling) Tool and Mirrors the Financial Report
- A budget covers quantitative, qualitative and cost aspects.
The purpose of budget is to:
- Ascertain reasonable estimation of costs for interventions/activities in a grant proposal/award.
- Segregates costs-direct/common/indirect or OH costs
- Cost matching/sharing (co-financing) for multi donor grant, in kind match.
- Is a framework for donor-donee in a grant award
- Enables course correction based on measurement of actual achievements versus estimates
- Statement of SOF and Estimated Costs
- Enables Recognition-activity, group, period, income, expenditure, deficit, surplus
Pre requisites
- Organisation structure
- Data
- Chart of accounts
- Managerial support
- Formal process for formulation
Types of Budgets:
Activity budget
Activity based budget as the name suggests, covers the costs required for implementing a project activity. In ABB, one looks at resources required for completing an activity and the resources cost
For example, if project strategy is to build capacity of civil society leaders, workshops is an activity. Workshops costs would be towards hiring resource persons, booking a venue, transportation cost, food, lodging and materials and handouts.
Activity Budget for Conducting a Workshop
| Particular of Expense | Rate per unit | No of Units | Total in Rs |
| Trainer Fees | @ Rs 1000 per day | 3 days | 3,000 |
| Venue | @ Rs 500 per day | 3 days | 1,500 |
| Rental for Furniture | @ Rs 500 per day | 3 days | 1,500 |
| Rental for Equipment | @ Rs 100 per day | 3 days | 300 |
| Catering Exp for Lunch and tea two times | @ 100 per person | 55 persons X 3 days = 165 | 16,500 |
| Conveyance paid to attendees |
@ Rs 50 per person per day |
50 attendees x 3 days = 150 |
7,500 |
| Printing of handouts | @ Re 1 per page | 50 pages x 50 copies = 2500 pages | 2,500 |
| Grand Total | 32,800 |
Line Item Budget
- A Line-item budget presents the budget under broad heads
- It lists income and expenses by category
- Major donors like USAID, European Commission prefer to have their budget templates by line items.
- It helps better tracking for trends in major cost categories
Line Item Budget
| Expenses | Unit | # of Units | Unit rate ($) | Cost ($) |
| Human Resources: | ||||
| CEO | Per day | 3 | 350 | 1050 |
| Trainer Fees | Per day | 2 | 200 | 400 |
| Subtotal Human Resources | 1450 | |||
| Travel: | ||||
| Trainer Airfare | Per person | 1 | 300 | 300 |
| Participant Transportation | Per person | 30 | 10 | 300 |
| Subtotal Travel | 600 | |||
| Equipment and Supplies: | ||||
| Materials and hand-outs | Per person | 30 | 15 | 450 |
| Subtotal Equipment and Supplies | 450 | |||
| Other Costs and Services: | ||||
| Venue | Per day | 2 | 300 | 600 |
| Catering | Per person | 30 | 15 | 450 |
| Subtotal Other Costs and Services: | 1050 | |||
| Subtotal | 3550 | |||
| Overhead (10%) | 355 | |||
| Total | 3905 |